Can Contractual Workers Engaged Through Service Providers Seek Regularization?

The High Court has addressed whether individuals employed through service providers (outsourcing agencies) possess the legal right to claim regularization against the principal employer. The ruling upholds established precedent that absence of direct employment precludes entitlement to regularization, reinforcing limitations on regularization claims by contractual workers. This decision is binding on lower courts within the court’s jurisdiction and serves as persuasive precedent elsewhere.

 

Summary

Category Data
Case Name LPA/2697/2025 of JASWINDER SINGH Vs PUNJAB MANDI BOARD AND OTHERS
CNR PHHC010918732025
Date of Registration 04-09-2025
Decision Date 30-10-2025
Disposal Nature DISMISSED
Judgment Author ANUPINDER SINGH GREWAL, J.; MEENAKSHI I. MEHTA, J.
Court High Court of Punjab and Haryana
Bench Division Bench: Anupinder Singh Grewal, J. and Meenakshi I. Mehta, J.
Precedent Value Binding within Punjab & Haryana; persuasive for other High Courts
Overrules / Affirms Affirms Single Bench decision
Type of Law Service Law; Employment Law
Questions of Law Whether a person engaged through a service provider (outsourcing) can seek regularization as a direct employee of the principal employer.
Ratio Decidendi
  • The court held that contractual workers engaged through service providers are not in a direct master-servant relationship with the principal employer.
  • Without such a relationship, regularization cannot be claimed against the principal employer.
  • The division bench concurred with the single judge’s view and dismissed the appeal.
  • The ruling reinforces judicial consensus against regularization rights for outsourcing appointees.
Facts as Summarised by the Court

The appellant was engaged for over 15 years through a service provider with the respondent Punjab Mandi Board.

He sought regularization of his services, but the single judge dismissed his writ petition, holding there was no direct employment relationship.

On appeal, the division bench found no merit and dismissed the LPA.

Practical Impact

Category Impact
Binding On All subordinate courts within Punjab & Haryana High Court’s jurisdiction
Persuasive For Other High Courts, legal practitioners in service law matters
Follows Upholds principles in previous decisions refusing regularization to outsourced/contractual appointees

What’s New / What Lawyers Should Note

  • Reaffirms that employees hired through service providers cannot claim direct regularization from the principal employer.
  • Clarifies that mere long tenure or continued service through a contractor/service provider does not create a master-servant relationship.
  • Provides a binding precedent against writ petitions seeking regularization by contractual or outsourced appointees in similar scenarios.
  • Lawyers representing principal employers can rely on this judgment to counter regularization claims by outsourced personnel.

Summary of Legal Reasoning

  • The appellant worked with the respondent Board for over 15 years but was appointed via a service provider (outsourcing agency).
  • The primary legal question was whether such indirect engagement gave the appellant grounds for claiming regularization as a direct employee.
  • The division bench observed that, per the facts, there was no relationship of master and servant between the appellant and official respondents, as the former was engaged only through a third-party service provider.
  • The bench explicitly agreed with the reasoning and decision of the single judge in the earlier writ petition.
  • The absence of direct employment disqualified the appellant from seeking regularization.
  • The LPA (Letters Patent Appeal) was dismissed for want of merit.

Arguments by the Parties

Petitioner

  • Asserted entitlement to regularization of services, citing over 15 years of service with the respondent Board.

Respondent

  • Submitted that the appellant was appointed through a service provider and there was thus no direct employment relationship, making him ineligible for regularization.

Factual Background

The appellant worked with the Punjab Mandi Board for more than 15 years, but his engagement was through a service provider and not as a direct employee. He filed a writ petition seeking regularization of his services, which was dismissed by the single bench on the ground that no employer-employee relationship existed. Aggrieved, he filed an appeal before the division bench, which confirmed the prior decision and dismissed the appeal.

Statutory Analysis

  • The judgment centered around the legal requirements for regularization under service and employment law.
  • The court analyzed and applied the principle that only a direct master-servant relationship can give rise to a regularization claim.
  • The court did not undertake any expansive or narrow interpretation but applied the prevailing statutory and case law framework.

Dissenting / Concurring Opinion Summary

No separate dissenting or concurring opinions were recorded in the judgment. The division bench was unanimous.

Procedural Innovations

  • The court addressed and allowed an application for condonation of delay in re-filing the appeal.
  • No new procedural guidelines or changes to the process were established.

Alert Indicators

  • ✔ Precedent Followed – The judgment upholds existing law and affirms prior single bench and established judicial reasoning against regularization of outsourced workers.

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