Hindalco Industries Ltd
Vs. Association of Engineering Workers  INSC 466 (14 March 2008)
Tarun Chatterjee & P.
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
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. 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 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
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
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 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
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
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
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 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 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 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 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
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 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. . 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 service of the canteen of the
Management and to pay them all consequential benefits including arrears of
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 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:
The canteen has been there since the
inception of the appellant's factory.
The workmen have been employed for
long years and despite a change of contractors the workers have continued to be
employed in the canteen.
The premises, furniture, fixture,
fuel, electricity, utensils etc. have been provided for by the appellant.
The wages of the canteen workers have
to be reimbursed by the appellant.
The supervision and control on the canteen is exercised by the appellant
through its authorised officer, as can be seen from the various clauses of the
contract between the appellant and the contractor.
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.
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
Canteen has been in existence since
Canteen employees were working in
Canteen is situated in the company
The company has provided utensils,
gas and other articles like chair, table, etc.
The company has also provided room to
the canteen employees for their residential complex.
Seven to Eight employees who are
bachelors are residing in the said room.
The company has provided electricity
Respective charges are not being deducted from the wages of the employees.
The company has also supplied
umbrellas for the rainy season.
The company is paying maintenance
charge and electricity charge and other expenses of the canteen.
All the facilities including premises
to the canteen are provided by the company.
The wages of employees of the canteen
are reimbursed by the company.
The company is purchasing the food
When ever there is rise in the wages
of the employees, it is the company who is to pay the same.
The company is providing three sets of uniforms to the employees and also
providing service washermen.
The employer's contribution P.F. is reimbursed by the company.
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
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 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