Termination without following Natural Justice Principles: Turning A Blind-Eye Towards the Rights of Contractual Employees


Contract worker is defined in section 2(b) of the Contract Labor (Regulation and Abolition) Act, 1970, which states that a contract worker is employed by the principal employer in the course of employment. facility’s working process through contractors. Previously, contract employees could simply be terminated according to the conditions set forth in the employment contract. However, during the past decade we have seen a notable change in the legal situation of the worker and his or her relationship with the employer. Due to a notable change, in January 2023, the Kerala High Court (“HC”) in the case of Tintu K. & Anr. v. Union of India and Ors. held that contract employees cannot be fired solely for “unsatisfactory performance” without receiving appropriate notice of such dismissal. Additionally, in February 2023, Orrisa HC in Bichitrananda Barik v. State of Odisha & Ors. held that it is mandatory to follow the rules of natural justice before dismissing a contract employee. This blog aims to highlight the plight of contract workers by providing instances of frequent struggles between employers and employees. The blog also highlights the impact of such continuous struggle. In what follows, this blog places the focus on the decisions of the judiciary by reiterating the need to provide adequate notice periods and respect the principles of natural justice when terminating contracts with an employee.

Tussle With The Employer: Plight Of The Contractual Employee

It is observed that contract workers enjoy limited rights from the employer as they are mainly employed on the basis of contract entered into by the employer. As a result, they are often treated unfairly within the organization by receiving less compensation for their work. In September 2022, Odisha witnessed a massive protest organized by contract workers. The main theme of the protest is the lower pay of contract workers compared to regular employees. Protesters highlighted the lack of benefits that contract workers receive and demanded equal pay for equal work.  Recently, contract employees of Visvesvaraya Steel Plant (“VISP”), a subsidiary of Steel Authority of India Limited (“SAIL”), staged a protest against SAIL’s decision to close the plant without Try to attract new investment to improve production. The factory closure threatens the jobs of more than 1,300 contract workers who have no other opportunities in an alternative industry. The author believes that contract workers have two mechanisms to deal with such working conditions:

  • contract workers can quit their current employer and hope to find another job or
  • contract workers can participate in protests and become members of a union to demonstrate present a united front for their concerns. However, due to the lack of job opportunities and loss of working conditions after Covid-19, contract workers have only the third option, which is to suffer in silence at the hands of their employers.

The Judicial Stance on Termination of Contractual Employee

To improve the conditions of these contract employees, in December 2011, the Honorable SC in GRID-CO Limited & Anr v. Sri Sadananda Doloi & Ors. held that the court exercising procedural jurisdiction had the right to consider the validity of the dismissal of the contract employee. In cases where the court has reason to believe that the termination of the contract is unfair, unreasonable, wrongful, arbitrary or illegal, the court has the right to intervene in that matter, regardless of its legality. its copper. Furthermore, contract workers can now claim protection against untimely or arbitrary dismissal even if the employer is the State. Therefore, the Hon’ble SC plays the role of protecting the contractual employee in case the employee is terminated for the reasons mentioned above.

a) Fire contract employees without a chance to be heard.

Therefore, the judiciary has repeatedly reiterated that employers, when dismissing contract employees, must comply with the principles of natural justice.  Orrisa HC in Bichitrananda Barik v. State of Odisha & Ors. insist on respecting the principles of fairness when dismissing contract employees. In the above-mentioned case, a show-cause notice was issued to a junior contract teacher regarding the termination of the contract of the District Education Officer. The points in dispute in this case are as follows:

(a) The Managing Director, Zilla Parisad-cum-collector, has the appointing as well as disciplinary authority and all action in this regard shall be deemed to be by the Managing Director and not the Director Education District initiated for any misconduct during the course of employment; And

(b) when the investigation was conducted, the applicant had no knowledge of the investigation and therefore lost the opportunity to defend himself against the charges. Orrisa HC, in response to the contentions, held that the District Education Officer had no authority to issue show cause notice to the petitioner. The HC further observed that investigating in this manner is unacceptable in the eyes of law and is against the principles of natural justice. It should be noted that in the above case, the Court did not prohibit any action against the petitioner but only ensured that disciplinary action must be taken in accordance with the provisions of law.

(b) Dismissal of contract employees solely for “unsatisfactory performance” without providing appropriate notice.

Relying on the importance of following the principles of natural justice while terminating an employee, Kerala HC in Tintu K. & Anr. v. Union of India and Ors. held that before dismissing a contract employee, it is mandatory to give notice of the unsatisfactory nature of his work and that the employee can be dismissed only after a thorough investigation if any the results prove that result. The court in the above-mentioned case found that the petitioners worked under contract from 2010 to 2016 and the reason given to remove them from the job was only for performing unsatisfactory work without need to be informed that it is widespread.

Analyzing the views adopted by different courts, the author proposes to incorporate three essential principles that employers should follow to promote open discussion and communication with contract employees:

First, only competent officials with the necessary authority can issue notice of contract termination to employees;

Second, during the investigation process, the employer must have a receptive and open stance to ensure that dismissal does not take place arbitrarily or widely; And

Third, the employer shall provide full consideration to the views of the contractual employee and shall ensure adherence to the principles of natural justice.


Over the past decade, the legal status of workers and their relationship with employers have undergone notable changes, but there is a need for a system of broad protections for workers. contract. By ensuring that the principles of natural justice are followed in the dismissal of contract workers, the judiciary attempts to bridge the gap that exists between contract law and the interests of contract workers. The blog recounts a number of cases of struggles between employers and contract workers. The common view in all these cases is that the contract worker must suffer at the hands of the employer because the employer has hidden leverage in the fine print of the contract. Finally, the blog advances the notion that an employer can permanently terminate a contractual relationship with an employee for reasons established by law; However, it is important that the employer firstly gives adequate notice of such dismissal and secondly respects the principles of natural justice by allowing the contract employee to defend himself in case of investigation.


Advocate Muskan Chauhan


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