Bypassing Regular Appointments Through Long-Term Outsourcing Is Unfair: Allahabad High Court Says State Must Not Be Exploitative

The Allahabad High Court last week strongly deprecated the practice of public employers bypassing regular recruitment by continuously engaging staff through outsourcing agencies. Observing that such a system provides wide "room for exploitation and unfairness", a bench of Justice Vikram D Chauhan directed the Bareilly Nagar Nigam to consider regularising a Computer Operator who has been working on an outsourced basis for over 13 years."Continuous long term employment by employer on outsourcing/daily wages, where duties are indispensable in nature, may indicate exploitative employment practices more particularly when the work in the department are performed by human resource supplied by outsourcing agency and thereby stopping or ignoring the regular mode of appointment on the sanctioned post," the bench observed in its 11-page order.The bench was essentially dealing with the case of one Kafi Ahmed Khan, who was initially engaged as a daily wage Computer Operator in the Construction Department of the Nagar Nigam on November 1, 2011. In August 2012, his services were formally terminated in accordance with a government directive. Thereafter, his services were transferred to the registered contractor under Nagar Nigam, and he has since been discharging his duties as a contractual employee.In 2019, his writ plea for regularisation was disposed of by the HC with a direction to the authorities to consider his claim. However, the Nagar Ayukt flatly rejected his claim in December 2020. The authority cited a February 2016 Government Order, which provides that regularisation was only legally permissible for daily wage employees appointed on or before December 31, 2001.Before the HC, his counsel primarily relied on the Supreme Court's 2024 judgment in Jaggo v. Union of India 2024 LiveLaw (SC) 1032, wherein the top court had criticised the practice of government institutions engaging workers on a temporary basis for a prolonged period, which results in the infringement of various labour rights.It was also contended that the long-standing employment of the petitioner was indicative of the fact that work is of a permanent nature, and the denial of regularisation of the petitioner, despite long-standing employment of more than 13 years, was arbitrary in nature.Against the backdrop of these submissions, the bench relied upon the Supreme Court recent decision in the case of Bhola Nath vs The State Of Jharkhand 2026 LiveLaw (SC) 95 to stress that the obligation of model employer is to act with fairness and responsibility to treat its employees in a manner that protects employees' livelihood, dignity and stable employment and not be exploitative.Justice Chauhan then drew a distinction between outsourcing the actual work of a department and merely outsourcing the human resources to perform internal departmental functions. The Court noted that while the outsourcing system may offer employers the advantage of bypassing lengthy recruitment and termination processes, keeping employees subjected to this policy for substantially long periods is inherently unfair."Continuous long term employment by employer on outsourcing/daily wages, where duties are indispensable in nature, may indicate exploitative employment practices more particularly when the work in the department are performed by human resource supplied by outsourcing agency and thereby stopping or ignoring the regular mode of appointment on the sanctioned post," the bench remarked.The Court further stressed that when a department's workload increases manifold on a permanent basis, the employer must revisit and proportionately enhance the department's sanctioned strength. However, instead of adopting this route, the bench noted that employers frequently resort to outsourcing agencies to handle work of a perennial nature.The Court observed that this longstanding outsourcing arrangement results in the employee losing future prospects and stable employment. Because they serve for substantial periods, these workers eventually lose their right to compete in regular recruitment processes by becoming overage, the Court said.Rellying upon Jago, the bench opined that engaging workers on a temporary basis for extended periods, especially when their roles are integral to the organisation's functioning, not only contravenes international labour standards but also exposes the organisation to legal challenges and undermines employee morale.Justice Chauhan added that by ensuring fair employment practices, government institutions can reduce the burden of unnecessary litigation, promote job security, and uphold the principles of justice and fairness that they are meant to embody.Against this backdrop, the bench set aside the impugned order passed by respondent no. 3-Nagar Ayukt, Nagar Nigam, Bareilly, and it directed that the claim for regularisation of the petitioner be considered by the respondents in light of the law laid down by the Supreme Court.The bench has asked the respondent to...

Bypassing Regular Appointments Through Long-Term Outsourcing Is Unfair: Allahabad High Court Says State Must Not Be Exploitative

Sparsh Upadhyay

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