Legal Correspondent

``Such an employee is not eligible to other benefit as regular employee''

New Delhi: An employee on contract basis is not eligible to any other benefit as a regular employee and his employment stood automatically terminated on the completion of the contract period, the Supreme Court held on Thursday.

The termination of such contract employee would not become an industrial dispute under the provisions of the Industrial Dispute Act, a Bench of Justices A.R. Lakshmanan and Altamas Kabir said.

Quoting an earlier judgment, the Bench said "when a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognised by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature."

In the instant case, the Karnataka Handloom Development Corporation appointed Sri Mahadeva Laxman Raval, a weaver on contract basis for a period of 200 days. He was terminated from service at the end of the contract period. He raised an industrial dispute stating that his retrenchment was without compliance of the provisions of Section 25 F of the ID Act.

After the Labour Court and the High Court ordered his reinstatement, the Corporation appealed in the apex court.

Writing the judgment, Justice Lakshmanan said the respondent was aware that he was not eligible to any other benefit as a regular employee and could be liable for termination without any notice and without payment of any compensation. "The claimant is also aware that his appointment stood automatically terminated on the completion of the stipulated period."

The Bench pointed out that the Corporation had only put an end to the contract and it could not be termed as dismissal from service.

Even assuming that the respondent had worked 240 days continuously, he could not claim that his services should be continued because the number of 240 days would not apply to him as his services were purely contractual.

Allowing the appeal, the Bench held that the view taken by the Labour court and the High Court was not correct and was illegal.