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2014 DIGILAW 186 (CAL)

Asish Dey Chowdhury v. State of West Bengal

2014-03-06

SOUMEN SEN

body2014
Judgment : Soumen Sen, J. 1. The subject-matter of challenge in this writ petition is the impugned Memo dated 24th December, 2012 by which the Assistant Labour Commissioner, Tamluk while disposing of the representation of the petitioner directed the petitioner to approach the concerned authority under the Contract Labour (Regulation & Abolition) Act, 1970. The said authority issued the said direction presumably on the basis of an order passed by the Hon’ble Supreme Court on 21st April, 2010. The reason for such direction appears to be and as stated in the impugned order is that according to the Contract Labour (Regulation & Abolition) Act, 1970 if a question arises whether any process or operation or other work which is of perennial nature, the decision of the appropriate government shall be final. In terms of Section 4 and 10 of the said Act the State Advisory Contract Labour Board is the authority to decide the matter. It was with such observation and direction the representation filed by the petitioner was disposed of. 2. The petitioner filed this application being aggrieved by the said direction. 3. The petitioner contends that the Assistant Labour Commissioner has completely misdirected his mind in disposing of the said representation. The petitioners state that the said authority has failed to exercise its jurisdiction in failing to refer the dispute raised by the writ petitioners to an Industrial Tribunal under the provisions of the Industrial Disputes Act, 1947. It is stated that the petitioners are all deep tube well pump operators working continuously without break of service on and from different dates since 1980. The petitioners were employed at Mecheda, Purba Midnapore for operating the deep tubewells used by the inhabitants under different contractors engaged by the West Bengal State Electricity Board and now by the West Bengal Power Development Corporation Limited, the 3rd respondent herein. The third respondent has always been engaging different contractors for creating an artificial intermediary for oblique purposes disregarding the fact that the services of the petitioners are perennial in nature and the job performed by the petitioners are regular jobs. In spite of rendering such perennial jobs for more than three decades the petitioners are getting less benefits than those directly in the pay roll of the respondent no. 3 as they have been working under the contractor appointed by the respondent no. 3 from time to time. In spite of rendering such perennial jobs for more than three decades the petitioners are getting less benefits than those directly in the pay roll of the respondent no. 3 as they have been working under the contractor appointed by the respondent no. 3 from time to time. The petitioners made several representations to the respondent no. 3 for absorption. The petitioners have also approached this Hon’ble Court with their grievance. In such proceeding an order was passed by the Hon’ble Supreme Court on 21st April, 2010 by which the order of the Single Bench and the Division Bench were set aside. The petitioners, however, were given liberty to approach the concerned authority for redressal of their grievance. The petitioners submit that the petitioners have been working in the establishment of the respondent no. 3 from different dates since 1980 till date and an intermediary has been put in between i.e. ‘contractor’ only with a view to deny the workmen including the petitioners direct employment in the establishment of the respondent no. 3 and the said arrangement is only a camaflouge and a veil, artificial one. It is stated that the paper trappings and/or arrangement by way of introduction of intermediary is to avoid the benefit to the workmen who are really contributing by rendering services and other activities of regular and perennial nature of the 3rd respondent. The petitioners stated that the petitioners’ case can only be settled by the appropriate Industrial Tribunal after referring the same by the 1st respondent based on the report of the 2nd respondent. The 2nd respondent has miserably failed to appreciate and proceeded to pronounce its impugned decision to the 2nd respondent which was communicated vide Memo dated 24th December, 2012. 4. The grievance of the petitioners are that the concerned authority has passed the impugned order without proper appreciation of the correct factual scenario and the true spirit and real intents of the order of the Hon’ble Supreme Court passed in Civil Appeal No. 2863 of 2006 dated 21st April, 2010. It is argued that the said respondent authorities have completely misconstrued the order of the Hon’ble Supreme Court and on such erroneous interpretation has refused to refer the dispute for industrial adjudication failed to exercise the jurisdiction vested in it in failing to refer the dispute to Industrial Tribunal for adjudication. 5. Mr. It is argued that the said respondent authorities have completely misconstrued the order of the Hon’ble Supreme Court and on such erroneous interpretation has refused to refer the dispute for industrial adjudication failed to exercise the jurisdiction vested in it in failing to refer the dispute to Industrial Tribunal for adjudication. 5. Mr. Dasgupta in support of the aforesaid contention has relied upon the following decisions:- i) 2006(12) SCC 233 (Steel Authority of India Ltd. Vs. Union of India & Ors.) ii) 2000(7) SCC 1 (Steel Authority of India Ltd. Vs. National Union Waterfront Workers) iii) 2006(3) SCC 674 (A.P. SRTC & Anr. G. Srinivas Reddy & Ors.) iv) 2014 LLR 198 (Sudarshan Chemical Industries Ltd. Vs. Labour Commissioner & Ors.) 6. Per contra Mr. Dipak Kumar Ghosh, learned counsel appearing for the respondent no. 3 submits that the respondent authorities on true and proper appreciation of the order passed by the Hon’ble Supreme Court and Section 4 and 10 of the Contract Labour (Regulation & Abolition) Act, 1970 directed the petitioners to approach the State Advisory Contract Labour Board for redressal of their grievance. Mr. Ghosh submits that with the same plea the petitioners had approached this Hon’ble Court on earlier occasion. Initially although orders were passed in favour of the petitioners, but ultimately the Hon’ble Supreme Court set aside the said order. Mr. Ghosh has referred to the observations made by the Hon’ble Supreme Court in the last two paragraph of the said order: “The Division Bench, in the impugned order, has held that the engagement of the contract labour is a camouflage, and work done by them is of perennial nature. In our opinion, this was a question of fact which requires evidence and the High Court in writ jurisdiction could not give such a finding. Accordingly, we allow this appeal, set aside the impugned order of the Division Bench of the High Court as also the direction given by a learned Single Judge to pay the minimum rate of wages of the regular employees. However, if the respondents (writ petitioners) approach the concerned authority under the Act, we direct the authority to decide the said application in accordance with law, expeditiously. No costs.” 7. However, if the respondents (writ petitioners) approach the concerned authority under the Act, we direct the authority to decide the said application in accordance with law, expeditiously. No costs.” 7. It is submitted that the Hon’ble Supreme Court has given liberty to the petitioners to approach the concerned authority under the Act which in the facts and circumstances of the case and on a proper reading of the order would mean that the appropriate authority under the Contract Labour (Regulation & Abolition) Act, 1970. It is argued that the writ petition is not maintainable since there is absence of employer-employee relationship and in view thereof the question of regularisation does not arise. It is argued that neither the Labour Court nor the Writ Court has the power to determine as to whether a contract labour could be regularised or not which is within the domain of appropriate government. Mr. Ghosh has supported the order passed by the Assistant Labour Commissioner on 24th December, 2012 and submitted that the said order is consistent with the provisions of the Contract Labour Regulation Act. The respondents have also denied that the engagement of contractor is a camouflage or veil or an artificial one or sham. The contractor was really a contractor and there has been no paper trappings or arrangement. Mr. Ghosh refers to the prayers made in the writ petition and submitted that the petitioners have claimed relief seeking a direction for reference of such dispute to an Industrial Tribunal. 8. In this regard he has relief upon the following decisions:- 1. 1997 (1) S.C.C. 118 (Bilas Sarkar & Ors. Vs. Union of India & Ors.) 2. 2006 (12 ) SCC 233 (Para 22, 23) (Steel Authority of India Ltd. Vs. Union of India & Ors.) 3. JT 2007 (5) S.C. 611 (Para-6) (U.P. Power Corporation Ltd. & Anr. Vs. Bijli Mazdoor Sangh & Ors.) 4. 2008 (3) S.C.C. 571 (Para-9) (Himmat Singh & Ors. Vs. ICI India Ltd. & Ors.) 5. 2010 (6) S. C. C. 759 (Para-17) (Himachal Pradesh Public Service Commission Vs. Mukesh Thakur & Anr.) 6. 2009 (13) SCC 374 (International Airport Authority of India Vs. International Air Cargo Workers’ Union and Anr.) 9. Vs. Bijli Mazdoor Sangh & Ors.) 4. 2008 (3) S.C.C. 571 (Para-9) (Himmat Singh & Ors. Vs. ICI India Ltd. & Ors.) 5. 2010 (6) S. C. C. 759 (Para-17) (Himachal Pradesh Public Service Commission Vs. Mukesh Thakur & Anr.) 6. 2009 (13) SCC 374 (International Airport Authority of India Vs. International Air Cargo Workers’ Union and Anr.) 9. The moot and essential question that arises for consideration in this proceeding is whether the dispute canvassed by the writ petitioners shall be referred to an industrial tribunal under the Industrial Disputes Act, 1947 (hereinafter referred to as “I.D. Act”) or Advisory Contract Labour Board under the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as “CLRA Act”). It is, thus, essential at this stage to understand the scope and nature of the two Acts. 10. The CLRA Act has been enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. 11. The said Act defines workman to mean any person employed in or in connection with the work of any establishment to do any skilled, semiskilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, but does not include any such person – (A) who is employed mainly in a managerial or administrative capacity; or (B) who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or (C) Who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the outworker or in some other premises, not being premises under the control and management of the principal employer. 12. 12. The State Government under the CLRA Act is required to constitute a State Advisory Contract Labour Board who would advise the State Government on matters arising out of the administration of the said Act and to carry out other functions assigned to it under the Act. Section 10 of the said Act authorizes the appropriate Government after consultation with the Central Board or with the State Board, as the case may be, by notification prohibit employment of contract labour in any process, operation or other work in any establishment. The said Section indicates the factors that the appropriate Government is required to take into consideration before issuing any such notification. The relevant factors are:- (a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; (b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation that is carried on in that establishment; (c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto; (d) whether it is sufficient to employ considerable number of wholetime workmen. 13. The explanation to the said Act provides that if question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final. 14. The reading of the said provisions indicate that as to whether the contract labour should be abolished or not shall fall within the exclusive domain of the authorities prescribed under the CLRA Act, 1970. The Industrial Court does not have any jurisdiction to determine such questions. It is only the appropriate Government under the said Act which has the jurisdiction and authority to abolish contract labour system and not the court including the industrial adjudicator. The primary object of the CLRA Act is to stop exploitation of contract labourers by contractors or establishment. 15. The Industrial Disputes Act, 1947 has been enacted to make provisions for the investigation and settlement of industrial disputes and for certain other purposes mentioned in the said Act. 16. The dispute essentially raised in the writ petition is that the contract between the principal employer and the contractor is a sham and a paper arrangement. 15. The Industrial Disputes Act, 1947 has been enacted to make provisions for the investigation and settlement of industrial disputes and for certain other purposes mentioned in the said Act. 16. The dispute essentially raised in the writ petition is that the contract between the principal employer and the contractor is a sham and a paper arrangement. The question that is posed is whether this dispute is referable to the State Advisory Board and the appropriate Government constituted under Section 4 read with Section 10 of the CLRA Act or it falls in the domain of industrial dispute to be adjudicated by an industrial adjudicator. 17. Although various decisions have been cited by the learned Counsels on behalf of both the parties, in my view, it would be useful to refer to the decision in International Air Port (supra) in which the similar issue came before the Hon’ble Supreme Court and the Supreme Court on analysis of the earlier decisions held that where there is no abolition of contract labour under Section 10 of the CLRA Act but the contract labour contends that the contract between the principal employer and the contractor is a sham, the remedy is purely under the I.D. Act. The Hon’ble Supreme Court reiterated that the principles laid down in the Gujarat Electricity Board Vs. Hind Mazdoor Sabha reported in 1995 (5) SCC 27 continues to govern the issue. The observations of the Hon’ble Supreme Court with regard to the jurisdiction of the Industrial Tribunal in matters where such agreement is questioned are stated below:- “31. In Gujarat Electricity Board this Court held: “42….. the exclusive authority to decide whether the contract labour should be abolished or not is that of the appropriate Government under the said provision. It is further not disputed before us that the decision of the Government is final, subject, of course, to the judicial review on the usual grounds. However, as stated earlier, the exclusive jurisdiction of the appropriate Government under Section 10 of the Act arises only where the labour contract is genuine and the question whether the contract is genuine or not can be examined and adjudicated upon by the Court or the industrial adjudicator, as the case may be. Hence, in such cases, the Workmen can make a grievance that there is no genuine contract and that they are in fact the Employees of the Principal Employer. …. Hence, in such cases, the Workmen can make a grievance that there is no genuine contract and that they are in fact the Employees of the Principal Employer. …. ….. …… 53. (ii) If the contract is a sham or not genuine, the Workmen of the so-called contractor can raise an industrial dispute for declaring that they were always the Employees of the Principal Employer and for claiming the appropriate service conditions. When such dispute is raised, it is not a dispute for abolition of the labour contract and hence the provisions of Section 10 of the Act will not bar either the raising or the adjudication of the dispute. When such dispute is raised, the Industrial Adjudicator has to decide whether the contract is a sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is a sham, that he will have jurisdiction to adjudicate the dispute. If, however, he comes to the conclusion that the contract is genuine, he may refer the Workmen to the appropriate Government for abolition of the contract labour under Section 10 of the Act and keep the dispute pending. However, he can do so if the dispute is espoused by the direct Workmen of the Principal Employer. If the workman of the Principal Employer have not espoused the dispute, the adjudicator, after coming to the conclusion that the contract is genuine, has to reject the reference, the dispute being not an industrial dispute within the meaning of Section 2(k) of the ID Act. He will not be competent to give any relief to the Workmen of the erstwhile contractor even if the labour contract is abolished by the appropriate Government under Section 10 of the Act.” In view of the provision of Section 10 of Act, it is only the appropriate Government which has the authority to abolish genuine labour contract in accordance with the provisions of the said Section. No Court including the Industrial Adjudicator has jurisdiction to do so. 32. No Court including the Industrial Adjudicator has jurisdiction to do so. 32. Gujarat Electricity Board was partly overruled in Air India in regard to the question whether on abolition of contract labour system, the contract labour have to be automatically absorbed by the principal Employer, this Court held as follows in Air India: “58… The moment the contract labour system stands prohibited under Section 10(1), the embargo to continue as a contract labour is put an end to and direct relationship has been provided between the Workmen and the Principal Employer Thereby, the Principal Employer directly becomes responsible for taking the services of the Workmen hitherto regulated through the Contractor……. …… …… ….. 66…..The linkage between the Contractor and the Employee stood snapped and direct relationship stood restored between the Principal Employer and the contract labour as its Employees. Considered from this perspective, all the Workmen in the respective services working on contract labour are required to be absorbed in the establishment of the [Employer].” 33. A course correction, if we may use that expression, was applied by the Constitution Bench in SAIL. This Court made it clear that neither Section 10, nor any other provision in the CLRA Act provides for automatic absorption of contract labour on issuing a Notification by the appropriate Government under Section 10(1) of the CLRA Act and consequently the Principal Employer cannot be required to absorb the contract labour working in the establishment. 34. This Court in SAIL further held that on a prohibition Notification being issued under Section 10(1) of the CLRA Act, prohibiting employment of contract labour in any process, operation or other work, if an industrial dispute is raised by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract, or as a mere ruse/camouflage to evade compliance with various beneficial legislations so as to deprive the workers of statutory benefits. If the contract is found to be sham or nominal and merely a camouflage, then the so-called contract labour will have to be treated as direct employees of the principal employer and the industrial adjudicator should direct the principal employer to regularize their services in the establishment subject to such conditions as it may specify for that purpose. On the other hand, if the contract is found to be genuine and at the same time there is a prohibition Notification under Section 10(1) of CLRA Act, in respect of the establishment, the Principal Employer intending to employ regular workmen for the process, operation or other work of the establishment in regard to which the prohibition Notification has been issued, it shall give preference to the erstwhile contract labour if otherwise found suitable, if necessary by giving relaxation of age. 35. As noticed above, SAIL did not specifically deal with the legal position as to when a dispute is brought before the Industrial Adjudicator as to whether the Contract Labour Agreement is a sham, nominal and merely a camouflage, when there is no prohibition Notification under Section 10(1) of the CLRA Act. 36. But where there is no abolition of contract labour under Section 10 of the CLRA Act, but the contract labour contend that the contract between the Prinicipal Employer and the contractor is sham and nominal, the remedy is purely under the ID Act. The principles in Gujarat Electricity Board continue to govern the issue. The remedy of the Workmen is to approach the industrial Adjudicator for an adjudication of their dispute that they are the direct Employees of the Principal Employer and the Agreement is sham, nominal and merely a camouflage, even when there is no order under Section 10(1) of the CLRA Act. 37. The Industrial Adjudicator can grant the relief sought if it finds that contract between the Principal Employer and the contractor is sham, nominal and merely a camouflage to deny employment benefits to the Employer and that there is in fact a direct employment, by applying tests like: who pays the salary; who has the power to remove/dismiss from service or initiate Disciplinary action; who can tell the Employee the way in which the work should be done, in short, who has direction and control over the Employee. But where there is no Notification under Section 10 of the CLRA Act and where it is not proved in the Industrial Adjudication that the contract was a sham/nominal and camouflage, then the question of directing the Principal Employer to absorb or regularise the services of the contract labour does not arise.” 18. The International Airport Authority of India (supra), however, has not referred its earlier decision, namely, Steel Authority of India Ltd. Vs. Union of India & Ors. reported in 2006 (12) SCC 233 . The Hon’ble Supreme Court in the said subsequent SAIL matter also opined that when, however, a contention has been raised that the contract entered into by and between the management and the contractor is a sham one, in view of the earlier decisions in SAIL reported in 2001(7) SCC 1 an industrial adjudicator would be entitled to determine the said issue. It was held that the industrial adjudicator would have jurisdiction to determine the said issue as in the event if it be held that the contract purportedly awarded by the management in favour of the contractor was really a camouflage or a sham one, the employees appointed by the contractor would, in fact and substance, be held to be direct employees of the management. The relevant observations of the Hon’ble Supreme Court are stated below:- “24. When, however, a contention is raised that the contract entered into by and between the Management and the contractor is a sham one, in view of the decision of this Court in Steel Authority of India Ltd., an Industrial Adjudicator would be entitled to determine the said issue. The Industrial Adjudicator would have jurisdiction to determine the said issue as in the event if it be held that the contract purportedly awarded by the Management in favour of the Contractor was really a camouflage or a sham one, the Employees appointed by the Contractor would, in effect and substance, be held to be direct Employees of the Management. 25. The view taken in Steel Authority of India Ltd. has been reiterated by this Court subsequently. (See e.g. Nitinkumar Nathalal Joshi v. ONGC Ltd. and Municipal Corpn. Of Grater Mumbai v. K.V. Sharamilk sangh.) 26. 25. The view taken in Steel Authority of India Ltd. has been reiterated by this Court subsequently. (See e.g. Nitinkumar Nathalal Joshi v. ONGC Ltd. and Municipal Corpn. Of Grater Mumbai v. K.V. Sharamilk sangh.) 26. In A.P. SRTC v. G. Srinivas Reddy this Court held: “If the Respondents want the relief of absorption, they will have to approach the Industrial Tribunal/Court and establish that the contract-labour system was only a ruse/camouflage to avoid labour law benefits to them. The High Court could not, in exercise of its jurisdiction under Article 226, direct absorption of the Respondents, on the ground that work for which the Respondents were engaged as contract labour, was perennial in nature.” 27. It was further held: “The only remedy of the Respondents, as noticed above, is to approach the Industrial Tribunal for declaring that the contract-labour system under which they were employed was a camouflage and therefore, they were, in fact, direct Employees of the Corporation and consequential relief.” 19. Although much emphasis has been laid on the observation of the Hon’ble Supreme Court that the writ petitioners shall approach the concerned authority under the Act but, in my view, the Hon’ble Supreme Court has not decided that the disputes raised by the writ petitioners are to be decided by the authority under the CLRA Act. The Hon’ble Supreme Court has not gone into the question as to which of the authorities would be the appropriate authority to decide the issue raised by the writ petitioners. Moreover, having regard to the clear pronouncement of the Hon’ble Supreme Court in similar matters that if the contractor is not genuine or mere camouflage, the Industrial Tribunal would have the jurisdiction to decide such issue as to whether a contract between the principal employer and the contractor is genuine or camouflage and having regard to the fact that under the CLRA Act, there is no machinery to adjudicate such issue, it is the industrial tribunal alone who can on a proper investigation and appreciation of evidence decide the said matter. The writ petitioners want the relief of absorption. In view of the aforesaid, the impugned order dated 24th December, 2012 is set aside. The respondent authorities are directed to take immediate steps for conciliation and in case of failure to make a reference of the dispute to an industrial tribunal for adjudication. The writ petitioners want the relief of absorption. In view of the aforesaid, the impugned order dated 24th December, 2012 is set aside. The respondent authorities are directed to take immediate steps for conciliation and in case of failure to make a reference of the dispute to an industrial tribunal for adjudication. It is expected that the respondent authorities shall take necessary steps for referring the said dispute to an industrial tribunal for adjudication preferably within a period of four weeks from the date of communication of this order. 20. It is, however, made clear that this Court has not gone into the merits of the claim made by the writ petitioners, i.e., to say whether the contract between the principal employer and contractor is sham and it is for the industrial adjudication to decide the said issue. 21. The writ application succeeds. 22. The authorities are directed to act on the server copy of this judgment. The urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.