Full Judgment Text
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CASE NO.:
Appeal (civil) 6410 of 2000
PETITIONER:
Hindalco Industries Ltd
RESPONDENT:
Association of Engineering Workers
DATE OF JUDGMENT: 14/03/2008
BENCH:
Tarun Chatterjee & P. Sathasivam
JUDGMENT:
JUDGMENT
CIVIL APPEAL NO. 6410 OF 2000
P. Sathasivam, J.
1) Hindalco Industries Ltd., aggrieved by the judgment and
order dated 20.01.2000 of the High Court of Bombay in L.P.A.
No. 58 of 1999 confirming the order of the Industrial Court
accepting the case of the Association of Engineering Workers’
Union, has filed the above appeal.
2) The respondent herein namely, Association of
Engineering Workers’ Union (hereinafter referred to as "the
Union") filed a complaint of unfair labour practice under Item
9 of Schedule IV of the Maharashtra Recognition of Trade
Unions and Prevention of Unfair Labour Practices Act, 1971
(hereinafter referred to as "the MRTU and PULP Act, 1971")
against Hindalco Industries Ltd. \026 appellant herein (hereinafter
referred to as "the Company") before the Industrial Court at
Thane. According to the Union, the complainant is a trade
union recognized as a representative union of the appellant-
company. The Company has engaged employees in unfair
labour practices on and from 1971 on a continuous basis from
month to month, therefore, the period of limitation is not
applicable. However, as a measure of abundant precaution,
the Union has filed a separate application for condonation of
delay. The Company has engaged about 500 workmen in the
manufacture of aluminium and aluminium products. The
complainant-Union (respondent herein) is a recognized Union
for the establishment of the appellant-Company. In terms of
Section 46 of the Factories Act, 1948, the Company is duty
bound to maintain a canteen for the benefits of workmen
working in an establishment. Accordingly, the Company is
maintaining a Canteen at its Kalwa establishment. In order to
avoid giving the workmen working in the canteen, permanency
and benefits which are applicable to permanent workmen of
the Company, the Company is illegally treating the workmen
working the canteen as contract workmen. It is the specific
case of the complainant-Union that the contract is sham and
is a mere arrangement made for the purpose of avoiding
permanency and giving wages and benefits as are applicable to
permanent workmen of the company.
3) On the date of filing of the complaint, out of 27 workmen
who have worked for various periods, 23 workmen have
worked for more than ten years continuously the maximum
being for 25 years. The remaining four workmen have also
worked for more than 3 = years and as such are permanent
workmen of the Company. The Company has been making
arrangement showing on papers that the contract is being
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given to someone or the other whereas in fact, the canteen is
engaged and run by the Company itself. It is, therefore, the
case of the Union that 27 workmen whose names are
mentioned in the complaint are, in fact, the workmen of the
Company. As per the various decisions of this Court, the
workmen who are working in the statutory canteen are treated
as workmen of the principal employer. On the same analogy,
all the 27 workmen are workers of the Company.
4) The Company has engaged and is engaging in unfair
labour practices by treating its own workmen as workmen on
contract. The workmen are entitled for a declaration that they
are the workmen of the Company. In order to comply with the
technicalities that are required to be done, the Union is
simultaneously making an application to the State Contract
Labour Advisory Board to abolish the contract system as far as
the canteen is concerned in the appellant-Company. The
Union is also raising a demand that all the 27 workmen
should be absorbed in the Company from the initial date of
their employment in the Company and pay them wages and
other benefits that are applicable to permanent workmen of
the Company.
5) The Company filed the reply in the Industrial Court
stating that the complaint is time barred since filed beyond the
prescribed time limit laid down under the provisions of the
MRTU & PULP Act, 1971, hence the same is to be dismissed in
limine. Further the dispute under reference is pertaining to
employees employed under the contract i.e., contract labour,
there is a specific remedy and relief available under the
Contract Labour (Regulation & Abolition) Act, 1971, which is a
specific forum available to redress the grievances, if any.
Inasmuch as the Complainant-Union has already approached
the appropriate authority for abolition of contract labour, the
present complaint before the Industrial Court is liable to be
dismissed on the principle of res judicata. With regard to the
merits, it is stated that the practice of giving contract to run
the canteen is in vogue right from inception. The complainant
is very well aware of the contract and the canteen contractor
who is managing the canteen. There are several decisions of
this Court holding that employing contract labour cannot be
agitated within the forum under MRTU & PULP Act 1971,
when there is specific remedy available in Contract Labour
(Regulation & Abolition) Act, 1971. Moreover, since it is a
disputable point such dispute is required to be resolved
through the machinery provided under the Industrial Disputes
Act, 1947, hence, any complaint to that effect under MRTU &
PULP Act, 1971 is not maintainable. It is further reiterated
that working of the canteen is distinct and separate which is
neither incidental nor connected with the manufacturing
process of the factory. The canteen is exclusively run and
managed by the contractor which is an outside agency.
6) On the above pleadings and on the basis of the oral and
documentary evidence, the Industrial Court, by order dated
15.10.1998, allowed the complaint and declared that the
Company has committed unfair labour practice under Item 9
of Schedule IV of the MRTU & PULP Act, 1971 and further
directed the Company to cease and desist such unfair labour
practice. In the same order, the Industrial Court directed the
Company to absorb and make the canteen employees referred
to in the Annexure as permanent employees of the Company
from the date of its order. In addition to the same, the
Industrial Court directed the Company to pay them the wages
and other benefits like the last category of unskilled workmen
in the Company.
7) Aggrieved by the aforesaid order of the Industrial Court,
the Company preferred Writ Petition No. 6181 of 1998 before
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the High Court of Bombay. The learned single Judge, by order
dated 25.01.1999, confirmed the order of the Industrial Court
and dismissed the writ petition. The said order of the learned
single Judge was challenged before the Division Bench of the
High Court in L.P.A. No. 58 of 1999. By order dated
22.03.1999, the said L.P.A. was summarily dismissed.
Questioning the same, the Company filed an appeal before this
Court in Civil Appeal No.6120 of 1999 (@ S.L.P.(C) No. 9244 of
1999). By order dated 25.10.1999, this Court allowed the
appeal of the Company, set aside the order passed by the High
Court and remitted the matter to the High Court for deciding
the same on merits. Pursuant to the said direction, L.P.A. No.
58 of 1999 was restored on its file and heard afresh and the
Division Bench by the impugned order dismissed the Letters
Patent Appeal and confirmed the order of the Industrial Court.
Aggrieved by the aforesaid order of the Division Bench of the
High Court dated 20.01.2000, the Company has filed the
present appeal.
8) Heard Mr. P.P. Rao, learned senior counsel for the
appellant-Company and Mr. S.F. Deshmuk, learned counsel
for the respondent-Union.
9) The points for consideration in this appeal are (i) whether
the Industrial Court is justified in issuing direction to absorb
all the employees of the canteen in the company’s employment
and pay them wages and other benefits to the extent of last
category of unskilled workers in the company; (ii) whether the
High Court is right in affirming the said order?
10) Since, the Union has filed a complaint under item 9 of
Schedule IV of the MRTU and PULP Act, 1971, before going
into the merits, let us refer the Preamble and relevant
provisions of the Act. The preamble of the MRTU and PULP
Act, 1971 reads as under:-
"An Act to provide for the recognition of trade unions for
facilitating collective bargaining for certain undertakings; to
state their rights and obligations; to confer certain powers on
unrecognized unions; to provide for declaring certain strikes
and lock-outs as illegal strikes and lock-outs; to define and
provide for the prevention of certain unfair labour practices;
to constitute courts (as independent machinery) for carrying
out the purposes of according recognition to trade unions
and for enforcing the provisions relating to unfair practices;
and to provide for matters connected with the purposes
aforesaid.
WHEREAS, by Government Resolution, Industries and
Labour Department, No. IDA.1367-LAB-II, dated the 14th
February, 1968, the Government of Maharashtra appointed
a Committee called "the Committee on Unfair Labour
Practices" for defining certain activities of employers and
workers and their organizations which should be treated as
unfair labour practices and for suggesting action which
should be taken against employers or workers, or their
organizations, for engaging in such unfair labour practices;
AND WHEREAS, after taking into consideration the report of
the Committee the Government is of opinion that it is
expedient to provide for the recognition of trade unions for
facilitating collective bargaining for certain undertakings; to
state their rights and obligations; to confer certain powers on
unrecognized unions; to provide for declaring certain strikes
and lock-outs as illegal strikes and lock-out; to define and
provide for the prevention of certain unfair labour practices;
to constitute courts (as independent machinery) for carrying
out the purposes or according recognition to trade unions
and for enforcing provisions relating to unfair practices; and
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to provide for matters connected with the purposes
aforesaid; It is hereby enacted in the Twenty-second Year of
the Republic of India as follows:-"
Among the various definitions, we are concerned about Section
3(16) which refers to "unfair labour practices" means unfair
labour practices as defined in section 26. Chapter-VI, Section
26 speaks about Unfair labour practices. It reads:
"26. Unfair labour practices
In this Act, unless the context requires otherwise, ’unfair
labour practices’ mean any of the practices listed in
Schedules II, III and IV."
Sections 4 and 5 refer Industrial Court and its duties. As per
Section 27, no employer or union and no employees shall
engage in any unfair labour practice. Section 28 provides
elaborate procedure for dealing with complaints relating to
unfair labour practices. Section 30 speaks about powers of
Industrial and Labour Courts. Section 32 mandates the Court
shall have the power to decide all matters arising out of any
application or a complaint referred to it for the decision under
any of the provisions of the Act. Section 59 makes it clear that
if any proceeding is initiated under the the MRTU and PULP
Act, 1971, no proceeding shall be entertained by any authority
in respect of those matters under the Bombay Industrial
Relations Act, 1946 (Bombay Act) and Industrial Disputes Act,
1947 (in short "the I.D. Act"). Section 60 prohibits filing of
suits in any civil court in respect of the subject-matter of a
complaint or application to the Industrial Court or Labour
Court under this Act.
11) Though an objection was raised as to limitation in filing
complaint before the Industrial Court in view of reasons
adduced and accepted by the Industrial Court and the High
Court, we are of the view that there is no need to elaborate the
same. We also reject the supplementary objection, namely,
the complaint is hit by the principle of res judicata since
according to the Industrial Court, no sufficient material was
placed to throw the complaint on the ground of earlier/parallel
proceeding in any other forum.
12) Coming to the main issue, according to the Union, the
Company is having 500 employees working in the
manufacturing and other activities. It is their specific case
that there is a canteen inside the campus of the
manufacturing unit and it is a statutory canteen and,
therefore, the employees working in the canteen numbering 27
are the employees of the company. It is not in dispute that the
provisions of Factories Act, 1948 are applicable to the
Company. Section 46(1) mandates that the State Government
may make rules requiring that in any specified factory wherein
more than 250 workers are ordinarily employed, a canteen or
canteens shall be provided and maintained by the occupier for
the use of the workers. The presence of a canteen within the
Company premises and statutory provision as referred above
are not disputed. However, it is the case of the Company that
the employees in the canteen are working through a contractor
and, therefore, they are not entitled for status of permanent
employees of the Company. Mr. P.P.Rao, learned senior
counsel appearing for the appellant-Company, by drawing our
attention to various decisions of this Court would submit that
unless relationship of employer and employee exists, the
present issue/claim cannot be gone into by the Industrial
Court under the provisions of the MRTU and PULP Act, 1971.
In other words, according to him, in view of the
objection/stand taken in the reply statement before the
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Industrial Court, the issue raised by the Union cannot be
adjudicated and it is for the Union or workmen to get an order
under the provisions of the I.D. Act and thereafter, approach
the Industrial Court for necessary relief, if any. On the other
hand, Mr. Deshmuk, learned counsel appearing for the
respondent-Union vehemently contended that in view of the
object of the enactment and all other details such as existence
of a canteen from several years, control and supervision by the
company, the contractor is only a name-lender and the
Industrial Court has jurisdiction to go into the issue raised in
the complaint. He further contended that based on the
relevant acceptable materials, the Industrial Court granted
relief in favour of the Union which was rightly affirmed by the
High Court and the same cannot be lightly interfered under
Article 136 of the Constitution of India.
13) In the earlier part of our judgment, we have referred to
the claim of both parties as well as relevant provisions of the
the MRTU and PULP Act, 1971. Now let us consider various
pronouncements on the point in issue. The earliest decision
relied on by the Company is General Labour Union (Red
Flag), Bombay vs. Ahmedabad Mfg. & Calico Printing Co.
Ltd. and Others, 1995 Supp (1) SCC 175. In that decision,
General Labour Union (Red Flag), Bombay had filed a
complaint before the Industrial Court under the MRTU and
PULP Act, 1971 complaining of the breach of Items 1(a), (b),
4(a), (f) and 6 of Schedule II and Items 7, 9 and 10 of Schedule
IV of the said Act. The case of the complainant-union was
that the 21 workmen who were working in one of the canteens
of the respondent-company, were not given the service
conditions as were available to the other workmen of the
company and there was also a threat of termination of their
services. It is an admitted fact that these workmen were
employed by a contractor who was given a contract to run the
canteen in question. The complaint was filed on the footing
that the workmen were the employees of the company and,
therefore, the breach committed and the threats of
retrenchments were cognizable by the Industrial Court, under
the said Act. The complaint proceeded on the basis as if the
workmen were a part of the work-force of the company. The
facts on record reveal that the workmen were never recognised
by the respondent-company as its workmen and it was the
contention of the company that they were not its employees.
The Industrial Court dismissed the complaint holding that
since the workmen were not the workmen of the respondent-
company, the complaint was not maintainable under the said
Act. The High Court in writ petition confirmed the said finding
and dismissed the petition on the same ground. Hence, the
Labour Union approached this Court by filing appeal. This
Court has concluded as under:-
"2. As pointed out both by the Industrial Court and the
High Court, it was not established that the workmen in
question were the workmen of the respondent-company. In
the circumstances, no complaint could lie under the Act as
is held by the two courts below. We, therefore, find nothing
wrong in the decision impugned before us. The workmen
have first to establish that they are the workmen of the
respondent-company before they can file any complaint
under the Act. Admittedly, this has not been done. It is open
for the workmen to raise an appropriate industrial dispute in
that behalf if they are entitled to do so before they resort to
the provisions of the present Act."
14) In Vividh Kamgar Sabha vs. Kalyani Steels Ltd. and
Another, (2001) 2 SCC 381, similar claim under the MRTU
and PULP Act, 1971 was considered. The two-Judge Bench
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following the General Labour Union (Red Flag), Bombay
case (supra) dismissed the appeal filed by the workers-Union
on the ground that the complaint was not maintainable.
Similar direction as issued in General Labour Union (Red
Flag), Bombay case (supra) has been issued in this case also.
15) The next decision which is also under the MRTU and
PULP Act, 1971 is Cipla Ltd. vs. Maharashtra General
Kamgar Union and Others, (2001) 3 SCC 101. When similar
claim was made by the trade-Union against the Management \026
Cipla Ltd., the same was negatived by the Labour Court.
However, the Division Bench of the High Court took a different
view of the matter and allowed the complaint. While
considering the appeal filed by Cipla, the two-Judge Bench
accepted the case of the Management and rejected the stand
taken by the trade-Union. The argument of learned senior
counsel appearing for the Union that in view of Section 32 of
the Act incidental question can be considered by the Industrial
Court was not acceptable and this Court concluded:
"11. Next decision relied upon by Shri Singhvi is Central
Bank of India Ltd. v. P.S. Rajagopalan AIR 1964 SC 743 to
contend that even in cases arising under Section 33-C(2) of
the Industrial Disputes Act the scope, though very limited,
certain incidental questions can be gone into like a claim for
special allowance for operating adding machine which may
not be based on the Sastry Award made under the provisions
of Chapter V-A. The learned counsel pointed out that in the
event we were to hold that it is only in clear cases or
undisputed cases the Labour Court or the Industrial
Tribunal under the Act can examine the complaints made
thereunder, the whole provision would be rendered otiose
and in each of those cases provisions of the Bombay
Industrial Relations Act, 1946 or the Industrial Disputes Act
will have to be invoked. We are afraid that this argument
cannot be sustained for the fact that even in respect of
claims arising under Section 33-C(2) appropriate dispute can
be raised in terms of Section 10 of the Industrial Disputes
Act and that has not been the position in the present case.
Nor can we say that even in cases where employer-employee
relationship is undisputed or indisputably referring to the
history of relationship between the parties, dispute can be
settled and not in a case of the present nature where it is
clear that the workmen are working under a contract. But it
is only a veil and that will have to be lifted to establish the
relationship between the parties. That exercise, we are
afraid, can also be done by the Industrial Tribunal under the
Bombay Industrial Relations Act, 1946 or under the
Industrial Disputes Act. Therefore, we are afraid that the
contention advanced very ably by Shri Singhvi on behalf of
the respondents cannot be accepted. Therefore, we hold that
the High Court went far beyond the scope of the provisions of
the Act and did not correctly understand the decisions of
this Court in Gujarat Electricity Board, Thermal Power Station
v. Hind Mazdoor Sabha (1995) 5 SCC 27 and General Labour
Union (Red Flag) v. Ahmedabad Mfg. & Calico Printing Co. Ltd.
1995 Supp (1) SCC 175. The correct interpretation of these
decisions will lead to the result, which we have stated in the
course of this order."
By saying so, allowed the appeal filed by Cipla Ltd.
15) The next decision heavily relied on the side of the
appellant-Company is Sarva Shramik Sangh vs. Indian
Smelting & Refining Co. Ltd. and Others, (2003) 10 SCC
455. Here again, this Court considered the very same
provisions of the MRTU and PULP Act, 1971. Similar
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contentions were raised by the Union and the Management.
Basing reliance on General Labour Union (Red Flag) Bombay
(supra) and Cipla Ltd. (supra), this Court concluded:
"24. \005 \005. In order to entertain a complaint under the
Maharashtra Act it has to be established that the claimant
was an employee of the employer against whom complaint is
made under the ID Act. When there is no dispute about such
relationship, as noted in para 9 of Cipla case the
Maharashtra Act would have full application. When that
basic claim is disputed obviously the issue has to be
adjudicated by the forum which is competent to adjudicate.
The sine qua non for application of the concept of unfair
labour practice is the existence of a direct relationship of
employer and employee. Until that basic question is decided,
the forum recedes to the background in the sense that first
that question has to be got separately adjudicated. Even if it
is accepted for the sake of arguments that two forums are
available, the court certainly can say which is the more
appropriate forum to effectively get it adjudicated and that is
what has been precisely said in the three decisions. Once the
existence of a contractor is accepted, it leads to an inevitable
conclusion that a relationship exists between the contractor
and the complainant. According to them, the contract was a
facade and sham one which has no real effectiveness. As
rightly observed in Cipla case it is the relationship existing
by contractual arrangement which is sought to be
abandoned and negated and in its place the complainant’s
claim is to the effect that there was in reality a relationship
between the employer and the complainant directly. It is the
establishment of the existence of such an arrangement
which decides the jurisdiction. That being the position, Cipla
case rightly held that an industrial dispute has to be raised
before the Tribunal under the ID Act to have the issue
relating to actual nature of employment sorted out. That
being the position, we find that there is no scope for
reconsidering Cipla case the view which really echoed the
one taken about almost a decade back."
16) In Oswal Petrochemicals vs. Govt. of Maharashtra
and Others, (2005) 12 SCC 433 which is also a two-Judge
Bench, while considering the very same Act, namely, the
MRTU and PULP Act, 1971 following the judgment of this
Court in Cipla Ltd. (supra) disposed of the appeal on the
same terms.
17) Though Mr. Deshmuk, learned counsel for the Union
relied on several decisions and also highlighted that all the
above referred decisions are distinguishable, it is useful to
refer to a three-Judge Bench decision of this Court in Indian
Petrochemicals Corporation Ltd. and Another vs. Shramik
Sena and Others, (1999) 6 SCC 439. This is an appeal
preferred by M/s Indian Petrochemicals Corporation Limited
and another (Management) against an order dated 29-8-1997
made by the High Court of Judicature at Bombay in W.P. No.
2206 of 1997 filed by the Shramik Sena and another
(workmen). Against the very same judgment, the workmen
also filed appeal being C.A. No. 1855 of 1998. Both the
appeals clubbed together, heard and disposed of by the said
common judgment. The workmen therein filed a writ petition
before the High Court of Bombay for a declaration that the
workmen whose names are shown in Ex. ’A’ annexed to the
said petition, are the regular workmen of the Management and
are entitled to have the same pay scales and service conditions
as are applicable to regular workmen of the Management. It
was further prayed that a direction be given to the
Management to absorb the workmen listed in the said Ex. ’A’
with effect from the actual date of their entering into the
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service of the canteen of the Management and to pay them all
consequential benefits including arrears of wages etc.
18) According to the workmen, the workers listed in Ex. ’A’ to
the petition are working in the canteen of the Management in
its factory at Nagothane, District Raigad in the State of
Maharashtra, and the Management was treating them as
persons employed on contract basis through a contractor
named M/s Rashmi Caterers, who was impleaded in the writ
petition as Respondent 5. It was contended on behalf of the
above workmen that the factory of the Management where the
workmen are employed, is governed by the provisions of the
Indian Factories Act, 1948 and the canteen where the said
workmen are employed is a statutory canteen established by
the Management as required under the said provisions of the
Act. It was further contended that the said canteen is
maintained for the benefit of the workmen employed in the
factory and the Management had direct control over the said
workmen and that Respondent 5, though shown as a
contractor, has no control over the Management,
administration and functioning of the said canteen. The
canteen is a part of the establishment of the Management and
the workers working in the canteen are the workmen of the
said Management. The further contention of the workmen was
that the work carried on by them in the said canteen is
perennial in nature and the canteen is incidental to and is
connected with the establishment of the Management. It is
their further case that the Management is denying the said
workmen the status of its regular employees and was treating
them as contract employees contrary to the statutory
provisions and judicial pronouncements of this Court.
19) On behalf of the Management, it was contended before
the High Court that it was a public sector undertaking and it
cannot appoint any person in contravention of the recruitment
policy which requires the Management to follow a roster
system. Therefore, apart from the fact that the workmen were
not in the regular employment of the said Management, the
absorption or regularisation of the services of the said
workmen would contravene Article 16(4) of the Constitution,
and would also contravene the reservation policy which is
applicable for recruitment in the establishment managed by it.
20) The High Court, following the decision in Parimal
Chandra Raha vs. LIC, 1995 Supp (2) SCC 611 allowed the
writ petition holding that since the workmen whose names
were found in Annexure ’A’ to the petition are working in the
statutory canteen of the Management, they are entitled to be
absorbed in the employment of the said Management and also
issued directions in regard to absorption of the employees.
21) Being aggrieved by the said judgment and order of the
High Court, the Management has preferred C.A No. 1854 of
1998 and being aggrieved by the conditions imposed while
directing the absorption of the employees, on behalf of the
workmen C.A. No. 1855 of 1998 has been preferred before this
Court.
22) Para 10 of the said decision shows that while considering
at the SLP stage for granting leave, a two-Judge Bench of this
Court observed that the questions involved in these appeals
are of considerable importance and it will be desirable if the
same is decided by a Bench of three Judges. Consequently,
both the appeals were heard by a three-Judge Bench. Similar
contentions as raised in the case on hand were raised on
behalf of the Management and Workmen. No doubt, taking
note of the definition 2(l) of the Factories Act which defines
"worker", did not accept the workmen’s contention that
employees of a statutory canteen ipso facto become the
employees of the establishment for all purposes. After
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considering Parimal Chandra Raha’s case (supra) and
M.M.R. Khan vs. Union of India, 1990 Supp SCC 191 and
Reserve Bank of India vs. Workmen, (1996) 3 SCC 267, this
Court concluded that the workmen of a statutory canteen
would be the workmen of the establishment for the purpose of
the Factories Act only and not for all other purposes. Had the
three-Judge Bench stopped therein, we have no other option
except to apply the principle as stated in General Labour
Union (Red Flag) case (supra), Vividh Kamgar Sabha case
(supra), Cipla Ltd. case (supra), Sarva Shramik Sangh
case (supra) and Oswal Petrochemicals. However, from
para 23 onwards, the three-Judge Bench discussed the main
issue with which we are concerned, namely, "whether from the
material on record it could be held that the workmen are, in
fact, the employees of the Management for all purposes".
Since the factual details that arose in the Indian
Petrochemicals case (supra) are identical to the case on
hand, we reproduce the following discussion and the ultimate
conclusion:
"25. Though the canteen in the appellant’s establishment is
being managed by engaging a contractor, it is also an
admitted fact that the canteen has been in existence from
the inception of the establishment. It is also an admitted fact
that all the employees who were initially employed and those
inducted from time to time in the canteen have continued to
work in the said canteen uninterruptedly. The employer
contends that this continuity of employment of the
employees, in spite of there being a change of contractors,
was due to an order made by the Industrial Court, Thane, on
10-11-1994 wherein the Industrial Court held that these
workmen are entitled to continuity of service in the same
canteen irrespective of the change in the contractor.
Consequently, a direction was issued to the Management
herein to incorporate appropriate clauses in the contract
that may be entered into with any outside contractor to
ensure the continuity of employment of these workmen. The
Management, therefore, contends that the continuous
employment of these workmen is not voluntary. A perusal of
the said order of the Industrial Court shows that these
workmen had contended before the said Court that the
Management was indulging in an unfair labour practice and
in fact they were employed by the Company. They specifically
contended therein that they are entitled to continue in the
employment of the Company irrespective of the change in the
contractor. The Industrial Court accepted their contention as
against the plea put forth by the Management herein. The
employer did not think it appropriate to challenge this
decision of the Industrial Court which has become final. This
clearly suggests that the Management accepted as a matter
of fact that the respondent workmen are permanent
employees of the Management’s canteen. This is a very
significant fact to show the true nature of the respondents’
employment. That apart, a perusal of the affidavits filed in
this Court and the contract entered into between the
Management and the contractor clearly establishes:
(a) The canteen has been there since the inception of the
appellant’s factory.
(b) The workmen have been employed for long years and
despite a change of contractors the workers have continued
to be employed in the canteen.
(c) The premises, furniture, fixture, fuel, electricity, utensils
etc. have been provided for by the appellant.
(d) The wages of the canteen workers have to be reimbursed
by the appellant.
(e) The supervision and control on the canteen is exercised
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by the appellant through its authorised officer, as can be
seen from the various clauses of the contract between the
appellant and the contractor.
(f) The contractor is nothing but an agent or a manager of
the appellant, who works completely under the supervision,
control and directions of the appellant.
(g) The workmen have the protection of continuous
employment in the establishment.
26. Considering these factors cumulatively, in addition to
the fact that the canteen in the establishment of the
Management is a statutory canteen, we are of the opinion
that in the instant case, the respondent workmen are in fact
the workmen of the appellant Management.
27. At this stage, it is necessary to note another argument of
Mr Andhyarujina that in view of the fact that there is no
abolition of contract labour in the canteen of the appellant’s
establishment, it is open to the Management to manage its
canteen through a contractor. Hence, he contends that by
virtue of the contract entered into by the Management with
the contractor, the respondent workmen cannot be treated
as the employees of the Management. This argument would
have had some substance if in reality the Management had
engaged a contractor who was wholly independent of the
Management, but we have come to the conclusion on facts
that the contractor in the present case is engaged only for
the purpose of record and for all purposes the workmen in
this case are in fact the workmen of the Management. In the
background of this finding, the last argument of Mr
Andhyarujina should also fail."
23) In the light of above background, let us consider the
factual details available and as asserted in the complaint of
the Union filed in our case. In order to establish the specific
plea raised in the complaint, the complainant has examined
one Dagdu Deshmukh and Shankar Nam Patil. Both of them
are working in the canteen. According to Deshmukh, he
joined the Company on 22.02.1982 and according to Shankar
he is in the service of the Company from 01.11.1989. The
Complainant has enclosed a list of the employees working in
the canteen in the Annexure to the complaint. The Industrial
Court, on perusal of the said list, found that they joined the
service in different years since 1978 till 1992. Most of them
have worked for more than 10 years. The Industrial Court has
also concluded that their dates of joining mentioned in
Annexure to the complaint have not been disputed by the
Company. It is also demonstrated before the Court that there
were number of contractors since 1971 till the contract was
taken by M/s Gambhir Caterers, since 1965 to 1968 one
Mehra was the canteen contractor. Thereafter, in 1968, one
S.S.Shetty worked as a Canteen Contractor. He was running
the said canteen for 14 years. Thereafter, the Universal
Caterer was the Canteen Contractor from 1981 to 1995. After
1995, Gambhir Caterer is the Canteen Contractor. It is
relevant to mention and in fact not disputed that in spite of
the changes in the Canteen Contractor the service of the
canteen employees continued and they were not issued fresh
appointment orders by any of the canteen contractors
including the last one, namely, Gambhir Caterer.
24) The Industrial Court analysed the evidence of
Complainant’s witness and also the evidence of the Company.
From the evidence and other materials, the Court noted the
following information:
(a) Canteen has been in existence since 1965.
(b) Canteen employees were working in four shifts.
(c) Canteen is situated in the company premises.
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(d) The company has provided utensils, gas and other
articles like chair, table, etc.
(e) The company has also provided room to the canteen
employees for their residential complex.
(f) Seven to Eight employees who are bachelors are
residing in the said room.
(g) The company has provided electricity and water.
Respective charges are not being deducted from the
wages of the employees.
(h) The company has also supplied umbrellas for the
rainy season.
(i) The company is paying maintenance charge and
electricity charge and other expenses of the canteen.
(j) All the facilities including premises to the canteen
are provided by the company.
(k) The wages of employees of the canteen are
reimbursed by the company.
(l) The company is purchasing the food items.
(m) When ever there is rise in the wages of the
employees, it is the company who is to pay the
same.
(n) The company is providing three sets of uniforms to
the employees and also providing service
washermen.
(o) The employer’s contribution P.F. is reimbursed by
the company.
(p) In the past the company has regularized some of the
employees working in the canteen.
From the above, it is clear that all the facilities to the canteen
are provided by the company.
25) It is true that Sridhar Bhandari, the Manager of Gambhir
Caterer, in his evidence has stated that the workers are
keeping the attendance card, muster roll (Ex.C-12 and C-13)
and payment details of Gambhir Caterer. In view of the above
statement, the Industrial Court ventured to find legitimate
control over the activities of the canteen employees. While
considering the said issue, the Court verified various terms of
agreement dated 28.11.1995. The relevant terms have been
reproduced in para 49 of the order of the Industrial Court
which clearly show that it is the duty of the company to
provide canteen premises free of rent along with free water,
electricity, fuel, furniture, fixtures, crockery and all cooking
utensils. It further shows that the company has fixed the rate
of meals, eatables, snacks, tea and beverages etc. As rightly
pointed out by the Industrial Court, apart from the evidence
let in on the side of the union and the company from the terms
of contract, it is clear that it is the duty of the company to
provide sufficient premises, furniture, fuel, gas, electricity,
water and also laid down several procedure as to how food
items to be supplied. As rightly concluded by the Industrial
Court, the company has clearly laid down the quality,
quantity, the rates and manner of supplying food articles.
After adverting to clause (d) (1)(2) of the agreement, the
Industrial Court has concluded that though responsibility is
cast upon the contractor to make payment of wages, P.F.
contribution etc. on submission of the bills, the amounts are
to be paid/reimbursed by the company. The above details
clearly show that though certain amounts are being paid by
the contractor, in the real sense, ultimately, it is the company
which pays all the amounts. From the evidence and the
materials, it is also clear that the activities of the workmen in
the canteen, their suitability to work, physical fitness are
ultimately controlled by the company. In those
circumstances, the Industrial Court is perfectly right in
arriving the conclusion that the evidence coupled with the
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terms of agreement show that the contract is nothing but
paper agreement. As stated earlier, in spite of change of
several contractors, neither the workmen were replaced nor
fresh appointments were made. On the other hand, same
workmen were continuing even on the date of filing of the
complaint. Taking note of all the above-mentioned relevant
materials, special circumstances and most of the employees
are working for more than 10-15 years and finding that there
is no valid reason for the company to deny their permanency,
the Industrial Court rightly concluded that the company has
committed unfair labour practice under Item 9 of Schedule IV
of the MRTU and PULP Act, 1971 and issued appropriate
directions. With the materials placed, we are also of the
opinion that even though the record shows that canteen is
being run by the contractor, ultimate control and supervision
over the canteen is of the Company. Inasmuch as the facts on
hand are identical to the decision in Indian Petrochemicals
Corpn. Ltd. case (supra) which is a three-Judge Bench
decision which was not cited before any of the decisions relied
on by the company, in view of the circumstances narrated in
the earlier paras, we accept the conclusion arrived by the
Industrial Tribunal.
26) Coming to the impugned order of the High Court, it is
argued that in spite of the earlier direction of this Court in SLP
(C) No. 9244 of 1999, the High Court has not adverted to the
relevant aspects and committed the same error in confirming
the order of the Industrial Court. In the light of the said
contention, we have gone through the impugned decision of
the High Court, which clearly shows that the High Court was
conscious about the observation of this Court. The High Court
order further shows that it has adverted to the relevant details
furnished before the Industrial Court and analysed the same
and finally after recording that the finding of fact arrived by
the Industrial Court cannot be termed as perverse and they
are based on proper appreciation of evidence and sound
reasoning dismissed the Letters Patent Appeal. We do not see
any error or infirmity in arriving such conclusion. On the
other hand, as discussed above, we are in entire agreement
with the conclusion arrived by the Industrial Court and
affirmed by the High Court.
27) In the light of what has been stated above and in view of
abundant factual details as mentioned in para 24 of this
judgment as well as the reasonings as laid down in Indian
Petrochemicals Corpn. Ltd. case (supra), we reject the
stand taken by the appellant-Company. Accordingly, the
appeal fails and the same is dismissed. Inasmuch as the
Industrial Court has issued directions as early as on
15.10.1998 and not implemented due to court proceedings, we
direct the appellant-Company to implement the same within a
period of three months from the date of receipt of copy of this
judgment. No costs.