STEEL AUTHORITY OF INDIA LIMITED v. WORKMEN OF STEEL AUTHORITY OF INDIA LIMITED
2017-01-17
ANIRUDDHA BOSE
body2017
DigiLaw.ai
JUDGMENT : Aniruddha Bose, J. The petitioners before me are Steel Authority of India Limited (SAIL), a public sector organization. In this writ petition, they have challenged the legality of an award passed by the learned Judge, 9th Industrial Tribunal, Durgapur on 4th September 2009 directing them to treat one hundred and fifty nine persons as workmen of the management. According to SAIL, these persons were engaged by the contractors of the Company for undertaking intermittent jobs, and were not employees of SAIL. The award further directs the Company to give identical pecuniary benefits and other service benefits to the persons covered by it at par with other workmen already admitted in the company's roll and such benefits have been directed to be extended with effect from 24th January 2005, being the date of reference of the dispute to the Tribunal. 2. This award was passed on the basis of reference made to the Tribunal by the State Government by an order issued in terms of Section 10(2A) of the Industrial Disputes act, 1947 bearing no. 65-I.R/I.R/10I-50/2002 dated 17th January 2005 in respect of the dispute between the parties on two issues. These issues were:- "1. Whether the claim of the union for regularization of the services of 159 workmen (vide list enclosed) in the company is justified" 2. What relief, if any, are they entitled?" 3. The persons who have been directed to be treated as workmen of the Company are represented by a trade union, Burnpur Ispat Karmachari Sangha. Their claim is that these workmen were engaged initially as contract workers at the erstwhile Indian Iron and Steel Company (IISCO) Burnpur works between the years 1968 and 1982. Thereafter, they had become workmen of the petitioners. IISCO was a subsidiary of the writ petitioners, SAIL but has since been merged with the latter and is one of the units of SAIL. The Government of West Bengal on 9th February 1980 issued a notification in exercise of power under Section 10 of the Contract Labour (Abolition and Regulation) Act, 1970 (the 1970 Act) prohibiting different categories of jobs in different departments of the Company with effect from 1st April 1980. Subsequent to issue of that notification on 9th February 1980, number of workmen who were initially working under the contractors were regularized by the management of SAIL at the intervention of authorities of the labour department.
Subsequent to issue of that notification on 9th February 1980, number of workmen who were initially working under the contractors were regularized by the management of SAIL at the intervention of authorities of the labour department. But these workmen, represented by the respondent no. 1 did not get such benefit. The case of the workmen before the Tribunal was that the jobs they were performing were perennial in nature and were essential to smooth functioning of the Company. In their claim statement before the Tribunal, it had been urged on behalf of the workmen that in the year 1984, all the contracts were abolished and these workmen were brought under direct control of the actual employer. It has been alleged that thereafter some contractors were brought in through "paper arrangement". SAIL's stand, however, is that these workmen had been deployed at all material points of time in non-notified jobs. Specific case of the petitioners is that the jobs being performed by the aforesaid persons, who were engaged by contractors were intermittent, non-notified casual jobs like carrying out miscellaneous works which were preparatory arrangements, such as housekeeping, materials handling and other jobs in Burnpur works, Riverside Pump House complex including Nehru Parks and other premises of the Company. Admitted position, however, is that though the contractors had changed from time to time, these persons continued to work for the same organization. This practise has been attributed by the Company to pressure from the Trade Unions. In paragraph 2 of the writ petition, the fact that these workmen had continued to work has been admitted, but it has been stated that this was done for the sake of industrial peace and harmony. It is also the petitioners' stand that the question of absorption of such contract workmen is impermissible in law as they were not recruited by the Company following the regular recruitment procedure. 4. There have been past proceedings over regularization of contractor appointed workmen, including the present set of workmen. There is reference to such proceedings in paragraphs 14 and 15 of the Written Statement filed on behalf of the employers before the Tribunal. "14. That the employers deny the statements and allegations made in para 10 of the W/s. of the Union and states that as a sequel to Govt.
There is reference to such proceedings in paragraphs 14 and 15 of the Written Statement filed on behalf of the employers before the Tribunal. "14. That the employers deny the statements and allegations made in para 10 of the W/s. of the Union and states that as a sequel to Govt. of West Bengal Gazettee notification dated 9.2.80 engagement of contract labour was prohibited in the notified job, on the basis of tripartite settlement at the level of DLC and ALC, 1550 contract labour were absorbed in Co's roll w.e.f. 15.4.82. After that 84 contractors workers in Wagon Repair Shop and 113 contractors workers in Refractory (Stores) were regularized in Co's roll in 1987 and 1991 respectively. With that the notification of 9.2.80 was fully implemented. Hon'ble Division Bench of Calcutta High court had observed on 5.5.95 in matter of FMAT 840 of 1995 and FMAT 994 of 1994 arising out of C.O. No. 13795 (W) of 1990 while delivering the judgment that the Co. should investigate further from time to time as to whether any contract labour is engaged in permanent/perennial nature in job. The remaining contractors workers including the petitioners of this case are being engaged in non prohibited category of jobs which are neither permanent nor perennial in nature. This apart in the context of the pronouncement of the Hon'ble Supreme Court they being engaged in non-notified non-prohibited category of jobs and are not entitled to be absorbed. 15. That the statements and allegations made in para 11 & 12 of the W/s. of the Union are matters of record. The employers state that two appeals and order of Division Bench of Calcutta High Court arose from the judgment and order of Division Bench of Calcutta High Court in the case of (1) C.A. No. 719 of 2001, SLP (Civil) No. 17632, IISCO v. Joydeb Bakshi & Ors. (arising out of W.P. No. 11932 (W) of 1998, MAT No. 1704/1999) and (2) CA No. 720 of 2001, SLP (Civil) No. 17623 of 2001 IISCO v. Tapan Kumar Mitra & Ors. (arising out of W.P. No. 13024 (W) of 1998, MAT No. 1705/1999). Wherein the Ld. Single Judge of Calcutta High Court directed interalia absorption of Contract labour on the basis of notification dated 14.10.99. IISCO filed the applications against the notifications on the ground that the respondents are not covered by the notifications. On Aug.
(arising out of W.P. No. 13024 (W) of 1998, MAT No. 1705/1999). Wherein the Ld. Single Judge of Calcutta High Court directed interalia absorption of Contract labour on the basis of notification dated 14.10.99. IISCO filed the applications against the notifications on the ground that the respondents are not covered by the notifications. On Aug. 2001 appeals filed by IISCO have been allowed by the Hon'ble Supreme Court has overruled the Judgement in Air India's case which covered the field when the order of the High Court was passed. Accordingly the Hon'ble Supreme Court set aside the order of the High Court. IISCO is thus out of an order of mandamus commanding the Appellant Company for the absorption of 446 contractor labours (In two writ petitions) on the basis of the Central Govt. notification dated 14.10.1999. " (Quoted Verbatim) 5. On behalf of SAIL, first point which has been urged before me is that the reference was not proper, on the ground that there was no valid industrial dispute and the cause of the workmen was not properly espoused by the union. The Tribunal in its award dealt with both these points and held:- "On the other hand, Ld. Lawyer appearing on behalf of the workmen has submitted that their union Burnpur Ispat Karmachari Sangh is a Registered Trade Union under the Trade Unions Act having its Registration No. 8514 and it represented appreciable number of workmen of the company. Moreover, the Union has produced the copy of resolution prior to raising the Industrial Dispute which has been marked Ext. 88. The certificate of Registration of Trade Union and Rules and Constitution of the company have also been produced in this case and list of counter foils of the contribution received from the members of the union has been produced in evidence and marked Ext. 33 to 42 respectively. As per espousal is concerned there is no particular form prescribed to effect such espousal but I find in this case that the Union has expressed itself in the form of resolution and that resolution has been produced and marked exhibit according to law. Furthermore, the General Secretary of the Union, P.W. 2 has categorically stated. "The said 59 workers were also employees of IISCO but that they were not made permanent. We served demand notice upon the Management but the Management did not implement the demand notice.
Furthermore, the General Secretary of the Union, P.W. 2 has categorically stated. "The said 59 workers were also employees of IISCO but that they were not made permanent. We served demand notice upon the Management but the Management did not implement the demand notice. Thereafter we raised dispute at Deputy Labour Commissioner, Asansol. The Officer of the Management attended the meeting of the office of the Deputy Labour Commissioner, Asansol, but no settlement could be arrived at. The Deputy Labour Commissioner, Asansol referred the matter to the Govt. of West Bengal for reference. Regarding the dispute of the 159 employees we took resolution at our union." On hearing both sides and very careful scrutiny of the materials on record I have no hesitation to hold that the workmen cause has been properly espoused by the Registered Union, Burnpur Ispat Karmachari Sangh. Now I find the submission of Ld. Lawyer of the Employer/Company that no Industrial Dispute has been proved in this case. He has submitted that an Industrial Dispute comes to an existence only when demand is made by the workmen to the Employer and such demand remains unresolved giving rise to the Industrial Dispute between the Employer and the workmen, So, there is no Industrial Dispute between the parties. He has referred a case law as reported in 205 LLR 600 and another decision as reported in 1968 SC 520 on this score. Ld. Lawyer appearing on behalf of the Union that he has forcefully submitted that the Union raised the dispute before the employer and that on being refused they raised dispute before the BL.C. Asansol and thereafter this reference came up for adjudication. There cannot be any doubt that for the existence of an Industrial Dispute, there ought to be a demand by the workmen and the refusal to grant it by the management, how the demand should be raised, should not and could not be legal notice of fixity or rigidity. Turning to the instant case I find that the grievance of the workmen and their demand for its redressal has been communicated to the management. The means and mechanic of the communication adopted are not matters and much significance so long as the demand is that of the workmen and reaches to the management.
Turning to the instant case I find that the grievance of the workmen and their demand for its redressal has been communicated to the management. The means and mechanic of the communication adopted are not matters and much significance so long as the demand is that of the workmen and reaches to the management. I do not find any illegality or irregularity on this issue." (quoted verbatim) I do not find any justification to overturn this finding, which is backed by elaborate reasoning. 6. The next point urged before me is that there was no employer/employees relationship between the parties. This is essentially a question of fact, and the Tribunal has examined various materials produced before it and found:- "On very careful scrutiny of the materials on record I find that the facts show that the concerned workmen are under the control, both administrative and economic of the company and the work done by the workmen is integral part of the industry, so far documents are concerned. Admittedly the applicants were earlier employed in the works of the company by the Ex-contractors but after expiry of the contract, these applicants appear to have been taken under direct control of the management, definitely for the need of the company. I do not find any document to show that the present applicants again went under the control of the contractors after expiry of the earlier control. So, the story of new contractors as put forth by the company can reasonably be held to be camouflage and has brought into the existence in order to conceal the relationship between the workers and the management. The company was given opportunity for adducing evidence of 6 (six) Contractors for the proper adjudication of the present reference, but no contractor has come forward to depose that the applicants were their workmen. On the other hand, I find existence of all the necessary factors which are required to be decided for establishing the master servant relationship have been fulfilled. Hon'ble Supreme Court has been pleased to observe in the case law as reported in AIR 1978 SC. 1410 . "Where a worker or group of workers, labours to produce goods or services and these gods or services are for the business of another, that other is, in fact, the employer.
Hon'ble Supreme Court has been pleased to observe in the case law as reported in AIR 1978 SC. 1410 . "Where a worker or group of workers, labours to produce goods or services and these gods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, still and continued employment, if he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship or contractor is of no consequence when, on lifting the veil or looking out of conspectus of factors governing employment, it is found, though drapsed in different perfect proper arrangement, that the real Employer is the management, not the immediately contractor." This case law is very much applicable here in this case. On very careful scrutiny of the materials on record and also regard been had to the entire circumstances of the instant case, it is very difficult to avoid the irresistible conclusion that the applicants were initially employed by the contractors but subsequently the management started controlling the supervising their works. The applicants of the instant case have been doing their works admittedly since 1968 to 1982. Nothing has been proved to show that the jobs performed by the applicants are not perennial in nature. Workmen have been working more than couple of decades in different departments closely connected with the process of production of the company. The dictionary meaning "perennial" is lasting for a long time; Enduring or continually recurring, continually engaged in a specific activity. In these premises, I hold that the issue raised under reference be answered in the affirmative in favour of the applicants." 7. Such finding has been assailed by Mr. Gupta, learned Senior Counsel appearing for the petitioners. His main submission is materials, relying on which the Tribunal came to its finding could not lead to such a conclusion. The petitioners, in substance wants me to hold that such finding is perverse. He has also submitted that none of the workmen involved was recruited through the applicable recruitment procedure, and hence their regularization or absorption cannot be directed by the Tribunal. On the former point, my attention has been drawn to Exhibits 15, 16, 20, 21 and 29 which were produced before the Tribunal. Mr.
He has also submitted that none of the workmen involved was recruited through the applicable recruitment procedure, and hence their regularization or absorption cannot be directed by the Tribunal. On the former point, my attention has been drawn to Exhibits 15, 16, 20, 21 and 29 which were produced before the Tribunal. Mr. Gupta argued that on the basis of these exhibits, it could not be held that the workmen concerned were direct employees of SAIL. For a Court exercising the power of judicial review, there is limited scope to re-appreciate evidence which formed the foundation of the ultimate decision of the fact finding Tribunal. Keeping in mind this limitation, I shall refer to these exhibits. Ext. 15 is a letter of Assistant General Manger of the company advising the security force naming some of the workmen as those temporarily deployed in shifts. Ext. 16 is a leave application of one Tapan Kumar Mitra, directly made to the Manager, Pig Casting machine, Blast furnace department of the Company. Ext. 20 is a communication originating, again from a Company official, dated 19th July 2002 for night permission of some of the workmen. In Exhibits 15 and 20, the workmen have been referred to as "contractor workers", but instructions or advises have directly originated from the Company officials, without any intervention of the contractor. Ext. 21 is an advise originating from an Assistant General Manager of the Company, meant for the Gate-in-charge, in which seven individuals out of the workmen in whose favour the award has been passed have been referred to as "employees of S.M.S. (Mech. Maint)." Argument of Mr. Gupta has been that the said officials had no power or authority to confer "employee" status on contractors' workmen. But that is not the sole factor which could determine the status of the workmen with whose employment dispute this writ petition is concerned. 8. In the case of Steel Authority of India Ltd. & Ors. v. National Union Waterfront Workers & Ors. [ (2001)7 SCC 1 ], a Constitution Bench of the Supreme Court laid down the principles following which plea of contract labour for being treated as employee of the establishment would have to be dealt with. Several appeals were disposed of by the Supreme Court by this judgment. In this judgment it has been held :- "125. The upshot of the above discussion is outlined thus: ........
Several appeals were disposed of by the Supreme Court by this judgment. In this judgment it has been held :- "125. The upshot of the above discussion is outlined thus: ........ (2) (a) A notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government : (1) after consulting with the Central Advisory Board or the State Advisory Board, as the case may be, and (2) having regard to (i) conditions of work and benefits provided for the contract labour in the establishment in question; and (ii) other relevant factors including those mentioned in sub-section (2) of Section 10; (b) inasmuch as the impugned notification issued by the Central Government on 9-12-1976 does not satisfy the aforesaid requirements of Section 10, it is quashed but we do so prospectively i.e. from the date of this judgment and subject to the clarification that on the basis of this judgment no order passed or no action taken giving effect to the said notification on or before the date of this judgment, shall be called in question in any tribunal or court including a High Court if it has otherwise attained finality and/or it has been implemented. (3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under subsection(1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the establishment concerned. (4) We overrule the judgment of this court in Air India case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any court including High Court, for absorption of contract labour following the judgment in Air India case (supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final.
(5) On issuance of prohibition 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 labour in regard to conditions of service, the industrial adjudicator will have to consider the question 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 is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder. (6) If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications." (emphasis supplied) 9. Mr. Mitra, appearing in person on behalf of the Union, who are the first respondent, submitted that the persons who he is representing were a party to the said decision. At the initial stage, the first respondent were represented by their learned counsel, but subsequently Mr. Mitra appeared in person and argued the case of the workmen. He brought to my notice the fact that in the award itself there is reference to various past proceedings between the management and the employees.
At the initial stage, the first respondent were represented by their learned counsel, but subsequently Mr. Mitra appeared in person and argued the case of the workmen. He brought to my notice the fact that in the award itself there is reference to various past proceedings between the management and the employees. It has been recorded in the award:- "That after issuance of the aforesaid notification a similar number of employees moved writ application before Hon'ble High Court, Calcutta and thereafter an appeal was preferred before Division Bench and the Division Bench of the Hon'ble High Court in the case of FMAT No. 994 of 1994 was pleased to dispose of the appeal holding that the process of regularization had been under taken by the company and as a quite number of employees had already by been regularized or absorbed in the regular service of the company after assessment of the nature of work and therefore the company should go on making similar investigation or assessment with regard to the petitioner and the company should an endeavour to take steps for concerned workmen were rendering services for a considerable period of time and jobs are perennial in nature of then there is no reason as to why the petitioners should not be absorbed. Thereafter a number of employees were absorbed but the management did not regularize the services of the petitioners as their regular employees. That the management of the company went to Hon'ble Supreme Court on appeal which was registered as C.A. No. 7191720 of 2001 and all connected appeals were finally disposed of on 30th August, 2001. That in the said judgment, Hon'ble Supreme Court has been pleased to hold that the Industrial Adjudicating Authority is the appropriate authority to find out whether the Contractor is a mere ruse/camouflage to avoid compliance of various beneficial registration so as to deprive the workers thereunder and if the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer and to be regularized in services subject to the conditions. If the contract is found to be genuine the Employers shall give preference to be erstwhile contract labour by releasing conditions regarding age, academic qualification, technical qualification etc." 10. Mr.
If the contract is found to be genuine the Employers shall give preference to be erstwhile contract labour by releasing conditions regarding age, academic qualification, technical qualification etc." 10. Mr. Mitra has pointed out that the cause of the set of employees espoused by the Union he represents was also asserted before the Supreme Court in C.A. No. 719-20 of 2001 but those proceedings originated from a writ petition and Hon'ble Supreme Court opined that the industrial adjudicator would be the appropriate authority for dealing with such grievance. Another appeal of the management also in connection with abolition of contract labour was decided by the Supreme Court in the case of Steel Authority of India Limited v. Union of India & Ors. [ (2006) 12 SCC 233 ]. In that case the State Government had made a reference under Section 10(1)(c) of the Industrial Disputes Act, 1947 Act in the following term :- "Are the contract workers employed in the nature of contract work listed as per annexure working in the premises of Visveswaraya Iron and Steel Ltd., Bhadravathi, justified in demanding absorption as regular permanent employees of Visveswaraya Iron & Steel Ltd., Bhadravathi?" 11. In that case, one of the questions raised by the management before the Industrial Forum was that the matter in dispute related to the Contract Labour (Regulation and Abolition) Act, 1970, and the reference made by the State Government in terms of the 1947 Act was impermissible in law. Point was also raised by the management that the State Government not having issued any notification prohibiting employment of contract labour under the 1970 Act pertaining to which the workmen had been engaged, the workmen did not have any legal right to claim absorption. An award was made by the Industrial Forum holding the reference to be not maintainable. Trade Unions challenged that award before the High Court. The main issue which was examined and determined by the Supreme Court was that neither the Labour Court nor the Writ Court could determine the question as to whether contract labour should be abolished or not, the same being within the exclusive domain of the appropriate Government. In this judgment also, the jurisdiction of the industrial adjudicator to determine the question as to the whether the contract entered into between the management and the contractor was sham one or not was discussed and it was held :- "24.
In this judgment also, the jurisdiction of the industrial adjudicator to determine the question as to the whether the contract entered into between the management and the contractor was sham one or not was discussed and it was held :- "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." 12. In two other decisions cited before me the question of absorption of contract labour arose. These are (i) International Airport Authority of India v. International Air Cargo Workers' Union and Another [ (2009) 13 SCC 374 ] and (ii) Food Corporation of India v. Central Government Industrial Tribunal, Asansol & Ors. [(2009) 3 CLT 16 (HC)]. In the case of International Airport Authority of India (supra) the claim for regularization of certain ground workers handling cargo at the erstwhile Madras Airport, who were engaged by the licensed contractor was rejected. On termination of the original licence, there were several rounds of litigations between the contract workers represented by their unions and the Airport's Authority and at one stage, the cargo handling jobs were entrusted to a cooperative society form by the contract labours. Their plea for regularization was rejected. In that case, however, the employees did not plead that the contract labour agreement between the society and the authority was a sham one. It was observed in paragraph 43 of the report :- "43. What is significant is that the Union did not plead that the contract labour agreement between the Society and IAAI was a sham and nominal. In fact, it could not do so, as the contract was not with a private contractor operating with a profit motive, but with a Society of the very workers.
What is significant is that the Union did not plead that the contract labour agreement between the Society and IAAI was a sham and nominal. In fact, it could not do so, as the contract was not with a private contractor operating with a profit motive, but with a Society of the very workers. Nor did the first respondent Union allege that IAAI was exercising direct control and supervision over their work or that IAAI was directly paying their salary or the IAAI was directly taking disciplinary action against them. In short, the two grounds urged were violation of Section 9-A of the ID Act and adoption of different standards and methods at different cities in regard to cargo handling." 13. The judgment of a Division Bench of this Court in the case of Food Corporation of India (supra) dealt with an award passed by the Tribunal for absorption of 49 casual workmen. In this case, the point that the agreement of the contractor with the management being sham does not appear to have had been taken. Relying on the Constitution Bench judgment of the Supreme Court in the case of Secretary, State of Karnataka & Ors. v. Uma Devi (3) & Ors. [ (2006) 4 SCC 1 ] the Division Bench rejected the plea of the workmen for regularization. This case had a specific feature, which appears from paragraphs 19, 20 and 21 of the report :- "19. In the instant case it appears that the workmen, illegal appointees, moved the writ application in the year 1994 and got an order of status quo to maintain their service condition passed by the writ Court and as such, service of the workmen since 1994 till this date is covered by the order of the Court, which is accordingly attracted by the said riders of para 53 as quoted, to negative their claim. 20. Even in the case of appointee as daily wager, the Apex Court considered the issue whether continuous working of more than 210 days ipso facto would entitle any relief for regularization of service in the cases Indian Drugs & Pharmaceuticals Ltd. (supra), Gangadhar Pillai (supra), M.P. Housing Board & Anr. v. Manoj Shrivastava, reported in (2006) 2 SCC 702 , Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra & Ors., reported in (2005) 5 SCC 122 in negative way.
v. Manoj Shrivastava, reported in (2006) 2 SCC 702 , Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra & Ors., reported in (2005) 5 SCC 122 in negative way. The same view reiterated by the Apex Court in the case Pankaj Gupta & Ors. v. State of J & K & Ors., reported in (2004) 8 SCC 353 . Those cases further have been relied upon in the case Dhampur Sugar Mills Ltd. v. Bhola Singh, reported in (2005) 2 SCC 470 . In the case Dharampur Sugar Mills Ltd. (supra) in para 18, the Court held "when a workman is appointed in terms of a scheme on daily wages, he does not derive any legal right to be regularized in his service. It is settled law that 240 days work in a year by itself cannot be a ground for regularization when workman not being appointed in accordance with rule." "21. Having regard to the aforesaid judgments of the Apex Court, now the law has got its firm root being the law of the land that no regularization even in respect of a workman under Industrial Dispute act is permissible unless the contingencies of the law is satisfied, namely, appointment following the rule, appointment in a post and appointment for a long continuous period in the angle of Uma Devi (3) & Ors. (supra). This law of the land was existing and it has been re-echoed and reviewed in Uma Devi (3) & Ors. (supra)." 14. The other authority on which the petitioners have relied upon is the case of U.P. Power Corporation Ltd. & Anr. v. Bijli Mazdoor Sangh & Ors. [(2007) 5 SCC 575]. In this case, two individuals were appointed as chowkidars on daily wage basis on 1st June 1997. On 17th January, 1979 the appellant decided that no one would be engaged as casual workers. Service of two individuals were terminated after the construction work at the location they were working was over. They disputed their termination on the ground of non-payment of retrenchment compensation. The Tribunal held their termination to be improper as they had completed 240 days of work. The power corporation approached the Supreme Court when they were unsuccessful before the High Court.
They disputed their termination on the ground of non-payment of retrenchment compensation. The Tribunal held their termination to be improper as they had completed 240 days of work. The power corporation approached the Supreme Court when they were unsuccessful before the High Court. In this case the appellant/employer sought to rely on the case of the Secretary, State of Karnataka v. Uma Devi (3) [ (2006) 4 SCC 1 ] and the respondent/employees sought to distinguish the application of the principle laid down in the case of Uma Devi (3) on the ground that, in that judgment, the power of the industrial adjudicator was not directly in issue. The Hon'ble Supreme Court held that there could not be a case for regularization without there being employer/employee relationship. It was held in this case:- "7. The plea of learned counsel for the respondent that at the time the High Court decided the matter, decision in Umadevi (3) case was not rendered is really of no consequence. There cannot be a case for regularisaiton without there being employee-employer relationship. As noted above the concept of regularization is clearly linked with Article 14 of the Constitution. However, if in a case the fact situation is covered by what is stated in para 45 of Umadevi (3) case the industrial adjudicator can modify the relief, but that does not dilute the observations made by this Court in Umadevi (3) case about the regularization. 8. On facts it is submitted by learned counsel for the appellants that Respondent 2 himself admitted that he never worked as a pump operator, but was engaged as daily labourer on daily-wage basis. He also did not possess the requisite qualification. Looked at from any angle, the direction for regularization, as given could not have been given in view of what has been stated in Umadevi (3) case." 15. Neither in U.P. Power Corporation Ltd's case (supra), nor in the case of Food Corporation of India (supra), the question of an agreement with the contractor being sham or a camouflage was in issue. But in the former authority, it has been held that the ratio of Uma Devi (3) (supra) applied to proceedings before the industrial adjudicator. In two later judgments Bhilwara Dugdh Utpadak Sahakari S. Ltd. v. Vinod Kr. Sharma & Ors.
But in the former authority, it has been held that the ratio of Uma Devi (3) (supra) applied to proceedings before the industrial adjudicator. In two later judgments Bhilwara Dugdh Utpadak Sahakari S. Ltd. v. Vinod Kr. Sharma & Ors. [ AIR 2011 SC 3546 ] and G.M. ONGC Silchar v. ONGC Contractual Workers Union [(2009) 1 SCC (L & S) 661] decisions of the industrial adjudicator that the workmen concerned were employees of the main employer and not the employees of the contractor has been confirmed upon considering the Steel Authority of India judgment [ (2001) 7 SCC 1 ]. In the case of GM ONGC Contractual Workers Union (supra), the employer had engaged large number of field staff initially through the employer. The demand of the employees for regularization followed the dispute resolution course specified in the 1947 Act, and the Industrial Tribunal held that the members of the Union were indeed employees of ONGC. The employer's challenge to the award was initially successful before the Single Judge of the High Court, but on appeal the Division Bench restored the award. The employer's appeal before the Supreme Court failed, and it was held by the Supreme Court :- "18. There are several observations which do suggest that a workman who has put in 240 days or is a contractual worker, is not entitled automatically to regularization. We, however, believe that the present case is not one of regularization simpliciter such as in the case of an ad-hoc or casual employee claiming this privilege. The basic issue in the present case is the status of the workmen and whether they were the employees of the ONGC or the contractor and in the event that they were employees of the former, a claim to be treated at par with other such employees. As would be clear from the discussion a little later, this was the basic issue on which the parties went to trial, notwithstanding the confusion created by the ill-worded reference. The Division Bench has examined the evidence on this aspect and has endorsed the finding of the Industrial Tribunal.
As would be clear from the discussion a little later, this was the basic issue on which the parties went to trial, notwithstanding the confusion created by the ill-worded reference. The Division Bench has examined the evidence on this aspect and has endorsed the finding of the Industrial Tribunal. We also find that the observations in R.K. Panda's case(supra) are significant: "It is true that with the passage of time and purely with a view to safeguard the interests of workers, many principal employers while renewing the contracts have been insisting that the contractor or the new contractor retains the old employees. In fact, such a condition is incorporated in the contract itself. However, such a clause in the contract which is benevolently inserted in the contract to protect the continuance of the source of livelihood of the contract labour cannot by itself give rise to a right to regularization in the employment of the principal employer. Whether the contract labourers have become the employees of the principal employer in course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors. As such at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act are the competent for a to adjudicate such disputes on the basis of the oral and documentary evidence produced before them." 16. The Supreme Court, discussed the ratio of the case of Uma Devi (3) in paragraphs 20, 21 and 22 of the report, and held :- "20. It was contended by Mr.
The Supreme Court, discussed the ratio of the case of Uma Devi (3) in paragraphs 20, 21 and 22 of the report, and held :- "20. It was contended by Mr. Dave that this Court in Uma Devi's case (supra) has clearly opined that the contract or casual labour could not claim regularization and he has in particular emphasized that in the light of the admitted position that at some stage, the workmen were indeed contract employees the ratio of the aforesaid was clearly applicable to the facts of the case. We, however, observe that the aforesaid decision was considered by another Bench of this Court in Pandey's case (supra) wherein it has been held that the ratio of any decision must be understood in the background of the facts of that case and that the case is only an authority for what it logically decides and what logically flows from it. In Pandey's case (supra) the question was as to whether casual employees working in the Electricity Board were entitled to regularization of their services. This is what the Division Bench had to say in paragraphs 16 and 17: "16.We are constrained to refer to the above decisions and principles contained therein because we find that often Uma Devi's case (supra) is being applied by Courts mechanically as if it were a Euclid's formula without seeing the facts of a particular case. As observed by this Court in Bhavnagar University's case (supra) and Bharat Petroleum Corporation Ltd.'s case (supra), a little difference in the precedential value of a decision. Hence, in our opinion, Uma Devi's case (supra) cannot be applied mechanically without seeing the facts of a particular case, as a little difference in facts can make Uma Devi's case (supra) inapplicable to the facts of that case. 17. In the present case the writ petitioners (respondents herein) only wish that they should not be discriminated against vis-a-vis the original employees of the Electricity Board since they have been taken over by the Electricity Board "in the same manner and position". Thus, the writ petitioners have to be deemed to have been appointed in the service of the Electricity Board from the date of their original appointments in the Society.
Thus, the writ petitioners have to be deemed to have been appointed in the service of the Electricity Board from the date of their original appointments in the Society. Since they were all appointed in the society because 4.5.1990 they cannot be denied the benefit of the decision of the Electricity Board dated 28.11.1996 permitting regularization of the employees of the Electricity Board who were working from before 4.5.1990. To take a contrary view would violate Article 14 of the Constitution. We have to read Uma Devi's case (supra) in conformity with Article 14 of the Constitution, and we cannot read it in a manner which will make it in conflict with Article 14. The Constitution is the supreme law of the land, and any judgment, not even of the Supreme Court, can violate the Constitution." It will be seen therefore that each case has to be examined to a very large extent on its specific facts, and a universal yardstick should not be attempted. 21. In the instant case, on a consideration of material produced before it, the Tribunal came to the following conclusions : (1) That there existed a relationship of master and servant. (2) That there was no contractor appointed by ONGC. (3) That the ONGC used to supervise and allot works to individual workers. (4) That the ONGC took disciplinary action and called for explanations from the workers. (5) The workers were paid wages though they did not attend their duties due to Cachar Bandh and due to flood. (6) The wages were paid direct to the workers by the ONGC and the acquaintance roll was prepared by the Management to make payment to the workmen". It has also been observed that even the ONGC had admitted that since 1988, there was no licensed contractor and that the wages were being paid through one of the leaders of the Union and one such contractor, Manik has been named. The Tribunal then opined that it appeared from the record that Manik himself was a workman and not a contractor as he too was shown in the acquaintance roll to have received wages.
The Tribunal then opined that it appeared from the record that Manik himself was a workman and not a contractor as he too was shown in the acquaintance roll to have received wages. We find that the real issue was as to the status of the workmen as employees of the ONGC or of the contractor, and it having been found that the workmen were the employees of the ONGC they would ipso-facto be entitled to all benefits available in that capacity, and the issue of regularization would, therefore, pale into insignificance. We find that in this situation, the Industrial Tribunal and the Division Bench of the High Court were justified in lifting the veil in order to determine as to the nature of employment in the light of the judgments quoted above. We, therefore, find that the ratio of the judgment in Uma Devi's case (supra) would not be applicable and that the facts of Pandey's case are on the contrary more akin to the facts of the present one. 22. We are therefore of the opinion that in the light of the aforesaid observations, Mr. Dave's argument that the workmen being on a contractual basis, were not entitled to any relief, cannot be accepted and the large number of judgments cited by Mr. Dave, on this aspect, cannot be applied to the facts of the case." 17. Point has also been raised on behalf of the petitioners that the initial appointments of the concerned workmen were not as per Recruitment Rule and they were not engaged in notified jobs. As regards the first point, this plea was not specifically taken in the written statement of the employer before the Tribunal. The employer ran a case before the Tribunal that these workmen were recruited by the contractors. This also does not appear to be a factor considered in the Constitution Bench decision of Steel Authority of India Limited (supra) decided in 2001, in which an exception to the general bar on regularization was carved out in paragraph 125(5) of the report, which has been reproduced earlier in this judgment. Moreover, the Steel Authority of India (supra) decision requires examination of real status of an employee vis-a-vis the principal or the main employer and the contractor.
Moreover, the Steel Authority of India (supra) decision requires examination of real status of an employee vis-a-vis the principal or the main employer and the contractor. In such a context, where initial entry of an employee is through a contractor, as was the case in GM ONGC, Silchar (supra), the question of initial employment not being through the regular recruitment route cannot arise. If an employee is initially recruited by the contractor, but later on is merged into the management's regular workforce but management wants to continue to treat such person as contractor's labour, his original entry, obviously could not be as per company's recruitment rule. Question may arise, while directing absorption or a mandate to treat such person as regular employee, as to whether he has necessary qualification or not to perform the duties as regular employee of the Company. But no point has been raised in this proceeding about qualification of the workmen to perform the duties once he becomes a regular employee of the petitioners. 18. There is another factor which I shall have to consider while dealing with this issue in this judgment. In 2001 Steel Authority of India (supra) decision, the workmen and the employer were both parties. The writ petitions of, or on behalf of the workmen were rejected ultimately but the forum which could adjudicate such a dispute and the legal principles on which such adjudication could take place was spelt out in that judgment in clear terms. The directives given in that judgment thus had attained finality between the parties, and it has been contended on behalf of the respondent no. 1 that the union had followed the course mandated in that decision. Mr. Gupta's contention is that at the time the decision was delivered, though forum for adjudication and the principles on which such adjudication shall take place was laid down, the rights and obligations of the parties had not crystalized at that stage. Relying on the decision of the Supreme Court in the case of State of Orissa v. Aswini Kumar Baliar Singh [ (2006) 6 SCC 759 ], he submits that at the time of actual adjudication of rights of the parties, subsequent change in legal position has to be taken into account.
Relying on the decision of the Supreme Court in the case of State of Orissa v. Aswini Kumar Baliar Singh [ (2006) 6 SCC 759 ], he submits that at the time of actual adjudication of rights of the parties, subsequent change in legal position has to be taken into account. The other authority relied on in support of the this proposition in the case of State of Maharashtra and Another v. Sarva Shramik Sangh, Sangli and Others with Sarva Shramik Sangh, Sangli v. State of Maharashtra and Others [ (2013) 16 SCC 16 ]. His submission is that after the Supreme Court's decision in Uma Devi (3) (supra) was delivered, the jurisdiction of industrial adjudicator to direct treating an irregular entrant to job through contractor as a regular employee stands abrogated. I am unable to accept this argument. In the case of GM ONGC SILCHAR (supra), the Supreme Court while examining the claim of contractor appointed labourers to be given regular status was considered. The Uma Devi (3) (supra) was considered by the Supreme Court in that judgment and ultimately the claim of the labourers on the basis of 2001 Steel Authority of India (supra) decision was upheld. That directive contained in paragraph 126 (5) and (6) of the latter decision still appears to hold the field. 19. It has also been urged on behalf of the petitioners that the concerned workmen were not engaged in any prohibited job under the 1970 statute. On this count, the Tribunal considered evidence adduced on behalf of the employer and found that no material was there to show that the workmen were engaged in non-prohibited category or jobs. On the other hand, there was admission on the part of witness of the employer that all the applicants were doing their jobs in the respective departments. There is finding of the Tribunal that the management representatives had explained the position directly to the applicants without involving the contractor. It has also been held by the Tribunal :- "Admittedly the applicants were earlier employed in the works of the company by the EX-contractors, but after expiry of the contract, these applicants appear to have been taken under direct control of the management, definitely for the need of the company.
It has also been held by the Tribunal :- "Admittedly the applicants were earlier employed in the works of the company by the EX-contractors, but after expiry of the contract, these applicants appear to have been taken under direct control of the management, definitely for the need of the company. I do not find any document to show that the present applicants again went under the control of the contractors after expiry of the earlier contract. So, the story of the new contractors as put forth by the company, can reasonably be held to be camouflage and has brought into the existence in order to conceal the relationship between the workers and the management. The company was given opportunity for adducing evidence of 6 (six) Contractors for the proper adjudication of the present reference, but no contractor has come forward to depose that the applicants were their workmen. On the other hand, I find existence of all the necessary factors which are required to be decided for establishing the master servant relationship have been fulfilled." In view of this clear finding by the Tribunal that master-servant relation stood established, I do not think argument of the petitioners on this point can be accepted. 20. Now I shall test as to whether the Tribunal's decision can be held to be perverse having regard to the materials which were examined by it. Mr. Gupta has argued that there was no material before the Tribunal to infer that the employment contract of the concerned workmen with the contractor was sham. The other point on which argument has been advanced is that the work which the concerned persons performed were intermittent and non-perennial in nature. I have reproduced the part of the award in which it has been observed by the Tribunal that though the applicants were earlier employed in the work of the company by the ex-contractors after expiry of the contract they had been taken under the fold of the management. It has also been found by the Tribunal that the workmen have been working more than couple of decades in different departments clearly connected with the process of the production of the company. 21. I do not find the decision of the Tribunal to be perverse. On behalf of the workmen, 58 exhibits were relied upon and oral evidence was also adduced both by the workmen and the management.
21. I do not find the decision of the Tribunal to be perverse. On behalf of the workmen, 58 exhibits were relied upon and oral evidence was also adduced both by the workmen and the management. These exhibits demonstrate direct supervision of officers of the petitioners over these workmen. Mr. Gupta has argued that certain officers of SAIL who described the workmen as employees had no authority to do so. But this is not a case where status is sought to be established by documents. The Tribunal had to see what was the actual nature of relationship between the parties. Thus it is immaterial as to whether a particular officer was authorised to describe a particular workman as direct employee of the organization or not. What is material is that they were treated as direct employees of the Company. In some cases, they were required to work in night shifts, which ordinarily a permanent workman has to work in. For certain period, the workmen had come out of the fold of the contractor. In this factual perspective, the description of the workmen represented by the first respondent as contract-worker is was a sham exercise, a camouflage to conceal their real status. 22. Though reference was framed as if it was case of regularization, this was not a case where dispute was on regularization simpliciter. This was a case where the Tribunal examined as to whether the employment by the contractor was a sham or camouflage arrangement. In my opinion the Tribunal had correctly arrived at its finding. I accordingly dismiss the writ petition. The award of the Tribunal is sustained. Interim order passed in this matter, if any, shall stand dissolved. 23. Urgent Photostat certified copy of this order be given to the parties expeditiously, if applied for.