Employer has right to change strength of staff: SC

New Delhi, Mar 28: In a verdict putting an employee fully at the mercy of his employer, the Supreme Court today (Mar 28, 2006) made it clear that an employer has the right to change the strength of staff in order to enforce the measure of economy or for streamlining the administration.

Handing down the ruling, a bench comprising Mr.Justice H.K. Sema and Mr. Justice A.R. Lakshmanan dismissed the appeals of employees of the Avas Vikas Sansthan (AVS) set up in 1989 which were later liquidated/closed down due to financial crunch faced by these bodies coupled with their inability to pay salaries to their employees. The court held that employees have no right of re-employment unless the liquidation was malafide.

According to the ruling, the court could not by a writ of mandamus direct the employer to continue employing such employees as have been dislodged as a result of department being partly or wholly abolished or abandoned for want of funds.

As many as 604 employees of AVS had lost their jobs after abolition of these bodies which were registered on Nov.17,1988, under the Societies Registration Act,1860 .In all 9 AVS were set up in the state of Rajasthan and were dissolved vide resolution dated March 26,1999. The court also noted the fact that Rajasthan government acting as welfare state formulated a scheme for absorption of these employees in local bodies such as Municipal Boards, Municipal Councils and Jaipur Development Authority on priority basis.

The employees of AVS vide state government order dated June 1,1999 were to be absorbed on the condition that they would be employed on the lowest post of pay drawn in AVS of direct recruitment and on the minimum grade with no benefits of past service. Voluntary Retirement Scheme (VRS) was offered to them. The apex court found erroneous the high court judgment dated May 3,2002 granting relief of re-employment, with pay protection,seniority and pension.

The court directed the state government to strictly adhere to and implement its decision to offer employment in other local bodies in letter and spirit.

Regarding 46 daily wagers of AVS the court held that they have no right of remployment.The court also rejected the claim of the employees for benefits of revised pay scales in terms of 5th pay commission report saying that AVS employees were not treated as government servants and hence 5th pay commission report was not applicable to them.

The court also observed that the employees of AVS have accepted alternative jobs on an undertaking that they would not claim continuity of service, nor will they challenge the terms of their new employment and shall also withdraw their writs pending in the high court.

The apex court while allowing the appeals filed by the Rajasthan Housing Board, the AVS and the state of Rajasthan held that the state of Rajasthan has acted fairly and benevolently though the state had no constitutional or legal obligation to offer alternative employment to the AVS employees upon abolition of posts.

UNI