In a verdict putting an employee fully at the mercy of his employer, the Supreme Court on Tuesday made it clear that an employer has the right to change the strength of staff in order to enforce the measure of economy or for streamlining the administration.
Handing down the ruling, a bench comprising Justice H K Sema and Justice A R Lakshmanan dismissed the appeals of employees of the Avas Vikas Sansthan set up in 1989 which were later liquidated/closed down due to financial crunch faced by these bodies coupled with their inability to pay salaries to their employees. The court held that employees have no right of re-employment unless the liquidation was malafide.
According to the ruling, the court could not by a writ of mandamus direct the employer to continue employing such employees as have been dislodged as a result of department being partly or wholly abolished or abandoned for want of funds.
As many as 604 employees of AVS had lost their jobs after abolition of these bodies which were registered on Nov.17,1988, under the Societies Registration Act,1860 .In all nine AVSs were set up in the state of Rajasthan and were dissolved vide resolution dated March 26,1999.
The court also noted the fact that Rajasthan government, acting as welfare state, formulated a scheme for absorption of these employees in local bodies such as municipal boards, municipal councils and Jaipur Development Authority on priority basis.