Contract labour absorption rights prevail over an age-bar settlement, while arrears were confined to a later start date.

A post-abolition settlement that imposed an upper age limit for absorption of contract labour was treated as inconsistent with the statutory object of the Contract Labour (Regulation and Abolition) Act where it arbitrarily excluded otherwise eligible workmen. The analysis emphasises that abolition is intended to prevent deprivation of livelihood and that courts may mould relief to give effect to that purpose. Absorption was upheld, but the monetary relief was confined to arrears from December 1996, not from the earlier date fixed by the Trial Court.

---

---

Issues: (i) Whether the tripartite settlement imposing an upper age limit for absorption of contract labour after abolition of contract labour in the notified work was valid and binding on the workmen; (ii) whether the workmen were entitled to absorption and consequential monetary relief from the date directed by the Trial Court or from a later date.

Issue (i): Whether the tripartite settlement imposing an upper age limit for absorption of contract labour after abolition of contract labour in the notified work was valid and binding on the workmen.

Analysis: The settlement was entered into after the notification abolishing contract labour in the relevant process. The earlier view that no direct absorption could be ordered stood displaced by the later authoritative exposition that abolition under the Contract Labour (Regulation and Abolition) Act is meant to prevent deprivation of livelihood and that courts may mould relief to give effect to the statutory purpose. A settlement which operates to defeat the object of abolition by excluding otherwise eligible workmen from absorption was treated as inconsistent with the statutory scheme and with constitutional protection against arbitrary exclusion.

Conclusion: The settlement, insofar as it imposed the age bar and prejudicially affected absorption, was held inoperative and ineffective against the respondents.

Issue (ii): Whether the workmen were entitled to absorption and consequential monetary relief from the date directed by the Trial Court or from a later date.

Analysis: While upholding the direction for absorption, the relief in respect of arrears was modified. The operative monetary benefit was confined to the period from the date of the later Supreme Court pronouncement recognised in the judgment as clarifying the law, rather than from the earlier date fixed by the Trial Court.

Conclusion: The respondents were held entitled to absorption, but the arrears of pay were restricted to the period from December 1996.

Final Conclusion: The appeal failed on the principal challenge to the settlement and absorption relief, with only the monetary component modified as to the starting point of arrears.

Ratio Decidendi: A settlement or condition entered into after abolition of contract labour cannot be enforced if it frustrates the statutory object and arbitrarily denies absorption to workmen otherwise covered by the abolition notification; courts may mould relief to protect the workmen's rights.

---