Supreme Court: Outsourcing jobs in public institutions cannot be used as a tool for exploitation

By Raj Kumar Sinha* 

Ahead of the Assembly elections in Bihar, the issue of contract workers has heated up. A few days ago in Patna, around 9,000 land survey contract workers arrived at the BJP office demanding their jobs be made permanent and for the payment of outstanding salaries. These contract workers, who are involved in land measurement, were then subjected to a police baton charge. The protest had been going on for a month at the Gardanibagh strike site in Patna, Bihar.

According to the contract workers, they have been working in various government offices, including the Revenue and Land Reforms Department, for years but do not receive the same rights and benefits as permanent employees. Their main demands are "equal pay for equal work" and guaranteed service until the age of 60.

The biggest challenge for contract workers is job insecurity. Their contracts are renewed periodically, which creates a constant fear of losing their jobs. Most contract workers do not receive a pension, gratuity, medical facilities, or other social security benefits, leaving their future uncertain.

Due to a lack of permanent positions in government departments, contract workers are often given extra work without a corresponding increase in salary or incentives. There is no clear promotion system for contract appointments. In many cases, employees remain in the same position even after 10-15 years of service. This uncertainty, low pay, and inequality lead to dissatisfaction, stress, and a feeling of insecurity among contract workers.

India's employment crisis is not new, but workers hired through contracts and outsourcing remain the most neglected class today. These employees do the same work and bear the same responsibilities as government employees, yet they are largely ignored when it comes to rights and benefits. Despite their continuous hard work, honesty, and loyalty, they never get stability or social and economic security. This is why contract and outsourced workers, who form the very foundation of the government's work, are the most distressed.

Recently, in response to an appeal filed by daily-wage workers of the Uttar Pradesh Higher Education Services Commission, a Supreme Court bench of Justices Vikram Nath and Sandeep Mehta stated that public institutions cannot use the outsourcing of jobs as a means of exploitation. They also cannot deny long-term ad-hoc employees regularization or pay parity by citing financial strain or a lack of vacancies. The court affirmed that constitutional principles such as equality (Article 14), equal opportunity in appointment processes (Article 16), and the right to a dignified life (Article 21) must be followed.

The Court said, "Outsourcing cannot become a convenient shield through which instability is maintained and fair appointment processes are avoided where the work is permanent."

Justice Nath commented that the "State (central and state governments) is not merely a market participant but a constitutional employer. It cannot balance its budget on the labor of those who perform the most basic and consistent public work. Where the work is continuous, day in and day out, year after year, the institution's sanctioned capacity and appointment processes must reflect that reality."

The court emphasized that "as a constitutional employer, the State must live up to higher standards and organize its permanent workforce on a sanctioned structure, budget for legitimate appointments, and implement judicial directives with complete sincerity. Delay in fulfilling these obligations is not mere negligence, but a deliberate pattern of denial that destroys the livelihood and dignity of these employees."

Justice Nath wrote that the long-term extraction of regular labor under a temporary label has undermined faith in public administration and hurt the promise of equal protection.

This decision was based on an appeal filed by daily-wage workers of the Uttar Pradesh Higher Education Services Commission, represented by advocate Sriram Parakkat. After the commission rejected their plea for regularization, citing financial hardship and a lack of vacancies, they approached the Supreme Court. The court accepted the appeal, stating, "Financial austerity certainly has a place in public policy, but it is not a talisman that can bypass the duty to organize work fairly, reasonably, and on a legal basis."

In Madhya Pradesh, millions of temporary outsourced employees work in various departments with no job security or fair wages. They work like daily laborers. Computer operators are given highly skilled work but are paid the wages of an unskilled laborer. Contract workers are forced to work 9 to 16 hours without a weekly off or a reliever.

Madhya Pradesh has more than 9 lakh contract and outsourced employees. About 2.75 lakh outsourced employees have been struggling for their outstanding arrears for 11 months. The amount of approximately ₹350 crore is stuck, and despite a clear order from the labor court in November 2024, departmental officials and contractors are procrastinating.

Employees complain that in many districts, old contractors' contracts have ended, and new contractors are refusing to take responsibility for paying the old arrears. The earnings of outsourced employees support not only them but also their families' futures. Before the 2023 Assembly elections, the current government promised a salary increase and contractual benefits for outsourced employees in its manifesto.

Madhya Pradesh MLA Hiralal Alawa said that temporary and outsourced employees are being treated unjustly in the state, as they are not paid their full wages. This shows the government's intention to make them slaves. The Madhya Pradesh Labor Department has ordered all department heads to make it mandatory for outsourced agencies to register and obtain a license so that action can be taken if labor laws are violated. Outsourced and contract workers employed in various government and semi-government departments will have to be provided benefits under labor laws. For this, agencies will have to register with the labor department, obtain a license, and provide the prescribed wages and facilities.

In different parts of the country, schemes like the National Health Mission (NHM), Jeevika, MGNREGA, and many state-level programs are running, whose foundation rests on these contract and outsourced employees. But the irony is that the voices of the employees who make these schemes successful on the ground are neither heard in the corridors of power nor in administrative offices. The biggest problem for contract and outsourced employees is that no regulatory commission has been formed for them, nor has any clear policy been set. This is an issue of social and administrative reform that affects the quality of services as well as the employees themselves.

Today, it is imperative that the problems of contract workers are not seen merely from the perspective of "temporary employment" but that a permanent solution is found by considering them the backbone of the system. This is because justice is not only their right but also the moral responsibility of the system.

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*Bargi Dam Displaced and Affected Union