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Surplus staff of Allwyn continue to be in service: SC

By Our Special Correspondent

HYDERABAD, SEPT. 24. In a judgment delivered last week, the Supreme Court ruled that 1,486 surplus employees of Hyderabad Allwyn Limited, who were absorbed in Government service, continue to remain in service, despite an act promulgated subsequently to prohibit absorption of employees of sick public sector undertakings into Government service.

The Government contended that all surplus employees were relieved and given benefits under the voluntary retirement schemes and that only 12 employees were retained for winding up operations.

The "Redeployed Allwyn Employees Association" has welcomed the judgment, dated September 18, in which Mr Justice S.Rajendra Babu and Mr Justice D.P.Mohapatra said that the ordinance was promulgated "under a misconception, thinking it would be applicable to the present employees, and we think, the attempt of the Government misfired."

Hyderabad Allwyn was privatised by the Congress (I) Government in March, 1993, when Voltas took over the refrigeration unit. An MoU was signed between the Government of Andhra Pradesh, Messrs Voltas and Hyderabad Allwyn which said, in part, "as regards employees numbering 1,486 the Hyderabad Allwyn will enter into satisfactory arrangements with the Government for their deployment elsewhere."

The Government then asked the heads of departments to issue temporary posting orders after creating a muster roll for individuals allotted to them. Under the scheme, the Government was to create a new auto company to which the surplus employees were to be transferred. By its order dated April 28, 1993, the Government completed the modalities and placed 1,486 surplus employees in various departments and State-level public enterprises. After this the Bureau of Industrial and Financial Reconstruction sanctioned the scheme of inducting Voltas into the management.

On July 28, 1994, a high power committee submitted its report to the Government, advising against absorption of surplus staff because it may create unrest among employees already in Government service, there was no rule under which surplus employees of Government undertakings could be placed in Government service in any cadre, and such lateral induction of employees was bound to create endless litigation.

After the Telugu Desam Party came to power, the Government issued a notification on October 1, 1996, to abolish all supernumerary posts with effect from November 30 that year, and to provide for payment of rehabilitation allowances equal to one and half months' pay for every year of completed service. An ordinance was promulgated on November 30, 1996, prohibiting absorption of employees of state-level public undertakings to Government service, and cancelling all orders of such appointment issued in the previous years.

The validity of the ordinance was challenged in the High Court, which set aside the notification of October 1996. The High court said that the surplus employees of Allwyn had already become the employees of the State Government, and therefore the GO cannot affect their rights. The High Court also held that a BIFR scheme cannot be defeated by a legislation to be made by the State, and that "arbitrariness is writ large in the case". Against this judgment, the Government went in appeal to the Supreme Court.

The Supreme Court said that the act was effective from November 26, 1996, whereas in the GO issued in April 1993, Government said it "completed" the modalities for placement of the surplus staff. The Supreme Court said that "it is not necessary to look into any other document. The reports of various committees and Government orders will have no relevance at all. We think that the finding recorded by the High Court that the surplus employees had been absorbed in the services and they are employees of the State is justified."

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