Government is a constitutional employer not a market player, it cannot use outsourcing as a means of exploitation: Supreme Court

The Supreme Court has held in a judgment that public institutions cannot use outsourcing of jobs as a means of exploitation, denying long-term ad hoc employees regularisation or basic pay parity by citing financial strain or lack of vacancies.

“Outsourcing cannot become a convenient shield to perpetuate precariousness and to sidestep fair engagement practices where the work is inherently perennial,” a Bench of Justices Vikram Nath and Sandeep Mehta observed in a recent judgment.

“The state (here referring to both the Union and the State governments) is not a mere market participant but a constitutional employer. It cannot balance budgets on the backs of those who perform the most basic and recurring public functions. Where work recurs day after day and year after year, the establishment must reflect that reality in its sanctioned strength and engagement practices,” Justice Nath observed.

The judgment was based on an appeal filed by daily wage workers, represented by advocate Sriram Parakkat, of the Uttar Pradesh Higher Education Services Commission. They had approached the apex court after their plea for regularisation was refused by the commission, which had variously cited financial strain or lack of vacancies.

Justice Nath wrote the long-term extraction of regular labour under temporary labels corroded confidence in public administration and offended the promise of equal protection.

“Financial stringency certainly has a place in public policy, but it is not a talisman that overrides fairness, reason and the duty to organise work on lawful lines,” the court noted while allowing the appeal.

The court said government departments must keep and produce accurate establishment registers, muster rolls and outsourcing arrangements. The departments must explain with evidence why they preferred “precarious” engagement over sanctioned posts when work was perennial.

Constitutional discipline

“Ad hocism thrives where administration is opaque… Sensitivity to the human consequences of prolonged insecurity is not sentimentality. It is a constitutional discipline that should inform every decision affecting those who keep public offices running,” Justice Nath wrote.

The court said “administrative drift” and prolonged ad hoc work only intensified insecurity at the workplace. There must be clear duties, fixed timelines and verifiable compliance.

“As a constitutional employer, the State is held to a higher standard and therefore it must organise its perennial workers on a sanctioned footing, create a budget for lawful engagement, and implement judicial directions in letter and spirit. Delay to follow these obligations is not mere negligence but rather it is a conscious method of denial that erodes livelihoods and dignity for these workers,” the court underscored.