Termination in Breach of Subsisting Interim Protection Is Legally Unsustainable Despite Non-Entitlement to Permanency.

The Petitioners were appointed as Junior Engineers (Civil) by the Respondent Corporation in 2008 on a temporary/contractual basis for fixed six-month periods

Anticipating termination, they filed a complaint for permanency before the Industrial Court, which passed an interim order on 30 July 2010 directing the Respondent to continue them in service until "duly selected candidates appointed in accordance with recruitment rules" joined in their place

Despite this subsisting interim order, the Respondent terminated the Petitioners’ services on 19 March 2011

The Industrial Court ultimately dismissed the main complaint for permanency in 2016, a decision upheld by the High Court

Meanwhile, the Petitioners raised an industrial dispute regarding their termination. The Labour Court, Pune, rejected the reference on 30 May 2024, holding the termination valid as the appointments were contractual

1. Whether the termination of the Petitioners' services on 19 March 2011 was legal and proper given the subsistence of a binding interim order

2. Whether the Labour Court exceeded the scope of the reference by adjudicating the issue of permanency instead of focusing on the legality of the termination

3. Whether the subsequent dismissal of the main complaint for permanency retrospectively validated the termination effected during the operation of the interim relief

The Court applied Section 2(oo)(bb) of the Industrial Disputes Act, 1947, regarding exceptions to "retrenchment" for fixed-term contracts

It relied on the principle of the sanctity of judicial orders, noting that interim orders impose a legal obligation on parties to act in conformity with their terms

The Court also addressed the doctrine of merger, clarifying that the eventual dismissal of a main proceeding does not retrospectively legalize a breach of an interim order committed during its pendency

Additionally, the principle of Res Judicata was implicitly applied regarding the Petitioners' prior failed claims for regularisation under the Maharashtra Municipal Corporations Act

The Court reasoned that while the Petitioners were not entitled to permanency (an issue already settled by prior litigation), the termination dated 19 March 2011 was independent of that status

The Respondent admitted the interim order of 30 July 2010 was operative at the time of termination but failed to produce evidence that "duly selected candidates" had actually replaced these specific Petitioners as required by the order

The Court found the Labour Court erred by merging the issue of "contractual nature of work" with "legality of termination," failing to see that even a contractual employer is bound by judicial directions

Furthermore, the Respondent's argument that the interim order merged into the final dismissal of the permanency complaint was rejected; a breach committed during the subsistence of an order is not "cured" by the final outcome of the litigation

The Court partly allowed the Writ Petitions and quashed the Labour Court’s Award. The Respondent was directed to reinstate the Petitioners on their original or equivalent posts within twelve weeks; however, it denied regularisation and full back wages, granting 25% lump sum compensation and continuity of service only for retiral benefits.