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Madras High Court· 25 September 2026

Must a workman with 480 days of continuous service within 24 consecutive months automatically be made a permanent employee under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981?

The District Manager v. The Assistant Commissioner of Labour (Enforcement)
WA(MD).2017/2025 · 2026:MHC:3941 · W.A.(MD)No.2017 of 2025
Coram: Justice C.V. Karthikeyan · Justice R.Sakthivel
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Answer

A workman with 480 days of continuous service within 24 consecutive months must automatically be made a permanent employee.

Yes. A workman with 480 days of continuous service within 24 consecutive months must automatically be made a permanent employee. The Act does not cover seasonal businesses or places where work is done only intermittently, and liquor shops doing business every day of the year are not seasonal. It was not disputed that the workmen, who were appointed through the employment exchange and not through the back door, had completed 480 days within 24 consecutive months between 2003 and 2005, and the Court held that they should be granted permanent status as declared by the authority.

Headnote

Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 — Ss.2(3)(e), 3, 9 — Tamil Nadu Shops and Establishments Act, 1947 — Ss.2(6), 4(1)(c) — Conferment of permanent status — TASMAC salesmen — Exemption of Government establishments — Letter of the Principal Secretary — Closure of shops — Permanent Status Act, 1981 — S.9 — Exemption — Letter of the Principal Secretary to the Government — Held: A letter of the Principal Secretary to the Government opining that no exemption is required is at most a private opinion of its author; it is not the law of the land, does not bind the Court and is not a notification granting exemption. When the law directs a particular act to be performed in a particular manner, it must be done only in that manner. (¶27, 34) Shops and Establishments Act, 1947 — S.4(1)(c) — Incorporation by reference — Definition of establishment — Held further: Only the definition of establishment is incorporated from the Shops Act into the Permanent Status Act, so the exemption in s.4(1)(c) of the Shops Act is of no consequence, and the Permanent Status Act continues to apply unless exemption is obtained from the State Government under s.9. V. Elayaperumal v. State Bank of India, 2007 (2) LLN 212, followed. (¶35, 36) Permanent Status Act, 1981 — S.3 — 480 days of continuous service — Closure of shops — Held further: A workman with 480 days of continuous service within 24 consecutive months must automatically be made a permanent employee; mere closure of shops does not imply that the tenure of workmen accommodated in other shops stood terminated. Writ appeals dismissed. (¶28, 37, 40, 43)

Headnote

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In the Court's own words
Paragraph 28Under the Permanent Status Act, 1981, any workman, who completed 480 days of continuous service within a period of 24 consecutive calender months, must automatically be made a permanent employee. This Act applies to commercial establishments. Seasonal businesses or places where work is done only intermediately, are not covered. By no stretch of imagination, can it be stated by any individual in this State that a liquor shop run by TASMAC is doing seasonal business. TASMAC itself would reject that suggestion. The shops are doing business day-in and day-out, practically 24 hours a day, 7 days a week and 365 days in a year and in a leap year for 366 days. Even when the shop is officially closed, business is done through the back door and through the opening in windows and through hoarded stock in the platforms in the dark. This is a reality, which the appellant encourages to gain more profit by bringing the common man to the door step of the liquor shop. In fact, reports suggest that they even intend to sell liquor online.
Paragraph 29The fact that the second respondent in each of the Writ Petitions had actually worked for 480 days continuously in 24 calender months between 2003 and 2005 had not been denied or disputed by the appellant. We should place our deep appreciation to the learned Additional Advocate for being extremely fair on this point. The learned Additional Advocate General, however, argued that satisfaction of that condition is not sufficient. He pointed out the definition of “establishment”, under Section 2(6) of the Shops Act, 1981, which is as follows:
Paragraph 37It is not in dispute that the employees had been initially employed through employment exchange. They did not enter employment through the back door. They had been appointed through an established procedure. They had worked for 480 days in 24 consecutive calender months. We hold that they should therefore be granted permanent status as declared by the first respondent.
Acts & Sections
Section 3 Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981Section 9 Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981Section 2(6) Tamil Nadu Shops and Establishments Act, 1947Section 4(1)(c) Tamil Nadu Shops and Establishments Act, 1947

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Also decided in this judgment
Is a letter of the Principal Secretary to the Government a notification granting exemption under Section 9 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981?Is Section 4(1)(c) of the Tamil Nadu Shops and Establishments Act, 1947 of no consequence to the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, which incorporated only the definition of establishment?Does mere closure of shops imply that the tenure of workmen accommodated in other shops stood terminated under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections