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2009 DIGILAW 18 (ORI)

Steel Authority of India Ltd. v. Sri Panchu Behera

2009-01-07

S.C.PARIJA

body2009
JUDGMENT S.C. PARIJA, J. — The management of Steel Authority of India Ltd. has filed this writ petition challenging the award dated 24.11.2003 passed by the Industrial Tribunal, Rourkela, in I.D. Case No.15 of 2002, holding that the services of the workmen are deemed to have been regularized under the petitioner-manage¬ment with effect from 30.3.1989, when the contract labour system was abolished by the State Government, without any pecuniary benefits and differential pay and their inter se seniority will be determined from the date of such regularization and the work¬men will be entitled to get consequential service benefits for the said period and their retirement benefits will be given accordingly. 2. The brief facts of the case are that the petitioner-management had been engaging contract labour through licensed contractors in some of its process, like Coke Oven Department. Complaining of non-regularisation of contact labourers by the petitioner-management, Rourkela Shramik Sangha, opposite party No 2., represented by Sri R.K. Panda, filed Writ Petition (Civil) No. 617 of 1986 before the Hon’ble Supreme Court of India, under Article 32 of the Constitution. It was alleged that the contract labourers have been employed by the management of Steel Authority of India Ltd. through various contractors as its Rourkela Steel Plant, but they are doing jobs which are perennial in nature and identical to the jobs which are being done by their regular employees. As such, they are entitled to the same pay which is being paid to the regular employees of Rourkela Steel Plant and are entitled to be treated as their regular employees. 3. During pendency of the aforesaid writ petition before the apex Court, the Government of Orissa, in exercise of its powers under Section 10(1) of the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act for short), issued Notification dated 30.03.1989, prohibiting employment of contract labour in 104 specified jobs, out of a total number of 246 jobs. The present aggrieved workmen belong to the categories of workers in respect of 104 prohibited jobs. 4. The present aggrieved workmen belong to the categories of workers in respect of 104 prohibited jobs. 4. Due to the prohibition notified by the Government of Orissa under the CLRA Act, the petitioner-management moved the Hon’ble Supreme Court, in the aforesaid writ petition, i.e., W.P.(C) No.617 of 1986, seeking permission of the Hon’ble Court to give option to all the contract labourers engaged in the Coke Oven Department, for either accepting the benefits of voluntary retirement, as per the terms offered by the management or to be absorbed on regular basis, in the employment of the management. The Hon’ble Supreme Court passed the following order : “Mr. Harish Salve learned counsel appearing for the respond¬ent states that there are 879 workmen holding notified jobs with the Management. According to him the Management is prepared to give options to all of them either to accept voluntary retirement on the terms offered by the management or agree to be absorbed on the regular basis in the employment of the respondent-management. The offer made by Mr. Salve is fair and is acceptable to the learned counsel for the petitioner. We, therefore, modify the interim orders passed by this Court till date to the extent that we permit the respondent-management to give the offered options to all the notified workmen.” 5. Pursuant to the order of the Hon’ble Supreme Court, out of the 879 contract labourers of the Coke Oven Department, those who opted for voluntary retirement, were provided with the benefits of such voluntary retirement, as per the scheme formu¬lated by the management. Others were provided with the benefits of absorption in the regular employment of the management. Ac¬cordingly the present workmen were regularized in service of the management with effect from 1.10.1992, as per the Memorandum of Settlement dated 29.8.1992, entered into between the management and Rourkela Mazdoor Sabha, representing the contract labourers. 6. Others were provided with the benefits of absorption in the regular employment of the management. Ac¬cordingly the present workmen were regularized in service of the management with effect from 1.10.1992, as per the Memorandum of Settlement dated 29.8.1992, entered into between the management and Rourkela Mazdoor Sabha, representing the contract labourers. 6. Subsequently the Hon’ble Supreme Court, taking all the facts and circumstances of the case into consideration, disposed of the Writ Petition (Civil) No.617 of 1986, vide its judgment dated 12.05.1994, with the following directions : “(i) All labourers, who had been initially engaged through contractors but have been continuously working with the respond¬ent for the last 10 years on different assigned to them in spite of the replacement and change of the contractors, shall be ab¬sorbed by the respondent, as their regular employees subject to being found medically fit and if they are below 58 years of age, which is the age of superannuation under the respondent. (ii) While absorbing them as regular employees their inter se seniority shall be determined department/job wise on the basis of their continuous employment. (iii) They will not be entitled to the difference in their contractual and regular wages till the date of their absorption. After absorption as regular employees, they shall be paid wages, allowances etc. at par with their counterpart, working as regular employees with the respondent. If in respect of any group of contract labourers, no rate of wages or emoluments have been fixed by the respondent because those jobs had not been performed by the regular employees of the respondent in the part, the contract labourers so absorbed for performing the said jobs, shall be paid at the minimum rate payable to the unskilled work¬men, doing other similar job. (iv) After absorption, the contract labourers will be governed exclusively by the terms and conditions prescribed by the re¬spondent for its own employees irrespective of any existing contract or agreement between the respondent and the contractors. No claim shall be made by the contractors against the respondent for premature termination of their contracts in respect of the contract labourers. (v) The benefit of absorption shall not be extended to contract labourers who in terms of this Court’s order referred to above have taken voluntary retirement on payment of the retrenchment compensation. (vi) The respondent shall be at liberty to retrench workmen so absorbed, in accordance with law. (v) The benefit of absorption shall not be extended to contract labourers who in terms of this Court’s order referred to above have taken voluntary retirement on payment of the retrenchment compensation. (vi) The respondent shall be at liberty to retrench workmen so absorbed, in accordance with law. This order shall not be pleaded as bar to such retrenchment. (vii) If there is any dispute in respect of the identification of the contract labourers to be absorbed as direct¬ed above, such dispute shall be decided by the Chief Commissioner (Central), on material, produced before him by the parties con¬cerned. (viii) The direction shall be operative only in respect of 142 jobs out of 246 jobs, in view of the fact that contract labour has already been abolished in 104 jobs. (ix) This order does not relate to the persons who have already been absorbed. (x) The persons, who had been retrenched, but in terms of the directions of this Court, have been taken back, shall also be entitled to the benefit of this Order. If there is any dispute in respect of the identity of such persons, that shall also be decided by the Chief Commissioner (Central). (xi) For the purpose of calculating the payment of retrenchment benefit, in the event of their retrenchment, hereafter, the 10 years period aforesaid shall be counted, in respect of such retrenched persons, although they are absorbed after the passing of this Order. (xii) This Order shall be complied with by the respondent within four months from today.” 7. Much thereafter, in February, 1998, the Rourkela Shra¬mik Sangha, opposite party No.2, raised a dispute in respect of 209 such contract labourers, who had been absorbed in the regular employment of the petitioner-management since 1.10.1992, alleging discrimination in the matter of payment of closure benefits extended to them vis-a-vis the workmen those who took voluntary retirement. The disgruntled workmen claimed for grant of re¬trenchment/closure compensation to them for the period from the date of their joining the establishment of the contractors till the date of their absorption/regularization under the petitioner-management and for continuity of their services under the present management from the date of their joining the establishment of their respective contractors. The disgruntled workmen claimed for grant of re¬trenchment/closure compensation to them for the period from the date of their joining the establishment of the contractors till the date of their absorption/regularization under the petitioner-management and for continuity of their services under the present management from the date of their joining the establishment of their respective contractors. The said claims of the workmen having been rejected by the petitioner-management, the same was taken up for conciliation, which having ended in failure, the State Government, in the Labour and Employment Department re¬ferred the dispute to the Industrial Tribunal, Rourkela, for adjudication. The terms of the reference were as follows : “Whether the action of the management of SAIL, Rourkela Steel Plant, Rourkela in denying either payment of retrenchment/closure benefit of 209 workmen (as per list) for their past service with the contractor or grant of continuity of service from the dates of their joining in contractors establish¬ment is legal and/or justified ? If not, to what relief these 209 workmen are entitled ?” 8. The Industrial Tribunal, in order to adjudicate the dispute referred to it, framed the following issues : “I. Whether the reference is maintainable ? II. Whether the action of the management of SAIL, Rourkela Steel Plant, Rourkela in denying either payment of retrenchment/closure benefit of 209 workmen (as per list) for their past service with the contractor or grant of continuity of service from the dates of their joining in contractors establish¬ment is legal and/or justified ? III. If not, to what relief these 209 workmen are entitled ?” 9. With regard to the maintainability of the reference, though the workmen in their claim statement had prayed for their regularization in services of the petitioner-management since the date of their joining the establishment of their respective con¬tractors, at the stage of argument, the said prayer was modified to the extent that the management is liable to regularize the services of the workmen since the date of issue of notification by the Government of Orissa, dated 30.03.1989, abolishing the contract labour system. The Industrial Tribunal came to find that the original prayer having been modified by the workmen at the stage of argument, limiting their claim for regularization from the date of abolition of the contract labour system, the refer¬ence cannot be thrown out and in order to do social justice, strict compliance of the reference need not be adhered to. Ac¬cordingly, the Industrial Tribunal accepted the modified prayer of the workmen as a part of the reference submitted to it for adjudication. 10. Learned counsel for the petitioner-management submits that this findings of the Tribunal is wholly erroneous and ille¬gal, inasmuch as, the Tribunal has travelled beyond the scope of the reference. As the reference made to the Tribunal does not speak about any dispute regarding regularization of the workmen, the Tribunal could not have taken the same to be a matter inci¬dental to the main dispute, in view of the provisions of Section 10(4) of the Industrial Disputes Act (I.D. Act for short). 11. It is now well settled in law that the Tribunal must confine its adjudication to the points of dispute and matters incidental thereto. In other words, the Tribunal is not free to enlarge the scope of the dispute referred to it but must confine its attention to the points specifically mentioned and anything which is incidental thereto. While considering as to what would constitute something incidental to a dispute, the apex Court in the case of Delhi Cloth and General Miles -vrs- Its Workmen, report¬ed in AIR 1967 SC 469 , held as under : “Something incidental to a dispute must, therefore, mean something happening as a result or in connection with the dispute or associated with the dispute. The dispute is a fundamental thing while something incidental, thereto is an adjunct to it. Something incidental, therefore, cannot cut at the root of the main thing to which it is an adjunct.” 12. It appears that the Tribunal in the garb of promoting social justice has transcended the scope of reference made to it for adjudication. Admittedly the reference made to the Tribunal did not pertain to the regularization of the workmen in the establishment of the petitioner-management. Further no case has been made out by the workmen in their statement of claim that they were employees of the petitioner-management and were there¬fore legally entitled to regularization. Admittedly the reference made to the Tribunal did not pertain to the regularization of the workmen in the establishment of the petitioner-management. Further no case has been made out by the workmen in their statement of claim that they were employees of the petitioner-management and were there¬fore legally entitled to regularization. There is nothing on record to show that such a claim had been put forward by the workmen in their demand raising the industrial dispute nor the same was the subject matter of the conciliation proceeding. As the Industrial Tribunal derives its jurisdiction from the refer¬ence made by the State Government, it was bound to act within the four corners of such reference. The Tribunal could not have enlarged the scope of the reference nor could deviate therefrom. Therefore a demand which was not made at the time of raising the industrial dispute, could not have been gone into by the Tribu¬nal, not being the subject matter thereof, as has been laid down by the apex Court in the case of Mahendra L. Jain and others v. Indore Development Authority and others, reported in AIR 2005 SC 1252 . 13. Coming to the merits of the reference, the Tribunal, on considering the materials on record, came to find that the Hon’¬ble Supreme Court in the W.P.(C) No.617 of 1986, filed by Sri R.K. Panda of Rourkela Shramik Sangha against the petitioner management, issued 12 directives in its final judgment, as de¬tailed above, which were required to be strictly complied with. Taking into consideration the directives issued by the apex Court, the Tribunal rejected the claim of the workmen for payment of retrenchment/closure benefit. 14. As regard the claim of 209 workmen for regularization, the Tribunal has come to find that the Hon’ble Supreme Court did not fix any date of absorption of the workmen in the services of the petitioner-management and as the management took a unilateral decision to absorb the workmen with effect from 1.10.1992, which was only on the basis of the fact that the contract of the con¬tractors, engaging these workmen had expired on 30.9.1992, the same cannot be said to be proper or justified. The Tribunal found that as the Hon’ble Supreme Court did not take into consideration these aspects of the matter as to the date from which the services of the workmen is required to be regularized by the management, the Tribunal is competent to adjudicate the same and accordingly came to hold that is just and proper that the date of their earlier absorption should be with effect from 30.3.1989, when the contract labour system was abolished as per the notification of the State Government in the Labour & Employment Department. On the basis of the above findings, the Tribunal proceeded to pass the following directions : “Their services are deemed to have been regularized since 30.3.1989 without any pecuniary benefit differential pay as has been denied by the Hon’ble apex Court in direction No.III of their judgment, Ext.A. Their inter se seniority will be respected after such regularization and they will be entitled to get conse¬quential benefits only after such regularization for their serv¬ices under the Ist party management and their retirement benefits will be given accordingly.” 15. Learned counsel for the petitioner-management submits that the Tribunal while passing the impugned award, has lost sight of the fact that the Hon’ble Supreme Court was in seisin of the matter when the prohibition notification was issued by the State Government dated 30.03.1989 and the process of regulariza¬tion was initiated by the petitioner-management, after taking due permission from the Hon’ble Court and such process of regularization of these notified workmen were also concluded during pendency of the writ petition. Even after the date of their regularization and before disposal of the writ petition by the apex Court, the workmen have never raised any such demand. Accordingly it is submitted that when the Hon’ble Supreme Court being conscious of the prohibition order passed by the State Government had not directed for regularization of the workmen with retrospective effect or fix any cut off date for such regu¬larization and instead having approved the scheme of the peti¬tioner-management, while fixing the guideline of or such regularization, the impugned award directing regularization of the workmen in the services of the management with effect from 30.3.1989 is wholly improper, illegal and without jurisdiction. It is further submitted that the Tribunal erred in holding that the abolition of contract labour by the State Government would amount to automatic regularization of such contract labour. 16. It is further submitted that the Tribunal erred in holding that the abolition of contract labour by the State Government would amount to automatic regularization of such contract labour. 16. Learned counsel for the petitioner-management, in support of his contention that the abolition of contract labour by the State Government does not amount to automatic regulariza¬tion of the contract labour, has relied upon the Constitutional Bench judgment of the apex Court in the case of Steel Authority of India Ltd. and others v. National Union Water Front Workers and others, reported in AIR 2001 SC 3527 . In the said decision the Hon’ble Supreme Court held that neither Section 10 of the CLRA Act nor any other provision in the said Act, whether ex¬pressly or by necessary implication, provide for automatic ab¬sorption of contract labour, on issuing of a notification by the appropriate Government, prohibiting employment of contract la¬bour, in any process, operation or other work in any establish¬ment. Consequently the principal employer cannot be required to order for absorption of the contract labour working in the con¬cerned establishment. The apex Court accordingly held that the scheme of the CLRA Act is to regulate conditions of workers in contract labour system and to provide for its abolition by the appropriate Government as provided in Section 10 of the said Act. The various regulatory and welfare measures provided under the provisions of the CLRA Act clearly be speak treatment of contract labour as employees of the contractor and not of the Principal employer. It is therefore difficult to perceive in Section 10 of the CLRA Act any implicit requirement of automatic absorption of contract labour by the principal employer in the concerned establishment on issuance of notification by the appropriate Government under Section 10(1), prohibiting employment of contract labour in a given establishment. 17. On a perusal of the impugned award, it is seen that the Tribunal has arrogated to itself the authority to interpret the order of the apex Court, on the plea that the Hon’ble Supreme Court has not taken into consideration the aspect of the matter with regard to the date from which the services of the workmen would be regularized by the petitioner-management and therefore it has the power to adjudicate the same. The Tribunal has accord¬ingly proceeded to direct automatic absorption of the workmen in the establishment of the petitioner-management, from the date of notification of the Government of Orissa, prohibiting contract labour, which is not permissible in law, in view of the Constitu¬tional Bench decision of the apex Court, reported in AIR 2001 SC 3527 . Even otherwise, this approach of the Tribunal is neither proper nor desirable, especially when the Hon’ble Supreme Court, after taking all facts and circumstances into consideration, including its earlier interim order dated 6.8.1992, had passed specific directives, as detailed above. 18. Applying the principles of law as discussed above to the facts of the present case, the impugned award of the Indus¬trial Tribunal cannot be sustained and the same is accordingly quashed. The writ application is accordingly allowed. There shall be no order as to costs. Application allowed.