Employees Cannot Waive Permanent Status Under Special Act | HC

  • News|Blog|Labour & Industrial Laws|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 25 May, 2026

Latest from Taxmann

Permanent Status Under Special Act

Case Details: Tamil Nadu State Transport Corporation (Madurai) Ltd. vs. S. Palaniraj - [2026] 186 taxmann.com 151 (HC-Madras)

Judiciary and Counsel Details

  • N. Sathish Kumar & M. Jothiraman, JJ.
  • S.C. Herold Singh for the Appellant.
  • M. Mohammed Imran for the Respondent.

Facts of the Case

In the instant case, the Respondents/workmen were engaged as Drivers through the employment exchange in the year 2001 and continued without interruption. A settlement under Section 12(3) of the Industrial Disputes Act was entered into between the Management of Transport Corporations and workmen on 25.09.2006.

Pursuant to the said 12(3) settlement, the services of all these daily-rated employees were regularised in sanctioned posts at the regular time scale of pay in the year 2006, vide an order dated 01.09.2005.

Respondents filed a writ petition challenging the fixation of a later effective date, seeking permanency from the date of completion of continuous service. Learned Single Judge partly allowed the writ petitions.

It was noted that, even though writ petitioners had entered into a 12(3) settlement on accepting the terms mentioned in the settlement in relation to the permanency of their work, Section 3(1) read with Explanation II of Section 3 of the Act would have a statutory effect over the above-mentioned settlement.

High Court Held

The High Court held that if a 12(3) settlement were binding on employees, it would amount to employees waiving their statutory rights, which was not permissible, as no person could waive any statutory rights conferred under the Special Act. Thus, there was no merit in these writ appeals, and the same were liable to be dismissed.

List of Cases Reviewed

  • S. Palnairaj v. Management of Tamilnadu State Transport Corporation, (Madurai) Ltd. WP. (MD) Nos. 2069 & 2071 of 2013, dated 30-8-2022 (para 19) affirmed

List of Cases Referred to

  • Management of Tamilnadu State Transport Corporation, (Madurai) Ltd. v. Labour Inspector [WA (MD) Nos. 1455 & 1456 of 2018, dated 24-10-2018] (para 7)
  • Management of Tamilnadu State Transport Corporation, (Madurai) Ltd. v. Labour Inspector [Rev. Aplc. (MD) Nos. 81 & 82 of 2019, dated 20-6-2023] (para 8)
  • Management of Tamilnadu State Transport Corporation, (Madurai) Ltd. v. S. Senthil [SLP. Nos. 16136-16137 of 2024, dated 17-7-2025] (para 9)
  • State of Tamil Nadu v. Nellai Cotton Mills Ltd. (1990) 2 SCC 581 (para 13)
  • Nellai Cotton Mills Ltd. v. State of Tamil Nadu [W. P. No. 5918 of 1983] (para 13)
  • Metal Powder Co. Ltd. v. State of Tamil Nadu 1985 (2) L.L.J. 376 (para 14).

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied