Barat
Fritz Werner Ltd. Vs. State of Karnataka
[2001] Insc 59 (2
February 2001)
S. Rajendra
Babu & S.N. Variava. Rajendra Babu, J. :
Special Leave Petition (civil) 10674 of 1998 Special Leave
Petition (civil) 10675 of 1998 Special Leave Petition (civil) 10701-10702 of
1998 Special Leave Petition (civil) 11057 of 1998 Special Leave Petition
(civil) 11651 of 1998 Special Leave Petition (civil) 12651 of 1998 Special
Leave Petition (civil) 20769 of 2000 Special Leave Petition (civil) 6285 of
1998 Special Leave Petition (civil) 7420 of 1998 Special Leave Petition (civil)
7580 of 1998 Special Leave Petition (civil) 7581 of 1998 Special Leave Petition
(civil) 7582 of 1998 Special Leave Petition (civil) 8125 of 1998 Special Leave
Petition (civil) 8127 of 1998 Special Leave Petition (civil) 8179 of 1998
Special Leave Petition (civil) 8192 of 1998 Special Leave Petition (civil)
8202-8205 of 1998 Special Leave Petition (civil) 8290 of 1998 Special Leave
Petition (civil) 8315 of 1998 Special Leave Petition (civil) 9893-9897 of 1998
Special Leave Petition (civil) 6515 of 1999
On the
basis of a report made by the National Commission on Labour in the year 1966 in
paragraph 9.10 to the effect that the practice of employing contract labour is
prevalent in varying degree in almost all the industries and services.
Since
the system of employment of contract labour led to various abuses, the question
of its abolition was accentuated. There had been consistent demand by the labour
for abolishing the system of contract labour.
The dispute
relating to contract labour or its absorption by the employer was, therefore,
held to be an industrial dispute. [Standard Vacuum Refining Co. of India Ltd. vs. Its Workmen & Anr., 1960 (3)
SCR 466].
Thereafter
industrial adjudication interfered to abolish or modify the system of contract labour
in industrial undertakings depending on the facts arising in each case.
Then
came on the scene the fate of contract workers in the canteen established as
mandated under Section 46 of the Factories Act, 1947. In Saraspur Mills Co.Ltd.
vs. Ramanlal Chimanlal & Ors., 1973 (3) SCR 967, in view of Section 46 of
the Factories Act and rules made thereunder requiring an employer to provide a
canteen in a factory where more than 250 workers are employed for the use of the
workers even if run by a cooperative society were workmen of the factory as it
was under a mandatory obligation to maintain and run the canteen. This question
was more elaborately dealt with in M.M.R.Khan & Ors. vs. Union of India & Ors., 1990(Supp) SCC 191. In that
case, this Court was concerned with canteen run by Railway establishments
falling into three different categories :
1.
Canteens compulsorily provided either pursuant to Section 46 of the Factories
Act or under other enactment described as statutory factories;
2.
Canteens set up as a staff welfare measure with the approval of the Railway
Board in terms of Railway Establishment Manual;
3.
Canteens established though as a staff welfare measure but without the approval
of the Railway Board in terms of Railway Establishment Manual.
The
employees falling in the first and the second categories were held to be
employees of the Railway establishment while the employees falling in the third
category were not held to be so.
In All
India Railway Institute of Employees Association vs. Union of India, 1991 (2)
LLJ 265, again this Court dealt with this question where the employees in the
Railway Institute or clubs were not treated as employees of the Railway
establishment.
In the
meanwhile, law further developed in such a manner that even in relation to
employees working in those canteens who were not established pursuant to
Section 46 of the Factories Act but pursuant to a settlement entered into with
the employees or under an award made by an industrial Tribunal or by way of a
condition of service, the matter was examined in Parimal Chandra Raha &
Ors. vs. L.I.C. of India & Ors., 1995 Supp. (2) SCC 611, that such
employees must be treated as employees of the establishment. Of course, in
Indian Petrochemicals Corpn. Ltd. & Anr. vs. Shramik Sena & Ors.,
1999(6) SCC 439, a new gloss was given to this decision by stating that the
presumption arising under the Factories Act in relation to such workers is
available only for the purpose of the Act and no further.
However,
in Employers in relation to the Management of RBI vs. Workmen, 1996(3) SCC 267,
this Court struck a different note. Again this Court in Indian Overseas Bank
vs. I.O.B.Staff Canteen Workers Union & Anr., 2000 (4) SCC 245, considered
the effect of the decisions in MMR Khan [supra], Parimal Chandra Raha [supra],
Employers in relation to the Management of RBI [supra] and Indian
Petrochemicals Corpn. Ltd. & Anr. vs. Shramik Sena & Ors., 1999(6) SCC
439, and it was made clear that the workers of a particular canteen statutorily
obligated to be run render no more than to deem them to be workers for limited
purpose of the Factories Act and not for all purposes and in cases where it is
a non-statutory recognised canteen the Court should find out whether the obligation
to run was implicit or explicit on the facts proved in that case and the
ordinary test of control, supervision and the nature of facilities provided
were taken note of to find out whether the employees therein are those of the
main establishment. However, in these cases that exercise may not be required.
What we are concerned with here is the validity of the notifications under the
Contract Labour [Regulation & abolition] Act, 1970 [hereinafter referred to
as the Act].
A
notification was issued by the Government of Karnataka under Section 10 of the
Act on 11.4.1997 prohibiting with effect from the date of publication of the
notifications employment of contract labour in industrial canteens and
factories employing 250 workers or above in the State of Karnataka. Writ
petitions were filed before the High Court of Karnataka challenging the
validity of the same on various grounds. However, the High Court upheld the
validity of the said notifications and dismissed the writ petitions. Hence
these petitions under Article 136 of the Constitution.
Before
we embark upon the contentions that are raised in these cases, it may be
necessary to briefly survey the provisions contained in the Factories Act and
the Act.
The
Factories Act was enacted to regulate the law relating to labour in factories.
Section 46 of the Factories Act provides 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. Section 2(n) defines the expression
occupier to mean a person who has ultimate control over the affairs of the
factory and further enumerates the persons who could be deemed to be occupier
in case of a firm, a company or a Government. Section 2(l) defines the
expression worker to mean a person who is employed, directly or by or through
any agency (including a contractor) with or without the knowledge of the
principal employer, whether for remuneration or not, in any manufacturing
process, or in cleaning any part of the machinery or premises used for a
manufacturing process, or in any other kind of work incidental to, or connected
with, the manufacturing process, or the subject of the manufacturing process but
does not include any member of the armed forces. Rule 93 of the Karnataka
Factories Rules, 1969, framed under Section 46 of the Factories Act by the
State of Karnataka, provides that the occupier of
every factory notified by the State Government, and wherein more than 250
workers are ordinarily employed shall provide in or near the factory an
adequate canteen according to the standards prescribed in the rules. Thereafter
the details regarding building, provision for dining hall, kitchen, store room,
pantry and washing places separately for workers and for utensils are provided.
Rule 94 of the Rules gives the details regarding dining hall. Rule 95 requires
the occupier to provide and maintain sufficient utensils, crockery, cutlery,
furniture and any other equipment necessary for the efficient running of the
canteen in a clean and hygienic condition. Rule 96(1) provides that food, drink
and other items served in the canteen shall be sold on a non-provide basis and
the prices charged shall be subject to the approval of the Canteen Managing
Committee, provided that if the management bears the cost of wages of canteen
staff, buildings, water, lighting, fuel and insurance, it shall not be
incumbent on them to run the canteen on any further loss to themselves. Thereafter,
certain details have been set forth as to what to be computed as part of the
expenditure in fixing the prices.
Rule
97 provides for maintenance of the canteen. Rule 98 provides for appointment of
a Canteen Managing Committee.
Rule
99 provides for food-stuffs to be served and prices to be charged. Rule 99-A
provides for annual medical examination for fitness of each member of canteen
staff.
Rule
100 provides for shelter room, rest room and the lunch room.
Now we
may have a look at the provisions of the Act.
Under
Section 2(c) of the Act, a contractor, in relation to an establishment, means a
person who undertakes to produce a given result for the establishment. Under
Section 2(i) of the Act, a workman is a person employed in or in connection
with the work of any establishment to do any skilled, semi-skilled or
un-skilled manual, supervisory, technical or clerical work. A workman is deemed
to be as contract labour in or in connection with the work of an establishment
when he is hired in or in connection with such work by or through a contractor,
with or without the knowledge of the principal employer. Chapter III of the Act
provides for registration of establishments employing contract labour in which
apart from regulating the contract labour the appropriate Government may also
provide for prohibition of the same under Section 10 of the Act.
Section
10 of the Act enables the appropriate Government may, after consultation with
the Central Board, as the case may be, a State Board, prohibit, by notification
in the official gazette, employment of contract labour in any process,
operation or other work in any establishment.
Before
issuing a notification as aforesaid, the appropriate Government shall have
regard to the conditions of work and benefits provided for the contract labour
in that establishment and other relevant factors such as:
(a) whether
the process, operation or other work is incidental to, or necessary for the
industry, trade, business, manufacture or occupation that is carried on in the
establishment;
(b) whether
it is of perennial nature, that is to say, it is of sufficient duration having
regard to the nature of industry, trade, business, manufacture or occupation
that is carried on in the establishment;
(c) whether
it is done ordinarily through regular workmen in that establishment or an
establishment similar thereto;
(d) whether
it is sufficient to employ considerable number of whole-time workmen.
Under
Section 2(e) of the Act, establishment means any office or department of the
Government or a local authority, or any place where any industry, trade,
business, manufacture or occupation that is carried on.
In the
background of these provisions, the contentions put forth before us on behalf
of the Petitioners are that the worker under the Factories Act is defined as
meaning a engaged directly or through any agency (including a contractor) in
any manufacturing process, or in cleaning any part of the machinery or premises
used for a manufacturing process or in any other kind of work incidental to or connected
with the manufacturing process or subject to the manufacturing process; that
the worker engaged in a canteen is not in any activity connected in the
manufacturing process. The canteen being only a facility offered to the workmen
and is dependent only on the number of workmen employed in the factory namely,
the figure being in excess of 250 and on no other consideration; that under the
Karnataka Factories Rules, 1969, it has been clearly provided under proviso to
Rule 96(1), that if the management bears the cost of wages of canteen staff,
buildings, water, lighting, fuel and insurance, it shall not be incumbent on
them to run the canteen on any further loss to themselves, which clearly
indicates that in such circumstances they could do so through an intermediary;
that even where the Act applies, the Act makes a clear distinction between the
prohibition of contract labour and the regulation of contract labour; that the
prohibition is contemplated only in respect of operations which are activities
closely and intimately connected with the main activity of factory or
establishment and where it is not, then section 10 does not apply and the
regulatory sections of the Act come into place; that the basis on which
contract labour can be abolished under the section is that it should relate to
the manufacturing, industry, trade, business or occupation that is carried on
in the establishment; in other words in matters integral to the work in the
establishment and not to a mere facility in respect of its workmen as defined
in Section 2(l) of the Factories Act; that the abolition of contract labour can
be effected only in respect of work which is integral to the industry and
vitally connected with the work carried in the establishment or factory and
relied in support of this proposition on the following decisions:
(i)
Standard Vacuum Refining Co. (supra). [That was a case of cleaning of the
machinery.]
(ii) Shibu
Metal Works vs. Their Workmen, 1966 (1) LLJ 717. [Being employed for work which
was of a permanent nature as it was a part of manufacturing process of the
goods manufactured in the factory.]
(iii) Vegoils
Pvt. Ltd. 1972 1 SCR 673. [that the feeding of hoppers in the solvent
extraction plant is an activity closely and intimately connected with main
activity of the appellant namely crushing oil cakes and oil seeds for
extraction of oil and other chemical production.]
The
learned counsel for the Petitioners further submitted that thus the Act makes a
clear distinction between activities germane and intimately connected with any
particular industry and other activities which are not so connected; that the
prohibition of employment of contract labour is confined to process; operation
and other works which is incidental to or necessary for the industry trade, business,
manufacture or occupation that is carried on in the establishment. This was so,
also in the case of Catering Cleaners of Southern Railways v. Union of India,
1987 (2) SCR 164, where in this court observed that it appears to be clear that
the work of cleaning, catering establishment and pantry car is necessary and
incidental to the industry or business of the Southern Railway and therefore
the requirement of Section 10(2) is satisfied.;
that
the dichotomy in the Act is emphasized in the case of Gammon India Ltd., etc.etc.,
vs. Union of India & Ors. etc., 1974 (3) SCR 665, at pages 669 and 670. The
words other work in any establishment in Section 10 are to be construed as ejusdem
generis. The expression other work in the collection of words process, operation
or other work in any establishment occurring in section 10 has not the same
meaning as the expression in connection with the work of an establishment,
spoken in relation to workmen or contractor (and occurring in definition of
section2); that in the two cases Parimal Chandra Raha (supra) and the case of
Reserve Bank of India (supra) it is made clear that where the intention is only
to provide an extra facility to the workmen that different considerations arise
and it is not necessary that the facility should be accorded only through the
employment of permanent workmen.
Apart
from these contentions, further contentions addressed by the Petitioners are
that there is no effective consultation as required under Section 10 of the Act
by the State Government before issuing the impugned notifications prohibiting
employment of contract labour in the canteen establishments nor is there
application of mind to the various factors such as conditions of work and
benefits provided for the contract labour in the establishment and other
relevant factors given under sub-section (2) of Section 10 of the Act. We will
advert to the various details of these arguments when we deal with this aspect.
In
reply, the learned Advocate General and Smt. Indira Jaising, learned senior
counsel, have contended that the definition of a worker or a factory under
Factories At, 1948, will not be of guidance nor relevant in determining the
question as to whether the provision of a canteen is incidental to the industry
and whether contract labour engaged for the same should be abolished under
Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (Act);
that this is so because the Act concerns itself with an establishment defined
in Section 2(e)(ii) as any place where any industry, trade, business,
manufacture or occupation is carried on; that the definition does not confine
itself to the manufacturing alone; that Section 46 of the Factories Act
mandates that any factory with more than 250 workers must provide and maintain
a canteen.
Therefore
the responsibility of provision and maintenance of a canteen in or near the
factory is not one of mere provision but also one of maintenance. This is
buttressed by the Rules 93 to 99; that the work of a canteen is therefore not
only incidental to, but also absolutely necessary and integral to the operation
of a factory employing 250 or more workmen. (See : J.K. Cotton Spinning &
Weaving Mills Co Ltd. v. Badri Mali & Ors. (1964 (3) SCR 724); that an
establishment which engages more than 250 workers must out of necessity
maintain a canteen; that Section 10 of the Act prefixes the listing of relevant
factors with the words such as, a term interpreted by this Court in Royal
Hatcheries Pvt Ltd. v. State of A.P. & Ors. (1994 Supp (1) SCC 429), to mean
only illustrative and not exhaustive. (See also Shri Sitaram Sugar Company
Limited & Anr. vs. Union of India, 1990 (3) SCC 233); that various factors
will have to be looked at and the same would weigh more than others depending
upon the class of establishments in respect of whom the Government is examining
abolition; that in respect of the class of establishments employing more than
250 workers, the factor which weighs strongly is running of canteen as a
statutory necessity ; that from this statutory obligation flows the other
criterion, its perennial nature, as long as the factory employs 250 or more
workmen it has a continuing obligation; that it has also been consistently held
that the practice of employing contract labour in jobs of a perennial nature is
baneful, archaic and medieval and not suitable to modern times. The Act itself
was introduced to prevent exploitation and unjust labour practices; that there
exists no right to employ contract labour, abolition does not result in
deprivation of any right; that the character of the exercise viz a viz Section
10 being legislative, the court ought not to interfere with the notification;
that the abolition being qua the process and not qua the establishment, the
characteristic feature of any establishment is an irrelevant consideration
under Section 10; that it has been consistent legislative practice to issue
notification qua a process and not an establishment/company as held in Air
India Statutory Corpn. v. United Labour Unions, 1997 (9) SCC 59; that a decision
under Section 10 is not quasi judicial as if it were so, the legislature would
have statutorily built in the safeguards of natural justice e.g. the revocation
of a licence under Section 14 of the Act; that the character of the exercise is
quasi-legislative and it is a conditional legislation and is therefore subject
to no pre-decisional due process.
(State
of Tamil Nadu v. K. Sabanagam, 1988 (1) SCC
318];
that
despite the act being quasi-legislative, the Act and in the instant case the
action of the board as well as the State Government has ensured a fair process
in the decision making. The Act ensues fairness by providing a tripartite
composition for the Board including representatives of the management and
contractors, the Board ensured fairness by providing a public notice (internal
page 26 of impugned order) and receiving and considering
representations/objections and obtaining reports in respect of major areas
(internal page 31 of impugned order). The Government ensured fairness by not
accepting the Boards advice in routine but permitted the employers to put on
record their objections (internal page 31 of the impugned order). (See :Shri Sitaram
Sugar Co. Ltd (supra); that out of the 740 odd affected industries only a few
have impugned the notification and the in any event, it is not the case of the
petitioners such as ITC and L&T that they have not been given an
opportunity to make a representation/objections before the
Board/Committee/Government. In fact it is their case that they made did make
representations. In the circumstances, the decision making process has been
fair; that Section 10 of the Act permits the appropriate Government to abolish
contract labour in respect of any work in any establishment; that this Court in
Lucknow Development Authority v. M.K. Gupta (1994 (1) SCC 243) has held that
the word any ordinarily means one or some or all and that in that context was
used in a wider sense extending from one to all; that it follows that power in
respect of abolishing a process, operation or other work in respect of one
establishment could well be exercised to cover some and even all, if the
circumstances so warrant; that the manner of exercise of the power is left to
the discretion of the State Government. The Government may consider that a certain
activity is typical in an industry and it would be unproductive to mandate that
it this quasi-legislative power be applied in instalments or by examining each
and every unit of that industry; that, in any event, as evidenced from the
statement of objects and reasons for the Act, the proposed Bill aims at the
abolition of contract labour in respect of such categories as may be notified
by the appropriate government, the Act concerns itself not with the nitty
gritty of each and every establishment, but with categories, types and classes
of activities which, if undertaken through contract labour, may warrant
abolition;
that
this Court in Gammons Case (supra) has laid down that the fundamental norm of
the Act is abolition and only if abolition is not possible would the options
such as regulation be considered; that defences of industrial sickness and/or
arrangement through co-operatives do not hold water; that once the appropriate
Government in consultation with the Board is of the opinion that Section 10(2)
of the Act conditions apply, it should as a norm opt for the abolition option
unless a strong case can be made out for a lesser alternative; that the courts
have in a catena of case law held that in judicial review the Court shall not
sit in judgment over the material or the result but restrict its examination to
only limited grounds such as perversity and gross injustice would the Court
interfere;
that
even in the absence of a Section 10 notification, this Court has held canteen
workers to be employees of the concerned industry.. In the instant case, given
the notification, the case is on strong footing.
The
High Court in the course of its judgment considered similar contentions raised
before it. After referring to the objectives of the Act and the decisions of
this Court in Royal Hatcheries Pvt. Ltd. vs. State of A.P., [supra], and Gammon
India Ltd. [supra] the High Court held that the policy of the Act was to
abolish contract labour wherever possible and where it cannot be altogether
abolished, the policy of the Act is to regulate the working conditions of the
contract labour to ensure payment of wages and essential amenities. While
opining as to whether contract labour has to be abolished or not the
consideration that has to be had to the fact as to whether contract labour is
necessary for the industry, trade, business, manufacture or occupation which is
carried on in the establishment. The High Court further held that the
Government before taking the decision to issue the notification did bear in
mind the necessary factors in this regard. The High Court referred to the
nature of the composition of the Advisory Board, various deliberations of the
meetings of the Advisory Board and the files of the Government relating to the
decision taken to abolish the contract labour. After a detailed discussion in
the course of its noting, the Government decided to abolish the contract labour
from canteens in establishments employing 250 or more employees. All facts that
had been raised by various groups of persons have been taken note of apart from
requirements of the statute and thereafter a decision has been taken by the
Government. The High Court noticed that the running of the canteen is of a
perennial nature and the canteen is provided pursuant to the mandatory requirement
of the Factories Act where there are more than 250 workers. The canteen having
been established pursuant to the requirement of Section 46 of the Factories Act
the same would be incidental and connected with the work of the establishment.
The fact that maintaining is not part of the core or competency of the industry
is irrelevant for deciding the question whether the contract labour should be
abolished or not. On this basis, the High Court decided against the
Petitioners.
From
what we have narrated above, it is clear that the Petitioners have made
provisions for running of the canteen in their establishments through a
contractor at any rate on the basis that as a mandatory requirement of law or
as contended for some of the Petitioners under the rules framed under the
Factories Act to make provision for establishment of a canteen even assuming
for a moment that the Petitioners have provided only for facilities to run a
canteen and they are not themselves running the canteen but it is only with the
help of a contractor the same is being run subject of course to the
restrictions placed in the Act in regard to the price and the provisions made
by the canteen managing committee even so the fact remains that they fall into
a particular class of persons namely factories engaging more than 250 workmen
in respect of whom canteen facilities have been provided in terms of Section 46
of the Factories Act and the rules framed thereunder and in such establishments
the policy of the Government is to see that there is no contract labour but
direct labour. To meet this view of the Government, the contention put forth on
behalf of the Petitioners is that the objectives of a factory and an
establishment is to produce the goods or services as the case may be in terms
of the Memorandum of Association or any other document under which it is
established and supply of food or beverages is not one of their objectives and,
therefore, the workmen in such establishments can never be treated as the
workmen of the factory. If at all such workmen are treated as workmen of the
factory it is only for the purpose of the Factories Act as has been held by
this Court in IPCL case. Under the Factories Act, a worker is defined under
Section 2(l) to mean a person who is employed, directly or by or through any
agency (including a contractor) with or without the knowledge of the principal
employer, whether for remuneration or not, in any manufacturing process, or in
cleaning any part of the machinery or premises used for a manufacturing
process, or in any other kind of work incidental to, or connected with, the
manufacturing process, or the subject of the manufacturing process. The
Factories Act has been enacted to regulate labour in factories. The main object
of the Factories Act, 1948 is to ensure adequate safety measures and to promote
the health and welfare of the workers employed in factories initiating various
measures from time to time to ensure that adequate standards of safety, health
and welfare are achieved at all work places. In particular, in the context of
the need to secure maximum production and productivity an appropriate work
culture conducive to safety, health and happiness of workers has to be evolved
in the factories. To achieve these objectives more effectively, this enactment
has been made. In fact, by amendments to the term worker so as to include
within its meaning contract labour employed in any manufacturing process,
improvement of the provisions in regard to safety and appointment of safety
officers, reduction of the minimum number of women employees have been made.
The said enactment was intended for the regulation in such a manner as to
benefit the welfare of the workers. Therefore, the objective of the Act is to
confine the applicability of the Act only to those workers on the premises of
the factory as factory workmen and not working in the industry as such.
The
industry or the establishment which runs the factory is much larger expression
and it includes not merely the workmen in the factory but others also. In that
background, various provisions have been made in the Factories Act for the
welfare of those who work in the factory and it became necessary to limit the
number of workers who would be covered by the Factories Act. Therefore, the
definition of worker meant to relate to a factory where a manufacturing process
activity is carried as otherwise it does not constitute a factory. That
definition of worker cannot be read outside the context of the factories as
defined under the Factories Act. But if this definition is applied in the
manner suggested by the learned counsel for the Petitioners, it would be
doubtful whether those in the Administration or the Accounts Department or the
Stores or other personnel like a Welfare Officer in the establishment which
runs the factory can at all be called the employees of the establishment or
not. The kind of definition sought to be relied upon by the learned counsel for
the Petitioners to be read beyond the statute would lead to absurd results.
Therefore,
we do not think we can subscribe to such a submission. What is to be seen in a
case of this nature is the definition as given in the Act. The worker therein
is defined in a very broad way. A workman would mean any person employed in or
in connection with the work of any establishment whether he is hired with or
without the knowledge of the principal employer. We may also notice that even
where Factories Act is not applicable to an establishment but canteen facility
is provided as a condition of service, this Court has in several cases examined
the question from various angles including the conditions referred to in
Section 10 of the Act. If the arguments of the learned counsel were to be
accepted, then all those cases where the question of considering a canteen
worker as falling within the ambit of worker under the Factories Act would not
arise for that enactment is not applicable and would form an officer class of
establishments to which the Act would be applicable. That is not the intention
of the Act at all. This Court having found that it is one of the incidental
activities of the establishment, which is necessary for running it, and after
ascertaining its perennial or ephemeral nature, done ordinarily through regular
workers or otherwise and necessarily employ whole-time employees have all been
considered and held that these employees are regular employees of the
establishment without reference to the Act. It cannot be disputed that the
provision for canteen is a welfare measure and necessarily a requirement to run
the same is incidental to the main activity of the establishment particularly
when it becomes a condition of service. Viewed from this angle, the suggestion
to examine the definition of worker in the Factories Act and to find out
necessity to have such worker to run the establishment will be an academic
exercise in semantics without any practical effect. Therefore, the argument of Shri
Pai that the canteen workmen are not engaged directly as workers in a factory
and therefore we should treat such workmen as workers engaged in the industry
will not be correct but plainly fallacious.
In
this context, we may advert to the decision in M/s J.K.Cotton Spinning &
Weaving Mills Co. Ltd. [supra] wherein gardeners engaged in maintaining the
bungalows provided for the officers of the industry were also treated as
workers. The contention put forth on behalf of the Petitioners to distinguish
this decision is that it depended on the definition available under the ID Act
as in force in that particular area where the factory had been established.
It is
not their case that Factories Act was not applicable in that area but in order
to ascertain whether the workers are covered by the ID Act or not what was seen
was the definition under the ID Act. In the same way what we have to see in the
present case is the definition of the term worker as provided under the Act and
not the Factories Act. The learned counsel for the Petitioners relied upon
Section 119 of the Factories Act to contend that the Factories Act would weigh
over the Act. In the first place, the learned counsel is unable to establish
that there is any inconsistency between the Factories Act and the Act. Unless
such inconsistency is pointed out this provision would not be attracted at all.
Therefore, we have to reject this contention also. Under Rule 96 of the
Karnataka Factories Rules, 1969, it has been provided that if the management
bears the cost of wages of canteen staff, buildings, water, lighting, fuel and
insurance it shall not be incumbent on them to run the canteen on any further
loss to themselves, which clearly indicate that in such circumstances they
could run the canteen through an intermediary. Therefore, they contend that
there is no legal obligation upon them to run a canteen but their obligation is
only to provide facilities for running of the canteen by bearing the cost of
wages of canteen staff, buildings, water, lighting, fuel and insurance, if the
said canteen cannot be carried on in an economically viable manner. But no
factual foundation has been laid in any of these petitions to point out that
they have incurred losses to themselves in running these canteens and,
therefore, an intermediary has become necessary.
Unless
that exercise is done this argument cannot be considered. The learned counsel
for the Petitioners sought to make a distinction arising under Section 10 of
the Act in relation to prohibition of contract labour and regulation of
contract labour. They contended that the basis on which contract labour can be
abolished under this section is that it should relate to the manufacturing,
industry, trade, business or occupation that is carried on in the
establishment. In other words, in matters integral to the work in the
establishment and not to a mere facility in respect of its workmen as defined
in Section 2(l) of the Factories Act. Once again, the argument cannot be
appreciated at all because it would be a matter of policy for the Government to
prohibit or to regulate the contract labour in an establishment does not
necessarily dependent upon whether they are engaged in the core activity or a
peripheral activity like the facility of a canteen. Learned counsel for the
Petitioners adverted to certain decisions in Standard Vacuum Refining Co.,
wherein the abolition was in relation to the workmen engaged in the cleaning of
the machinery; Shibu Metal Works, wherein workers being engaged for work which
was of a permanent nature and it was a part of manufacturing process of the
goods manufactured in the factory; Vegoils Pvt. Ltd., wherein it was in
relation to the feeding of hoppers in the solvent extraction plant which is an
activity closely and intimately connected with main activity of the appellant
such as crushing oil cakes and oil seeds for extraction of oil and other
chemical production;
Catering
Cleaners of Southern Railways where it was observed that the work of cleaning,
catering establishment and pantry car is necessary and incidental to the
industry or business of the Southern Railway and, therefore, the requirement of
Section 10(2) was satisfied. The words other work in any establishment in
section 10 are to be construed as ejusdom generis and the expression other work
in the collection of words process, operation or other work in any
establishment occurring in section 10 has not the same meaning as the expression
in connection with the work of an establishment with reference to a workman or
a contractor.
Section
10 of the Act provides for prohibition of employment of contract labour in any
process, operation or other work in an establishment. The words Process,
operation or other work need not be interpreted to mean only the core activity
and not peripheral activity as is sought to be suggested by learned counsel for
Petitioners.
In
sub- section (2) of Section 10 of the Act certain guidelines have been provided
for the Government before the issue of any notification to find out whether the
Process, operation or other work is incidental or necessary for the industry,
trade, business, manufacture or occupation that is carried on in the
establishment. The expression used therein is wide in ambit to cover other
activity arising in industry and not merely the actual manufacture. Otherwise
to understand the expression Process, operation or other work other than the
meaning given in clause (a) of sub-section (2) of section 10 would be to narrow
down the meaning thereto. That does not seem to be the intention of the
enactment at all. Therefore, we cannot agree with the submission made by the
learned counsel for the Petitioners in this regard either.
Shri Venugopal,
learned senior counsel appearing for some of the Petitioners, contended that
there has been no consultation by the Government of Karnataka in an effective
manner before the issue of the notification. He referred to certain details of
the different meetings held by the Advisory Board. The fact is that the
decision to abolish the contract labour in the canteen establishments was taken
by the Advisory Board as earlier as 1988 but the same was not given effect to
and the matter was further discussed and information was gathered from
different sources.
Ultimately,
the Advisory Board sent its advice to the Government suggesting the abolition
of the contract labour.
When
the matter went back to the Government, the factors, such as, the report of the
Advisory Board and the various conditions of the work and the benefits of the
contract labour in the establishment, need for such activity, whether it is a
perennial in nature or otherwise and whether such activity is done ordinarily
through regular workmen in that establishment or an establishment similar
thereto or whether it is sufficient to employ considerable number of whole-time
workmen, were all taken note of in a detailed noting prepared by the Government
before reaching that decision.
These
files have been perused by the High Court based upon which the High Court
upheld the notifications in question.
We
have also been taken through these files and we can say that the High Court is
justified in reaching that conclusion. What is required to be done by the
Government in this regard is to consult the Board and it does not mean that the
Government is bound by the advice given by the Advisory Board. All that is
required is that the Government should consult the Advisory Board which has
been done in the present case which consisted of representations from different
sections such as the Government nominees, the management, the employees and the
contractor who have establishments apart from effectively ascertaining
information from various sources, these members in the Advisory Board itself
had sufficient experience in different fields who also could form an opinion in
regard to the same.
Based
upon such report and all the factors available in the State as per the
information furnished to them from different sources, the Government had
reached the conclusion it did. Further, learned counsel referred to different
proceedings of the Advisory Board to contend that they are inconclusive and
cannot give due advice to the Government.
We may
notice that apart from the deliberations, the Advisory Board has collected
material from different districts and information from the Department of Labour.
That
material was also taken note of by the Government in reaching its conclusion
and hence even assuming that the Advisory Boards proceedings were inconclusive
will not materially affect the decision of the Government.
It was
next contended that conditions in each one of the factories had to be
ascertained and separate notification had to be issued in respect of each one
of the factories.
This
argument needs to be rejected out right because when the Government was
formulating the policy it has to take note of the conditions prevalent
generally in such establishments and not with reference to any one or other.
In
general, if it is found that it would be appropriate to abolish contract labour
in canteens run by factories, individual distinctive features do not affect
such a decision.
It is
next contended that only one notification is issued and not with reference to
each of the establishment separately and, therefore, the action of the
Government is vitiated. When the notification is applicable to establishments
falling in a particular category, the fact that separate notification is not
issued will not make impact on the action of the Government in the issue of a
notification, if otherwise it is valid. Hence this contention also has no
merit.
After
we reserved the matter for orders, it is brought to our notice that the
Government of Karnataka has issued a notification on 15th November, 2000 in No.LD 46 LWA 2000 rescinding notification No.KAE
5 LWA 97 dated 11th
April, 1997
prohibiting under Section 10 of the Act contract labour in certain processes of
steel re-rolling mills. The consideration for issue or cancellation of
notifications in regard to steel re-rolling mills have no bearing on the issue
on hand as in the present case prohibition is only with respect to contract labour
in canteens maintained pursuant to Section 46 of the Factories Act and the
principles applicable in regard to the two issues are entirely different.
Therefore,
we do not find any merit in any arguments advanced on behalf of the
Petitioners. Thus the petitions are liable to be and are dismissed. The
challenge to the notification fails. No costs.
S.L.P.
(Civil) No. 8315/1998 The Petitioner in this case claims that the Petitioner is
a sick industry and, therefore, requires a different kind of treatment at the
hands of the Government and that the Government had not taken note of the fact
whether the Act should be made applicable in respect of industries which are
sick or not. During the pendency of these proceedings, the Board for Industrial
& Financial Reconstruction has made an order providing for a scheme for
revival and reconstruction of the Petitioner and, therefore, it is not feasible
to provide for abolition of contract labour in such an establishment and
abolition of contract labour will not be more beneficial to the workmen
concerned. This stand is strongly refuted by the respondents. The fact that the
industry is sick and it has been subjected to the proceedings before the BIFR
is undoubtedly correct but the view of the BIFR is that the networth of the
company would become positive by the year 1999-2000 and the accumulated losses
would be wiped out by the year 2000-2001. If those are the circumstances it
will be too hazardous for us to embark upon a consideration as to whether the
Government should have separately considered in respect of such an industry
also to abolish contract labour or not. When as a matter of policy the Government
adopted that in respect of industry where there is at least 250 workmen and a
canteen had been provided in terms of the Factories Act and the rules framed thereunder
to abolish contract labour pursuant to which the action has now been taken, we
do not think the Petitioner can stand on a different footing merely because it
has become sick. In that view of the matter, we find no substance in the
separate contentions addressed on behalf of the Petitioner in this petition.
This
petition also stands dismissed. No costs.
Back