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2016 DIGILAW 941 (KER)

BALACHANDRAN NAIR S. S. v. INDIAN SPACE RESEARCH ORGANISATION

2016-11-04

MOHAN M.SHANTANAGOUDAR, SATHISH NINAN

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JUDGMENT : These writ petitions involve a question as to the scope of exercise of power by this court under Article 226 of the Constitution of India to issue a writ of mandamus to command the principal employer not to alter the service conditions of the contract labourers (petitioners) pending adjudication of a dispute regarding regularization before the Industrial Adjudicator. 2. The petitioners are the contract labourer working with different contractors engaged by the Indian Space Organisation (ISRO) and its other establishments (hereinafter referred to as principal employer') for the purpose of executing work in the units under it. The petitioners claim that they are employed in various units of the principal employer and many of them have completed more than 20 years of service. They have been engaged continuously by the contractors to execute the work on behalf of principal employer. The length of service rendered by the petitioners varies from 9 to 20 years. The petitioners also approached the Regional Labour Commissioner Central, Thiruvananthapuram raising an industrial dispute for regularization in the service of principal employer. According to the petitioners, the contract of labour work is camouflaged to avoid the compliance of various statutory provisions to deprive monetary benefits and welfare measures to them. The petitioners claim that the establishments of principal employer are covered by the provisions of Contract Labour (Regulation and Abolition) Act, 1970 (the 'CLRA Act' for short). Therefore, it is argued by the learned counsel for the petitioners that the petitioners will have to be treated as employees of principal employer and entitled for regularization in the service of the principal employer. The petitioners have approached this court seeking for a writ of mandamus directing the principal employer not to alter the service conditions of the petitioners directly or indirectly affecting the procedure for regularization of their service during the pendency of adjudication before the Industrial adjudicator. 3. Since the common question of law involved in these writ petitions and reliefs sought for are one and the same, these writ petitions are considered together for disposal. 4. The principal employer resisted this writ petition contending that they discharge the sovereign function and therefore, the establishment under them cannot be termed as an industry. It is their case that the Department of Space and its functionality ISRO/LPSC and its constituent centres discharge sovereign functions. 4. The principal employer resisted this writ petition contending that they discharge the sovereign function and therefore, the establishment under them cannot be termed as an industry. It is their case that the Department of Space and its functionality ISRO/LPSC and its constituent centres discharge sovereign functions. It is contended that the primary objective of the principal employer is to promote development activities of space science and technology for all round development of the nation. It is the case that principal employer focus on core area of the work and outsource all peripheral nature of work through contract labour system. They denied having any employer-employee relationship with workers engaged by the contractors, and also stated that officials of principal employer do not exercise any supervisory function over the workers employed by the contractors for the execution of the work. It is also contended that while awarding the work, principal employer ensured compliance of provisions of CLRA Act and other labour legislations. It is further stated that the terms and conditions of the contract provide that the contractor shall obtain license under the CLRA Act. Thus, it is submitted that the contract labourers are not exploited and they are provided with all rights and benefits as provided under the CLRA Act. It is also contended by the principal employer that the grievance of the petitioners cannot be decided by this Court and the petitioners are having an alternative remedy before the Central Administrative Tribunal. 5. Issues in these writ petitions are arising in the context of CLRA Act, 1970. The case of the petitioners is that the contract awarded by the principal employer to various contractors are sham and camouflage, therefore, the Industrial Adjudicator has to decide the nature of the contract for the purpose of absorbing the petitioners in the service of the principal employer. It is argued, if the service conditions of the petitioners are altered and they happened to be terminated, the petitioners will be deprived of ultimate benefit based on outcome of industrial adjudication. 6. The CLRA Act was enacted to regulate the employment of the contract labourers in certain establishments. There is no dispute to the fact that the provisions of the CLRA Act would apply to the ISRO and its units. It is also admitted that the principal employer also have obtained registration in terms of section 7 of the CLRA Act. 6. The CLRA Act was enacted to regulate the employment of the contract labourers in certain establishments. There is no dispute to the fact that the provisions of the CLRA Act would apply to the ISRO and its units. It is also admitted that the principal employer also have obtained registration in terms of section 7 of the CLRA Act. It is also admitted that the contractors are licensed contractors in terms of section 12 of CLRA Act. However, it is to be noted that, there is no prohibition issued for the employment of the contract labourers in terms of section 10 of the CLRA Act. Therefore, the industrial adjudicator, if he is called upon to decide, has to determine whether the contract labour agreement is sham or camouflage, when there is no prohibition under Section 10 (1) of CLRA Act. It is apposite to refer some of the judgments of the Hon'ble Supreme Court in the context of CLRA Act. In Gujarat Electricity Board, Thermal Power Station, UKAI vs. Hind Mazdoor Sabha and others [ (1995) 5 SCC 27 ] an industrial dispute was adjudicated in a claim raised by the workmen contending that they are the employees of the principal employer and the contract was sham and camouflage. The Hon'ble Supreme court after elaborate discussion, in paragraph 53 (ii) held as follows: "53. Our conclusions and answers to the questions raised are, therefore, as follows : (i) In view of the provisions of Section 10 of the 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. (ii) if the contract is sham or not genuine, the workmen of the so called contractor can raise an industrial dispute for declaring that they were always the employess 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 sham or genuine. 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 sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is 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 workmen 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." It is further held, when the contract is genuine, it is open for the permanent employee under the principal employer to raise industrial dispute or also for the workmen to approach the Government for abolishment of the contract labour under section 10 of the Act. 7. In 'International Airport Authority of India vs. International Air Cargo Workers Union [ 1997 9 SCC 377 ], the judgment in Gujarat Electricity Board's case (supra) was partially modified with regard to the question that on abolition of contract labour system, contract labourers have to be automatically absorbed by the principal employer. In Air India's case (supra), the Hon'ble Supreme Court held that consequent upon abolition of the contract labour, by issuing prohibitory notification under Section 10 (1) of the CLRA Act, the principal employer directly becomes employer of the workmen. 8. In Air India's case (supra), the Hon'ble Supreme Court held that consequent upon abolition of the contract labour, by issuing prohibitory notification under Section 10 (1) of the CLRA Act, the principal employer directly becomes employer of the workmen. 8. In another judgment of the Hon'ble Supreme Court in 'Steel Authority of India Ltd. vs. National Union Waterfront workers' [2001 7 SCC 268] over ruled the Air India's case (supra) and held that, on issuance of prohibitory notification under section 10 (1) of the CLRA Act, prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labourer in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contract has been interposed either on the ground of having undertaken to produce any given result for the establishment for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/comouflage to evade compliance with various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine, the principal employer who shall be directed to regularise the services of the contract labour. Thus automatic absorption as propounded in Air India's case has been overruled in SAIL's case. The judgment in the SAIL's case (supra) in fact is on the premise of prohibition notification issued under Section 10 (1) of the CLRA Act. 9. The Hon'ble Supreme Court also had an occasion to consider the dispute raised by the contract labour when there is no prohibition notification issued under section 10 (1) of the CLRA Act. In International Airport Authority of India vs. International Cargo Union and others [ 2009 (13) SCC 374 ], it is held as follows: "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 directed employees of the principle employer and he industrial adjudicator should direct the principal employer to regularise their services in the establishment subject to such conditions as it may specify for that purpose. 20. But there is no abolition of contract labour under section 10 of CLRA Act, but the contract labour contend that the contract between principal employer and contractor is sham and nominal, the remedy is purely under the ID Act. 20. But there is no abolition of contract labour under section 10 of CLRA Act, but the contract labour contend that the contract between principal employer and contractor is sham and nominal, the remedy is purely under the ID Act. The principals 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 he principal employer and the agreement is sham, nominal and merely a camouflage, even when there is no order under section 10(1) of CLRA Act." (emphasis supplied) Thus, in the light of the judgment in International Air Port Authority India's case it is clear, when there is no notification under prohibition of section 10 (1) of CLRA Act, the remedy of the workmen is to approach the industrial adjudicator for dispute. 10. In Gujarat Electricity Board (supra) in categorical terms, it was held by the Hon'ble Supreme court in aforenoted paragraph 53 (2) as follows: "When such dispute is raised, the industrial adjudicator has to decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is sham, that he will have jurisdiction to adjudicate the dispute." (emphasis supplied) 11. In the light of the above, I am of the view, the industrial adjudicator has to decide first, whether the contract is sham or genuine, and it is only then the industrial adjudicator will have jurisdiction to decide the dispute. Therefore, it is clear in the light of the proposition laid down in the Gujarat Electricity Board's case (supra), the dispute raised by the workmen will have the character of industrial dispute only on a finding by the industrial adjudicator that the contract is sham or camouflage. Merely because a dispute has been raised by a workmen itself, will not result it as an industrial dispute as characterised in the Industrial Disputes Act, 1947, unless it is found that contract is sham or camouflage. I have stated so, for the reasons that the learned counsel for the petitioner Sri.Thomas Abraham strenuously contended that in terms of section 33 (b) Industrial Disputes Act,1947 conditions of service shall remain unchanged during the proceedings before the conciliation and Industrial Adjudicator. It is also appropriate to refer Schedule V under the Industrial Dispute Act, 1947. I have stated so, for the reasons that the learned counsel for the petitioner Sri.Thomas Abraham strenuously contended that in terms of section 33 (b) Industrial Disputes Act,1947 conditions of service shall remain unchanged during the proceedings before the conciliation and Industrial Adjudicator. It is also appropriate to refer Schedule V under the Industrial Dispute Act, 1947. Schedule V defines unfair labour practices; Clause 10 of Schedule V refers about the workmen employed as a "badlis", casuals or temporaries, and their continuation with the employer to deprive them the status and privileges of permanent worker. It does not take in a workman who raised a dispute under the contract labour. Therefore, scheme and provisions of the Industrial Dispute Act do not cover any such dispute being espoused as an industrial dispute within the meaning of Industrial Dispute Act in respect of contract labour, unless the industrial adjudicator enters into a finding that the contract is sham or camouflage. No doubt, the industrial adjudicator when declares the contract as sham, the dispute attains the status of industrial dispute as contemplated in the Industrial Disputes Act and workmen will be entitled for all protection as envisaged under section 33 of the Industrial Dispute Act. 12. Learned Assistant Solicitor General resisted the writ petition on the ground that ISRO and other units are discharging sovereign function and activity is being discharged by them do not come within the ambit of an industry. I am of the view that this court cannot decide this issue without reference to the factual situation. Therefore, this issue is left open. 13. Learned Assistant Solicitor General also contended that the remedy of the petitioner is to approach the Central Administrative Tribunal and not this court or Industrial Adjudicator. 14. Learned counsel Sri.Thomas Abraham, relying on a Full Bench decision of the Hon'ble Calcutta High Court in W.P. 21119 of 2011 and connected matters, argued that both courts and Administrative Tribunal and the Industrial Adjudicator have jurisdiction to decide a question related to regularisation of contract labour. He also referred to a judgment of Karnataka High Court in W.P.9974 of 2006. 15. A Full Bench of Calcutta High Court decided the matter, on a reference on account of the conflicting views of two Division Benches. He also referred to a judgment of Karnataka High Court in W.P.9974 of 2006. 15. A Full Bench of Calcutta High Court decided the matter, on a reference on account of the conflicting views of two Division Benches. One of the Division Bench held that now the Central Administrative Tribunal alone has jurisdiction in the matter of regularization of contract labourers in the Railway Service. However, another Division Bench took the view that the Central Administrative Tribunal has no jurisdiction to entertain application filed on behalf of Railway contract labours, since the contract labourers cannot be considered as the employees of Railway. 16. The Full Bench after referring to some of the Hon'ble Supreme Court judgments answered the reference as follows: "We are of the opinion that when regularization /absorption and /or reinstatement /continuance I sought in the service of the Eastern Railway, the Central Administrative Tribunal will have the jurisdiction and as per provisions of section 28 of the Act of 1985, the matter can also be filed before the Industrial Tribunal or the Labour Court, as the case may be. Section 28 does not oust such jurisdiction of the Central Administrative Tribunal, it gives option to the workman to choose the forum. Thus, High Court will have no jurisdiction to adjudicate upon the merits of the case directing absorption/regularization or reinstatement/continuance in service of such employees with respect to the affairs of the controversies as contemplated within the purview of the Act of 1985/ The cases have to be filed afresh before the Central Administrative Tribunal or Industrial Tribunal or Labour Court, at the option of the employees. The reference is accordingly answered." 17. The Full Bench decision as above, is premised on Section 28 of the Administrative Tribunal Act (Act 1985), I am also of the view that in the light of the Section 28 of the Act of 1985, the contract labourer is free to agitate the claim either before Central Administrative Tribunal or before the Industrial Adjudicator. In fact Section 28 of the Central Administrative Tribunal Act saves the jurisdiction of the Industrial Tribunal and does not oust the jurisdiction of the Industrial Tribunal. It is appropriate to quote Sec. 28 of the Act 1985:. In fact Section 28 of the Central Administrative Tribunal Act saves the jurisdiction of the Industrial Tribunal and does not oust the jurisdiction of the Industrial Tribunal. It is appropriate to quote Sec. 28 of the Act 1985:. Exclusion of jurisdiction of Courts except the Supreme Court - On and from the date from which any jurisdiction, powers and authority becomes exercisable under this Act by a Tribunal in relation to recruitment and matters concerning recruitment to any Service or post or service matters concerning members of any Service or persons appointed to any service or post, [no Court except]. (a) the Supreme Court; or (b) any industrial Tribunal, Labour Court or other authority constituted under the industrial Disputes Act, 1947 (14 of 1947) or any other corresponding law for the time being in force, shall have], or be entitled to exercise any jurisdiction, powers or authority in relation to such recruitment or matters concerning such recruitment or such service matters." Therefore, the matters covered under Section 28, the Industrial Tribunal will have the jurisdiction. 19. The petitioner's right therefore, for any relief during the pendency of the adjudication before the industrial Adjudicator would depend upon the decision by the Adjudicator as to the genuineness of the contract. If ultimately it is found that the contract is sham, certainly, the petitioner would be entitled for consideration for regularization in the employment of principal employer. The right of workmen is protected only when such exercise is completed by the Industrial Adjudicator or Central Administrative Tribunal as to the nature of contract. 20. A question incidentally also therefore, in the above background arises, whether a writ of mandamus can be issued on equitable consideration when there is no specific provision exists to protect the interest of workmen. The writ of mandamus is an extraordinary remedy to be exercised by this Court when the petitioners have right to relief, the respondents have duty to act and there are no other adequate remedy available to the petitioners. The Court cannot compel the respondents not to alter the service conditions, when they have no statutory obligations, even on sympathetically or equitable grounds. It is to be noted that the petitioners' rights are inchoate and yet to be crystalised. Therefore, this court cannot issue a writ of mandamus when there are no established rights. The Court cannot compel the respondents not to alter the service conditions, when they have no statutory obligations, even on sympathetically or equitable grounds. It is to be noted that the petitioners' rights are inchoate and yet to be crystalised. Therefore, this court cannot issue a writ of mandamus when there are no established rights. In the light of the above discussion, the petitioners are not entitled for any relief as prayed at the moment. Accordingly, the writ petitions are dismissed. No costs.