Court holds Industrial Tribunal exceeded authority by granting permanency after 240 days; affirms applicability of Industrial Disputes Act to offshore workers and endorses regularization under Umadevi (3) exception
In a significant judgment delivered on September 9, 2026, the Bombay High Court partially allowed the writ petition filed by Oil & Natural Gas Corporation Ltd. (ONGC) challenging an award by the Central Government Industrial Tribunal-II (CGIT-II), Mumbai. The dispute pertained to nine tenure-based contract workers engaged by ONGC for offshore oil exploration activities, whose union had demanded regularization of their services.
The CGIT-II had earlier ruled in April 2025 that these nine employees were entitled to permanency from the date they completed 240 days of service, ordering ONGC to regularize their employment retrospectively with all consequential financial benefits. ONGC challenged this ruling before the Bombay High Court, contending that the Industrial Disputes Act, 1947 (ID Act) did not apply to workers posted offshore beyond 12 nautical miles and arguing that the tribunal lacked jurisdiction. Further, ONGC argued that regularization and permanency are legally distinct; regularization was sought but permanency was granted, which was impermissible without following the constitutional scheme of public employment under Articles 14 and 16. They also contended that the workers were not appointed through a proper selection process and were effectively "backdoor entrants," thus ineligible for regularization.
The court rejected ONGC's jurisdictional plea, observing that although the workers performed duties offshore, all appointments, service-related decisions, disciplinary actions, and incident reporting took place within Indian territory at Mumbai. The court emphasized that Indian laws, including the ID Act, apply to such workers since their contractual relationship and service administration are centered in India.
Referring to the landmark Supreme Court judgment in Secretary, State of Karnataka v. Umadevi (3) (2006), the court reiterated the constitutional mandate that irregular or ad hoc appointments made outside the public employment rules cannot be regularized or made permanent merely on the basis of long service. However, the court recognized the exception carved out in Umadevi (3) for irregular appointments made against duly sanctioned posts to qualified persons who have continued working for over 10 years without court intervention.
Applying these principles, the court found that the nine workers were not backdoor entrants as they were sponsored by the Employment Exchange, subjected to written tests and interviews, and qualified for their posts. Their continuous service for over 25 years demonstrated the necessity of their services by ONGC. Therefore, the workers were entitled to the benefit of regularization under the Umadevi (3) exception.
However, the court held that the CGIT-II exceeded its authority by directing permanency from the date of completion of 240 days of service, effectively creating posts and granting permanency without sanctioned vacancies or following constitutional recruitment norms. The court modified the award to direct regularization of the nine workers with effect from the completion of 10 years of service from their initial appointment dates, consistent with the exception recognized by the Supreme Court. ONGC was ordered to grant all consequential benefits within eight weeks.
The judgment clarifies that while Indian laws govern offshore workers appointed and managed from Indian territory, industrial tribunals cannot bypass the constitutional and statutory framework to confer permanency. It reinforces that regularization is distinct from permanency and can only be granted within the constitutional scheme, particularly for irregular appointments fulfilling the criteria in Umadevi (3).
Bottom Line:
Industrial Disputes - Workers employed on tenure-based contracts for over 10 years can be granted the benefit of regularization under the principles laid down in Umadevi (3), provided their initial appointments were not illegal or made through the backdoor.
Statutory provision(s): Industrial Disputes Act, 1947; Articles 14 and 16 of the Constitution of India
