Singh & Ors Vs. Union Territory, Chandigarh & Ors  Insc 556 (7 November 2003)
V. Patil & D.M. Dharmadhikari Dharmadhikari J.
Appeal (civil) 3200 of 2002 Appeal (civil) 3167 of 2002
Department of Engineering, Chandigarh Administration, is maintaining
electricity supply to the Government Medical College and Hospital, Chandigarh. It has established a sub-station for that purpose.
the appellants in this batch of appeals are trained electricians and skilled
workmen. They have been employed through different Contractors for various jobs
connected with the sub-station set up to maintain electricity supply.
employees working at the sub-station in the Medical College and Hospital premises approached
the Central Administrative Tribunal, Chandigarh with a prayer that the work of the employees for maintaining supply of
electricity in the College and Hospital premises being of a perennial nature,
the Engineering Department of Chandigarh Administration be directed to regularise
their services in the Administration. By its detailed judgment passed on
13.8.1988 the Tribunal rejected the petitions filed by the employees on merits
as also on the ground that the employees engaged through contractor cannot be
held to be holders of 'civil post' as defined under Section 3(q) of the
Administrative Tribunals Act hence the Tribunal has no jurisdiction to grant
employees then filed separate Writ Petitions under Article 227 of the
Constitution in the High Court of Punjab and Haryana which have been dismissed
by the impugned common judgment passed on 3.8.2000.
contention advanced by the contract employees before the High Court was that
although they were employed on various jobs by the Contractor for maintaining
supply of electricity to the College and Hospital the Engineering Department of
the Chandigarh Administration exercises complete control over their work.
According to them the real employer is the Engineering Department of the Chandigarh
Administration and the Contractor has been introduced only to pay them salary
or wages. It was argued that in order to deny the employees benefits of regular
employment under Chandigarh Administration, the agency of Contractor has been
resorted to. The employees sought annulment of the order of the Tribunal and in
the alternative sought issuance of directions for consideration of their cases
for regularisation of their services under the Chandigarh Administration. They
also sought directions to prohibit by issuance of a notification under the
provisions of the Contract Labour (Regulation and Abolition) Act 1970,
engagement of labour through contractor for maintaining electricity supply to
the government hospitals and other college premises.
this batch of appeals, learned counsel appearing for the employees have drawn
our attention to certain conditions of the contracts which have been awarded to
various Contractors for maintaining supply of electricity. Reading those
contentions of the contract, it is argued that they clearly indicate that
Engineering Department of Chandigarh Administration has retained complete
control on the employment, work and continuance of service of the contract labour.
It is further argued that maintenance of supply of electricity to hospital and
college premises being a work of permanent and perennial nature, employment of
the staff for it through contractor is an unfair labour practice.
respondent Chandigarh Administration has not disputed the fact that the
maintenance of electricity supply to the Hospital and College building is under
the Engineering Department of Chandigarh Administration. Its case is that the
Engineering Department of Chandigarh Administration does not have adequate
maintenance staff to execute the job, hence the work has been awarded to
Contractors through the process of tender. With regard to the certain terms of
the contract it is explained that to ensure efficiency and quality of work,
which is of a technical nature to be carried under technical guidance and as
the Contractors' availability at the site for all twenty four hours is not
possible, work of supervision is kept with the regular staff of the Engineering
Department attached to the College and Hospital. In the event of emergency, the
employees have to seek guidance from the available staff at the Hospital. This
is said to be the reason for incorporating conditions in the contract that the
contract employees would be directly under the control of the Department. It is
submitted that such control is only for the purpose of ensuring efficiency and
quality of work.
it is explained that the contract labour has been employed for technical work.
Insistence has been made in the condition of contract for engaging qualified
electricians and helpers to avoid any danger and hazard in the maintenance of
electricity. The condition that the staff provided by the contractor would not
be changed without approval of the Department is for the sake of convenience
since the staff already engaged by the Contractor would become familiar with
the electrical system of the Hospital and frequent change in the staff might
impair normal work. Thus explaining the various conditions of the contract it
is submitted that the employees have been engaged through the Contractor for
maintenance of electricity from the sub-station. This, it is said, is a
temporary arrangement till the Administration creates requisite number of posts
and decides to recruit employees under the Department on deputation or by
have examined the contentions advanced by the employees before the Tribunal and
in the High Court. Before the Tribunal and the High Court, the appellants did
not dispute the fact that they are employees of the Contractor. They sought
relief of regularisation of their services under the Engineering Department of Chandigarh
Administration on the ground that the work of maintaining supply of electricity
for which they have been employed being of a permanent and perennial nature,
they should be directed to be directly employed by the Administration.
appeals before us there appears to be a shift from the stand taken by the
employees before the Tribunal and in the High Court. What is now being urged is
that the electricity supply is to be maintained by the Engineering Department
of the Administration and instead of directly employing the appellants, the
Administration has resorted to the mode of appointment through Contractor.
Relying on the terms and conditions of the contract it is submitted that entire
control exercised on the employees is of the Engineering Department.
are, in fact, employed by the Engineering Department though under the garb of
contractual appointment which is fake and a camouflage. It is argued that this
Court can lift the veil of make- believe relationship and hold that the
appellants are in fact the employees of the Engineering Department of the
reliance is placed on [1978 (4) SCC 257] Hussainbhai, Calicut vs. The Alath Factory Thezhilali
Union Kozhikode; [1999 (3) SCC 601] Secretary, HSEB vs. Suresh; [2003 (6) SCC
528 BHEL vs. State of UP.
counsel appearing for the respondent on the side of the Administration
submitted that in the Constitution Bench decision of this Court in the case of
Steel Authority of India Ltd. vs. National Union Waterfront Workers [2001 (7)
SCC 1], after considering all previous decisions, this Court has explained the
nature of right of contract employees in various contingencies such as where
there exists a notification issued under Section 10(1) of CLRA Act prohibiting
employment of contract labour in particular establishment and where there is no
such prohibition. The Constitution Bench has also explained the legal position
of the contract labour where it is employed through the agency of contractor
although in reality such employment is directly under the principal employer
and for the employer's work or processes in the establishment.
has also been made by counsel for the parties to the decision of this Court in
Municipal Corporation of Greater Mumbai vs. KV Shramik Sangh [2002 (4) SCC 609]
in which the Constitution Bench decision in Steel Authority of India (supra)
has been relied to direct the employees to seek remedy by availing forum of
industrial adjudication under the Industrial Disputes Act. It is held that it
is only in industrial adjudication that facts and circumstances can be
investigated to ascertain the nature of employment.
behalf of the Delhi Administration, it is stated that its Engineering
Department is registered under Section 7 of the CLRA Act. It is not disputed by
the parties that no notification under section 10(1) of the CLRA Act has been
issued prohibiting employment of contract labour in the Engineering Department
of Chandigarh Administration.
have considered the arguments advanced on behalf of the employees based on the
terms of the contract.
determining the relationship of employer and employee, no doubt 'control' is
one of the important tests but is not to be taken as the sole test. In
determining the relationship of employer and employee all other relevant facts
and circumstances are required to be considered including the terms and
conditions of the contract. It is necessary to take a multiple pragmatic
approach weighing up all the factors for and against an employment instead of
going by the sole 'test of control'. An integrated approach is needed.
test is one of the relevant tests. It is applied by examining whether the
person was fully integrated into the employer's concern or remained apart from
and independent of it.
other factors which may be relevant are - who has the power to select and
dismiss, to pay remuneration, deduct insurance contributions, organise the
work, supply tools and materials and what are the 'mutual obligations' between
them (see Industrial Law Third edition by I.T. Smith and JC Wood at pages 8 to
the relationship of employer and employee does not exist between an employer
and Contractor and servant of an independent Contractor. Where, however, an
employer retains or assumes control over the means and method by which the work
of a Contractor is to be done it may be said that the relationship between
employer and the employee exists between him and the servants of such a
Contractor. In such a situation the mere fact of formal employment by an
independent Contractor will not relieve the master of liability where the
servant is, in fact, in his employment. In that event, it may be held that an
independent Contractor is created or is operating as a subterfuge and the employee
will be regarded as the servant of the principal employer. Where a particular
relationship between employer and employee is genuine or a camouflage through
the mode of Contractor is essentially a question of fact to be determined on
the basis of features of relationship, the written terms of employment, if any,
and the actual nature of the employment.
actual nature of relationship concerning a particular employment being
essentially a question of fact, it has to be raised and proved before an industrial
adjudicator. Conclusion Nos. 5 & 6 of the Constitution Bench decision of
this Court in Steel Authority of India (supra) are decisive for purposes of
this case which read as under:
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 with 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 establishment concerned subject to
the conditions as may be specified by it for that purpose in the light of para
the contract is found to be genuine and prohibition notification under Section
10(1) of the CLRA Act in respect of the establishment concerned has been issued
by the appropriate Government, prohibiting employment of contract labour in any
process, operation or other work of any establishment and wherein 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." In case of Steel Authority of India (supra) after
recording the above conclusions, the Constitution Bench added :- "We have
used the expression "industrial adjudicator" by design as
determination of the questions aforementioned requires enquiry into disputed
questions of facts which cannot conveniently be made by High Courts in exercise
of jurisdiction under Article 226 of the Constitution. Therefore, in such cases
the appropriate authority to go into those issues will be the Industrial
Tribunal/Court whose determination will be amenable to judicial review."
Relying on the Constitution Bench decision of this Court, in the case of
Municipal Corporation of Greater Mumbai vs. KV Shramik Sangh [2002 (4) SCC 609]
the employer who had lost the case in the writ petition before the High Court
was directed to approach the appropriate court for industrial adjudication.
rulings of this Court which have been relied but which are earlier to the
decision of the Constitution Bench in case of Steel Authority of India (supra)
can be of little assistance to support the contentions on behalf of the
appellants. The other decision strongly relied in the case of BHEL (supra)
[2003 (6) SCC 528] is distinguishable. The decision in favour of the workmen
was rendered in that case after an industrial adjudication had ended in their favour.
view of clear and binding pronouncement of law by the Constitution Bench of
this Court in the case of Steel Authority of India (supra), in the present
appeals which arise from writ petitions preferred against the adverse judgment
of the Central Administrative Tribunal (CAT), none of the reliefs, as prayed
for, can be granted to the employees. Without ascertaining through the
industrial forum, factual aspects of inter se relationship between the Chandigarh
Administration, the Contractor and the contract employees, no relief can be
the aforesaid reasons, these appeals are dismissed but without prejudice to the
rights of the employees to resort to the remedy of industrial adjudication in
accordance with law as explained above.
circumstances, we make no order as to costs in these appeals.