Corporation of India Ltd. Vs. Electronics Corporation of India Service Engineers Union  Insc 508 (21 August 2006)
Pasasyat & Lokeshwar Singh Panta Arijit Pasayat, J.
in this appeal is to the order passed by a learned Single Judge of the Bombay
High Court allowing a Writ Petition filed by the respondent.
respondent filed a Writ Petition before the High Court challenging the award
dated 18th August, 1995 passed by the Industrial Tribunal, Bombay (in short the
'Tribunal') rejecting the reference made to it by the Government of Maharashtra
under the Industrial Disputes Act, 1947 (in short the 'Act') on the ground that
the respondent-Union was not able to establish master and servant relationship
between the alleged workmen represented by the Union and the present appellant
(hereinafter referred to as the 'Company'). The entire dispute arose on account
of the services of the alleged workmen represented by the Union, being terminated.
of the Union in a nutshell is as follows:
Reference was in respect of about 30 workmen involved in the dispute. The Union represents the employees who are called
"Retainers" by the Company. These employees sought permanent
absorption and other reliefs from the Company. The Company is engaged in the
business of manufacturing, selling and servicing of electronic items, mainly
Televisions. Between the years 1972 and 1978, the Company engaged these 30
persons as Technicians initially on a contract basis for a period of four
years. Some of these Technicians were then made permanent as either Tradesmen
or Scientific Assistants or Assistant Technical Officers. These 30 employees
obtained employment after responding to an advertisement issued by the Company
for engaging Service Engineers on retainer basis. The employees were selected
pursuant to a written test and oral interview. After selection, they were
required to undergo practical training which was imparted by the Company for a
period of three months. After the training period was completed, contracts were
entered into between the Company and each of these 30 employees.
to them, the contract which labels each of them as "Retainer" was
nothing but a paper arrangement between themselves and the Company who did not
want to implement certain labour laws. Although the service contracts were
treated as individual contracts, the Union
has averred that the workmen were under the supervision of the Company and no
independent decision could be taken by these employees. The employees raised a
demand for permanent absorption in employment and for all other service
conditions which were applicable to other employees. As this was not granted by
the Company, the Union approached the High Court under Article 226 of the
Constitution of India, 1950 (in short the 'Constitution') by filing Writ
Petition No.2689 of 1983. This petition was dismissed as the petitioner had an
alternate remedy by approaching the machinery provided under the Act.
the Union raised a dispute against the
Company which was referred for adjudication by the Tribunal. The dispute
pertained to the claim of regularization as well as certain other demands
including wage revision made by the Union
on behalf of the employees.
The Union filed their Statement of Claim justifying the
demands made by them for regularization of the employees and absorption and
permanency, wage rise, etc. The Union
demonstrated that in fact these employees were always the workmen of the
company and had wrongly been treated as retainers. It was emphasized in the
Statement of Claim that the Company had direct control and supervision over
these employees who were not able to take any independent decisions in respect
of their work. The Company in its Written Statement contended that there was no
contract of service between them and the retainers claiming to be employees
since they were independent persons with whom the Company had entered into a
contract for servicing of Television sets sold by them to the customers. It was
contended that the industrial dispute referred was not maintainable as there
could be no dispute between the Company and the Retainers. Evidence of one of
the employee was led on behalf of all the 30 employees before the Tribunal. No
evidence, oral or documentary, was led by the Company. On a consideration of
the documents as well as oral evidence, the Tribunal by an Award rejected the
Reference as not maintainable. It decided as a preliminary issue as to whether
employee-employer relationship was established. The Tribunal came to the
conclusion that the Retainers had individually entered into contracts with the
Company for service of repairing the Television sets sold by the Company and
that there was no master and servant relationship between the company and the
30 persons who claimed to be employees. According to the Tribunal, the evidence
clearly indicated that these 30 persons were merely contractors and there was
no direct nexus of master and servant relationship between them. The Tribunal's
decision was assailed before the High Court by a writ petition filed by the Union. The primary stand of the Union-writ petitioner was
that the evidence adduced clearly established that a paper arrangement was
erroneously accepted by the Tribunal as the reality. Master and servant
relationship was clearly established.
contra, the Company supported the reasonings given by the Tribunal.
the rival submissions, High Court by the impugned judgment held that it was for
the appellant to establish that there was no master and servant relationship
between the parties and the members of the Union
were not workmen within the meaning of the expression "workman" under
Section 2(s) of the Act. The High Court was of the further view that the
Company had not established either that the members of the Union were not workmen or that the employer employee
relationship does not exist. Accordingly, the writ petition was allowed and the
parties were directed to appear before the Tribunal for further hearing of the
support of the appeal, it was inter alia submitted as follows:
Corporation was entering into individual contracts with the Service Engineers/Licencees
and, there was no compulsion of whatsoever nature on them to enter into the
contracts year after year. Some of the workmen also opted for working with the
Company in terms of those individual contracts, as they found the same to be
such more lucrative and paying rather then being regular employees of the
are no regular posts like Service Engineers or the Licencees or Retainers in
the company and such contracts are entered into by the Company to attend the
additional work as and when required in accordance with terms and conditions of
the contracts. The regular employees are governed by the Service condition as applicable
to the Company, whereas the Service Engineers/Licencees are governed by the
individual contracts signed by them with the Company. It is quite evident that
service conditions under which the regular employees of the Company function
are totally different and incomparable and, therefore, there cannot be similar
wages for different kind of work under different conditions applicable to
different categories of persons. So the demand of regularization of the
employment of the Service Engineers is not maintainable. They were only
required to attend the complaints received in respect of T.V. sets allotted to
them and they were not doing any other work in connection with the said sets,
whereas the regular employees of the company are required to do other work in
addition to the servicing of the T.V. sets manufactured by the Company. The
terms of the employment of the regular employees of the company are governed by
the standing orders of the Company under the Industrial Employment (Standing
Orders) Act as well as the provisions of the Act whereas the terms of the
employment of the Service Engineers/Licencees are governed in terms of
individual contracts entered into by the Company with them.
without admitting that the Service Engineers are required to be absorbed by the
Company, then the same also is practically impossible for the Company to
implement, as the Company is the Central Government Undertaking, and it is
governed by the directions of the Government. Regular employees are required to
work for fixed and regular hours.
Service Engineers/Licensees were not required to adhere to follow any specific
schedule or routine. The Service Engineers cannot claim any regularization or
absorption in the Company and, hence they are not entitled to parity of wage
scales and other benefits which are provided to the regular employees of the
Company. The Service Engineers are required to work as per their convenience
without any interference of whatsoever nature from the Company. It is quite
evident that the nature of duties performed by the regular employees of the
Company and Service Engineers are quite different and distinct and, the same
cannot be compared. It is submitted that regular employees were totally at the
disposal of the Company during their duty hours and they were under its direct
supervision, control and management, whereas the Service Engineers/Licencees
were not under any such supervision, control or management and, so also they
were required to work as per their convenience and, their services were not
available to the Company during any fixed or particular hours or as per its
response, learned counsel for the respondent submitted that the High Court's
view was correct. It took note of the relevant factors. Hence, no interference
is called for.
find that the High Court accepted that the onus was on the persons claiming to
be workmen to prove that they are workmen as defined in the Act. It came to a
peculiar conclusion that since preliminary issue was raised by the employer the
onus shifts to it.
not in dispute that the claimants were retained for a very long period of time
by the appellant on the basis of a contract entered into between them and the
company. Dispute was raised in respect of permanency, absorption,
regularization and pay scale only in 1992 and, therefore, appeared to be an
afterthought and a highly belated claim. No reason was set out as to why such
belated demand was raised.
itself was indicative of the fact that the concerned persons were of the view
that they were retainers and did not have any master and servant relationship
with the company.
agreements indicate that they were entered into for a period of few months. A
minimum 250 sets in a year was allotted to each retainer. The agreement to
appoint as Service Engineers/Licensees as retainer contains some clauses which
throw considerable light.
successful completion of the training, the retainer will be allotted ECTV sets
to be maintained by him. This agreement expires 12 months from the date of
allotment of TV sets.
shall pay to the Retainer at Rs.90/- per set year for ECTV sets allotted to him
out of those covered by warranty and Annual Service Contract with ECTVHowever
the allotment will be so arranged that any point of time, a minimum of 250 ECTV
sets will be maintained by the retainer.
should nominate alternative retainer authority by ECIL to attend complaints
pertaining to the TV sets allotted to him and inform the ECIL office in writing
of such an arrangement before absenting himself from work. In the absence of
such arrangement, the Licensor will arrange to attend such pending complaints
and charge the Retainer at Rs.10/- per complaint plus the value of spares used.
subsistence of this contract in regard to the construction or interpretation of
the terms and provisions hereof or otherwise howsoever in relation thereto or
in any way touching on this agreement, such dispute or difference shall be
referred to the decision of two arbitrators one each to be named by either
party and thereupon all the provisions of the Indian Arbitration Act (Act X of
1940) or any other statutory modification thereof for the time being in force
shall be applicable." It is to be noted that this Court had occasion to
deal with a similar issue. By order dated 16.8.1989 in SLP (Civil) 5169/1989,
it was observed as follows:
hearing the learned counsel for both the parties and on a consideration of the
facts and the circumstances of this case we direct that the contracts which
have been terminated already should be renewed on the same terms and the
petitioners will be permitted to work on the basis of this contract.
regards other whose contracts are yet to and their contracts will be renewed as
soon as the present terms ends and they will also be permitted to work on the
basis of the same terms of the contract. We do not find any basis for the
contention that the Agreement-in- question are contracts of service.
there is any shortage of work then the available work will be equally
distributed amongst the service engineers. Fresh appointments may be considered
if the quantum of work justifies.
writ petition pending before the High Court are disposed off.
special leave petition is disposed of accordingly." Though clarification
was later on sought for and this Court clarified that where the contracts are
different and contain clauses which exclude the application of the decision in
the earlier batch, they should not be held to be bound by the original
decision. It is accepted that against the decision in writ petitions filed by
almost similarly situated persons before the Delhi High Court, which dismissed
the claim by order dated 15.3.1989 in C.W.No.2855/88 this Court was moved and
order dated 16.8.1989 was passed. Though the High Court in the present judgment
referred to a decision of the learned Single Judge of the Calcutta High Court
to hold that employer employee relationship existed, the Division Bench of the
said High Court set aside the order of the learned Single Judge by its order
dated 26.4.2004 in M.A.T.No.1427 of 1998. It is fairly accepted by learned
counsel for the respondent that there has been no further challenge to the
orders passed by the Division Bench of the Calcutta High Court. The Tribunal
rightly noted the relevant features and observed after making a comparison of
the duties of claimants and the regular employees that employer employee
relationship did not exist.
important conclusion of the Tribunal was that there are no regular posts like
Service Engineers or Licencees or retainer in the company and such contracts
are entered into by the Company to attend to additional work as and when
required. It was further noted that there is a definite procedure for
appointment of personnel of the appellant- Company. It was pointed out that the
question of designating the claimants as Tradesmen or Technical Officer on
permanent basis in the Company does not arise as they have neither requisite
qualifications for holding any of the above posts nor were they employees of
the Company and they have not been employed after following the procedure
required for appointment of the personnel of the Company. Further, technical
officers cannot claim to be workmen under the Act as they did mainly
supervisory duties and drew wages exceeding Rs.1600/-p.m. The Company was
entering into individual contracts with its retainers and there was no
compulsion whatsoever to enter into the contract year after year. As a matter
of fact, it was note that some of the workmen of the Corporation opted for
working in terms of those individual contracts as they found the same to be
more lucrative and paying rather than being regular employees.
is no denial of this position by learned counsel for the respondent With
reference to the evidence of the witness examined by the claimants it is clear
that even he (Mr. Kasbekar) agreed that the service engineers and the licencees
were independent contractors. The agreement signed by them makes the position
clear. He accepted that no appointment letter was ever given by the company.
They have not enrolled their names with the Employment Exchange. The first
agreement was signed in 1978. He joined the company along with others in view
of the advertisement regarding retainership. He also accepted that seven
persons as noted above were previously working in the company, but left the
service and joined as retainers. They were aware at the time of signing the
agreement about the service conditions, salary, benefits given to regular
fairly accepted and admitted that taking into consideration that retainership
was more beneficial than the regular service employees, all the seven employees
left the service of the company and accepted the retainership. It was also accepted
that there were several retainers who were working in several places like Delhi, Calcutta, Lucknow. One significant admission was that
complaints of T.V. sets were made by the customers to the appellant company.
The retainers used to visit the company for collecting complaints, collecting
components, for receiving payments and for repairing the calledback sets.
Except for these reasons, they were not required to go to the company.
further significant admission was that there were several types of employees
working in the company whose work cannot be compared with that of the
retainers. Whenever the retainers went on leave they used to provide a
substitute to the company. The Tribunal also noted that the witness has
admitted that the scheme was for retainership and there was no question of his
asking for absorption as regular employees.
1989-90 they were getting more income than the regular employees and,
therefore, had not sought for regularization.
since 1989-90 they found the regular employees were getting more salary than
their income, and, therefore, they claimed regularization. Further 2.24%
deduction towards Income tax was made from the bills of the retainers in view
of the contract and that was not applicable to the case of salaries of the
regular employees. He accepted that he did not know about the nature of work
and working hours of the regular employees. Factually, it was found that the
retainers were getting Rs.90/- per set. The agreement was on job contract
basis. In Clause 15 of the agreement, there was a provision for arbitration
under the Indian Arbitration Act, 1940.
view of what has been stated, the Tribunal was right in its view that no
employer employee relationship existed.
of the High Court to the contrary are clearly untenable because the findings
and the reasons given by the Tribunal have not been discussed. No reason has
been given by the High Court as to how these conclusions were erroneous and
perverse. The inevitable conclusion is that the impugned judgment of the High
Court deserves to be set aside and that of the Tribunal to be restored and we
appeal is allowed. No costs.