Retrospective regularisation cannot be claimed after accepting a compromise-based regular appointment.

The first respondent was engaged as a Sanitary Worker by Ulundurpet Special Grade Town Panchayat on daily wages from 01.01.1992.

He sought permanent status under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, claiming 480 days of continuous service in two calendar years.

The Inspector of Labour allowed his claim in I.D.No.1040 of 1996.

The Town Panchayat challenged that order, but the parties subsequently entered into a compromise, which was recorded by the Writ Court on 18.09.2007.

Pursuant to the compromise, the respondent was appointed on a regular basis in a sanctioned Sanitary Worker post, in the time scale of pay, by proceedings dated 12.09.2008; the appointment order described the appointment as temporary and restricted any claim to seniority for promotion.

The respondent accepted the appointment and continued in service without challenging its terms.

After approximately five years, he sought retrospective regularisation and monetary benefits from the date on which he allegedly completed 480 days of service.

The Executive Officer rejected his representation on 09.07.2021, holding that the compromise and subsequent appointment did not provide for retrospective regularisation.

The Single Judge allowed the respondent’s writ petition and directed notional pay fixation with effect from 01.01.1994, relying on the Inspector of Labour’s order and the compromise recorded by the Writ Court.

The Municipality preferred the present intra-court appeal.

1. Whether the Inspector of Labour’s order granting permanent status under the 1981 Act could be implemented after the parties had entered into a compromise that was recorded by the Writ Court.

2. Whether the 1981 Act applied to employees of a Special Grade Town Panchayat governed by the relevant special enactment and service rules.

3. Whether the respondent was entitled to retrospective regularisation and retrospective pay fixation on the basis of 480 days of prior daily-wage service, despite his regular appointment in 2008 pursuant to the compromise.

The Court considered the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, which provides for conferment of permanent status upon fulfilment of the statutory continuous-service requirement.

However, it held that employees of a Special Grade Town Panchayat are governed by the special enactment and service rules applicable to that establishment, and that the special statutory regime prevails over the general law where applicable.

The Court further applied the service-law principle that regularisation or permanent absorption must conform to the governing service rules and that retrospective regularisation cannot ordinarily be granted in respect of irregular or illegal appointments.

It also applied the principle that a party who accepts an appointment made pursuant to a compromise cannot subsequently seek benefits inconsistent with the terms of that appointment, particularly after substantial delay.

The Court found that the respondent’s initial engagement as a daily-wage worker was not made in accordance with the service rules applicable to the Town Panchayat.

His subsequent appointment in 2008 was made in a sanctioned post and in the regular time scale of pay pursuant to the parties’ compromise, which had been accepted by the Writ Court.

The Inspector of Labour’s order had not involved a proper adjudication of the applicability of the Town Panchayat service rules or the respondent’s service rights and, in any event, could not be enforced independently after the compromise.

Since the respondent accepted the 2008 appointment without challenge and claimed retrospective benefits only after five years, the Court held that his claim was inconsistent with the compromise, the accepted appointment order, and settled principles governing retrospective regularisation.

The Single Judge therefore erred in directing retrospective pay fixation from 01.01.1994.

It held that the respondent was not entitled to retrospective regularisation or retrospective pay fixation based on his earlier daily-wage service or the Inspector of Labour’s order.

His regular appointment pursuant to the compromise took effect from 12.09.2008, and the connected miscellaneous petition was closed.

No order as to costs was made.