Nitinkumar
Nathalal Joshi & Ors Vs. Oil & Natural Gas Corporation Ltd. & Ors
[2002] Insc 133 (14
March 2002)
S.N.
Phukan & K.G. Balakrishnan K.G. Balakrishnan, J.
Leave
granted.
The
Judgment of the Division Bench of the High Court of Gujarat at Ahmedabad in
Letters Patent Appeal No. 395 of 1999 is challenged before us.
The
appellants alleged that they were workmen employed as contract labourers in the
capacity of Boiler Operators through the Contractor, Ahmedabad Electricity Co.
Limited. According to these appellant workmen, they were employed on contract labour
with the first respondent-principal employer, namely, Oil & Natural Gas
Corporation Limited(hereinafter being called as "ONGC Limited").
Consequent
upon the notification dated 8.9.1994 under Section 10(1) of the Contract Labour(Regulation
and Abolition) Act, 1970 by the Central Government, the contract labour in the
posts of Boiler Operators, Attendants, Helpers and Peons was prohibited and
these appellants claimed that they should be treated as the employees of the
first respondent. They filed a Writ Petition before the High Court of Gujarat
and learned Single Judge held that these appellants were persons engaged for
attending different operations of the boiler in the boiler house of ONGC Ltd.
through the contractor, which was clearly in breach of the provisions of the
Act. It was held that these appellants must be deemed to be performing duties
directly under the first respondent ONGC Limited and they must be given the
terms of service as applicable to other employees of ONGC Limited with effect
from the date of notification.
The
Judgment of the learned Single Judge was challenged before the Division Bench
and the Division Bench was of the view that there were some disputed questions
of fact and an investigation into facts regarding service conditions of
contract labour was necessary before granting them the relief of direct
employment with the principal employer and that the proceedings under Article
226 of the Constitution were not appropriate. It also held that there should be
an investigation by the Industrial Tribunal and these appellants were directed
to approach the Conciliation Officer of the concerned area and further
direction was given to the Conciliation Officer to complete the conciliation
proceedings within three months and if the dispute survived, the matter be
referred to the Industrial Tribunal under Section 10 of the Industrial Dispute
Act and the Industrial Tribunal/Labour court to take a final decision in the
matter within a period of four months thereafter. These directions are
challenged before us.
We
heard Shri T.R. Andhyarujina, learned senior Counsel on behalf of the
appellants and Mr. Mukul Rohtgi, learned ASG on behalf of the respondents.
What
is the effect of abolition of contract labour by virtue of the notification
issued by Central Government under Section 10 of the Industrial Disputes Act
was Union Waterfront Workers and Others (2001) 7 SCC 1. The main question that
arose for consideration in that case was whether there should be an automatic
absorption of contract labourers working in the establishment of principal
employer as regular employees consequent upon the notification under Section
10(1) of the Act. This Court held in clause (5) and (6) of paragraph 125 at
page 63 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 6 hereunder.
If 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 where in 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 the present case, the appellants have alleged that
after the filing of the said appeal, the contract between first respondent ONGC
Limited and the second respondent Ahmedabad Electricity Co. Limited came to an
end on 30.11.2000 for operation of boilers and first respondent ONGC Limited
entered into a contract with M/s. S.S. Construction, Mumbai and M/s. Essel
Engineering Services, Mumbai for operation of the boilers at ONGC Limited with
effect from 1.12.2000. They have also alleged that some of the appellants were
given employment with a lesser payment but these facts have been denied by the
first respondent. As these are disputed questions of fact, we do not propose to
go into these questions and do not interfere with the directions given in the
impugned Judgment. However, we make it clear that the Industrial Tribunal/Labour Court shall also consider these
allegations and shall give appropriate direction.
We may
also emphasise that the Constitution Bench of this Court in Steel Authority of
India Ltd.
case(supra)
in paragraph 107 observed as under:- "An analysis of the cases, discussed
above, shows that they fall in three classes:
(i)
where contract labour is engaged in or in connection with the work of an establishment
and employment of contract labour is prohibited either because the industrial
adjudicator/court ordered abolition of contract labour or because the
appropriate Government issued notification under Section 10(1) of the CLRA Act,
no automatic absorption of the contract labour working in the establishment was
ordered;
(ii)
where the contract was found to be a sham and nominal, rather a camouflage, in
which case the contract labour working in the establishment of the principal
employer were held, in fact and in reality, the employees of the principal
employer himself. Indeed such cases do not relate to abolition of contract labour
but present instances wherein the Court pierced the veil and declared the
correct position as a fact at the stage after employment of contract labour
stood prohibited;
(iii) where
in discharge of a statutory obligation of maintaining a canteen in an
establishment the principal employer availed the services of a contractor the
courts have held that the contract labour would indeed be the employees of the
principal employer." These matters are also to be considered by the Industrial Court/Labour Court if reference ultimately reaches
before that forum.
The
learned Counsel for the appellants contended that the decision in Steel Autority
of India Ltd. case(supra), is prospective in operation, therefore, these
appellants should have been given the benefit of employment under the principal
employer, the first respondent ONGC Limited. It is true that in Steel Authority
of India Ltd. case(supra), it was specifically made clear in clause (4) of
paragraph 125 as follows:- "We overrule the judgment of this Court in Air
India case prospectively and declare that any direction issued by any
Industrial adjudicator/any court including the High Court, for absorption of
contract labour following the judgment in Air India case shall hold good and
that the same shall not be set aside, altered or modified on the basis of this
judgment in cases where such a direction has been given effect to and it has become
final." In the present case, the appellants were not absorbed by the
principal employer. Therefore, it cannot be said that the decision in Steel
Authority of India Ltd. case(supra) cannot be applied. The directions issued by
the learned Single Judge were modified by the Division Bench of the High Court
and never given effect to. Therefore, the directions issued by this Court in
the Steel Authority of India Ltd. case(supra) are applicable on all force.
` We
do not find any reason to interfere with the directions given in the impugned
Judgment. They are to be complied with subject to the observations made above
and also having due regard to the decision rendered by this Court in Steel
Authority of India Ltd. case(supra). The appeal is disposed of accordingly.
..J.
(S.N.
PHUKAN) ..J.
(K.G.
BALAKRISHNAN) March 14,
2002.
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