Jamshedpur Contractors' Workers' Union Vs. State of Bihar & Ors  INSC 248 (22 August 1990)
Rangnath Misra Rangnath Punchhi, M.M. Ramaswamy, K.
1990 SCR (3) 977 1991 SCC Supl. (1) 158 JT 1990 (3) 650 1990 SCALE (2)402
Disputes Act, 1947: S. 10/Contract Labour (Regulation & Abolition) Act,
1970: S. 10--Contract workers engaged by Tata Iron and Steel Company Ltd. in
permanent and regular nature of work--Whether entitled to permanent em- ployment
under the principal employer.
contract workers engaged by the management of the Tata Iron and Steel Company
Ltd., Jamshedpur in the perma- nent and regular nature of work before February
11, 1981 in
of materials within the plant which was not dependent on outside supply,
connected with manufacturing process,
and handling of waste products, and
and cleaning of machines etc., sought permanent employment under the principal em-
ployer. The dispute was referred by the State Government under s. 10 of the
Industrial Disputes Act to the Industrial Tribunal.
Tribunal held that the workmen constituted the contract labour and, therefore,
the reference was not main- tainable. It further held that action, if any, had
to be taken under s. 10 of the Contract Labour (Regulation and Abolition) Act,
1970, power to take steps for which vested in the State Government and not in
the Tribunal. The writ petition challenging the award was dismissed by the High
Court in limine.
appeal by special leave it was brought to the notice of the Court on behalf of
the management that con- tract labour was now confined to item 3 only.
of the appeal, the Court ordered:
reference to the Tribunal shall now read: "Wheth- er the contract workers
engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur
in the perma- nent and regular nature of work before 11.2.1981 are enti- tled
to permanent employment in 978 regard to items 1, 2 and 4 under the principal
State Government to take its own decision within three months under the
provisions of the Contract Labour (Regulation and Abolition) Act, 1970 in
regard to item No. 3 as to whether the contract labour employment should be
Tribunal to dispose of the dispute within six months. [980F]
APPELLATE JURISDICTION: Civil Appeal No. 4380 of 1990.
the Judgment and Order dated 4th October, 1985 of the Patna High Court in
C.W.J.C. No. 4065 of 1985.
and A. Sharan for the Appellant.
P. Chidambaram, S. Sukumaran, K.K. Lahiri, D. Partha Sarthy and S.N. Jha (N.P.)
for the Re- spondents.
following Order of the Court was delivered:
have heard Mr. Garg for the appellant, Mr. Chidamba- ram for the Principal
Employer and Mr. Venugopal for the respondent Union.
reference was made by the State Government of Bihar under section 10 of the
Industrial Disputes Act to the Industrial Tribunal, Ranchi, on 9.7.81 referring to the
following disputes for adjudication:
Whether the contract workers engaged by the management of the Tata Iron and
Steel Company Ltd., Jamshedpur in the following permanent and regular nature of
work before 11.2. 198 1 are entitled for permanent employment?
Transportation of materials within the plant which is not dependent on outside
All processes connected with the manufacturing process;
Removal and handling of waste product; and (5) Sweeping and cleaning the
machines, conveyors, shops and offices.
Tribunal by its Award dated 18.12.1984-, came to hold that the workmen
constituted the contract labour and, there- fore, the reference was not
maintainable. If further held that action, if any, had to be taken only under
section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 and the
power to take steps under that statutory provision vested in the State
Government and not in the Tribunal.
be pointed out that prior to the reference being made to the Tribunal, the
matter had been taken before the Patna High Court and by judgment dated
4.9.1981 the writ petition was disposed of holding that a reference had al-
ready been made to the Industrial Tribunal and the Award was awaited and it was
open to the State Government to take steps under section 10(1) of the Contract Labour
(Regulation and Abolition) Act, 1970. The High Court in its ultimate conclusion
the Award was finally made by the Industrial Tribunal, to the State Government,
as the learned Advocate General assures us, shall determine the matter in
accordance with law. If after such an Award is made and no decision is taken by
the State Government within a reasonable time, the peti- tioners shall be at
liberty to move this Court again ....
The subsequent events have exposed the fallacy of the con- clusion of the High
Court. In fact if the provisions of the Contract Labour (Regulation and
Abolition) Act, 1970 had been properly kept in view; no reliance could have
been placed on the fact that the Award was awaited.
the Award was made challenge was raised before the High Court but it refused to
entertain the writ petition.
appeal by special leave is against the in limine dis- missal of the writ petition.
have heard learned counsel for the parties at some length and it has been
brought to our notice by Mr. Chidam- baram that in regard to Items 1, 2 and 4
of the heads of dispute as indicated in the reference, the contract labour
system is no more vogue and contract labour is now 980 confined to Item 3 only.
In view of the changed situation and taking into consideration the background
of the dispute as also the fact that the litigation has been pending for almost
a decade now, we do not think it would be appropriate to take a technical view
of the situation and endorse the decision of the Tribunal. We are, therefore,
inclined to substitute the terms of the reference to the Tribunal by indicating
that the reference shall now read thus:
the contract workers engaged by the Management of the Tata Iron and Steel
Company Ltd., Jamshedpur in the permanent and regular nature of work before
11.2. 198 1 are entitled to permanent employment in regard to Items 1, 2 and 4
under the Principal Employer." In regard to Item No. 3 it shall be for the
State Gov- ernment to take its own decision under the provisions of the
Contract Labour (Regulation and Abolition) Act, 1970 as to whether the contract
labour employment should be terminated, and since the State Government had
already been considering this matter for some time, we direct the State
Government to take its decision in terms of the assurances held out by its
learned Advocate General to the Patna High Court several years back within
three months from now.
regulate the matter in a more effective way before the Tribunal and keeping in
view the submissions made by Mr. Venugopal we direct that 'the Tribunal shall
initially devote attention to identify the workmen who are desirous of being
permanently absorbed under the Principal Employer and after such identification
is made, the matter should be proceeded with in accordance with law. All
parties should be given full opportunity to raise their contentions and sub- stantiate
the same with such evidence as they like to lead but the Tribunal shall ensure
that the dispute is disposed of within six months from today. If necessary,
full atten- tion should be given to this case so as to comply with the
direction regarding disposal within the time limit set by us. There would be no
order for costs.
Appeal disposed of.