While upholding the WAPCOS’s November 2025 policy discontinuing further extensions to non-technical contractual employees as a prospective manpower measure, the Delhi High Court has set aside the January 2026 notices seeking to terminate subsisting contracts before their stipulated expiry, as unsustainable. The Court strongly asserted that public sector undertaking cannot retain its own five-year Rule-based consideration mechanism for long serving contractual employees, while ignoring eligible claims through successive extensions.
The Court held that long service cannot by itself command regularisation, but where an employer has its own Rules contemplating consideration for regular appointment after a specified period, and the employee has crossed that period, the employer cannot ignore that provision while continuing to retain the employee through successive extensions. The enquiry must examine the legality of the initial entry, the employee’s qualifications, the continuity and duration of service, the nature of the work performed, the service record, and the employer’s own conduct in allowing a temporary arrangement to mature into a long working relationship.
Five years is the Rule-based threshold fixed by Guideline (j) itself, and an employee who completes that period enters the zone of consideration under that provision. Ten years is not an independent statutory threshold, but it identifies the long-service cohort for the purpose of moulding relief, where the cumulative effect of long and substantially continuous service, repeated official renewals, continuing institutional deployment, and the employer’s failure to undertake the Rule-based exercise warrants substantive relief rather than a fresh remand to the same unexercised discretion, explained the Court.
A Single Judge Bench of Justice Sanjeev Narula observed that the controversy could not be resolved merely by repeating that a contractual employee has no right to indefinite continuation or that length of service alone does not confer regular status. Both propositions were settled. The real question was what followed when the manner of entry, length and continuity of service, qualifications, nature of work, conduct of the employer, and WAPCOS’s own regular-appointment framework were considered together.
The Court noted that WAPCOS’s R&P Rules did not treat contractual employment as a closed category from which movement into regular service was impossible. Guideline (j) marked the point at which a suitable and efficient contractual employee became eligible for the preferential route, and WAPCOS could not retain that provision in its Rules while leaving eligible claims unaddressed through successive extensions.
The Court further observed that the November 2025 policy was a legitimate organisational choice for the future, but it could not be applied to defeat claims that had already entered the field of consideration under Guideline (j). The January 2026 notices travelled beyond the November policy by seeking to curtail contractual terms which WAPCOS itself had granted only months earlier, without any petitioner-specific material showing that the requirement had ceased or that the employee had become surplus. The later restructuring exercise of June 2026 could not retrospectively supply the basis for the earlier decision.
The Court also held that contractual entry was not illegal merely because the employee was not initially appointed against a sanctioned regular post, and that the absence of an immediately available vacancy was not an absolute bar where an employee was otherwise found entitled to substantive relief.
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Briefly, a large group of employees working with WAPCOS, a public sector undertaking under the Union of India, were engaged on contractual terms for several years, with many serving for over a decade and some for more than fifteen years. WAPCOS repeatedly renewed their contracts, moved many of them into contractual pay scales, and deployed them on continuing institutional functions. On 10th November 2025, WAPCOS issued an Office Order deciding to discontinue the practice of granting further extensions to non-technical contractual employees. This was followed by substantially identical notices dated 30th January 2026, which sought to terminate the engagements on 28th February 2026 by invoking a one-month notice clause in the contracts.
The petitioners, who were long-serving contractual employees, challenged both the policy and the notices. WAPCOS’s own Recruitment and Promotion Rules contained a provision, known as Guideline (j), which contemplated that suitable and efficient contractual employees who had rendered at least five years of service could be given preference and opportunity for regular appointment, subject to suitability, vacancies and management discretion. Many of the petitioners had crossed this five-year threshold years ago, but their cases were never considered under that provision.
WAPCOS also disclosed that approximately 195 contractual employees had been regularised over the years, though a later internal review found irregularities in several of those exercises, leading to show-cause notices to about 171 employees. WAPCOS further relied on financial pressures and a restructuring proposal dated 24th June 2026, which contemplated surrender of 682 vacant posts and a revised sanctioned strength of 910 against 814 employees in position, leaving 96 vacancies including 32 non-technical posts.
