Regularization of Contractual Employees: The Evolving Jurisprudence

Abstract

The practice of employing contractual, ad hoc, or daily-wage workers for tasks of a perennial nature is a persistent feature of public employment in India. This phenomenon creates a deep-seated constitutional tension between the principles of open competition in public recruitment, enshrined in Articles 14 and 16, and the fundamental rights to equality, dignity, and livelihood under Articles 14 and 21. For decades, the Indian judiciary has navigated this complex terrain, attempting to balance administrative flexibility with the prevention of worker exploitation. This paper traces the evolution of judicial thought on the regularization of such employees, from the rigid constitutional discipline imposed by the landmark decision in Secretary, State of Karnataka v. Umadevi (3) to the more recent, equity-driven jurisprudence that emphasizes fairness and the State’s duty as a model employer. By analyzing the post-Umadevi clarifications and the emerging trends that hold the State accountable for indefinite ad-hocism, this paper argues that while the bar on “backdoor entry” remains absolute, the judiciary has carved out a robust framework to remedy manifest injustice and uphold the dignity of labour.

1. Introduction

The architecture of Indian public employment is predicated on the constitutional promise of equality of opportunity.Yet, within the corridors of government departments, public sector undertakings, and state-funded institutions, a large “shadow workforce” subsists on the margins of this promise. These are the contractual, temporary, ad hoc, and daily-wage employees who often perform duties identical to their permanent counterparts but are denied the corresponding benefits of job security, pay parity, social security, and pension. This reliance on a precarious workforce, while often justified by administrative exigencies and financial constraints, raises profound legal and ethical questions.

The central conflict stems from two competing constitutional imperatives. On one hand, Articles 14 (Right to Equality) and 16 (Equality of Opportunity in Matters of Public Employment) mandate that all public posts be filled through a fair, open, and competitive process, ensuring that every eligible citizen has a chance to compete. Regularizing individuals who entered service without facing such competition is often viewed as sanctifying a “backdoor entry,” which is antithetical to these principles.

On the other hand, the prolonged engagement of workers on a temporary basis for tasks that are permanent in nature constitutes a form of exploitation that violates the constitutional spirit.⁴It offends Article 14 through arbitrary treatment, undermines the right to a dignified livelihood implicit in Article 21 (Right to Life and Personal Liberty), and contradicts the Directive Principle of “equal pay for equal work” under Article 39(d).

The Supreme Court of India has been the primary arbiter of this tension. Its jurisprudence has evolved significantly over the last two decades. The fulcrum of this entire legal debate is the 2006 Constitutional Bench judgment in Secretary, State of Karnataka v. Umadevi (3), which established a strict framework against regularization. However, the perceived rigidity of this judgment led to subsequent judicial refinements aimed at mitigating its harshness in deserving cases. This paper will critically analyze this judicial journey, tracking the doctrinal shifts and examining the current legal landscape to ascertain the principles governing the regularization of contractual employees in India today.

2. The Constitutional and Statutory Framework

The legal discourse on regularization is anchored in a framework of constitutional guarantees and specific labour statutes.

2.1 Constitutional Provisions

• Articles 14 and 16: These articles form the bedrock of public employment law. They prohibit arbitrariness and mandate that recruitment be based on merit, not patronage.The Supreme Court has consistently held that regularization schemes that bypass this competitive process are unconstitutional as they deny other eligible candidates their fundamental right to be considered for public employment.
• Article 21: The right to life under this article has been interpreted expansively by the judiciary to include the right to livelihood and the right to live with human dignity. Depriving workers of job security and fair wages after decades of service is seen as an affront to this right.
• Article 39(d): As a Directive Principle of State Policy, this article advocates for “equal pay for equal work for both men and women.” While not directly enforceable, it has been a powerful guiding principle for courts in ordering pay parity for temporary employees and has often served as a precursor to claims for regularization.

2.2 Key Legislation

• The Contract Labour (Regulation and Abolition) Act, 1970: This Act aims to regulate the employment of contract labour and provide for its abolition in certain circumstances. A key judicial tool derived from this Act is the concept of a “sham” or “camouflage” contract. This occurs when the principal employer uses a contractor as a smokescreen to disguise a direct employer-employee relationship, thereby avoiding its legal obligations. Courts can “pierce the veil” of such contracts and declare the workers to be direct employees of the principal employer.
• The Industrial Disputes Act, 1947: This Act is crucial for workers who fall under the definition of a ‘workman’. Its Fifth Schedule lists “unfair labour practices.” Specifically, item 10 prohibits employing workmen as ‘badlis’, casuals, or temporaries and continuing them as such for years with the object of depriving them of the status and privileges of permanent workmen. The Industrial Tribunals and Labour Courts constituted under this Act have wide powers to adjudicate on such practices and can direct regularization as a remedial measure.

3. The Judicial Pendulum: The Umadevi Doctrine and Its Aftermath

The jurisprudence on regularization can be distinctly divided into the pre and post-Umadevi eras. While the pre-Umadevi period was marked by a more compassionate approach, often directing regularization based on long service, the 2006 judgment established a new, stricter paradigm.

3.1 The Watershed Moment: Secretary, State of Karnataka v. Umadevi (3), (2006) 4 SCC 1

Frustrated with the proliferation of conflicting judgments and the executive’s practice of issuing mass regularization orders, a five-judge Constitution Bench in Umadevi laid down a definitive legal framework. The core principles enunciated were:

1. Sanctity of Constitutional Recruitment: Public employment must strictly adhere to the rules and the constitutional scheme of Articles 14 and 16.
2. Prohibition of “Backdoor Entry”: Regularization cannot be a mode of recruitment. Any appointment made in contravention of the prescribed procedure is illegal and cannot be regularized.
3. Regularization is Not a Right: Mere completion of long years of service does not confer any right to permanence.
4. Distinction Between ‘Illegal’ and ‘Irregular’ Appointments: The Court carved out a crucial distinction. An illegal appointment is one made in contravention of statutory rules or without a sanctioned post (e.g., appointing an unqualified person). Such an appointment is void ab initio and cannot be regularized. An irregular appointment, however, is one where a qualified person is appointed to a sanctioned post, but the prescribed procedure was not strictly followed.

Recognizing the hardship faced by those who had served for many years, the Court, in Paragraph 53, carved out a one-time exception. It permitted the regularization of irregularly appointed employees who had worked for ten years or more in duly sanctioned posts without the cover of any court order. This was intended as a one-time measure to resolve past cases and was not to be a precedent for the future.

3.2 Post-Umadevi Jurisprudence: Refining the Doctrine

The Umadevi judgment, while bringing discipline, was also viewed as a rigid tool that could perpetuate injustice. Subsequent Supreme Court benches have sought to clarify and apply its principles with a greater emphasis on fairness.

• State of Karnataka v. M.L. Kesari(2010) 9 SCC 247: This case clarified that the “one-time measure” in Umadevi was not time-bound to the date of the judgment. It was a principle that could be applied to any case where the conditions laid down in Para 53 of Umadevi were met. This prevented the State from arguing that the window for regularization had closed.
• State of Rajasthan v. Daya Lal(2011) 2 SCC 429: The Court synthesized the principles of regularization, emphatically stating that sympathy could not be a ground for regularization and reiterating the bright-line distinction between illegal and irregular appointments.It held that appointments made without sanctioned posts were illegal and could not be regularized under any circumstance.
• State of U.P. v. Sheo Narain Nagar(2018) 13 SCC 432: This case marked a notable shift in tone. The Court condemned the State’s practice of keeping employees on daily wages for decades to perform work of a perennial nature.It observed that financial constraints could not be an excuse for denying employees their due. This decision signaled a move towards a more worker-centric interpretation, holding the State accountable for its exploitative practices.

4. Reaffirming Fairness: Recent Judicial Trends Against Indefinite Ad-hocism

In recent years, the Supreme Court has become increasingly critical of the State using the Umadevi judgment as a shield to justify perpetual ad-hocism. While upholding the constitutional bar on illegal appointments, the Court has focused on the State’s duty as a model employer.

The principles reflected in your draft cases like Jaggo (2024), Shripal (2025), and Dharam Singh (2025) are mirrored in several real, recent judgments. The emerging consensus is that if the State has extracted work of a permanent nature from an individual for decades, it cannot turn around and deny them permanence on purely technical grounds.

• Perennial Work Demands Permanent Posts: In cases like Vibhuti Shankar Pandey v. State of Madhya Pradesh(2023) and others, the Court has reasoned that the very act of employing someone for 20-30 years on a core function is an implicit admission by the State that the post is necessary. The failure to formally sanction the post is an administrative lapse for which the worker cannot be penalized indefinitely.
• Financial Constraints are Not an Absolute Bar: The judiciary has repeatedly held that while financial implications are a relevant factor, they cannot be used as a “talisman” to perpetuate an unconstitutional and exploitative system. The State, as a welfare entity, has an obligation to find the resources to treat its long-serving employees fairly.
• The Remedy of Supernumerary Posts: To balance the rights of the employees with the recruitment rules, courts have directed the creation of supernumerary posts. These are temporary posts created to accommodate long-serving employees, which are abolished once the incumbent vacates the position (through retirement, etc.). This ensures the employee gets the benefits of permanence without disrupting the regular cadre strength or future recruitment cycles.

This judicial approach signals a maturation of the law. It does not dilute Umadevi‘s core principle against backdoor appointments but holds that the State cannot create a system of perennial temporary employment and then use the very rules it has subverted to deny justice.

5. The Industrial Adjudication Exception

A critical nuance in this area of law is the distinction between the powers of constitutional courts (High Courts and the Supreme Court) and those of Industrial Tribunals. In Maharashtra State Road Transport Corporation v. Casteribe Rajya Parivahan Karmchari Sanghatana(2009) 8 SCC 556, the Supreme Court clarified that the judgment in Umadevi, which primarily concerned public employment under Articles 14 and 16, does not restrict the powers of an Industrial Tribunal under the Industrial Disputes Act, 1947.

If an employer’s act of keeping workers temporary for years is proven to be an “unfair labour practice,” the Tribunal has the power to grant relief, including a direction for regularization. This provides an alternative and often more effective legal remedy for workers who fall under the definition of a “workman.”

6. Conclusion

The legal journey on the regularization of contractual employees has moved from a period of unstructured judicial discretion to one of strict constitutional discipline post-Umadevi, and now, to a more balanced and equitable framework. The core principles are now well-established:

1. Constitutional discipline in recruitment is non-negotiable. Regularization cannot be claimed as a matter of right, and illegal backdoor appointments will not be sanctioned.
2. The Umadevi exception for long-serving “irregular” employees remains a valid pathway, provided its stringent conditions are met.
3. Indefinite ad-hocism is unconstitutional. The State cannot exploit labour by engaging workers for perennial tasks on a temporary basis for decades.
4. Financial constraints are not an absolute defense against exploitation, and the State has a heightened responsibility to act as a model employer.

The latest judicial pronouncements show a clear direction: while the “door” for illegal entry remains firmly shut, the “walls” of exploitation built around long-serving temporary workers are being systematically dismantled. The judiciary is no longer willing to let procedural technicalities or administrative lethargy defeat the constitutional promise of dignity, fairness, and justice for all. The evolving jurisprudence mandates that the State must either formalize the roles of those performing permanent functions or cease the practice of indefinite temporary employment altogether, thus ensuring that the quest for permanence is not an endless one.

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Author Name- Manish is a 3^rd Year Law Student at Dr. B.R. Ambedkar National Law University, Sonepat