Featured image for Supreme Court Judgment dated 06-12-2019 in case of petitioner name Kandla Port Workers Union vs Food Corporation of India & Or
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Kandla Port Workers’ Transfer Dispute: Supreme Court Denies Parity with Regular Employees

The case of Kandla Port Workers Union v. Food Corporation of India & Ors. is a significant ruling concerning employment rights, transfer of employees under statutory provisions, and the distinction between regular and work charge employees. The Supreme Court, in its judgment dated December 6, 2019, denied the claim of work charge employees of Kandla Port Trust (KPT) for parity in benefits with regular employees transferred to the Food Corporation of India (FCI). The ruling clarified that work charge employees, who had agreed to FCI’s service conditions, could not retrospectively demand benefits granted to a separate category of employees.

Background of the Case

The dispute arose from a government order dated May 9, 1996, which transferred 15 employees from Kandla Port Trust’s Vacuvator Division to the Food Corporation of India (FCI) with effect from January 1, 1973. The Kandla Port Workers Union filed a petition before the Gujarat High Court, demanding that the remaining 306 employees of KPT, who were also transferred to FCI, be granted the same benefits as the 15 employees.

The union relied on a 1996 Industrial Tribunal award, which had recognized the rights of the 15 employees under Section 12A of the Food Corporation of India Act, 1964 (FCI Act, 1964). The union argued that all 321 employees of the Vacuvator Division should be treated equally. A Single Judge of the High Court ruled in favor of the union, directing FCI to extend the same benefits to all transferred employees. However, the Division Bench of the High Court overturned this decision, restricting the benefits only to the 15 employees. The union challenged this decision before the Supreme Court.

Petitioner’s Arguments

The Kandla Port Workers Union, representing the affected employees, argued that:

  • The government had agreed in a 1965 agreement with KPT that employees engaged by KPT would be transferred to the government upon conclusion of the agreement.
  • The 1996 Industrial Tribunal award recognized the rights of all 321 employees to be treated as part of the FCI workforce.
  • The government’s selective transfer order discriminated against the remaining 306 employees, violating principles of equality and fairness.
  • Since all employees were performing similar duties in the Vacuvator Division, they should be given the same employment benefits.

Respondents’ Arguments

The Food Corporation of India and the State of Gujarat, defending the transfer order, contended:

  • The 15 employees transferred under Section 12A of the FCI Act, 1964, were regular employees of KPT, while the 306 employees were work charge employees.
  • The work charge employees had accepted FCI’s service conditions upon transfer and were not entitled to claim benefits retrospectively.
  • Their employment status was different from that of regular employees, as reflected in the 1973 Office Order by FCI.
  • The claim for parity was raised belatedly, after over two decades, making it unsustainable.

Supreme Court’s Analysis

The Supreme Court examined the employment conditions of the transferred employees and found:

  • The 1965 agreement between the government and KPT allowed the takeover of employees but did not mandate equal treatment for all categories.
  • The Industrial Tribunal’s ruling applied only to the 15 employees covered under the reference and did not extend to all 321 employees.
  • The Office Order of 1973 explicitly stated that work charge employees would be governed by FCI’s service regulations, which they had accepted at the time of transfer.
  • After accepting FCI employment terms and serving under them for decades, the work charge employees could not now claim parity with regular employees.

The Court observed:

“The distinction between regular employees and work charge employees cannot be ignored. Even assuming that work charge employees had a right to be appointed in the FCI, they cannot claim parity with regular employees.”

Key Legal Precedents Cited

The Supreme Court referred to various precedents that guided its decision:

  • State of Rajasthan v. Daya Lal – Holding that temporary and work charge employees cannot claim parity with regular employees.
  • Union of India v. Kartick Chandra Mondal – Emphasizing that acceptance of employment terms precludes later claims for retrospective benefits.
  • Delhi Transport Corporation v. D.T.C. Mazdoor Congress – Differentiating between permanent and temporary employees in service matters.

Final Judgment

The Supreme Court dismissed the appeal and upheld the Division Bench’s ruling, stating:

“The Appellant-Union is not entitled to the relief claimed. The transfer benefits extended to the 15 employees cannot be retrospectively granted to others who accepted different service conditions.”

Impact of the Judgment

This ruling has significant implications for labor and employment law:

  • It reaffirms that work charge employees cannot claim retrospective benefits after accepting different service terms.
  • It clarifies that employees transferred under different statutory provisions are not automatically entitled to equal benefits.
  • It prevents reopening settled employment matters decades later based on evolving interpretations.
  • It strengthens the principle that employment benefits are based on contractual and statutory obligations rather than broad equality claims.

Conclusion

The Supreme Court’s decision in Kandla Port Workers Union v. Food Corporation of India & Ors. reinforces the principle that employment conditions accepted at the time of transfer are binding. By rejecting the belated claim for parity, the ruling ensures that statutory and contractual distinctions between employee categories are respected, preserving stability in labor relations.


Petitioner Name: Kandla Port Workers Union.
Respondent Name: Food Corporation of India & Ors..
Judgment By: Justice L. Nageswara Rao, Justice Hemant Gupta.
Place Of Incident: Kandla, Gujarat.
Judgment Date: 06-12-2019.

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