Full Judgment Text
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PETITIONER:
B.H.E.L. WORKERS’ ASSOCIATION HARDWAR & ORS., ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & ORS., ETC. ETC
DATE OF JUDGMENT18/01/1985
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
KHALID, V. (J)
CITATION:
1985 AIR 409 1985 SCR (2) 611
1985 SCC (1) 630 1985 SCALE (1)58
ACT:
Contract Labour (Regulation and Abolition) Act 1970,
Section 10 an i Contract Labour (Regulation and Abolition)
Central Rules 1971, Rule 25.
Public Sector Undertaking-’Contract labour’ engagement
of by contractors -Claim of ’contract labour’ of performance
of same work as workers directly employed’ by undertaking
but receiving lesser Wages- Whether court entitled to issue
declaration abolishing ’contract labour’ system.
Constitution of India 1950, Article 32.
Employment of contract labour’ in public sector
undertaking-Competency of court to enquire into question and
issue declaration abolishing ’contract labour’ system.
HEADNOTE:
The petitioner-union contended in the writ petitions
to this Court that out of the 16,000 and odd workers working
within the premises of the respondent undertaking as many as
a thousand workers were treated as ’contract labour’ and
placed under the control and at the mercy of contractors and
that though they did the same work as the workers directly
employed by the undertaking, they were not paid the same
wages nor were their conditions of service the same. It was
further alleged that the management pays to the contractors
and in turn the contractors pay them their salary after
deducting substantial commissions and that the wages
received by them bear no comparison with the wages paid to
those directly employed by the undertaking. In view of these
circumstances it was alleged that the rights of these
workers were infringed under Articles 14 and 19(1) (f) and a
declaration was sought from the Court, that the system of
contract labour prevalent in the respondent-undertaking was
illegal, that the ’contract labour’ employees were direct
employees of the respondent-undertaking and entitled to
equal pay as the workmen directly employed,
612
The respondent-undertaking opposed the writ
petitions and contended that if the petitioners had any
genuine grievance they could have availed themselves of the
rights secured to them under the Contract Labour (Regulation
and Abolition) Act, 1970 Minimum Wages Act, 1948. Equal
Remuneration Act 1976 etc., for ventilation their grievances
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and seeking appropriate relief, instead of invoking Article
32. It was further contended, that certain jobs though
required to be done within the plant area could be more
conveniently and efficiently done on a job-con tract basis
by contractors and this Was actually due to the
incorporation of new technology for expansion of production
programme with foreign collaboration. The jobs themselves
were entrusted to contractors and it was not appropriate to
say that the contractors merely supplied the labour, they
were required to do the total job and payment was made on
the basis of the quantum of work involved and not on the
basis of the workers employed by the contractor.
Dismissing the writ petitions,
^
HELD: 1. The Contract Labour (Regulation and
Abolition) Act, 1970 does not provide for the total
abolition of contract labour, but only for its abolition in
certain circumstances, and for the regulation of the
employment of con tract labour in certain establishments The
Act is not confined to private employers only. The
definitions of ’establishment’ section 2(e), and ’principal
employer’ section 2(g), expressly include the Government or
any of its departments. [616F, 617]
2. No invidious distinction can be made against
Contract labour. Contract labour is entitled to the same
wages, holidays, hours of work, and conditions of service as
are applicable to workmen directly employed by the principal
employer of the establishment on the same or similar kind of
work. They are entitled to recover their wages and their
conditions of service in the same manner as workers employed
by the principal employer under the appropriate Industrial
and Labour Laws. If there is any dispute with regard to the
type of work, the dispute has to be decided by the Chief
Labour Commissioner (Central). [620A-C]
3. Parliament has not abolished contract labour but
has provided for its abolition by the Central Government in
appropriate cases under sec. 10 of the Contract Labour
(Regulation and Abolition) Act, 1970. It is not for the
court to enquire into the question and to decide whether the
employment of contract labour in any process, operation or
other work in any establishment should be abolished or not.
This is a matter for the decision of the Government after
considering the matters required to be considered under sec.
10 of the Act. [620C-D]
4. Whether the work done by the Contract Labour is the
same or similar work as that done by the workmen directly
employed by the principal employer of any establishment is a
matter to be decided by the Chief Labour Commissioner under
the proviso to Rule 25(ii) (v) (a) of the Contract Labour
(Regulation and Abolition) Central Rules, 1971. [620D-E] 31
In the instant case, from the allegations and counter-
allegations made in the writ petition it is not possible in
an application under Art. 32 to embark into an enquiry
whether the thousand and odd workmen working in various
capacities and engaged in multifarious activities do work
identical with work done-by
613
the workmen directly employed by the BHEL and whether for
that reason they should be treated not as contract labour
but as direct employees of the undertakings. There are other
forums created under statutes designed for deciding such
question.
5. A direction would issue to the Central Government to
consider whether the employment of Contract Labour should
not be prohibited under sec. 10 of the Act in any process,
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operation or other work of the public undertaking. [620E] 6.
There will also be a direction to the Chief Labour
Commissioner to enquire into the question whether the work
done by the workmen employed by the contractors is the same
type of work as that done by the workmen directly employed
by the principal employer in the undertaking. [620E-F]
JUDGMENT:
ORIGINAL JURISDICTION : Writ Petition ( Civil) Nos.
7982, 9874 and 9249 of 1983
(Under article 32 of the Constitution of India)
R.K. Garg, D.K Garg and A.K. Goel for the Petitioners.
G.L. Sanghi, Kapil Sibal, V.C. Mahajan. Miss Meera
Mathur. S. Sukumaran O.C. Mathur, D.N. Mishra, Ashok
Grover, C.K. Mahajan, l.S. Goel, R.N. Poddar and C.V. Subba
Rao for the Respondents.
The Judgment of the Court was delivered by
CHINNAPPA REDDY, J. These three Writ Petitions Art.
under 32 of the Constitution of India appear to us to be
entirely misconceived. In Writ Petition No. 7982 of 1983 and
Writ Petition No. 9874 of 1983, the respective petitioners
are the BHEL Workers Association, Hardwar and others and
Bharat Heavy Electricals Karamchari Sangh, Ranipur, Hardwar.
They allege that out of the 16,000 and odd workers working
within the premises of the BHEL factory at Hardwar, as many
as a thousand workers are treated as ’contract labour’ and
placed under the control and at the mercy of contractors.
Though they do the same work as the workers directly
employed by the BHEL, they are not paid the same wages nor
are their conditions of service the same. They allege that
the management pays their salary to the contractors and in
turn the contractors pay them their salary after deducting
substantial commission. The wages received by them bear no
comparison with the wages paid to those directly employed by
the BHEL. They say that they work within the premises of the
BHEL in different departments under the direct supervision
and control of the Chargemen, Foremen and Engineers of the
BHEL. Their
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working hours are as stipulated by the BHEL. They work on
the machines of the BHEL and they are essentially part of
the organisation involved ht the production process of
manufacture carried on by the BHEL. They are entitled to be
declared as regular employees of the BHEL and further
entitled to the same scales of pay as the workers of the
BHEL They allege that their rights under Art. 14 and 19 (i)
(f) are infringed. It is claimed that whenever a demand is
made by them, they are thrown out of employment. They want a
declaration from this Court that the system of contract
labour is illegal, that they are direct employees of the
BHEL and that they are entitled to equal pay as the workmen
of the BHEL.
An affidavit has been filed on behalf of the BHEL by
Shri P.C. Rao, Deputy General Manager, who while denying the
allegations made in the petition, has pointed out that if
the petitioners had any genuine grievance, they should have
availed themselves of the rights
secured to them under the Contract Labour (Regulation and
Abolition) Act, Minimum Wages Act, Equal Remuneration Act,
etc, for ventilating their grievances and seeking
appropriate relief instead of rushing to this Court under
Act. 32 of the Constitution. It is pointed out in the
counter-affidavit that certain jobs though required to be
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done within the plant area can be more conveniently and
efficiently
done on a job contract basis by contractors. This is
particularly so in regard to the incorporation of new
technology for expansion of production programme called the
LSTG programme with foreign collaboration. The jobs
themselves are entrusted to the contractors and it is not
true to say that the contractors merely supply labour. They
are required to do the total job and payment is made on the
basis of the quantum of the work involved and not on the
basis of the number of workers employed by the contractor.
It is further pointed out that contract labour on the basis
of job contracts is usually employed in connection with
construction, erection and commissioning activities which
are purely of a temporary nature, transportation including
loading and unloading from wagons, trucks, trailers,
tractors etc. as well as internal transport, jungle
clearance, weed removal and other horticultural activities
Work in connection with cleaning and upkeep of approach
roads and plant areas and work relating to modernisation and
rationalisation, such as shifting of equipment, etc. is also
done on a job contract basis. These activities require
varying number of workers at different times and it is
considered, as a matter of policy, that the works are better
done by job contractors than by the BHEL itself which has to
concern itself primarily with the manufacture of turbines,
etc.
615
It is clear from the allegations and counter-
allegations that it is not possible for this Court in an
application under Art 32 of the Constitution to embark into
an enquiry whether these thousand and odd workmen working in
various capacities and engaged in multifarious activities do
work identical with work done by the workmen directly
employed by the BHEL and whether for that reason they B
should be treated not as contract labour but as direct
employees of the BHEL ? There are other forums created under
other statutes designed for deciding such and like questions
Perhaps realising and futility of asking us to compare the
nature of the work done by those directly employed by the
BHEL and those employed by contractors, the learned counsel
chose to advance the extreme argument that the court must
declare a total ban on the employment of contract labour by
public sector undertakings. It was argued that the
employment of contract labour has been frowned upon by
various committees appointed by the Government and
Parliament itself thought that the employment of contract
labour was undesirable and therefore, enacted the Contract
Labour (Regulation and Abolition) Act 1970. It was submitted
that in order to give effect the intention of Parliament as
well as the Directive Principles of State Policy, the court
should declare illegal the employment of contract labour by
the State or by any public sector undertaking which for the
purposes of Art. 12 of the Constitution is the State. In
other words, the counsel wants this Court by its writ to
abolish the employment of contract labour by the State and
by all public sector undertakings. We are afraid that would
be nothing but the exercise of legislative activity with
which function the Court is not entrusted by the
Constitution.
It is true that for a long time, the maleficent nature
of the system of contract labour and the destructive results
which flow from it had been noticed by various committees
appointed by the Government including the Planning
Commission and that as a result of the reports and the
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discussions etc that took place, the Contract Labour
(Regulation and Abolition) Act, 1970 was passed. According
to the Statement of Objects and Reasons:-
"The system of employment of contract labour
lends itself to various abuses. The question of its
abolition has been under the consideration of
Government for a long time In the second-five year
plan, the Planning Commission made certain
recommendations, namely, undertaking of studies to
ascertain the extent of the problem of Contract
616
labour, progressive abolition of system and improvement
of service, conditions of contract labour where the
abolition was not possible. The matter was discussed at
various meetings of Tripartite Committees at which the
State Governments were also represented and general
consensus of opinion was that the system should be
abolished wherever possible or practicable and that in
cases where this system could not be abolished
altogether, the working conditions of contract labour
should be regulated so as to ensure payment of wages
and provision of essential amenities.
2. The proposed Bill aims at abolition of contract
labour in respect of such categories as may be notified
by appropriate Government in the light OF certain
criteria that have been laid down, and at regulating
the service conditions of contract labour where
abolition is not possible. The Bill provides for the
setting up of Advisory Boards of a tripartite
character, representing various interests, to advise
Central and State Governments in administering the
legislation and registration of establishments and
contractors. Under the Scheme of the Bill, the
provision and maintenance of certain basic welfare
amenities for contract labour, like drinking water and
first-aid facilities, and in certain cases rest-rooms
and canteens, have been made obligatory. Provisions
have also been made to guard against details in the
matter of wage payment".
The long title of the Act describes it as "an Act to
regulate the employment of contract labour in certain
establishment and to provide for its abolition in certain
circumstances and for matters connected therewith." As the
long title itself indicates the Act does not’ provide for
the total abolition of contract labour, but only for its
abolition in certain circumstances, and for the regulation
of the employment of contract labour in certain
establishments. Section 1 (4) applies to all establishments
in which 20 or more workmen are employed or were employed on
any day of the preceding 12 months
as contract labour and to every contractor who employs or
has employed on any way of the preceding 12 months 20 or
more workmen. The Act does not apply to establishments in
which work of an intermittent or casual nature alone is
performed. Section 2 (e) defines an establishment as
meaning: (i) any office or department of the Government or
local authority ; or (ii) any place where any industry,
trade, business, manufacture or occupation is carried on.
Section 2 (g) defines "principal employer" as meaning:
617
"(i) in relation to any office or department of the
Government or a local authority, the head of that
office or department or such other officer as the
Government or the local authority, as the case may
be, may specify in this behalf,
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(ii) in a factory, the owner or occupier of the factory
and where a person has been named as the manager
of the factory under the Factories Act, 1948, the
person so named,
(iii) in a mine, the owner or agent of the mine and
where a person has been named as the manager of
the mine, the person so named,
(iv) in any other establishment, any person responsible
for the supervision- and control of the
establishment.’’
The definitions of ’establishment’ and ’principal
employer’ clearly do not exclude but on the other hand
expressly include the Government or any of its departments
and the Act applied to them too. The Act is not confined to
private employers only. Section 2 (c) defines a contractor,
in relation to an establishment, as meaning ’a person who
undertakes to produce a given result for the establishment
other than a mere supply of goods or articles of manufacture
to such establishment, through contract labour or who
supplied contract labour for any work of the establishment
and includes a sub contractor. Sections 3 and 4 provide for
the constitution of Central and State Advisory Boards.
Section 7 provides for the registration of an establishment.
Section 8 provides for the revocation of registration and
sec. 9 provides for the effect of non-registration. Section
10 which is important provides for and enables the
prohibition of F employment of contract labour in any
processes, operations or other work employment in any
establishment. Section 10 may be usefully extracted:
"(I) Notwithstanding anything contained in this
Act, the appropriate Government may, after consultation
with the Central Board or, as the case may be, a State
Board, prohibit, by notification in the Official
Gazette, employment of contract labour in any process,
operation or other work in any establishment.
618
(2) Before issuing any notification under sub-
section (I) in relation to an establishment, the
appropriate Government shall have regard to the
conditions of work and benefits provided for the
contract labour in that establishment and other
relevant factors, such as-
(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 or sufficient duration having regard to
the nature of industry, trade, business, manufacture or
occupation 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 whole-time workmen,"
Section 12 provides for the licensing of
contractors. Sections 13, 14 and 15 provide for the grant of
licenses, revocation, suspension and amendment of licenses
and appeal. Sections 16 to 21 make detailed provision for
the welfare and health of contract labour. Section 20 in
particular provides that if any amenity required to be
provided for the benefit of the contract labour employed in
an establishment is not provided by the contractor within
the prescribed time such amenity shall be provided by the
principal employer. Section 21 makes the contractor
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responsible for payment of wages to each worker employed by
him as contract labour but further prescribes that the
principal employer shall nominate a representative duly
authorised by him to be present at the time of disbursement
of wages by the contractor. Sections 22 to 27 provide for
penalities and procedure. Section 28 provides for the
appointment of inspecting staff. Section 30 makes the
provisions of the Act effective notwithstanding anything
inconsistent therewith contained in any other law or in the
terms of any agreement or contract of service or any
standing orders applicable to the establishment. It,
however, saves to the contract labour any favourable
benefits that the contract labour may be entitled to under
the agreement, contract of service or standing orders.
Section 35
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invests the appropriate Government with power to make rules
for A carrying out the purposes of the Act Rules made by the
Central Government are required to be laid before each House
of Parliament for a total period of 30 days. In exercise of
the powers conferred by section 35 of the Contract Labour
(Regulation and Abolition) Act, 1970, the Central Government
has made the Contract Labour (Regulation and Abolition)
Central Rules, 1971. Chapter 11 of the rules relates to
matters pertaining to the Central Advisory Contract Labour
Board while Chapter Ill of the Rules deals with registration
of establishments and licensing of contractors. Rule 25
prescribes the forms terms and conditions of licence. Rule
25 (ii) (iv) prescribes that it shall be the condition of
every licence that the rates of wages shall not be less than
the rates prescribed under the Minimum Wages Act, 1948 for
such employment where applicable, and where the rates have
been fixed by agreement, settlement or award, not less than
the rates so fixed. Rule 25 (ii) (v) (a) prescribes that it
shall be the condition of every licence that-
"(v) (a) in cases where the workmen employed by
the contractor perform the same or similar kind of work
as the workmen directly employed by the principal
employer of the establishment, the wage rates,
holidays, hours of work and other conditions of service
of the workmen of the con tractor shall be the same as
applicable to the workmen directly employed by the
principal employer of the establishment on the same or
similar kind of work:
Provided that in the case of any disagreement
with regard to the type of work the same shall be
decided by the Chief Labour Commissioner (Central)
whose decision shall be final "
Similarly Rule 25 (ii) ’ v) (b) provides that in
other cases the wage rates, holidays, hours of work and
conditions of service of the workmen of the contractor
shall be such as may be specified in this behalf by the
Chief Labour Commissioner (Central). While determining
the wage rates, holidays, hours of work and other
conditions of service under Rule 25 (ii) (v) (b) the
Chief Labour Commissioner is required to have regard to
the wage rates, holidays, hours of work and other
conditions of service obtaining in similar employments.
There is no dispute before us that the Payment of Wages
Act applies as much to contract labour as to labour
directly employed by the principal employer of the
establishment.
620
Thus we see that no invidious distinction can be
made against contract labour. Contract labour is entitled to
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the same wages, holidays, hours of work and conditions of
service as are applicable to workmen directly employed by
the principal employer of the establishment on the same or
similar kind of work. They are entitled to recover their
wages and their conditions of service in the same manner as
workers employed by the principal employer under the
appropriate Industrial and labour Laws. If there is any
dispute with regard to the type of work, the dispute has to
be decided by the Chief Labour Commissioner (Central). It is
clear that Parliament has not abolished contract labour as
such but has provided for its abolition by the Central
Government in appropriate cases under sec. 10 of the
contract Labour (Regulation and Abolition) Act, 1970. It is
not for the court to enquire into the question and to decide
whether the employment of contract labour in any process,
operation or other work in any establishment should be
abolished or not. This is a matter for the decision of the
Government after considering the matters required to be
considered under sec. 10 of the Act. Similarly the question
whether the work done by Contract labour is the same or
similar work as that done by the workmen directly employed
by the principal employer of any establishment is a matter
to be decided by the Chief Labour Commissioner under the
proviso to Rule 25 (ii) (v) (a). In these circumstances, we
have no option but to dismiss both the writ petitions but
with a direction to the Central Government to consider
whether the employment of contract labour should not be
prohibited under sec. 10. of the Act in any process,
operation or other work of the BHEL, Hardwar. There will
also be a direction to the Chief Labour Commissioner to
enquire into the question whether the work done by the
workmen employed by the contractors is the same type of work
as that done by the workmen directly employed by the
principal employer in the BHEL, Hardwar.
In Writ Petition No. 9249 of 1983. the petitioners are
the employees of Lal Jhanda National Fertilizer Limited
Mazdoor Union Panipat. They pray for similar reliefs against
the National Fertilizer Limited, Panipat as in the BHEL
case. This writ petition is also dismissed subject to
similar directions to the State of Haryana and the
appropriate authority in the State of Haryana as those
issued in the BHEL case.
N.V.K. Petitions dismissed.
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