The Introduction of Contract Labour Acts
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Jul 03, 2024
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About This Presentation
Introduction about contract labour act and definitions and laws.
Slide Content
The Contract Labour
(Regulation and Abolition)
Act, 1970
(Regulation and Abolition)
Act, 1970
Objectives
•To regulate employment of
contract Labour and their terms
and conditions
•Where it is found necessary,
to abolish contract labour
•To regulate employment of
contract Labour and their terms
and conditions
•Where it is found necessary,
to abolish contract labour
Case Law 1
Standard Vacuum Refining Company
V/s
its Workmen 1960 II LLJ 233
(Supreme Court)
Standard Vacuum Refining Company
V/s
its Workmen 1960 II LLJ 233
(Supreme Court)
Facts
1.A dispute was raised by the workmen of the
company (hereinafter called the respondents)
with respect to contract labour employed by the
company for cleaning maintenance of the
refinery, (plant and premises) belonging to the
company.
2.On April 27, 1957, the respondents made a
demand for abolition of the contract system
that prevailed in the company and for absorbing
the workmen employed through the contractors
into the regular service of the company with
retrospective effect from the date of their
employment in the company through the
contractors….
1.A dispute was raised by the workmen of the
company (hereinafter called the respondents)
with respect to contract labour employed by the
company for cleaning maintenance of the
refinery, (plant and premises) belonging to the
company.
2.On April 27, 1957, the respondents made a
demand for abolition of the contract system
that prevailed in the company and for absorbing
the workmen employed through the contractors
into the regular service of the company with
retrospective effect from the date of their
employment in the company through the
contractors….
Facts…
The case of the respondents was that the
contractor used to change sometimes from year
to year with the result that the workmen
employed by the previous contractor were thrown
out of employment.
As an instance, it was said that previous to
October 1, 1957, the contract was with Gowri
Construction Company. That company employed
67 workmen to do the work. But when the
contract was given to Ramji Gordhan and
Company, all these 67 workmen were thrown out
of employment, though 40 of them were
subsequently re-employed as fresh employees by
Ramji Gordhan and Company.
The case of the respondents was that the
contractor used to change sometimes from year
to year with the result that the workmen
employed by the previous contractor were thrown
out of employment.
As an instance, it was said that previous to
October 1, 1957, the contract was with Gowri
Construction Company. That company employed
67 workmen to do the work. But when the
contract was given to Ramji Gordhan and
Company, all these 67 workmen were thrown out
of employment, though 40 of them were
subsequently re-employed as fresh employees by
Ramji Gordhan and Company.
Facts…
The result of the system therefore was that there
was no security of service to the workmen who
were in effect doing the work of the company.
Besides the contractors were paying much less to
the workmen that the amount paid by the
company to its unskilled regular workmen.
Further, the workmen of the contractors were not
entitled to other benefits and amenities such as
provident fund, gratuity, bonus, privilege leave,
medical facilities and subsidized food and housing
to which the regular workmen of the company
were entitled. The work was of a permanent
nature, but the contract system was introduced
to deny the workmen the rights and benefits
which the company gave to its own workmen.
The result of the system therefore was that there
was no security of service to the workmen who
were in effect doing the work of the company.
Besides the contractors were paying much less to
the workmen that the amount paid by the
company to its unskilled regular workmen.
Further, the workmen of the contractors were not
entitled to other benefits and amenities such as
provident fund, gratuity, bonus, privilege leave,
medical facilities and subsidized food and housing
to which the regular workmen of the company
were entitled. The work was of a permanent
nature, but the contract system was introduced
to deny the workmen the rights and benefits
which the company gave to its own workmen.
Facts…
3.The tribunal held that the reference was
competent. On the merits it was of opinion that
the work which was being done through the
contractor was necessary for the company and
had to be done daily, though it was not a part of
the manufacturing process.
It further held that doing of this work through
annual contracts resulted in the deprivation of
security of service and other benefits, privileges,
leave, etc., for the workmen of the contractor.
Therefore considering the nature of the case it
was of opinion that this was a proper case where
a direction should be given to the company to
abolish the contract system with respect to this
work.
3.The tribunal held that the reference was
competent. On the merits it was of opinion that
the work which was being done through the
contractor was necessary for the company and
had to be done daily, though it was not a part of
the manufacturing process.
It further held that doing of this work through
annual contracts resulted in the deprivation of
security of service and other benefits, privileges,
leave, etc., for the workmen of the contractor.
Therefore considering the nature of the case it
was of opinion that this was a proper case where
a direction should be given to the company to
abolish the contract system with respect to this
work.
Facts…
In the result the company was directed with
effect from November 1, 1958, to discontinue
the practice of getting this work done through
contractors and to have it done through
workmen engaged by itself.
4.The company was further directed to engage
regular workmen for this work and in so doing
it was to give preference to the workmen
employed by Ramji Gordhan and Company.
In the result the company was directed with
effect from November 1, 1958, to discontinue
the practice of getting this work done through
contractors and to have it done through
workmen engaged by itself.
4.The company was further directed to engage
regular workmen for this work and in so doing
it was to give preference to the workmen
employed by Ramji Gordhan and Company.
Facts…
5.The reference is confined to one only, viz.,
cleaning maintenance work at the refinery
including premises and plant and we shall deal
with that only.
So far as this work is concerned, it is incidental
to the manufacturing process and is necessary
for it and of a perennial nature which must be
done every day.
Such work is generally done by workmen in the
regular employ of the employer and there should
be no difficulty in having regular workmen for
this kind of work.
5.The reference is confined to one only, viz.,
cleaning maintenance work at the refinery
including premises and plant and we shall deal
with that only.
So far as this work is concerned, it is incidental
to the manufacturing process and is necessary
for it and of a perennial nature which must be
done every day.
Such work is generally done by workmen in the
regular employ of the employer and there should
be no difficulty in having regular workmen for
this kind of work.
Facts…
The matter would be different if the work was of
intermittent or temporary nature or was so little
that it would not be possible to employ full-time
workmen for the purpose.
Under the circumstances the order of the
tribunal appears to be just and there are no good
reasons for interfering with it.
The matter would be different if the work was of
intermittent or temporary nature or was so little
that it would not be possible to employ full-time
workmen for the purpose.
Under the circumstances the order of the
tribunal appears to be just and there are no good
reasons for interfering with it.
Ratio
“If the work for which Contract Labour
is employed is incidental to and
closely connected with the main
activity of the industry and is of a
perennial and permanent nature, the
abolition of Contract Labour would be
justified”.
“If the work for which Contract Labour
is employed is incidental to and
closely connected with the main
activity of the industry and is of a
perennial and permanent nature, the
abolition of Contract Labour would be
justified”.
Prohibition of employment of
contract labour
Section 10 of the Contract Labour Act :-
1.Notwithstanding anything contained in this Act,
the appropriate Government may, after
consultation with the Central Board or, 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.
2.Before issuing any notification under sub-
section (1) in relation to an establishment, 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 –
contract labour
Section 10 of the Contract Labour Act :-
1.Notwithstanding anything contained in this Act,
the appropriate Government may, after
consultation with the Central Board or, 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.
2.Before issuing any notification under sub-
section (1) in relation to an establishment, 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 –
Prohibition of employment of
contract labour ….
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 carried on in that
establishment.
contract labour ….
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 carried on in that
establishment.
Prohibition of employment of
contract labour….
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.
contract labour….
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.
Case Law 2
The Supreme Court in Vegoils
V/s
The Workmen
(1971 2 SCC 724 )
The Supreme Court in Vegoils
V/s
The Workmen
(1971 2 SCC 724 )
Ratio
1.Thefeedingofhoopersinthesolventextraction
plantisanactivitycloselyandintimately
connectedwiththemainactivityoftheappellant,
namely,crushingoilcakesandoilseedsfor
extractionofoilandotherchemicalproduction.
Exceptingafewdays,thisworkhastogoon
continuouslyalmostthroughouttheyear.Itisnot
asiftheworkofanintermittentortemporary
natureorsolittlethatitwouldnotbepossiblefor
theappellanttoemployfull-timeworkmenforthis
purpose.Thefactthatthisworkisdoneby
departmentalworkmeninotherconcernsshows
thatitisanessentialpartoftheindustry.
1.Thefeedingofhoopersinthesolventextraction
plantisanactivitycloselyandintimately
connectedwiththemainactivityoftheappellant,
namely,crushingoilcakesandoilseedsfor
extractionofoilandotherchemicalproduction.
Exceptingafewdays,thisworkhastogoon
continuouslyalmostthroughouttheyear.Itisnot
asiftheworkofanintermittentortemporary
natureorsolittlethatitwouldnotbepossiblefor
theappellanttoemployfull-timeworkmenforthis
purpose.Thefactthatthisworkisdoneby
departmentalworkmeninotherconcernsshows
thatitisanessentialpartoftheindustry.
Ratio…..
2.Iftheworkforwhichcontractlabouris
employed isincidentaltoandclosely
connectedwiththemainactivityofthe
industryandisofaperennialandpermanent
nature,theabolitionofContractLabour
wouldbejustified.Theseprinciplesarealso
incorporatedintheContractLabourAct.
2.Iftheworkforwhichcontractlabouris
employed isincidentaltoandclosely
connectedwiththemainactivityofthe
industryandisofaperennialandpermanent
nature,theabolitionofContractLabour
wouldbejustified.Theseprinciplesarealso
incorporatedintheContractLabourAct.
Ratio……..
3.Inviewofthefactsofthepresentcase,therefore,
thereshouldbenodifficultyinhavingregular
workmenintheemploymentoftheappellantto
dothistypeofwork.
4.In the present case the work of loading and
unloading is not done on all the working days and
on some days a number of wagons and trucks
suddenly arrive necessitating employment of large
number of workers and they are to be ……..
3.Inviewofthefactsofthepresentcase,therefore,
thereshouldbenodifficultyinhavingregular
workmenintheemploymentoftheappellantto
dothistypeofwork.
4.In the present case the work of loading and
unloading is not done on all the working days and
on some days a number of wagons and trucks
suddenly arrive necessitating employment of large
number of workers and they are to be ……..
Ratio…..
….cleared from the railway wagons within a
limited time to avoid demurrage. The fact
that in other units also, the work is done by
contract labour shows that it is not profitable
to employ full time workers for this purpose
and no directions can, therefore, be given for
abolition of contract labour.
….cleared from the railway wagons within a
limited time to avoid demurrage. The fact
that in other units also, the work is done by
contract labour shows that it is not profitable
to employ full time workers for this purpose
and no directions can, therefore, be given for
abolition of contract labour.
Ratio…….
5.Thefollowingpointsemergefroms.10.(1)ofthe
ContractLabour(RegulationandAbolition)Act,
1970(37of1970)
(1)TheappropriateGovernmenthaspowerto
prohibittheemploymentofcontractlabourinany
process,operationorotherworkinany
establishment;
(2)beforeissuinganotificationprohibiting
contractlabour,theappropriateGovernmenthas
toconsulttheCentralorStateBoard,asthecase
maybe,comprisesoftherepresentativesofthe
workmen,contractorandtheindustry;
5.Thefollowingpointsemergefroms.10.(1)ofthe
ContractLabour(RegulationandAbolition)Act,
1970(37of1970)
(1)TheappropriateGovernmenthaspowerto
prohibittheemploymentofcontractlabourinany
process,operationorotherworkinany
establishment;
(2)beforeissuinganotificationprohibiting
contractlabour,theappropriateGovernmenthas
toconsulttheCentralorStateBoard,asthecase
maybe,comprisesoftherepresentativesofthe
workmen,contractorandtheindustry;
Ratio……
(3)beforeissuinganynotificationundersub-s.(1)
ofS.10,prohibitingtheemploymentofcontract
labourtheappropriateGovernmentisboundtohave
regard,notonlytotheconditionsofworkand
benefitsprovidedforthecontractlabourina
particularestablishment,butalsootherrelevant
factorsenumeratedinclauses.(a)to(d)ofsub-s.
(2)ofS.10and
(4)undertheexplanationwhichreallyrelatesto
clause(b),thedecisionoftheappropriate
Government,onthequestionwhetheranyprocess,
operationorotherworkisofperennialnature,shall
befinal.
(3)beforeissuinganynotificationundersub-s.(1)
ofS.10,prohibitingtheemploymentofcontract
labourtheappropriateGovernmentisboundtohave
regard,notonlytotheconditionsofworkand
benefitsprovidedforthecontractlabourina
particularestablishment,butalsootherrelevant
factorsenumeratedinclauses.(a)to(d)ofsub-s.
(2)ofS.10and
(4)undertheexplanationwhichreallyrelatesto
clause(b),thedecisionoftheappropriate
Government,onthequestionwhetheranyprocess,
operationorotherworkisofperennialnature,shall
befinal.
Ratio…..
6.Under the Act (37 of 1970), the appropriate
Government when taking action under S. 10 will
have an overall picture of the industries carrying on
similar activities and decide whether contract labour
is to be abolished in respect of any of the activities
of that industry. Therefore, it is reasonable to
conclude that the jurisdiction to decide about the
abolition of contract labour, or to put it differently, to
prohibit the employment of contract labour, is now
to be done in accordance with S. 10. Therefore, it is
proper that the question whether the contract labour
in the appellant’s industry is to be abolished or not,
is left to be dealt with by the appropriate
Government under the Act, if it becomes necessary..
6.Under the Act (37 of 1970), the appropriate
Government when taking action under S. 10 will
have an overall picture of the industries carrying on
similar activities and decide whether contract labour
is to be abolished in respect of any of the activities
of that industry. Therefore, it is reasonable to
conclude that the jurisdiction to decide about the
abolition of contract labour, or to put it differently, to
prohibit the employment of contract labour, is now
to be done in accordance with S. 10. Therefore, it is
proper that the question whether the contract labour
in the appellant’s industry is to be abolished or not,
is left to be dealt with by the appropriate
Government under the Act, if it becomes necessary..
Ratio…..
Onthisground,thedirectionsofthe
IndustrialTribunaltotheCompanyto
abolishthecontractsystem,etc.cannot
bemaintained.
Onthisground,thedirectionsofthe
IndustrialTribunaltotheCompanyto
abolishthecontractsystem,etc.cannot
bemaintained.
Case Law 3
TheSupremeCourtin:
CateringCleanersofS.Rly.
V/s
UnionofIndia
(19871SCC700)
TheSupremeCourtin:
CateringCleanersofS.Rly.
V/s
UnionofIndia
(19871SCC700)
Facts
1.The petitioners are catering cleaners working in
the catering establishments in various railway
junctions of the Southern Railway and in the pantry
cars of long distance trains running under the
control of the Southern Railway. Since a long time
they have been agitating for the abolition of the
contract system and for their absorption as regular
employees of the principal employer, namely, the
Southern Railway. They complain that they are not
even paid minimum wages. They are paid a pittance
averaging from Rs. 2.00/-to Rs. 2.50/-per day.
Although the contract system has been abolished in
almost all the other railways, the Southern Railway
persists in employing contract labour for cleaning its
catering establishments and pantry cars.……
1.The petitioners are catering cleaners working in
the catering establishments in various railway
junctions of the Southern Railway and in the pantry
cars of long distance trains running under the
control of the Southern Railway. Since a long time
they have been agitating for the abolition of the
contract system and for their absorption as regular
employees of the principal employer, namely, the
Southern Railway. They complain that they are not
even paid minimum wages. They are paid a pittance
averaging from Rs. 2.00/-to Rs. 2.50/-per day.
Although the contract system has been abolished in
almost all the other railways, the Southern Railway
persists in employing contract labour for cleaning its
catering establishments and pantry cars.……
Facts…
….SotheyfiledpetitionunderArt.32forabolitionof
contractlaboursystemandregularisationoftheir
services.
2.Against that the Railway Administration
contended that it has not been found to be possible
to abolish the contract labour system because the
nature of the cleaning work in the catering units of
the Southern Railway was fluctuating and
intermittent. The contract labour system is followed
not only in the Southern Railway but also in the
South Central Railway and the South Eastern
Railway..….
….SotheyfiledpetitionunderArt.32forabolitionof
contractlaboursystemandregularisationoftheir
services.
2.Against that the Railway Administration
contended that it has not been found to be possible
to abolish the contract labour system because the
nature of the cleaning work in the catering units of
the Southern Railway was fluctuating and
intermittent. The contract labour system is followed
not only in the Southern Railway but also in the
South Central Railway and the South Eastern
Railway..….
Facts…
They claim that any departmental unit not working
profitably could be handed over to a private licensee
and this was the alternative that was adopted by the
Southern Railway in the case of catering cleaners.
Experience showed that it was difficult to extract
work from catering cleaners if they were engaged on
a regular basis by the railway and it was not
possible to supervise their work effectively. To
ensure satisfactory service to the public the work
had to be entrusted to a private agency……
They claim that any departmental unit not working
profitably could be handed over to a private licensee
and this was the alternative that was adopted by the
Southern Railway in the case of catering cleaners.
Experience showed that it was difficult to extract
work from catering cleaners if they were engaged on
a regular basis by the railway and it was not
possible to supervise their work effectively. To
ensure satisfactory service to the public the work
had to be entrusted to a private agency……
Held
“(a) TheRailwayAdministrationhasonlymade
vagueandgeneralstatementsforwhichnofactsor
figuresinsupportthereofhavebeenplacedbefore
theCourt.Infacttheircontentionsstand
contradictedbytheReportofParliamentary
Committee ofPetitionswhichwentintothis
question.”
“(a) TheRailwayAdministrationhasonlymade
vagueandgeneralstatementsforwhichnofactsor
figuresinsupportthereofhavebeenplacedbefore
theCourt.Infacttheircontentionsstand
contradictedbytheReportofParliamentary
Committee ofPetitionswhichwentintothis
question.”
Held….
“(b)Onfacts,alltherelevantfactorsstatedinclauses
(a)to(d)ofS.10(2)aresatisfied.Thatcatering
establishmentsmakeprofitisalsoestablished.The
historyandobjectoftheActsupportabolitionof
contractlabourinthiscase.However,inthe
circumstances,insteadofissuingamandamustothe
CentralGovernment,theCentralGovernmentisbeing
directedtotakeappropriateactionunderS.10withinsix
months.”
“(b)Onfacts,alltherelevantfactorsstatedinclauses
(a)to(d)ofS.10(2)aresatisfied.Thatcatering
establishmentsmakeprofitisalsoestablished.The
historyandobjectoftheActsupportabolitionof
contractlabourinthiscase.However,inthe
circumstances,insteadofissuingamandamustothe
CentralGovernment,theCentralGovernmentisbeing
directedtotakeappropriateactionunderS.10withinsix
months.”
Held...
“(c)Theworkofcleaningcateringestablishmentsand
pantrycarswillbedonedepartmentallybyemploying
thoseworkmenwhowerepreviouslyemployedbythe
contractoronthesamewagesandconditionsofworkas
areapplicabletothoseengagedinsimilarworkbythe
WesternRailway.”
“(c)Theworkofcleaningcateringestablishmentsand
pantrycarswillbedonedepartmentallybyemploying
thoseworkmenwhowerepreviouslyemployedbythe
contractoronthesamewagesandconditionsofworkas
areapplicabletothoseengagedinsimilarworkbythe
WesternRailway.”
Section7oftheCLRAprovidesfor
registrationinrespectofaprincipal
employer.
Section 12 of the CLRA provides for the
Contractor to obtain license.
registrationinrespectofaprincipal
employer.
Section 12 of the CLRA provides for the
Contractor to obtain license.
Case Law 4
TheSupremeCourtinDenaNath
V/s
NationalFertilisersLtd.,
(19921SCC695)
TheSupremeCourtinDenaNath
V/s
NationalFertilisersLtd.,
(19921SCC695)
Held
“InproceedingsunderArt.226oftheConstitution
merelybecausecontractorortheemployerhad
violatedanyprovisionoftheActortherules,the
Courtcouldnotissueanymandamusfordeemingthe
contractlabourashavingbecometheemployeesof
theprincipalemployer.”
“InproceedingsunderArt.226oftheConstitution
merelybecausecontractorortheemployerhad
violatedanyprovisionoftheActortherules,the
Courtcouldnotissueanymandamusfordeemingthe
contractlabourashavingbecometheemployeesof
theprincipalemployer.”
Case Law 5
TheSupremeCourtin
GujaratElectricityBoard,ThermalPower
Station
V/s
HindMazdoorSabha
(19955SCC27)
TheSupremeCourtin
GujaratElectricityBoard,ThermalPower
Station
V/s
HindMazdoorSabha
(19955SCC27)
Held
“After the coming into operation of the Contract
Labour (Regulation and Abolition) Act,(for short the
Act), the authority to abolish the contract labour is
vested exclusively in the appropriate Government
which has to take its decision in the matter in
accordance with the provisions of Section 10 of the
Act. No Court including the industrial adjudicator
has jurisdiction to do so. However, the authority to
abolish the contract labour under Section 10 of the
Act comes into play only where there exists a
genuine contract.
“After the coming into operation of the Contract
Labour (Regulation and Abolition) Act,(for short the
Act), the authority to abolish the contract labour is
vested exclusively in the appropriate Government
which has to take its decision in the matter in
accordance with the provisions of Section 10 of the
Act. No Court including the industrial adjudicator
has jurisdiction to do so. However, the authority to
abolish the contract labour under Section 10 of the
Act comes into play only where there exists a
genuine contract.
Held…
Inotherwords,ifthereisnogenuinecontract
andtheso-calledcontractisashamora
camouflagetohidethereality,thesaidprovisions
areinapplicable.When,insuchcircumstances,the
workmenconcernedraiseanindustrialdisputefor
reliefthattheyshouldbedeemedtobethe
employeesoftheprincipalemployer,thecourtor
theindustrialadjudicatorwillhavejurisdictionto
entertainthedisputeandgrantthenecessary
relief.”
Inotherwords,ifthereisnogenuinecontract
andtheso-calledcontractisashamora
camouflagetohidethereality,thesaidprovisions
areinapplicable.When,insuchcircumstances,the
workmenconcernedraiseanindustrialdisputefor
reliefthattheyshouldbedeemedtobethe
employeesoftheprincipalemployer,thecourtor
theindustrialadjudicatorwillhavejurisdictionto
entertainthedisputeandgrantthenecessary
relief.”
Case Law 6
TheSupremeCourtin
AirIndiaStatutoryCorpn.
V/s
UnitedLabourUnion
(19979SCC377)
TheSupremeCourtin
AirIndiaStatutoryCorpn.
V/s
UnitedLabourUnion
(19979SCC377)
Facts
1.TheCentralGovernment,exercisingthepower
underSection10oftheAct,onthebasisof
recommendation andinconsultationwiththe
CentralAdvisoryBoardconstitutedunderSection
10(1)oftheAct,issuedanotificationon9-12-
1976prohibiting"employmentofcontractlabour
onandfrom9-12-1976forsweeping,cleaning,
dustingandwatchingofthebuildingsownedor
occupiedbytheestablishmentsinrespectofwhich
theappropriategovernmentunderthesaidActis
theCentralGovernment".
1.TheCentralGovernment,exercisingthepower
underSection10oftheAct,onthebasisof
recommendation andinconsultationwiththe
CentralAdvisoryBoardconstitutedunderSection
10(1)oftheAct,issuedanotificationon9-12-
1976prohibiting"employmentofcontractlabour
onandfrom9-12-1976forsweeping,cleaning,
dustingandwatchingofthebuildingsownedor
occupiedbytheestablishmentsinrespectofwhich
theappropriategovernmentunderthesaidActis
theCentralGovernment".
Facts….
2.Sincetheappellantdidnotabolishthecontract
systemandfailedtoenforcethenotificationofthe
Government ofIndiadated9-12-1976,the
respondentsfiledwritpetitionsfordirectiontothe
appellanttoenforceforthwiththeaforesaid
notificationabolishingthecontractlaboursystem
intheaforesaidservicesandtodirecttheappellant
toabsorballtheemployeesdoingcleaning,
sweeping,dusting,washingandwatchingofthe
buildingsownedoroccupiedbytheappellant-
establishment,witheffectfromtherespective
datesoftheirjoiningascontractlabourinthe
appellant'sestablishmentwithallconsequential
rights/benefits,monetaryorotherwise.
2.Sincetheappellantdidnotabolishthecontract
systemandfailedtoenforcethenotificationofthe
Government ofIndiadated9-12-1976,the
respondentsfiledwritpetitionsfordirectiontothe
appellanttoenforceforthwiththeaforesaid
notificationabolishingthecontractlaboursystem
intheaforesaidservicesandtodirecttheappellant
toabsorballtheemployeesdoingcleaning,
sweeping,dusting,washingandwatchingofthe
buildingsownedoroccupiedbytheappellant-
establishment,witheffectfromtherespective
datesoftheirjoiningascontractlabourinthe
appellant'sestablishmentwithallconsequential
rights/benefits,monetaryorotherwise.
Held
“(a)The contractor is an intermediary between the
workmen and the principal employer. The moment
the contract labour system stands prohibited under
Section 10(1), the embargo to continue as a
contract labour is put an end to and direct
relationship has been provided between the
workmen and the principal employer. Thereby, the
principal employer directly becomes responsible for
taking the services of the workmen hitherto
regulated through the contractor. The object of
the penal provisions was to prevent the employer
from committing breach of the provisions of the
Act and to put an end to exploitation of the labour.
“(a)The contractor is an intermediary between the
workmen and the principal employer. The moment
the contract labour system stands prohibited under
Section 10(1), the embargo to continue as a
contract labour is put an end to and direct
relationship has been provided between the
workmen and the principal employer. Thereby, the
principal employer directly becomes responsible for
taking the services of the workmen hitherto
regulated through the contractor. The object of
the penal provisions was to prevent the employer
from committing breach of the provisions of the
Act and to put an end to exploitation of the labour.
Held….
andtodeterhimfromactinginviolationofthe
constitutionalrightoftheworkmentoattaindecent
standardoflife,livingwages,righttohealthetc.
WhentheappropriateGovernmentfindsthatthe
employmentisofaperennialnatureetc.contract
systemstandabolished,thereby,itintendedthatif
theworkmenwereperformingthedutiesofthepost
whichwerefoundtobeofperennialnatureonpar
withregularservice,theyalsorequiretobe
regularised.TheActdidnotintendtodenudethem
oftheirsourceoflivelihoodandmeans of
development,throwingthemoutfromemployment.
andtodeterhimfromactinginviolationofthe
constitutionalrightoftheworkmentoattaindecent
standardoflife,livingwages,righttohealthetc.
WhentheappropriateGovernmentfindsthatthe
employmentisofaperennialnatureetc.contract
systemstandabolished,thereby,itintendedthatif
theworkmenwereperformingthedutiesofthepost
whichwerefoundtobeofperennialnatureonpar
withregularservice,theyalsorequiretobe
regularised.TheActdidnotintendtodenudethem
oftheirsourceoflivelihoodandmeans of
development,throwingthemoutfromemployment.
Held….
TheActisasocio-economicwelfarelegislation.
Righttosocio-economicjusticeandempowerment
areconstitutionalrights.Righttomeansof
livelihoodisalsoaconstitutionalright.Rightto
facilitiesandopportunitiesareonlypartofand
means torighttodevelopment.Without
employmentorappointment,theworkmenwillbe
denudedoftheirmeansoflivelihoodandresultant
righttolife,leavingtheminthelurchsinceprior
toabolition,theyhadtheworkandthereby
earnedlivelihood.”
TheActisasocio-economicwelfarelegislation.
Righttosocio-economicjusticeandempowerment
areconstitutionalrights.Righttomeansof
livelihoodisalsoaconstitutionalright.Rightto
facilitiesandopportunitiesareonlypartofand
means torighttodevelopment.Without
employmentorappointment,theworkmenwillbe
denudedoftheirmeansoflivelihoodandresultant
righttolife,leavingtheminthelurchsinceprior
toabolition,theyhadtheworkandthereby
earnedlivelihood.”
Held….
“(b) Theawardproceedingsassuggestedin
GujaratElectricityBoardcase((1995)5SCC27:
1995SCC(L&S)1166)arebesetwithseveral
incongruitiesandobstaclesinthewayofthe
contractlabourforimmediateabsorption.Since,
thecontractlabourgetsintotheserviceofthe
principalemployer,theUnionoftheexisting
employeesmaynotespousetheircausefor
referenceunderSection10oftheIDAct.The
workmen,onabolitionofcontractlaboursystem
havenorighttoseekreferenceunderSection10
oftheIDAct.
“(b) Theawardproceedingsassuggestedin
GujaratElectricityBoardcase((1995)5SCC27:
1995SCC(L&S)1166)arebesetwithseveral
incongruitiesandobstaclesinthewayofthe
contractlabourforimmediateabsorption.Since,
thecontractlabourgetsintotheserviceofthe
principalemployer,theUnionoftheexisting
employeesmaynotespousetheircausefor
referenceunderSection10oftheIDAct.The
workmen,onabolitionofcontractlaboursystem
havenorighttoseekreferenceunderSection10
oftheIDAct.
Held…
Moreover,theworkmenimmediatelyarekeptoutofjobto
endlesslykeepwaitingforawardandthereafterresultingin
furtherlitigationanddelayinenforcement.Themanagement
wouldalwayskeepthematbayforabsorption.Itwouldbe
difficultforthemtoworkouttheirright.Moreover,itisa
tardyandtime-consumingprocessandyearswouldrollby.
Withoutwages,theycannotkeepfightingthelitigation
endlessly.Therightandremedywouldbeateasingillusion
andwouldberenderedotioseandpracticallycompelthe
workmentoremainatthemercyoftheprincipalemployer.”
Moreover,theworkmenimmediatelyarekeptoutofjobto
endlesslykeepwaitingforawardandthereafterresultingin
furtherlitigationanddelayinenforcement.Themanagement
wouldalwayskeepthematbayforabsorption.Itwouldbe
difficultforthemtoworkouttheirright.Moreover,itisa
tardyandtime-consumingprocessandyearswouldrollby.
Withoutwages,theycannotkeepfightingthelitigation
endlessly.Therightandremedywouldbeateasingillusion
andwouldberenderedotioseandpracticallycompelthe
workmentoremainatthemercyoftheprincipalemployer.”
Held….
“(c) When these contract workers carry out
the work of the principal employer which is of a
perennial nature and if provisions of Section 10
get attracted and such contract labour system in
the establishment gets abolished on fulfillment
of the conditions requisite for that purpose, it is
obvious that the intermediary contractor
vanishes and along with him vanishes the term
"principal employer". Unless there is a
contractor agent there is no principal. Once the
contractor intermediary goes the term
"principal" also goes with it. ……….
“(c) When these contract workers carry out
the work of the principal employer which is of a
perennial nature and if provisions of Section 10
get attracted and such contract labour system in
the establishment gets abolished on fulfillment
of the conditions requisite for that purpose, it is
obvious that the intermediary contractor
vanishes and along with him vanishes the term
"principal employer". Unless there is a
contractor agent there is no principal. Once the
contractor intermediary goes the term
"principal" also goes with it. ……….
Held….
Thenremainoutofthistripartitecontractualscenario
onlytwoparties-thebeneficiariesoftheabolitionofthe
erstwhilecontractlaboursystemi.e.theworkmenonthe
onehandandtheemployerontheotherwhoisnolonger
theirprincipalemployerbutnecessarilybecomesadirect
employerfortheseerstwhilecontractlabourers.Implicit
intheprovisionofSection10isthelegislativeintentthat
onabolitionofcontractlaboursystem,theerstwhile
contract-workmenwouldbecomedirectemployeesofthe
employeronwhoseestablishmenttheywereearlier
workingandwereenjoyingalltheregulatoryfacilities…..
Thenremainoutofthistripartitecontractualscenario
onlytwoparties-thebeneficiariesoftheabolitionofthe
erstwhilecontractlaboursystemi.e.theworkmenonthe
onehandandtheemployerontheotherwhoisnolonger
theirprincipalemployerbutnecessarilybecomesadirect
employerfortheseerstwhilecontractlabourers.Implicit
intheprovisionofSection10isthelegislativeintentthat
onabolitionofcontractlaboursystem,theerstwhile
contract-workmenwouldbecomedirectemployeesofthe
employeronwhoseestablishmenttheywereearlier
workingandwereenjoyingalltheregulatoryfacilities…..
Held….
thatveryestablishmentunderChapterVpriorto
theabolitionofsuchcontractlaboursystem.”
“(d)engagementofcontractlabourhasbeenfound
tobeunjustifiedbyacatenaofdecisionsofthis
Court.Whentheworkisofperennialnatureand
insteadofengagingregularworkmen,thesystem
ofcontractlabourisresortedto,itwouldonlybe
forfulfillingthebasicpurposeofsecuring
monetaryadvantagetotheprincipalemployerby
reducingexpenditureonwork….
thatveryestablishmentunderChapterVpriorto
theabolitionofsuchcontractlaboursystem.”
“(d)engagementofcontractlabourhasbeenfound
tobeunjustifiedbyacatenaofdecisionsofthis
Court.Whentheworkisofperennialnatureand
insteadofengagingregularworkmen,thesystem
ofcontractlabourisresortedto,itwouldonlybe
forfulfillingthebasicpurposeofsecuring
monetaryadvantagetotheprincipalemployerby
reducingexpenditureonwork….
Held….
force. It would obviously be an unfair labour
practice and is also an economically short-sighted
and unsound policy, both from the point of view of
the undertaking concerned and the country as a
whole. Such a system was tried to be put to an
end by the legislature by enacting the Act but
when it found there are certain activities of
establishment where the work is not of perennial
nature then the contract labour may not be
abolished but still it would be required to be
regulated so that the lot of the workmen is not
rendered miserable. The real scope and ambit of
the Act is to abolish contract labour system as far
as possible from every establishment.
force. It would obviously be an unfair labour
practice and is also an economically short-sighted
and unsound policy, both from the point of view of
the undertaking concerned and the country as a
whole. Such a system was tried to be put to an
end by the legislature by enacting the Act but
when it found there are certain activities of
establishment where the work is not of perennial
nature then the contract labour may not be
abolished but still it would be required to be
regulated so that the lot of the workmen is not
rendered miserable. The real scope and ambit of
the Act is to abolish contract labour system as far
as possible from every establishment.
Held….
Consequently,onabolitionwhichistheultimate
goal,theerstwhileregulatedcontractlabourcannot
bethrownoutofestablishmentastriedtobe
submittedonbehalfofthemanagement taking
resorttotheexpresslanguageofSection10ofthe
Act.Suchaconclusionreachedbythetwomember
BenchinDenaNathcase,fliesinthefaceofthe
veryscopeandambitoftheActandfrustratesthe
veryscheme ofabolitionofcontractlabour
envisagedbytheAct.Suchaconclusion,with
respect,cannotbecountenanced,asitresultsina
situationwhererelativesofthepatientaretoldby
theoperatingsurgeonthatoperationissuccessful
butpatienthasdied."
Consequently,onabolitionwhichistheultimate
goal,theerstwhileregulatedcontractlabourcannot
bethrownoutofestablishmentastriedtobe
submittedonbehalfofthemanagement taking
resorttotheexpresslanguageofSection10ofthe
Act.Suchaconclusionreachedbythetwomember
BenchinDenaNathcase,fliesinthefaceofthe
veryscopeandambitoftheActandfrustratesthe
veryscheme ofabolitionofcontractlabour
envisagedbytheAct.Suchaconclusion,with
respect,cannotbecountenanced,asitresultsina
situationwhererelativesofthepatientaretoldby
theoperatingsurgeonthatoperationissuccessful
butpatienthasdied."
Ratio
“1.OnProhibitionofContractLabour,intermediary
goesaway.ContractLabourersaredirectemployeesof
Principalemployers”.
“2.AbolitionmeansautomaticabsorptionofContract
Labour”
“1.OnProhibitionofContractLabour,intermediary
goesaway.ContractLabourersaredirectemployeesof
Principalemployers”.
“2.AbolitionmeansautomaticabsorptionofContract
Labour”
Case Law 7
The Supreme Court in
Secy., Haryana SEB
V/s
Suresh
(1999 3 SCC 601)
The Supreme Court in
Secy., Haryana SEB
V/s
Suresh
(1999 3 SCC 601)
Facts
1.Theappellant--HaryanaStateElectricityBoard
(hereinafter“theBoard”)isastatutoryBoard.It
isalicenseewithinthemeaningofElectricityAct,
1910andElectricity(supply)Act,1948,It
suppliespowerthroughouttheStateofHaryana
throughitsvariousplantsandstations.
2.Inordertokeepthesaidplantsandstations
cleanandhygienic,theappellant-Board,awards
contractstocontractors
1.Theappellant--HaryanaStateElectricityBoard
(hereinafter“theBoard”)isastatutoryBoard.It
isalicenseewithinthemeaningofElectricityAct,
1910andElectricity(supply)Act,1948,It
suppliespowerthroughouttheStateofHaryana
throughitsvariousplantsandstations.
2.Inordertokeepthesaidplantsandstations
cleanandhygienic,theappellant-Board,awards
contractstocontractors
Facts….
3.OnesuchcontractwasawardedtooneKfor
cleaning,sweepingandremovalofgarbagefrom
theMainPlantBuilding"atPanipatforapayment
ofacertainamountpermonthwithastipulation
toengageaminimum42SafaiKaramcharisfora
year
4.Aftercompletionofmorethan240workingdaysintheyear,
servicesoftheseSafaiKaramchariswereterminated.They
raisedanindustrialdisputeforpermanentabsorptioninthe
employmentoftheBoardonthegroundofcompletionofthe
saidlengthofservice.ThequestionwaswhethertheseSafai
KaramchariswereemployeesoftheBoard.
3.OnesuchcontractwasawardedtooneKfor
cleaning,sweepingandremovalofgarbagefrom
theMainPlantBuilding"atPanipatforapayment
ofacertainamountpermonthwithastipulation
toengageaminimum42SafaiKaramcharisfora
year
4.Aftercompletionofmorethan240workingdaysintheyear,
servicesoftheseSafaiKaramchariswereterminated.They
raisedanindustrialdisputeforpermanentabsorptioninthe
employmentoftheBoardonthegroundofcompletionofthe
saidlengthofservice.ThequestionwaswhethertheseSafai
KaramchariswereemployeesoftheBoard.
Facts……
5.BoththeLabourCourtandtheHighCourt
answeredintheaffirmativeanddirected
reinstatement oftherespondent Safai
Karamchariswithcontinuityofservice,albeit
withoutbackwages.Itwasfoundthatthe
Board exercisedsupervisionoverthe
attendanceoftheSafaiKaramcharisand
maintainedrecordofotherstatutoryduties
andliabilities.
5.BoththeLabourCourtandtheHighCourt
answeredintheaffirmativeanddirected
reinstatement oftherespondent Safai
Karamchariswithcontinuityofservice,albeit
withoutbackwages.Itwasfoundthatthe
Board exercisedsupervisionoverthe
attendanceoftheSafaiKaramcharisand
maintainedrecordofotherstatutoryduties
andliabilities.
Facts….
6.Documents onrecordshowedthatoverall
controloftheworkingofthecontractlabour
includingadministrativecontroloftheworking
ofthecontractlabourwaswiththeBoard.It
wasfoundbytheLabourCourt,asconfirmed
bytheHighCourtonapplyingthedoctrineof
liftingoftheveiltothefactsofthecase,thatK
wasmerelyanamelender,abrokeroran
agentoftheBoardforprocuringlabourforthe
Boardfromtheopenmarket.Therewasno
proofofKbeingevenalicensedcontractor.In
suchcircumstances,dismissingtheBoard’s
appeal.
6.Documents onrecordshowedthatoverall
controloftheworkingofthecontractlabour
includingadministrativecontroloftheworking
ofthecontractlabourwaswiththeBoard.It
wasfoundbytheLabourCourt,asconfirmed
bytheHighCourtonapplyingthedoctrineof
liftingoftheveiltothefactsofthecase,thatK
wasmerelyanamelender,abrokeroran
agentoftheBoardforprocuringlabourforthe
Boardfromtheopenmarket.Therewasno
proofofKbeingevenalicensedcontractor.In
suchcircumstances,dismissingtheBoard’s
appeal.
Held
“(a)Thedemocraticpolityoughttosurvivewith
fullvigour:socialiststatusasenshrinedinthe
Constitutionoughttobegivenitsfullplayanditis
inthisperspectivethequestionarises-isit
permissibleinthenewmillenniumtodecrythecry
ofthelabourforcedesirousofabsorptionafter
workingformorethan240daysinan
establishment and having theirworkings
supervisedandadministeredbyanagencywithin
themeaningofArticle12oftheConstitution-the
answercannotpossiblybeintheaffirmative-the
lawcourtsexistforthesocietyandintheevent
lawcourtsfeeltherequirementinaccordancewith
principlesofjustice,equityandgoodconscience,
thelawcourtsoughttoriseuptotheoccasion……
“(a)Thedemocraticpolityoughttosurvivewith
fullvigour:socialiststatusasenshrinedinthe
Constitutionoughttobegivenitsfullplayanditis
inthisperspectivethequestionarises-isit
permissibleinthenewmillenniumtodecrythecry
ofthelabourforcedesirousofabsorptionafter
workingformorethan240daysinan
establishment and having theirworkings
supervisedandadministeredbyanagencywithin
themeaningofArticle12oftheConstitution-the
answercannotpossiblybeintheaffirmative-the
lawcourtsexistforthesocietyandintheevent
lawcourtsfeeltherequirementinaccordancewith
principlesofjustice,equityandgoodconscience,
thelawcourtsoughttoriseuptotheoccasion……
Held…..
…meetandredresstheexpectationofthepeople.
Theexpression"regulation"cannotpossiblybe
readascontrapublicinterestbutintheinterestof
thepublic.“
“(b) Had there been any genuine contract
labour system prevailing with the appellant Board,
then obviously it had to be abolished as per
Section 10 of the Contract Labour (Regulation and
Abolition) Act after following the procedure laid
down therein. However, on the facts of the present
case, there was no genuine contract system…..
…meetandredresstheexpectationofthepeople.
Theexpression"regulation"cannotpossiblybe
readascontrapublicinterestbutintheinterestof
thepublic.“
“(b) Had there been any genuine contract
labour system prevailing with the appellant Board,
then obviously it had to be abolished as per
Section 10 of the Contract Labour (Regulation and
Abolition) Act after following the procedure laid
down therein. However, on the facts of the present
case, there was no genuine contract system…..
Held….
prevailingattherelevanttimewhereinthe
Boardcouldhaveactedasonlytheprincipal
employerandKasalicensedcontractor
employinglabouronhisownaccount,moreso
whentheBoardattherelevanttimewasnot
registeredastheprincipalemployerunderthe
ContractLabourRegulationandAbolitionAct.
OncetheBoardwasnotaprincipalemployer
andtheso-calledcontractorKwasnota
licensedcontractorundertheAct,the
inevitableconclusionisthattheso-called
contractsystemwasamere……….
prevailingattherelevanttimewhereinthe
Boardcouldhaveactedasonlytheprincipal
employerandKasalicensedcontractor
employinglabouronhisownaccount,moreso
whentheBoardattherelevanttimewasnot
registeredastheprincipalemployerunderthe
ContractLabourRegulationandAbolitionAct.
OncetheBoardwasnotaprincipalemployer
andtheso-calledcontractorKwasnota
licensedcontractorundertheAct,the
inevitableconclusionisthattheso-called
contractsystemwasamere……….
Held….
camouflage,smokeandascreenanddisguisedin
almostatransparentveilwhichcouldeasilybe
piercedandtherealcontractualrelationship
betweentheBoard,ontheonehand,andthe
employees,ontheother,couldbeclearly
visualised.”
TheSupreme Courtupheldthereliefof
reinstatementgrantedtotheSafaiKaramcharisby
theHighCourt.
camouflage,smokeandascreenanddisguisedin
almostatransparentveilwhichcouldeasilybe
piercedandtherealcontractualrelationship
betweentheBoard,ontheonehand,andthe
employees,ontheother,couldbeclearly
visualised.”
TheSupreme Courtupheldthereliefof
reinstatementgrantedtotheSafaiKaramcharisby
theHighCourt.
Case Law 8
ContractLabourengagedinstatutory
Canteens(LEGALPOSITION)
TheSupremeCourtin
ParimalChandraRaha
V/s
LIC
(1995Supp(2)611)
ContractLabourengagedinstatutory
Canteens(LEGALPOSITION)
TheSupremeCourtin
ParimalChandraRaha
V/s
LIC
(1995Supp(2)611)
Facts
1.The facts on record it appeared that
canteen services have been provided to the
employees of the Corporation for a long time
and that it was the Corporation which has been
from time to time, taking steps to provide the
said services. The canteen committees, the
Cooperative Society of the employees and the
contractors entrusted to run and manage the
canteens had only been acting for and on
behalf of the Corporation as its agencies to
provide the said services. ……..
1.The facts on record it appeared that
canteen services have been provided to the
employees of the Corporation for a long time
and that it was the Corporation which has been
from time to time, taking steps to provide the
said services. The canteen committees, the
Cooperative Society of the employees and the
contractors entrusted to run and manage the
canteens had only been acting for and on
behalf of the Corporation as its agencies to
provide the said services. ……..
Facts….
It was the Corporation which had been
appointing the contractors and entering with
them into agreements which had been
appointing the contractors and entering with
them into agreements which were in the nature
of directions regarding the manner in which the
canteen was to be run and the canteen services
rendered. Both the appointment of the
contractor and the tenure of the contract is as
per the stipulations made by the Corporation in
the agreement…
It was the Corporation which had been
appointing the contractors and entering with
them into agreements which had been
appointing the contractors and entering with
them into agreements which were in the nature
of directions regarding the manner in which the
canteen was to be run and the canteen services
rendered. Both the appointment of the
contractor and the tenure of the contract is as
per the stipulations made by the Corporation in
the agreement…
Facts….
1.Eventhepricesoftheitemsserved,the
placewheretheyshouldbecooked,thehours
duringwhichandtheplacewheretheyshould
beserved,aredictatedbytheCorporation.
TheCorporationhasalsoreservedtherightto
modifythetermsofthecontractunilaterally
andthecontractorhasnosayinthematter.
Further,therecordshowsthatalmostallthe
workersofthecanteenliketheappellantsand
othercanteenworkershadbeenworking
continuouslyforalongtime.
1.Eventhepricesoftheitemsserved,the
placewheretheyshouldbecooked,thehours
duringwhichandtheplacewheretheyshould
beserved,aredictatedbytheCorporation.
TheCorporationhasalsoreservedtherightto
modifythetermsofthecontractunilaterally
andthecontractorhasnosayinthematter.
Further,therecordshowsthatalmostallthe
workersofthecanteenliketheappellantsand
othercanteenworkershadbeenworking
continuouslyforalongtime.
Facts……
2.The infrastructure for running the canteen, viz.,
the premises, furniture, electricity, water etc. is
supplied by the Corporation to the managing
agency for running the canteen. The canteen
service was admittedly essential for the efficient
working of the employees and of the offices of
the Corporation. The functioning hours for the
canteen were also fixed by the Corporation. The
employees of the Corporation had all along been
making the complaints about the poor or
inadequate service rendered by the canteen to
them,…
2.The infrastructure for running the canteen, viz.,
the premises, furniture, electricity, water etc. is
supplied by the Corporation to the managing
agency for running the canteen. The canteen
service was admittedly essential for the efficient
working of the employees and of the offices of
the Corporation. The functioning hours for the
canteen were also fixed by the Corporation. The
employees of the Corporation had all along been
making the complaints about the poor or
inadequate service rendered by the canteen to
them,…
Facts….
onlytotheCorporationandtheCorporation
hadbeentakingstepstoremedythedefectsin
thecanteenservice.Further,wheneverthere
wasatemporarybreakdowninthecanteen
service,onaccountoftheagitationorofstrike
bythecanteenworkers,itwastheCorporation
whichhadbeentakingactiveinterestin
gettingthedisputeresolvedandthecanteen
workershadalsolookedupontheCorporation
astheirrealemployerandjoinedthe
Corporationasapartytotheindustrialdispute
raisedbythem.
onlytotheCorporationandtheCorporation
hadbeentakingstepstoremedythedefectsin
thecanteenservice.Further,wheneverthere
wasatemporarybreakdowninthecanteen
service,onaccountoftheagitationorofstrike
bythecanteenworkers,itwastheCorporation
whichhadbeentakingactiveinterestin
gettingthedisputeresolvedandthecanteen
workershadalsolookedupontheCorporation
astheirrealemployerandjoinedthe
Corporationasapartytotheindustrialdispute
raisedbythem.
Held
“a)Inthecircumstancesofthecase,the
canteensoftherespondent–Corporationhave
becomeapartoftheestablishmentofthe
Corporation.Thecanteencommittees,the
cooperativesocietyoftheemployeesandthe
contractorsengagedfromtimetotimearein
realitytheagenciesoftheCorporationandare,
onlyaveilbetweentheCorporationandthe
canteenworkers.Therefore,thecanteen
workersareinfacttheemployeesofthe
Corporation.”
“a)Inthecircumstancesofthecase,the
canteensoftherespondent–Corporationhave
becomeapartoftheestablishmentofthe
Corporation.Thecanteencommittees,the
cooperativesocietyoftheemployeesandthe
contractorsengagedfromtimetotimearein
realitytheagenciesoftheCorporationandare,
onlyaveilbetweentheCorporationandthe
canteenworkers.Therefore,thecanteen
workersareinfacttheemployeesofthe
Corporation.”
Held….
“b)What emerges from the statute law and the
judicial decisions is as follows :
(i)WhereasundertheprovisionsoftheFactories
Act,itisstatutorilyobligatoryontheemployerto
provideandmaintaincanteenfortheuseofhis
employees,thecanteenbecomesapartofthe
establishment and,therefore,theworkers
employedinsuchcanteenaretheemployeesof
themanagement.
“b)What emerges from the statute law and the
judicial decisions is as follows :
(i)WhereasundertheprovisionsoftheFactories
Act,itisstatutorilyobligatoryontheemployerto
provideandmaintaincanteenfortheuseofhis
employees,thecanteenbecomesapartofthe
establishment and,therefore,theworkers
employedinsuchcanteenaretheemployeesof
themanagement.
Held….
(ii)Where,althoughitisnotstatutorilyobligatory
toprovideacanteen,itisotherwiseanobligation
ontheemployertoprovideacanteen,the
canteenbecomesapartoftheestablishmentand
theworkersworkinginthecanteen,the
employeesofthemanagement.Theobligationto
provideacanteenhastobedistinguishedfrom
theobligationtoprovidefacilitiestoruncanteen.
Thecanteenrunpursuanttothelatterobligation,
doesnotbecomeapartoftheestablishment.
(ii)Where,althoughitisnotstatutorilyobligatory
toprovideacanteen,itisotherwiseanobligation
ontheemployertoprovideacanteen,the
canteenbecomesapartoftheestablishmentand
theworkersworkinginthecanteen,the
employeesofthemanagement.Theobligationto
provideacanteenhastobedistinguishedfrom
theobligationtoprovidefacilitiestoruncanteen.
Thecanteenrunpursuanttothelatterobligation,
doesnotbecomeapartoftheestablishment.
Held….
(iii)Theobligationtoprovidecanteenmaybe
explicitorimplicit.Wheretheobligationisnot
explicitlyacceptedbyorcastupontheemployer
eitherbyanagreementoranaward,etc.,itmaybe
inferredfromthecircumstances,andtheprovision
ofthecanteenmaybeheldtohavebecomeapart
oftheserviceconditionsoftheemployees.Whether
theprovisionforcanteenserviceshasbecomeapart
oftheserviceconditionsornot,isaquestionoffact
tobedeterminedonthefactsandcircumstancesin
eachcase.
(iii)Theobligationtoprovidecanteenmaybe
explicitorimplicit.Wheretheobligationisnot
explicitlyacceptedbyorcastupontheemployer
eitherbyanagreementoranaward,etc.,itmaybe
inferredfromthecircumstances,andtheprovision
ofthecanteenmaybeheldtohavebecomeapart
oftheserviceconditionsoftheemployees.Whether
theprovisionforcanteenserviceshasbecomeapart
oftheserviceconditionsornot,isaquestionoffact
tobedeterminedonthefactsandcircumstancesin
eachcase.
Held….
Wheretoprovidecanteenserviceshasbecomea
partoftheserviceconditionsoftheemployees,
thecanteenbecomesapartoftheestablishment
andtheworkersinsuchcanteenbecomethe
employeesofthemanagement.
(iv) Whether a particular facility or service has
become implicitly a part of the service conditions
of the employees or not, will depend, among
others, on the nature of the service/facility, the
contribution the service in question makes to the
efficiency of the employees and the establishment,
…
Wheretoprovidecanteenserviceshasbecomea
partoftheserviceconditionsoftheemployees,
thecanteenbecomesapartoftheestablishment
andtheworkersinsuchcanteenbecomethe
employeesofthemanagement.
(iv) Whether a particular facility or service has
become implicitly a part of the service conditions
of the employees or not, will depend, among
others, on the nature of the service/facility, the
contribution the service in question makes to the
efficiency of the employees and the establishment,
…
Held….
whether the service is available as a matter of
right to all the employees in their capacity as
employees and nothing more, the number of
employees employed in the establishment and
the number of employees who avail of the
service, the length of time for which the
service has been continuously available, the
hours during which it is available, the nature
and character of management, the interest
taken by the employer in providing,
maintaining, supervising…..
whether the service is available as a matter of
right to all the employees in their capacity as
employees and nothing more, the number of
employees employed in the establishment and
the number of employees who avail of the
service, the length of time for which the
service has been continuously available, the
hours during which it is available, the nature
and character of management, the interest
taken by the employer in providing,
maintaining, supervising…..
Held….
andcontrollingtheservice,thecontribution
madebythemanagement intheformof
infrastructureandfundsformakingthe
serviceavailableetc.”
andcontrollingtheservice,thecontribution
madebythemanagement intheformof
infrastructureandfundsformakingthe
serviceavailableetc.”
Case Law 9
Inthecaseof
WorkersinCanteenofSRFLtd.,
V/s
Government ofTamilnadu &Other
Cases,
1996(88)FJR220(Mad,D.B):1995II
CLR136
Inthecaseof
WorkersinCanteenofSRFLtd.,
V/s
Government ofTamilnadu &Other
Cases,
1996(88)FJR220(Mad,D.B):1995II
CLR136
Held
TheWorkersofstatutorycanteenrunby
contractororbyCo-opSocietycannotbe
treatedasworkmen oftheCompany
merelybecauseitisastatutorycanteen
butthathastobedecidedonspecific
evidence.
TheWorkersofstatutorycanteenrunby
contractororbyCo-opSocietycannotbe
treatedasworkmen oftheCompany
merelybecauseitisastatutorycanteen
butthathastobedecidedonspecific
evidence.
Ratio
“………… The question whether there exists the
employer-employee relationship between the
proprietor of the factory and the canteen
employees, is not a matter of presumption, but it
is a question of fact, which has to be decided in
each case on the facts and circumstances of such
case. The statutory canteens may be run by the
independent contractors or by the co-operative
societies of the workers as provided under rule
70(6) of the Tamil Nadu Factories Rules, 1950, or
may be run by the occupier of the factory itself
in……
“………… The question whether there exists the
employer-employee relationship between the
proprietor of the factory and the canteen
employees, is not a matter of presumption, but it
is a question of fact, which has to be decided in
each case on the facts and circumstances of such
case. The statutory canteens may be run by the
independent contractors or by the co-operative
societies of the workers as provided under rule
70(6) of the Tamil Nadu Factories Rules, 1950, or
may be run by the occupier of the factory itself
in……
Ratio….
discharge of the obligation under section 46 of the
Factories act. In the first two categories, the
workers in the canteen cannot be considered to be
employees of the occupier of the factory in the
absence of specific evidence showing that even
such canteen employees are the employees of the
occupier of the factory………….. the workmen
employed in the canteen by such contractor
cannot be treated as the workmen of the principal
employer, viz., occupier or proprietor of the
factory.
discharge of the obligation under section 46 of the
Factories act. In the first two categories, the
workers in the canteen cannot be considered to be
employees of the occupier of the factory in the
absence of specific evidence showing that even
such canteen employees are the employees of the
occupier of the factory………….. the workmen
employed in the canteen by such contractor
cannot be treated as the workmen of the principal
employer, viz., occupier or proprietor of the
factory.
Ratio….
In such a case, there is no employer-employee
relationship between the proprietor of the
factory. In such a case, there is no employer-
employee relationship between the proprietor
of the factory and the canteen
employees………….”
In such a case, there is no employer-employee
relationship between the proprietor of the
factory. In such a case, there is no employer-
employee relationship between the proprietor
of the factory and the canteen
employees………….”
Case Law 10
InthecaseofHindustan Machine
ToolsEmployees’Union
V/s
Hindustan MachineToolLtd.&Other
cases,
1996IILLN680(Raj.H.C)
InthecaseofHindustan Machine
ToolsEmployees’Union
V/s
Hindustan MachineToolLtd.&Other
cases,
1996IILLN680(Raj.H.C)
Held
TheemployeesofCo-opSocietyrunning
statutorycanteencannotbetheemployeesof
CompanysinceCo-opSocietyisregistered
one, maintains employees attendance
register,payspaybills,exercisespowerof
appointmentordismissaloftheemployeeand
isaseparatelegalentity.
TheemployeesofCo-opSocietyrunning
statutorycanteencannotbetheemployeesof
CompanysinceCo-opSocietyisregistered
one, maintains employees attendance
register,payspaybills,exercisespowerof
appointmentordismissaloftheemployeeand
isaseparatelegalentity.
Ratio
“……..Iamsatisfiedfromthedocumentsproduced
andtheevidenceonrecordthatthecompanyhas
giventhecontractforrunningthecanteentothe
co-operativecanteentodischargeitsstatutory
obligationandtheco-operativecanteenisa
separatelegalentity.Theemployeesoftheco-
operativecanteencannotbeconsideredtobethe
employeesoftheCompany……….”(Page695,para
52)
“……..Iamsatisfiedfromthedocumentsproduced
andtheevidenceonrecordthatthecompanyhas
giventhecontractforrunningthecanteentothe
co-operativecanteentodischargeitsstatutory
obligationandtheco-operativecanteenisa
separatelegalentity.Theemployeesoftheco-
operativecanteencannotbeconsideredtobethe
employeesoftheCompany……….”(Page695,para
52)
Ratio….
“TheTribunalhasprocessedonthebasisthat
theCompanyisunderstatutoryobligationto
maintainthecanteenbut,bythatreasonaloneit
cannotbeconsideredthatthecanteenis
managedandrunbytheCompany,whenthe
contracthasbeengiventoco-operative
society……”(Page696,Para57)
“………….The attendance register of the
employees of the canteen is separately
maintained. The pay-bills are separately
prepared. The registration of the………….
“TheTribunalhasprocessedonthebasisthat
theCompanyisunderstatutoryobligationto
maintainthecanteenbut,bythatreasonaloneit
cannotbeconsideredthatthecanteenis
managedandrunbytheCompany,whenthe
contracthasbeengiventoco-operative
society……”(Page696,Para57)
“………….The attendance register of the
employees of the canteen is separately
maintained. The pay-bills are separately
prepared. The registration of the………….
Ratio……..
Co-operativecanteenundertheCo-operative
SocietiesActaswellasundertheActof1970,
provesthattheH.M.T.EmployeesCo-operative
Canteenwasnotafictitiousentity.Thepower
ofappointmentanddismissalofanemployeeof
thecanteencouldbeexercisedbyit.”(Page
697,Para57)
Co-operativecanteenundertheCo-operative
SocietiesActaswellasundertheActof1970,
provesthattheH.M.T.EmployeesCo-operative
Canteenwasnotafictitiousentity.Thepower
ofappointmentanddismissalofanemployeeof
thecanteencouldbeexercisedbyit.”(Page
697,Para57)
Case Law 11
TheSupremeCourtin
IndianPetrochemicalsCorporation
Ltd.,
V/s
ShramikSena
(19996SCC439)
TheSupremeCourtin
IndianPetrochemicalsCorporation
Ltd.,
V/s
ShramikSena
(19996SCC439)
Held
(a)“In view of Section 2(l) and 46 of the
Factories Act, the Management has rightly
conceded that the respondent workman by
virtue of the definition of the “Workman under
the Act, are the employees of the appellant
Management for purposes of the Act. The
Factories Act does not govern the rights of
employees with reference to recruitment,
seniority, promotion, retirement benefits etc.
These are governed by other statutes, rules,
contracts or policies…..
(a)“In view of Section 2(l) and 46 of the
Factories Act, the Management has rightly
conceded that the respondent workman by
virtue of the definition of the “Workman under
the Act, are the employees of the appellant
Management for purposes of the Act. The
Factories Act does not govern the rights of
employees with reference to recruitment,
seniority, promotion, retirement benefits etc.
These are governed by other statutes, rules,
contracts or policies…..
Held….
Therefore,theworkmen’s contentionthat
employeesofastatutorycanteenipsofacto
becometheemployeesoftheestablishmentforall
purposescannotbeaccepted.”
(b)“In Raha case, 1995 Supp (2) SCC 611 the
Supreme Court did not specifically hold that the
deemed employment of the workers is for all
purposes nor did it specifically hold that it is only
for the purpose of the Factories Act,…..
Therefore,theworkmen’s contentionthat
employeesofastatutorycanteenipsofacto
becometheemployeesoftheestablishmentforall
purposescannotbeaccepted.”
(b)“In Raha case, 1995 Supp (2) SCC 611 the
Supreme Court did not specifically hold that the
deemed employment of the workers is for all
purposes nor did it specifically hold that it is only
for the purpose of the Factories Act,…..
Held….
However,areadingofthejudgmentinits
entirelymakesitclearthatthedeemed
employmentisonlyforthepurposeofthe
FactoriesAct,Therefore,ithastobeheld
thattheworkmen ofastatutorycanteen
wouldbetheworkmenoftheestablishment
forthepurposeoftheFactoriesActonlyand
notforallotherpurposes.”
However,areadingofthejudgmentinits
entirelymakesitclearthatthedeemed
employmentisonlyforthepurposeofthe
FactoriesAct,Therefore,ithastobeheld
thattheworkmen ofastatutorycanteen
wouldbetheworkmenoftheestablishment
forthepurposeoftheFactoriesActonlyand
notforallotherpurposes.”
Held….
(c)“Thenextquestionthatarisesiswhetherfrom
thematerialonrecorditcouldbeheldthatthe
workmen are,infect,theemployeesofthe
Management forallpurposes.Normally,this
beingaquestionoffact,theSupremeCourt
wouldhavebeenreluctanttoexaminethis
questionwhichintheordinarycourseshouldbe
firstdecidedbyafact-findingtribunal.However,
inthepresentcasepartieshavefileddetailed
affidavitsanddocumentswhicharesufficientfor
decidingthisquestionwithouttheneedforany
oralevidence.”
(c)“Thenextquestionthatarisesiswhetherfrom
thematerialonrecorditcouldbeheldthatthe
workmen are,infect,theemployeesofthe
Management forallpurposes.Normally,this
beingaquestionoffact,theSupremeCourt
wouldhavebeenreluctanttoexaminethis
questionwhichintheordinarycourseshouldbe
firstdecidedbyafact-findingtribunal.However,
inthepresentcasepartieshavefileddetailed
affidavitsanddocumentswhicharesufficientfor
decidingthisquestionwithouttheneedforany
oralevidence.”
Held….
(d)“Though thecanteenintheappellant’s
establishmentisbeingmanagedbyacontractor,it
isalsoanadmittedfactthatthecanteenhasbeen
inexistencefromtheinceptionofthe
establishment.Itisalsoanadmittedfactthatall
theemployeeswhowereinitiallyemployedand
thoseinductedfromtimetotimeinthecanteen
havecontinuedtoworkinthesaidcanteen
uninterruptedalbeitunderanorderofthe
IndustrialCourtwhichhasbecomefinal.This
clearlysuggeststhattheManagementacceptedas
amatteroffactthattherespondentworkmen
werepermanentemployeesoftheManagement’s
canteen.”
(d)“Though thecanteenintheappellant’s
establishmentisbeingmanagedbyacontractor,it
isalsoanadmittedfactthatthecanteenhasbeen
inexistencefromtheinceptionofthe
establishment.Itisalsoanadmittedfactthatall
theemployeeswhowereinitiallyemployedand
thoseinductedfromtimetotimeinthecanteen
havecontinuedtoworkinthesaidcanteen
uninterruptedalbeitunderanorderofthe
IndustrialCourtwhichhasbecomefinal.This
clearlysuggeststhattheManagementacceptedas
amatteroffactthattherespondentworkmen
werepermanentemployeesoftheManagement’s
canteen.”
Held….
(e)“Consideringthesefactorscumulatively,in
additiontothefactthatthecanteeninthe
establishmentoftheManagement isastatutory
canteen,ithastobeheldthatintheinstantcase,
therespondentworkmenareinfacttheworkmenof
theappellantManagement.”
(f)TheSecondcontentionoftheappellantwouldhave
hadsomesubstanceifinrealitytheManagement
hadengaged acontractorwhowaswholly
independentoftheManagement, butthatisnot
situationinthepresentcase.”
(e)“Consideringthesefactorscumulatively,in
additiontothefactthatthecanteeninthe
establishmentoftheManagement isastatutory
canteen,ithastobeheldthatintheinstantcase,
therespondentworkmenareinfacttheworkmenof
theappellantManagement.”
(f)TheSecondcontentionoftheappellantwouldhave
hadsomesubstanceifinrealitytheManagement
hadengaged acontractorwhowaswholly
independentoftheManagement, butthatisnot
situationinthepresentcase.”
Case Law 12
TheSupremeCourtin
HariShankarSharma
V/s
ArtificialLimbsMfg.Corpn.,
(20021SCC337)
TheSupremeCourtin
HariShankarSharma
V/s
ArtificialLimbsMfg.Corpn.,
(20021SCC337)
Facts
1.TheRespondentCompany owneda
factorywheremorethan700personsare
employed.
2.TheRespondentsetupacanteenforits
employees.
3.Fromtimetotimeagreementswere
enteredintobetweenRespondent and
differentcontractorsunderwhichthe
contractoragreedtoprepareandserve
foodstuffsandotherrefreshmentsatthe
canteen.
1.TheRespondentCompany owneda
factorywheremorethan700personsare
employed.
2.TheRespondentsetupacanteenforits
employees.
3.Fromtimetotimeagreementswere
enteredintobetweenRespondent and
differentcontractorsunderwhichthe
contractoragreedtoprepareandserve
foodstuffsandotherrefreshmentsatthe
canteen.
Facts
4.Afterunsuccessfulclaimingbeforethe
LabourCourtandtheHighCourttobe
regularworkmenoftherespondent,the
appellantemployees ofthecanteen
approached theSupreme Court.They
contendedthatsinceSection46(1)ofthe
FactoriesActwasapplicabletothe
Respondent’sfactoryandtheRespondent
wasstatutorilyobligedtoprovideand
maintainacanteenfortheuseofits
employees,thecanteenwaspartof
Respondent'sestablishmentandtherefore..
4.Afterunsuccessfulclaimingbeforethe
LabourCourtandtheHighCourttobe
regularworkmenoftherespondent,the
appellantemployees ofthecanteen
approached theSupreme Court.They
contendedthatsinceSection46(1)ofthe
FactoriesActwasapplicabletothe
Respondent’sfactoryandtheRespondent
wasstatutorilyobligedtoprovideand
maintainacanteenfortheuseofits
employees,thecanteenwaspartof
Respondent'sestablishmentandtherefore..
Facts….
theappellantsweretheemployees of
Respondent.Theycontendedthattheir
claimwassupportedbythefactsthat:(i)in
termsinthecontractbetweenthecontractor
andRespondent theappellantswereunder
thedirectsupervisionandcontrolof
Respondentand(ii)theappellantshad
continuedtobeemployedinthecanteen
despiteseveralchangesofcontractors.
Dismissingtheappeal.
theappellantsweretheemployees of
Respondent.Theycontendedthattheir
claimwassupportedbythefactsthat:(i)in
termsinthecontractbetweenthecontractor
andRespondent theappellantswereunder
thedirectsupervisionandcontrolof
Respondentand(ii)theappellantshad
continuedtobeemployedinthecanteen
despiteseveralchangesofcontractors.
Dismissingtheappeal.
Held
(a)“It cannot be said as an absolute proposition
of law that whenever in discharge of a statutory
mandate, a canteen is set up or other facility is
provided by an establishment, the employees of
the canteen or such other facility become the
employees of that establishment. It may
depend on how the obligation is discharged by
the establishment. It may be carried out wholly
or substantially by the establishment itself or
the burden may be delegated to an independent
contractor.”
(a)“It cannot be said as an absolute proposition
of law that whenever in discharge of a statutory
mandate, a canteen is set up or other facility is
provided by an establishment, the employees of
the canteen or such other facility become the
employees of that establishment. It may
depend on how the obligation is discharged by
the establishment. It may be carried out wholly
or substantially by the establishment itself or
the burden may be delegated to an independent
contractor.”
Held….
(b)“ThereisnothinginSection46oftheFactories
Act,norhasanyprovisionofanyotherstatute,
whichprovidesforthemodeinwhichthespecified
establishmentmustsetupacanteen.Whereitis
lefttothediscretionoftheestablishment
concernedtodischargeitsobligationofsettingup
acanteeneitherbywayofdirectrecruitmentorby
employment ofacontractor,itcannotbe
postulatedthatinthelatterevent,thepersons
workinginthecanteenwouldbetheemployeesof
theestablishment.”
(b)“ThereisnothinginSection46oftheFactories
Act,norhasanyprovisionofanyotherstatute,
whichprovidesforthemodeinwhichthespecified
establishmentmustsetupacanteen.Whereitis
lefttothediscretionoftheestablishment
concernedtodischargeitsobligationofsettingup
acanteeneitherbywayofdirectrecruitmentorby
employment ofacontractor,itcannotbe
postulatedthatinthelatterevent,thepersons
workinginthecanteenwouldbetheemployeesof
theestablishment.”
Held….
(c)“Itmaybe,andhasbeenoftenso
found,thattheemployeesofacontractor
arede factoemployees ofthe
establishmentdespitetheexistenceofa
writtenagreementbetweenthecontractor
andtheestablishment.Fromascrutinyof
theagreement,itisclearthatalthough
Respondent hadagreedtoprovidethe
contractorwiththebasicinfrastructure,the
actualrunningofthecanteenwasthe
responsibilityofthecontractoralone.”
(c)“Itmaybe,andhasbeenoftenso
found,thattheemployeesofacontractor
arede factoemployees ofthe
establishmentdespitetheexistenceofa
writtenagreementbetweenthecontractor
andtheestablishment.Fromascrutinyof
theagreement,itisclearthatalthough
Respondent hadagreedtoprovidethe
contractorwiththebasicinfrastructure,the
actualrunningofthecanteenwasthe
responsibilityofthecontractoralone.”
Held….
(d)“It is true that the Respondent agreed to
pay to the contractor service charges of Rs.
73,372.48 per month up to 700 employees
but this may have only ensured that the
margin of profit of the contractor was
reasonable and fixed on relevant
considerations. Besides, the agreement
must be construed in the background of the
Rules framed by the State Government
under Section 46(2) of the Factories Act,
1948. In view of the …….
(d)“It is true that the Respondent agreed to
pay to the contractor service charges of Rs.
73,372.48 per month up to 700 employees
but this may have only ensured that the
margin of profit of the contractor was
reasonable and fixed on relevant
considerations. Besides, the agreement
must be construed in the background of the
Rules framed by the State Government
under Section 46(2) of the Factories Act,
1948. In view of the …….
Held….
provisionsofSection46(2)merelybecause
thereiscompliancewiththeRulesby
providingtheequipmentandfortherateat
whichthefoodstuffswouldbesoldatthe
canteenbythecontractorwouldnot
necessarilymeanthattheemployerwas
runningthecanteenthroughtheagencyof
thecontractor.Theremustbesomething
more.”
(e)“Under the agreement the contractor was
given the discretion to employ the workers
already working in the canteen (like the…..
provisionsofSection46(2)merelybecause
thereiscompliancewiththeRulesby
providingtheequipmentandfortherateat
whichthefoodstuffswouldbesoldatthe
canteenbythecontractorwouldnot
necessarilymeanthattheemployerwas
runningthecanteenthroughtheagencyof
thecontractor.Theremustbesomething
more.”
(e)“Under the agreement the contractor was
given the discretion to employ the workers
already working in the canteen (like the…..
Held….
appellants)butitwasmadeclearthatthecontractor
couldtakeactionagainstthecanteenworkers.The
Respondenthadnosayastowhoshouldbe
employedbythecontractornorthemethodof
recruitmenttobefollowedbythecontractor.There
wasnoobligationonthecontractortoemploythe
personswhohadservedunderearliercontractors.
Eveniftheagreementhadcontainedacondition
thatthecontractormustretaintheoldemployees,it
wouldnotnecessarilymeanthatthoseemployees
weretheemployeesoftheestablishment.”
appellants)butitwasmadeclearthatthecontractor
couldtakeactionagainstthecanteenworkers.The
Respondenthadnosayastowhoshouldbe
employedbythecontractornorthemethodof
recruitmenttobefollowedbythecontractor.There
wasnoobligationonthecontractortoemploythe
personswhohadservedunderearliercontractors.
Eveniftheagreementhadcontainedacondition
thatthecontractormustretaintheoldemployees,it
wouldnotnecessarilymeanthatthoseemployees
weretheemployeesoftheestablishment.”
Held….
“Theissueis,therefore,primarilyand
ultimatelyoneoffacttobedeterminedby
afact-findingTribunal.InthePresentcase
theterms oftheagreement are
inconclusive.”
“After a detailed analysis of the evidence,
the Labour Court concluded that the
appellants were not the employees of
Respondent. The finding cannot be termed
to be perverse. Therefore, it would have
been inappropriate for the High Court …..
“Theissueis,therefore,primarilyand
ultimatelyoneoffacttobedeterminedby
afact-findingTribunal.InthePresentcase
theterms oftheagreement are
inconclusive.”
“After a detailed analysis of the evidence,
the Labour Court concluded that the
appellants were not the employees of
Respondent. The finding cannot be termed
to be perverse. Therefore, it would have
been inappropriate for the High Court …..
Held….
underArticle226toreappreciatethe
evidenceandcometoadifferentfactual
conclusion.TheHighCourtdidnotdo
thatnordoestheSupreme Court
proposetodosounderArticle136.”
underArticle226toreappreciatethe
evidenceandcometoadifferentfactual
conclusion.TheHighCourtdidnotdo
thatnordoestheSupreme Court
proposetodosounderArticle136.”
Case Law 13
TheSupremeCourtin
SteelAuthorityofIndiaLtd.,
V/s
National Union Waterfront Workers,
(20017SCC1)
TheSupremeCourtin
SteelAuthorityofIndiaLtd.,
V/s
National Union Waterfront Workers,
(20017SCC1)
Held….
(a) “Questionthat arosewas:
“whetherautomaticabsorptionofcontract
labour,workingintheestablishmentofthe
principalemployerasregularemployees,
followsonissuanceofavalidnotification
underSection10(1)oftheCLRAAct,
prohibitingthecontractlabourinthe
establishmentconcerned.”Answeringthe
saidquestioninthenegative,”
(a) “Questionthat arosewas:
“whetherautomaticabsorptionofcontract
labour,workingintheestablishmentofthe
principalemployerasregularemployees,
followsonissuanceofavalidnotification
underSection10(1)oftheCLRAAct,
prohibitingthecontractlabourinthe
establishmentconcerned.”Answeringthe
saidquestioninthenegative,”
Held….
(b).“TheStatementofObjectsandReasons
oftheactalsodoesnotalliedtothe
conceptofautomaticabsorptionofthe
contractlabouronissuanceofnotification
forprohibitionofemployment ofthe
contractlabour.”
(c). “Admittedly, the consequence of
prohibition notification under Section 10 (1)
of the CLRA Act, prohibiting employment of
contract labour, is neither spelt out in
Section 10 nor indicated anywhere in the
Act.
(b).“TheStatementofObjectsandReasons
oftheactalsodoesnotalliedtothe
conceptofautomaticabsorptionofthe
contractlabouronissuanceofnotification
forprohibitionofemployment ofthe
contractlabour.”
(c). “Admittedly, the consequence of
prohibition notification under Section 10 (1)
of the CLRA Act, prohibiting employment of
contract labour, is neither spelt out in
Section 10 nor indicated anywhere in the
Act.
Held….
the eloquence of the CLRA Act in not
spelling out the consequence of abolition of
contract labour system, discerned in the
light of various reports of the Commissions
and the Committees and the Statement of
Objects and Reasons of the Act, appears to
be that Parliament intended to create a bar
on engaging contract labour in the
establishment covered by the prohibition
notification, by a principal employer so as
to leave no option with him except to
employ the workers as regular employees
directly.
the eloquence of the CLRA Act in not
spelling out the consequence of abolition of
contract labour system, discerned in the
light of various reports of the Commissions
and the Committees and the Statement of
Objects and Reasons of the Act, appears to
be that Parliament intended to create a bar
on engaging contract labour in the
establishment covered by the prohibition
notification, by a principal employer so as
to leave no option with him except to
employ the workers as regular employees
directly.
Held….
Section 10 is intended to work as a
permanent solution to the problem rather
than to provide a one-time measure by
departmentalizing the existing contract
labour who may, by a fortuitous
circumstance be in a given establishment
for a very short time as on the date of the
prohibition notification. It could as well be
that a contractor and his contract labour
who were with an establishment for a
number of years were changed just before
the issuance of prohibition notification.
Section 10 is intended to work as a
permanent solution to the problem rather
than to provide a one-time measure by
departmentalizing the existing contract
labour who may, by a fortuitous
circumstance be in a given establishment
for a very short time as on the date of the
prohibition notification. It could as well be
that a contractor and his contract labour
who were with an establishment for a
number of years were changed just before
the issuance of prohibition notification.
Held….
Insuchacasetherecouldbenojustificationto
preferthecontractlabourengagedontherelevant
dateoverthecontractlabouremployedfora
longerperiodearlier.”
(d)“Bydefinitiontheterm‘Contractlabour”isa
speciesofworkman.Whereaworkmanishiredin
orinconnectionwiththeworkofanestablishment
bytheprincipalemployerthroughacontractor,he
merelyactsanagentsotherewillbemaster–and
–Servantrelationshipbetweentheprincipal
employerandtheworkman.
Insuchacasetherecouldbenojustificationto
preferthecontractlabourengagedontherelevant
dateoverthecontractlabouremployedfora
longerperiodearlier.”
(d)“Bydefinitiontheterm‘Contractlabour”isa
speciesofworkman.Whereaworkmanishiredin
orinconnectionwiththeworkofanestablishment
bytheprincipalemployerthroughacontractor,he
merelyactsanagentsotherewillbemaster–and
–Servantrelationshipbetweentheprincipal
employerandtheworkman.
Held….
Butwhereaworkmanishiredinorinconnection
withtheworkofanestablishmentbyacontractor,
eitherbecausehehasundertakentoproducea
givenresultfortheestablishmentorbecausehe
suppliesworkmen foranyworkofthe
establishment,aquestionmightarisewhetherthe
contractorisamerecamouflage,iftheanswerisin
theaffirmative,theworkmanwillbeinfactan
employeeoftheprincipalemployer;butifthe
answerisinthenegative,theworkmanwillbea
contractlabour.”
Butwhereaworkmanishiredinorinconnection
withtheworkofanestablishmentbyacontractor,
eitherbecausehehasundertakentoproducea
givenresultfortheestablishmentorbecausehe
suppliesworkmen foranyworkofthe
establishment,aquestionmightarisewhetherthe
contractorisamerecamouflage,iftheanswerisin
theaffirmative,theworkmanwillbeinfactan
employeeoftheprincipalemployer;butifthe
answerisinthenegative,theworkmanwillbea
contractlabour.”
Held….
5.“Therefore,itisnotpossibletoperceive
inSection10anyimplicitrequirementof
automaticabsorptionofcontractlabourby
theprincipalemployerintheestablishment
concernedonissuanceofnotificationbythe
appropriateGovernmentunderSection10
(1)prohibitingemployment ofcontract
labour inagiven establishment.
Consequentlytheprincipalemployercannot
berequiredtoorderabsorptionofthe
contractlabourworking inthe
establishmentconcerned.”
5.“Therefore,itisnotpossibletoperceive
inSection10anyimplicitrequirementof
automaticabsorptionofcontractlabourby
theprincipalemployerintheestablishment
concernedonissuanceofnotificationbythe
appropriateGovernmentunderSection10
(1)prohibitingemployment ofcontract
labour inagiven establishment.
Consequentlytheprincipalemployercannot
berequiredtoorderabsorptionofthe
contractlabourworking inthe
establishmentconcerned.”
Held….
6.“The principle that a beneficial legislation
needs to be construed liberally in favour of the
class for whose benefit it is intended, does not
extend to reading in the provisions of the Act what
the legislature has not provided whether expressly
or by necessary implication, or substituting
remedy or benefits for that provided by the
legislature. The CLRA Act regulates the conditions
of service of the contract labour and authorizes in
Section 10(1) prohibition of contract labour
system by the appropriate Government on
consideration of factors enumerated in sub-section
(2) of Section 10 of the Act ……..
6.“The principle that a beneficial legislation
needs to be construed liberally in favour of the
class for whose benefit it is intended, does not
extend to reading in the provisions of the Act what
the legislature has not provided whether expressly
or by necessary implication, or substituting
remedy or benefits for that provided by the
legislature. The CLRA Act regulates the conditions
of service of the contract labour and authorizes in
Section 10(1) prohibition of contract labour
system by the appropriate Government on
consideration of factors enumerated in sub-section
(2) of Section 10 of the Act ……..
Held….
among other relevant factors. But, the presence of
some or all those factors, provides no ground for
absorption of contract labour on issuing notification
under sub-section (1) of Section 10. Admittedly,
when the concept of automatic absorption of
contract labour as a consequence of issuing
notification under Section 10(1) by the appropriate
Government, is not alluded to either in Section 10
or at any other place in the Act and the
consequence of violation of Sections 7 and 12 of
the CLRA Act is explicitly provided in Sections 23
and 25 of the CLRA Act, it is not for the High
Courts or this …………..
among other relevant factors. But, the presence of
some or all those factors, provides no ground for
absorption of contract labour on issuing notification
under sub-section (1) of Section 10. Admittedly,
when the concept of automatic absorption of
contract labour as a consequence of issuing
notification under Section 10(1) by the appropriate
Government, is not alluded to either in Section 10
or at any other place in the Act and the
consequence of violation of Sections 7 and 12 of
the CLRA Act is explicitly provided in Sections 23
and 25 of the CLRA Act, it is not for the High
Courts or this …………..
Held….
Courttoreadinsomeunspecifiedremedy
inSection10orsubstituteforpenal
consequencesspecifiedinSections23and
25adifferentsequel,beitabsorptionof
contractlabourintheestablishmentof
principalemployeroralesseroraharsher
punishment.”
Courttoreadinsomeunspecifiedremedy
inSection10orsubstituteforpenal
consequencesspecifiedinSections23and
25adifferentsequel,beitabsorptionof
contractlabourintheestablishmentof
principalemployeroralesseroraharsher
punishment.”
Ratio
“A glance through the said notification makes it
manifest that with effect from 1-3-1977, it
prohibits employment of contract labour for
sweeping, cleaning, dusting and watching of
buildings owned or occupied by establishment in
respect of which the appropriate Government
under the said Act is the Central Government.
This clearly indicates that the Central Government
had not adverted to any of the essentials,
referred to above, except the requirement of
consultation with the Central Advisory Board.
“A glance through the said notification makes it
manifest that with effect from 1-3-1977, it
prohibits employment of contract labour for
sweeping, cleaning, dusting and watching of
buildings owned or occupied by establishment in
respect of which the appropriate Government
under the said Act is the Central Government.
This clearly indicates that the Central Government
had not adverted to any of the essentials,
referred to above, except the requirement of
consultation with the Central Advisory Board.
Ratio….
Considerationofthefactorsmentionedabovehas
tobeinrespectofeachestablishment,whether
individuallyorcollectively,inrespectofwhich
notificationundersub-section(1)ofSection10is
proposedtobeissued.Theimpugnednotification
apartfrombeinganomnibusnotificationdoesnot
revealcompliancewithsub-section(2)ofSection
10.Thisisexfaciecontrarytothepostulatesof
Section10oftheAct.Besides,italsoexhibitsnon-
applicationofmindbytheCentralGovernment.We
are,therefore,unabletosustainthesaid
impugnednotificationdated9-12-1976issuedby
theCentralGovernment.”
Considerationofthefactorsmentionedabovehas
tobeinrespectofeachestablishment,whether
individuallyorcollectively,inrespectofwhich
notificationundersub-section(1)ofSection10is
proposedtobeissued.Theimpugnednotification
apartfrombeinganomnibusnotificationdoesnot
revealcompliancewithsub-section(2)ofSection
10.Thisisexfaciecontrarytothepostulatesof
Section10oftheAct.Besides,italsoexhibitsnon-
applicationofmindbytheCentralGovernment.We
are,therefore,unabletosustainthesaid
impugnednotificationdated9-12-1976issuedby
theCentralGovernment.”
NOTIFICATION DATED 9.12.1976
“Inexerciseofthepowerconferredby
sub-section(i)ofSection10ofCL(R&A)
Act1970,theCentralGovernment after
consultationwiththeCentralAdvisory
ContractLabourBoard,herebyprohibits
employmentofcontractlabouronandfrom
1.3.1977,forsweeping,cleaning,dusting
andwatchingofbuildings,ownedor
occupiedbyestablishmentsinrespectof
whichtheAppropriateGovernmentisthe
CentralGovernment.”
“Inexerciseofthepowerconferredby
sub-section(i)ofSection10ofCL(R&A)
Act1970,theCentralGovernment after
consultationwiththeCentralAdvisory
ContractLabourBoard,herebyprohibits
employmentofcontractlabouronandfrom
1.3.1977,forsweeping,cleaning,dusting
andwatchingofbuildings,ownedor
occupiedbyestablishmentsinrespectof
whichtheAppropriateGovernmentisthe
CentralGovernment.”
Contd…..
“Providedthatthisnotificationshallnot
applytooutsidecleaningandother
maintenanceoperationsormultistoreyed
buildingswhere such cleaningor
maintenanceoperationscannotbecarried
outexceptwithspecializedexperience.”
“Providedthatthisnotificationshallnot
applytooutsidecleaningandother
maintenanceoperationsormultistoreyed
buildingswhere such cleaningor
maintenanceoperationscannotbecarried
outexceptwithspecializedexperience.”
Case Law 14
Inthecaseof
VividhKamgarSabha
V/s
KalyaniSteelsLtdandAnother
(200111SCC381)
Inthecaseof
VividhKamgarSabha
V/s
KalyaniSteelsLtdandAnother
(200111SCC381)
Held….
“TheprohibitionsoftheMRTUandPULPAct
canonlybeenforcedbypersonswho
admittedlyareworkmen.Ifthereisdispute
astowhethertheemployeesareemployees
oftheCompany,thenthatdisputemust
firstbegotresolvedbyraisingadispute
beforetheappropriationforum.Itisonly
afterthestatusasaworkmen is
establishedinanappropriateforumthata
complaintcouldbemade underthe
provisionsoftheMRTUandPULPAct.”
“TheprohibitionsoftheMRTUandPULPAct
canonlybeenforcedbypersonswho
admittedlyareworkmen.Ifthereisdispute
astowhethertheemployeesareemployees
oftheCompany,thenthatdisputemust
firstbegotresolvedbyraisingadispute
beforetheappropriationforum.Itisonly
afterthestatusasaworkmen is
establishedinanappropriateforumthata
complaintcouldbemade underthe
provisionsoftheMRTUandPULPAct.”
Case Law 15
IntheCaseof
CiplaLtd.
V/s
MaharashtraGeneralKamgarUnion
(20013SCC101)
IntheCaseof
CiplaLtd.
V/s
MaharashtraGeneralKamgarUnion
(20013SCC101)
Facts
1.TheRespondentunionoftheworkmen,
filedacomplaintunderSection28ofthe
MaharashtraRecognitionofTradeUnions
andPreventionofUnfairLabourPractices
Act,1971(forshort"theAct")againstthe
appellantforunfairlabourpracticesunder
items1(a),(b),(d)and(f)ofScheduleIV
oftheAct.
1.TheRespondentunionoftheworkmen,
filedacomplaintunderSection28ofthe
MaharashtraRecognitionofTradeUnions
andPreventionofUnfairLabourPractices
Act,1971(forshort"theAct")againstthe
appellantforunfairlabourpracticesunder
items1(a),(b),(d)and(f)ofScheduleIV
oftheAct.
Facts…..
2.TheRespondentallegedthattheappellanthad
beenengagingpersonstokeepitsfactory
premisesandthesurroundingsthereofclean,
hygienicanddust-freebutonpapertheywere
shownas“contractworkmen”workingforthe
contractor,Respondent2herein.Thatinthepast,
theappellantusedtoappointsuchpersonson
casualortemporarybasisandterminatetheir
servicesfromtimetotimewithaviewtodeprive
themofthepermanentstatusandwagesand
otherbenefitsasapplicabletopermanent
workmen.
2.TheRespondentallegedthattheappellanthad
beenengagingpersonstokeepitsfactory
premisesandthesurroundingsthereofclean,
hygienicanddust-freebutonpapertheywere
shownas“contractworkmen”workingforthe
contractor,Respondent2herein.Thatinthepast,
theappellantusedtoappointsuchpersonson
casualortemporarybasisandterminatetheir
servicesfromtimetotimewithaviewtodeprive
themofthepermanentstatusandwagesand
otherbenefitsasapplicabletopermanent
workmen.
Facts….
3.TheLabourCourtheldthearrangement
between theappellantandsecond
respondenttobebonafideanddismissed
theComplaint.Revisionapplicationwas
dismissedbytheIndustrialTribunal.
However,theHighCourtallowedthe
complaint.
4.AllowingtheAppeal.
3.TheLabourCourtheldthearrangement
between theappellantandsecond
respondenttobebonafideanddismissed
theComplaint.Revisionapplicationwas
dismissedbytheIndustrialTribunal.
However,theHighCourtallowedthe
complaint.
4.AllowingtheAppeal.
Held….
(a)“The object of the enactment is, amongst
other aspects, enforcing provisions relating to
unfair labour practices. Therefore, unless it is
undisputed or indisputable that there is employer-
employee relationship between the parties, the
question of unfair practice cannot be inquired into
at all. The respondent Union came to the Labour
Court with a complaint that the workmen were
engaged by the appellant through the contractor
and though that is ostensible relationship the true
relationship is one of master and servant between
the appellant and the workmen in question.…..
(a)“The object of the enactment is, amongst
other aspects, enforcing provisions relating to
unfair labour practices. Therefore, unless it is
undisputed or indisputable that there is employer-
employee relationship between the parties, the
question of unfair practice cannot be inquired into
at all. The respondent Union came to the Labour
Court with a complaint that the workmen were
engaged by the appellant through the contractor
and though that is ostensible relationship the true
relationship is one of master and servant between
the appellant and the workmen in question.…..
Held….
Bythatprocess,workmenrepudiatetheir
relationshipwiththecontractorunder
whomtheywereemployedbutclaimed
relationshipofanemployeeunderthe
appellant.Thatexerciseofrepudiationof
thecontractwithoneandestablishmentof
alegalrelationshipwithanothercanbe
done onlyinaregularIndustrial
Tribunal/CourtundertheIDActandnotin
theLabourCourtortheIndustrialCourt
constitutedundertheAct..
Bythatprocess,workmenrepudiatetheir
relationshipwiththecontractorunder
whomtheywereemployedbutclaimed
relationshipofanemployeeunderthe
appellant.Thatexerciseofrepudiationof
thecontractwithoneandestablishmentof
alegalrelationshipwithanothercanbe
done onlyinaregularIndustrial
Tribunal/CourtundertheIDActandnotin
theLabourCourtortheIndustrialCourt
constitutedundertheAct..
Held….
(b)Labour Court does not have any
jurisdiction to deal with abolition of
contract labour as it is purely the job of
appropriate Government.
(b)Labour Court does not have any
jurisdiction to deal with abolition of
contract labour as it is purely the job of
appropriate Government.
Ratio
“Butonethingisclear-iftheemployeesare
workingunderacontractcoveredbythe
ContractLabour(RegulationandAbolition)
ActthenitisclearthattheLabourCourtor
theindustrialadjudicatingauthorities
cannothaveanyjurisdictiontodealwith
thematterasitfallswithintheprovinceof
anappropriateGovernmenttoabolishthe
same……..”(Page:1067,para8.)
“Butonethingisclear-iftheemployeesare
workingunderacontractcoveredbythe
ContractLabour(RegulationandAbolition)
ActthenitisclearthattheLabourCourtor
theindustrialadjudicatingauthorities
cannothaveanyjurisdictiontodealwith
thematterasitfallswithintheprovinceof
anappropriateGovernmenttoabolishthe
same……..”(Page:1067,para8.)
Case Law 15
In the Bombay High Court Case of
Contract Laghu Udyag
V/s
V.G.Mohite
( 2001 II CLR 1011)
In the Bombay High Court Case of
Contract Laghu Udyag
V/s
V.G.Mohite
( 2001 II CLR 1011)
Held
1. "(4) It applies :-
(a) to every establishment in which twenty
or more workmen are employed or were
employed on any day of the preceding
twelve months as contract labour;
(b) to every contractor who employs or
who employed on any day of the preceding
twelve months twenty or more workmen.”
(Para 10)
1. "(4) It applies :-
(a) to every establishment in which twenty
or more workmen are employed or were
employed on any day of the preceding
twelve months as contract labour;
(b) to every contractor who employs or
who employed on any day of the preceding
twelve months twenty or more workmen.”
(Para 10)
Held….
2.Onaplainreadingofclause(a)ofsub-
section4,ofsection1ofthesaidAct,it
wouldappearthattheActwouldapplyto
everyestablishmentinwhichtwentyor
moreworkmenareemployedonanydayof
theprecedingtwelvemonthsascontract
labour.(Para11)
3.ThereisnothingintheActtosuggest
thattheprescribednumberofworkmen
mustbeemployedascontractlabourbythe
saidestablishmentthroughoneagency
(Contractor)orotherwise.
2.Onaplainreadingofclause(a)ofsub-
section4,ofsection1ofthesaidAct,it
wouldappearthattheActwouldapplyto
everyestablishmentinwhichtwentyor
moreworkmenareemployedonanydayof
theprecedingtwelvemonthsascontract
labour.(Para11)
3.ThereisnothingintheActtosuggest
thattheprescribednumberofworkmen
mustbeemployedascontractlabourbythe
saidestablishmentthroughoneagency
(Contractor)orotherwise.
Held….
4.WeareoftheviewthattheActwouldapplyto
everyestablishmentinwhich20ormoreworkmen
areemployedorwereemployedonanydayofthe
precedingtwelvemonthsascontractlabour,
irrespectiveofthefactthattheywereemployedby
theestablishmentdirectlyorthroughoneormore
contractors.
5.On a plain reading of clause (b) of sub-section
4, of section 1 of the said Act, it would appear
that, similarly, the provisions of the Act would
apply to every contractor who employs or who
employed on any day of the preceding twelve
months twenty or more workmen.
4.WeareoftheviewthattheActwouldapplyto
everyestablishmentinwhich20ormoreworkmen
areemployedorwereemployedonanydayofthe
precedingtwelvemonthsascontractlabour,
irrespectiveofthefactthattheywereemployedby
theestablishmentdirectlyorthroughoneormore
contractors.
5.On a plain reading of clause (b) of sub-section
4, of section 1 of the said Act, it would appear
that, similarly, the provisions of the Act would
apply to every contractor who employs or who
employed on any day of the preceding twelve
months twenty or more workmen.
Held….
ThereisnothingintheActtosuggestthatthe
contractorshouldhavehademployed the
prescribedworkmen inoneestablishmentor
otherwise.Further,thereisnothinginthis
provisiontosuggestthattheActwouldapplyonly
tosuchcontractorwhoemploysorwhoemployed
onanydayoftheprecedingtwelvemonths
prescribed number ofworkmen inan
establishmenttowhichthisActapplies.
6.In our view, clause (a) and clause (b) of sub-
section 4 of Section 1 of the Act are mutually
exclusive. Once the Act becomes applicable,….
ThereisnothingintheActtosuggestthatthe
contractorshouldhavehademployed the
prescribedworkmen inoneestablishmentor
otherwise.Further,thereisnothinginthis
provisiontosuggestthattheActwouldapplyonly
tosuchcontractorwhoemploysorwhoemployed
onanydayoftheprecedingtwelvemonths
prescribed number ofworkmen inan
establishmenttowhichthisActapplies.
6.In our view, clause (a) and clause (b) of sub-
section 4 of Section 1 of the Act are mutually
exclusive. Once the Act becomes applicable,….
Held….
theestablishmentorthecontractorconcerned,are
underobligationtocomplywiththemandatory
requirementofregistrationorlicensingintermsof
sections7and12oftheAct,asthecasemaybe.
Itis,therefore,notpossibletocountenancethe
argumentadvancedonbehalfoftherespondents,
thatlicensingofthecontractorbenecessarilyon
establishmentwisebasisandthattheActwould
applyonlyagainstsuchcontractorwhohas
engagedworkmen ascontractlabourinan
establishmentwhichisregisteredundertheAct
andtowhichprovisionsoftheActof1970are
attracted.
theestablishmentorthecontractorconcerned,are
underobligationtocomplywiththemandatory
requirementofregistrationorlicensingintermsof
sections7and12oftheAct,asthecasemaybe.
Itis,therefore,notpossibletocountenancethe
argumentadvancedonbehalfoftherespondents,
thatlicensingofthecontractorbenecessarilyon
establishmentwisebasisandthattheActwould
applyonlyagainstsuchcontractorwhohas
engagedworkmen ascontractlabourinan
establishmentwhichisregisteredundertheAct
andtowhichprovisionsoftheActof1970are
attracted.
Held….
7.Toillustrateourpoint,itwouldbeappositeto
takeahypotheticalcase.Takeacasewherethe
establishmentgetstheworkdone,whichare
essentiallyofperennialnature,thoughnotits
mainactivity/work,justasinthepresentcase,of
sweeping,cleaningetc.,throughmorethanone
contractorbyemployingmorethantheprescribed
workmenascontractlabour;andalsoensures
thatnoneofthecontractorwouldengage20or
moreworkmeninagivendaysoastoextricate
fromthetheclutchesoftheprovisionsofthisAct.
(Para12)
7.Toillustrateourpoint,itwouldbeappositeto
takeahypotheticalcase.Takeacasewherethe
establishmentgetstheworkdone,whichare
essentiallyofperennialnature,thoughnotits
mainactivity/work,justasinthepresentcase,of
sweeping,cleaningetc.,throughmorethanone
contractorbyemployingmorethantheprescribed
workmenascontractlabour;andalsoensures
thatnoneofthecontractorwouldengage20or
moreworkmeninagivendaysoastoextricate
fromthetheclutchesoftheprovisionsofthisAct.
(Para12)
Held….
8.Similarly,inanothersituation,where
thecontractorhasaworkforceofmore
than20workmen andcontinuously
suppliescontractlabourtomorethanone
establishment,butensuresthatnoneof
theestablishmenthasmorethan20
workmenemployedascontractlabourona
givendayduringthepreceding12months
withaviewtofrustratetheprovisionsof
theAct.
8.Similarly,inanothersituation,where
thecontractorhasaworkforceofmore
than20workmen andcontinuously
suppliescontractlabourtomorethanone
establishment,butensuresthatnoneof
theestablishmenthasmorethan20
workmenemployedascontractlabourona
givendayduringthepreceding12months
withaviewtofrustratetheprovisionsof
theAct.
Held….
9.Inourview,therefore,theprovisionsof
theActwouldbecomeapplicablenotonly
wheretheestablishment,butalsowhenthe
contractor,asthecasemaybe,orbothor
either,fulfilltherequirementofengaging
20ormoreworkmenascontractlabouron
anydayofthepreceding12months.
9.Inourview,therefore,theprovisionsof
theActwouldbecomeapplicablenotonly
wheretheestablishment,butalsowhenthe
contractor,asthecasemaybe,orbothor
either,fulfilltherequirementofengaging
20ormoreworkmenascontractlabouron
anydayofthepreceding12months.
Case Law 16
IntheCaseof
Hussainbhai
V/s
AlathFactoryThezhilaliUnion
(19784SCC257)
IntheCaseof
Hussainbhai
V/s
AlathFactoryThezhilaliUnion
(19784SCC257)
HEAD NOTE
Asaworkdonebyworkman wasan
integralpartofindustry,theirwork
wasunderthecontrolofmanagement
andtheyproduce goods forthe
businessofmanagement, thepresence
ofintermediatecontractorwasofno
consequence andtherealemployer
wasmanagement andnotcontractor.
Asaworkdonebyworkman wasan
integralpartofindustry,theirwork
wasunderthecontrolofmanagement
andtheyproduce goods forthe
businessofmanagement, thepresence
ofintermediatecontractorwasofno
consequence andtherealemployer
wasmanagement andnotcontractor.
Held
(a)“The true test is where a worker or group
of workers labours to produce goods or
services and these goods or services are for
the business of another, that other is, in fact,
the employer. He has economic control over
the workers' subsistence, skill, and continued
employment. If he, for any reason, chokes
off, the worker is, virtually, laid off. The
presence of intermediate contractors with
whom along the workers have immediate or
direct relationship ex contractu is of no
consequence when,….
(a)“The true test is where a worker or group
of workers labours to produce goods or
services and these goods or services are for
the business of another, that other is, in fact,
the employer. He has economic control over
the workers' subsistence, skill, and continued
employment. If he, for any reason, chokes
off, the worker is, virtually, laid off. The
presence of intermediate contractors with
whom along the workers have immediate or
direct relationship ex contractu is of no
consequence when,….
Held….
on lifting the veil or looking at the conspectus of
factors governing employment, the naked truth is
discerned, and especially since it is one of the
myriad devices resorted to by managements to
avoid the responsibility when labour legislation
casts welfare obligations on the real employer
based on Articles 38, 39, 42, 43 and 43-A. If
livelihood of the workmen substantially depends on
labour rendered to produce goods and services for
the benefit and satisfaction of an enterprise, the
absence of direct relationship or the presence of
dubious intermediaries cannot snap the real life-
bond…..
on lifting the veil or looking at the conspectus of
factors governing employment, the naked truth is
discerned, and especially since it is one of the
myriad devices resorted to by managements to
avoid the responsibility when labour legislation
casts welfare obligations on the real employer
based on Articles 38, 39, 42, 43 and 43-A. If
livelihood of the workmen substantially depends on
labour rendered to produce goods and services for
the benefit and satisfaction of an enterprise, the
absence of direct relationship or the presence of
dubious intermediaries cannot snap the real life-
bond…..
Held….
If,however,ifthereistotaldissociationinfact
betweenthedisowningManagement andthe
aggrievedworkmen, theemployment is,in
substanceandinreal-lifeterms,byanother.”
(b)“The facts found are that the work done by the
workmen was an integral part of the industry
concerned; that the raw material was supplied by
the Management; that the factory premises
belonged to the Management; that the equipment
used also belonged to the Management and that
the finished product was taken by the
Management for its own trade.
If,however,ifthereistotaldissociationinfact
betweenthedisowningManagement andthe
aggrievedworkmen, theemployment is,in
substanceandinreal-lifeterms,byanother.”
(b)“The facts found are that the work done by the
workmen was an integral part of the industry
concerned; that the raw material was supplied by
the Management; that the factory premises
belonged to the Management; that the equipment
used also belonged to the Management and that
the finished product was taken by the
Management for its own trade.
Held….
(c)Theworkmen werebroadlyunderthe
controloftheManagement anddefective
articlesweredirectedtoberectifiedbythe
Management.
(d)Thisconcatenationofcircumstancesis
conclusivethattheworkmen werethe
workmenofthepetitioner.
(c)Theworkmen werebroadlyunderthe
controloftheManagement anddefective
articlesweredirectedtoberectifiedbythe
Management.
(d)Thisconcatenationofcircumstancesis
conclusivethattheworkmen werethe
workmenofthepetitioner.
MISCELLANEOUS
Cases
1.HindustanLeverLtd.
V/s
HindustanLeverEmployees’Union
2001IILLN945
(BombayHighCourt).
Cases
1.HindustanLeverLtd.
V/s
HindustanLeverEmployees’Union
2001IILLN945
(BombayHighCourt).
Head Note
ContractLabour,doingtheworkof
perennialnatureforyearstogether,in
theabsence ofgenuine contract
betweencompanyandcontractors,they
become entitledtoberegularizedin
employment .
ContractLabour,doingtheworkof
perennialnatureforyearstogether,in
theabsence ofgenuine contract
betweencompanyandcontractors,they
become entitledtoberegularizedin
employment .
Held
“………………….We cannot lose sight of the fact that
the petitioner is a multinational company and a
corporate body and, therefore, it will always act
through proper resolutions and decisions and
written contracts. In the case of engaging a
contractor it could never be believed that the
petitioner company had entered into an oral
agreement, as whispered by Shri Rele, to engage
the watchmen as contract labour through the
alleged contractors. The petitioner have not proved
even a paper arrangement of contract with them...
“………………….We cannot lose sight of the fact that
the petitioner is a multinational company and a
corporate body and, therefore, it will always act
through proper resolutions and decisions and
written contracts. In the case of engaging a
contractor it could never be believed that the
petitioner company had entered into an oral
agreement, as whispered by Shri Rele, to engage
the watchmen as contract labour through the
alleged contractors. The petitioner have not proved
even a paper arrangement of contract with them...
Held….
Accordingtome,therewasnosuch
contractinexistencebetweenthepetitioner
companyandtheallegedcontractorsand
theconcernedwatchmenwereinfactand
inrealityemployed bythepetitioner
company……………..”(Page949,Para6)
Accordingtome,therewasnosuch
contractinexistencebetweenthepetitioner
companyandtheallegedcontractorsand
theconcernedwatchmenwereinfactand
inrealityemployed bythepetitioner
company……………..”(Page949,Para6)
Misc. Case Laws
2.Krishna Vasudeo Kotwal &Ors
V/s
StateofMaharashtra&Ors.,
2002LLR94(BOM.DB):2001IIICLR
1091.
2.Krishna Vasudeo Kotwal &Ors
V/s
StateofMaharashtra&Ors.,
2002LLR94(BOM.DB):2001IIICLR
1091.
Head Note
Since contractor was paying better
salary to security guards and other
conditions of service offered by the
contractor was satisfactory, there was
no exploitation of the labour and
therefore Government rejecting
petitioners demand of abolition of
contract labour system does not suffer
from any infirmity warranting
interference by High Court in its extra
ordinary jurisdiction.
Since contractor was paying better
salary to security guards and other
conditions of service offered by the
contractor was satisfactory, there was
no exploitation of the labour and
therefore Government rejecting
petitioners demand of abolition of
contract labour system does not suffer
from any infirmity warranting
interference by High Court in its extra
ordinary jurisdiction.
Held
“………………… .Thecontractorwaspayingatthe
rateofRs.30/-perday,whichisinexcessofthe
remunerationbeingpaidtotheguardsregistered
withtheBoard.TheAdvisoryBoardalsofoundthat
theotherconditionsofserviceofferedbythe
contractoraresatisfactoryanditcannotbesaid
thattherewasanyexploitationofthelabour
employedbythecontractor”(Page95,line30)
“………………… .Thecontractorwaspayingatthe
rateofRs.30/-perday,whichisinexcessofthe
remunerationbeingpaidtotheguardsregistered
withtheBoard.TheAdvisoryBoardalsofoundthat
theotherconditionsofserviceofferedbythe
contractoraresatisfactoryanditcannotbesaid
thattherewasanyexploitationofthelabour
employedbythecontractor”(Page95,line30)
Held….
“…………………… .TheBoard'sReportappearstohave
beenconsideredbytheStateGovernmentandby
orderdated11.9.1989,theStateGovernment
rejectedthedemandmadebythepetitionersto
abolishcontractsystemofsupplyingsecurity
guardstothecontractor.Theorderpassedbythe
StateGovernmentcannotbesaidtobevitiatedby
anyerroroflawnortheconsiderationofthe
matterbytheBoardcanbesaidtosufferfromany
infirmitywarrantinginterferencebythisCourtin
itsextraordinaryjurisdiction”(Page95B.L.:11)
“…………………… .TheBoard'sReportappearstohave
beenconsideredbytheStateGovernmentandby
orderdated11.9.1989,theStateGovernment
rejectedthedemandmadebythepetitionersto
abolishcontractsystemofsupplyingsecurity
guardstothecontractor.Theorderpassedbythe
StateGovernmentcannotbesaidtobevitiatedby
anyerroroflawnortheconsiderationofthe
matterbytheBoardcanbesaidtosufferfromany
infirmitywarrantinginterferencebythisCourtin
itsextraordinaryjurisdiction”(Page95B.L.:11)
Misc. Case Laws
3. International Airport Authority
Employees’ Union
V/s
International Airports Authority of
India, 2001 I LLJ 549 (S.C.)
3. International Airport Authority
Employees’ Union
V/s
International Airports Authority of
India, 2001 I LLJ 549 (S.C.)
Head Note
Theairportincludespassengerfacility
likecarparkingwhichisapartof
airport building and hence the
sweepersemployed incarparkingon
contractbasisareentitledtobe
absorbed.
Theairportincludespassengerfacility
likecarparkingwhichisapartof
airport building and hence the
sweepersemployed incarparkingon
contractbasisareentitledtobe
absorbed.
Held
“…………..Theairportincludesnotonlylandingand
takingoffareasfortheaircrafts,therunwaysand
aircraftsmaintenanceareas,butalsopassenger
facilities.Passengerfacilitieswouldcertainly
includecarparkinganditcannotbesaidthatcar
parkingisnotapartofthebuilding.Buildinginits
ordinarysensewouldincludeappurtenances
whichformpartthereofunlessitbethat
expression“building”istobeunderstoodaswas
donebytheMerchantofVenicewithreferenceto
thepoundofflesh.Therefore,wecannotagree
withthestandoftherespondents.”(Page:550,
Para:2,T.L.:22)
“…………..Theairportincludesnotonlylandingand
takingoffareasfortheaircrafts,therunwaysand
aircraftsmaintenanceareas,butalsopassenger
facilities.Passengerfacilitieswouldcertainly
includecarparkinganditcannotbesaidthatcar
parkingisnotapartofthebuilding.Buildinginits
ordinarysensewouldincludeappurtenances
whichformpartthereofunlessitbethat
expression“building”istobeunderstoodaswas
donebytheMerchantofVenicewithreferenceto
thepoundofflesh.Therefore,wecannotagree
withthestandoftherespondents.”(Page:550,
Para:2,T.L.:22)
Misc. Case Laws ….
SteelAuthorityofIndiaLtd.&Ors.
V/s
NationalUnionWaterfrontWorkers&
Ors.
2001IILLJ1087(S.C.)
SteelAuthorityofIndiaLtd.&Ors.
V/s
NationalUnionWaterfrontWorkers&
Ors.
2001IILLJ1087(S.C.)
Head Note
Once notification prohibiting the
employment ofcontractlabourinany
particularprocessoperationorother
workoftheestablishmentisissuedby
Government andifprincipalemployer
intendstoemployregularworkmen in
those processes, he shallgive
preferencestotheerstwhilecontract
labour,iffoundsuitablebyrelaxing
theconditions likemaximum age
prescribedetc.
Once notification prohibiting the
employment ofcontractlabourinany
particularprocessoperationorother
workoftheestablishmentisissuedby
Government andifprincipalemployer
intendstoemployregularworkmen in
those processes, he shallgive
preferencestotheerstwhilecontract
labour,iffoundsuitablebyrelaxing
theconditions likemaximum age
prescribedetc.
Held
“(6) 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,…….
“(6) 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,…….
Held….
heshallgivepreferencetotheerstwhile
contractlabour,ifotherwisefoundsuitable
and,ifnecessary,byrelaxingthecondition
astomaximum ageappropriately,taking
intoconsiderationtheageoftheworkersat
thetimeoftheirinitialemploymentbythe
contractorandalsorelaxingthecondition
astoacademicqualificationsotherthan
technicalqualifications.”(Page:1132,Para:
119(6))
heshallgivepreferencetotheerstwhile
contractlabour,ifotherwisefoundsuitable
and,ifnecessary,byrelaxingthecondition
astomaximum ageappropriately,taking
intoconsiderationtheageoftheworkersat
thetimeoftheirinitialemploymentbythe
contractorandalsorelaxingthecondition
astoacademicqualificationsotherthan
technicalqualifications.”(Page:1132,Para:
119(6))
Misc. Case Laws ….
Association ofChemical Workers,
Bombay
V/s
AlaspurkarA.L.,
1998IIILLJ800S.C.)
Association ofChemical Workers,
Bombay
V/s
AlaspurkarA.L.,
1998IIILLJ800S.C.)
Head Note
On prohibition of the contract labour,
preference should be given to the
erstwhile contract labour for
employment as and when vacancy
arises in their respective operational
areas
On prohibition of the contract labour,
preference should be given to the
erstwhile contract labour for
employment as and when vacancy
arises in their respective operational
areas
Held
“………………..Itappearsappropriatethat
whiletheirsomewhatexaggeratedclaims
forreinstatementandbackwagesrequire
tobe,andarehereby,rejected,they
shouldbeaffordedanopportunityofbeing
consideredforfreshrecruitmentwith
Respondent2asandwhenthevacancies,
existingorfuture,arefilledupinthe
respectiveoperationalareasofcontract
labour which have been
abolished………………… .”(Page:801,Para:
10)
“………………..Itappearsappropriatethat
whiletheirsomewhatexaggeratedclaims
forreinstatementandbackwagesrequire
tobe,andarehereby,rejected,they
shouldbeaffordedanopportunityofbeing
consideredforfreshrecruitmentwith
Respondent2asandwhenthevacancies,
existingorfuture,arefilledupinthe
respectiveoperationalareasofcontract
labour which have been
abolished………………… .”(Page:801,Para:
10)
Misc. Case Laws ….
ComincoBinaniZincLtd.,
V/s
Pappachan,
1989ILLJ452(KeralaHighCourt)
ComincoBinaniZincLtd.,
V/s
Pappachan,
1989ILLJ452(KeralaHighCourt)
Head Note
Theworkersinthecanteenarenot
employees oftheCompany andso
theyarenotentitledtoclaim
gratuityfromtheCompany
Theworkersinthecanteenarenot
employees oftheCompany andso
theyarenotentitledtoclaim
gratuityfromtheCompany
Held
“TheTribunalwhiledealingwiththeissuerelating
togratuitytooktheviewthatworkersinthe
canteenaredirectlyemployedbythepetitioner,
thattheyareintegralpartofthefactoryandon
thataccounttheyareentitledtogratuityfrom
thePetitioner.Thisfindingisalsoagainstthe
provisionsoflaw.Asstatedearlier,theworkersin
thecanteenarenottheemployeesofthe
petitionerandsotheyarenotentitledtoclaim
gratuityfromthepetitioner.”(Page:455.Para:
9)
“TheTribunalwhiledealingwiththeissuerelating
togratuitytooktheviewthatworkersinthe
canteenaredirectlyemployedbythepetitioner,
thattheyareintegralpartofthefactoryandon
thataccounttheyareentitledtogratuityfrom
thePetitioner.Thisfindingisalsoagainstthe
provisionsoflaw.Asstatedearlier,theworkersin
thecanteenarenottheemployeesofthe
petitionerandsotheyarenotentitledtoclaim
gratuityfromthepetitioner.”(Page:455.Para:
9)
Misc. Case Laws ….
HindustanSteelworksConstructionLtd.
V/s
Commissioner ofLabour,
1997ILLJ656(S.C.)
HindustanSteelworksConstructionLtd.
V/s
Commissioner ofLabour,
1997ILLJ656(S.C.)
Head Note
TheContractor hastopayto
contractworkersequalwagesas
paidbyprincipleemployertohis
employees forsimilarworkand
failuretopaywillamount to
breachofconditionssubjectto
whichalicenseisgrantedtohim.
TheContractor hastopayto
contractworkersequalwagesas
paidbyprincipleemployertohis
employees forsimilarworkand
failuretopaywillamount to
breachofconditionssubjectto
whichalicenseisgrantedtohim.
Held
“Rule25oftheAndhraPradeshContractLabour
(RegulationandAbolition)Rules,1971imposeson
thecontractorcertainconditionssubjecttowhicha
licenseisgrantedtohim.Onesuchconditionisto
theeffectthatthecontractorshallnotpaytothe
contractlabourinhisemploymentwageswhichare
lowerthanthewagespaidbytheprincipalemployer
tohisownworkerswhichdothesameorsimilarkind
ofwork…………… .”(Page:658,Para:14)
“Rule25oftheAndhraPradeshContractLabour
(RegulationandAbolition)Rules,1971imposeson
thecontractorcertainconditionssubjecttowhicha
licenseisgrantedtohim.Onesuchconditionisto
theeffectthatthecontractorshallnotpaytothe
contractlabourinhisemploymentwageswhichare
lowerthanthewagespaidbytheprincipalemployer
tohisownworkerswhichdothesameorsimilarkind
ofwork…………… .”(Page:658,Para:14)
Misc. Case Laws ….
Southern Security and Detective
Bureau,Mysore
V/s
Commissioner ofLabour,Government
ofA.P.,1998(80)FLR642
(AP.HC)
Southern Security and Detective
Bureau,Mysore
V/s
Commissioner ofLabour,Government
ofA.P.,1998(80)FLR642
(AP.HC)
Head Note
The license of Contractor is
liable to be cancelled if he does
not pay same wages to his
employees as paid to direct
employees.
The license of Contractor is
liable to be cancelled if he does
not pay same wages to his
employees as paid to direct
employees.
Held
“…………Inaway,byjustifyinghisactions
thepetitionerhasallalongadmittedthat
thepersonnelemployedthroughthem
werenotbeingpaidsamewagesasthe
SecurityGuardswhohadbeenengagedby
thePaperMillitself……………Admittedlythe
petitionershadviolatedandcontravened
Rule25(v)(a).Therefore,therespondents
werewellwithintheirrightstocancelthe
licenceintermsofSection.14oftheAct.”
(Page:645,Para1,B.L.:16)
“…………Inaway,byjustifyinghisactions
thepetitionerhasallalongadmittedthat
thepersonnelemployedthroughthem
werenotbeingpaidsamewagesasthe
SecurityGuardswhohadbeenengagedby
thePaperMillitself……………Admittedlythe
petitionershadviolatedandcontravened
Rule25(v)(a).Therefore,therespondents
werewellwithintheirrightstocancelthe
licenceintermsofSection.14oftheAct.”
(Page:645,Para1,B.L.:16)
LABOUR CONTRACT –AGREEMENT
FORM
ThisContractofAgreementismadeand
enteredonthis__________ dayof
___________ betweenM/s__________
havingtheirofficesituatedat__________
(hereinafterreferredtoas“theCompany”)
oftheONEPARTANDM/s.___________
havinghisofficeorestablishmentsituated
at_______________(hereinafter referred
toas“TheContractor”)oftheOTHER
PART.
FORM
ThisContractofAgreementismadeand
enteredonthis__________ dayof
___________ betweenM/s__________
havingtheirofficesituatedat__________
(hereinafterreferredtoas“theCompany”)
oftheONEPARTANDM/s.___________
havinghisofficeorestablishmentsituated
at_______________(hereinafter referred
toas“TheContractor”)oftheOTHER
PART.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
WHEREAS theCompany isinthebusinessof
______________ andisonthelookoutfora
suitableContractorwhocanundertake/render
servicesfortheFactory/Establishmentinrespectof
(Detailsofthejobtobegiven).
ANDWHEREAS theContractorhastheexpertiseto
dosuchkindofworkandhastakenordonesimilar
suchtypeofjobsinotherconcerns.
Contd….
WHEREAS theCompany isinthebusinessof
______________ andisonthelookoutfora
suitableContractorwhocanundertake/render
servicesfortheFactory/Establishmentinrespectof
(Detailsofthejobtobegiven).
ANDWHEREAS theContractorhastheexpertiseto
dosuchkindofworkandhastakenordonesimilar
suchtypeofjobsinotherconcerns.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
ANDWHEREAStheCompanywantstogive
andtheContractorhasagreedto
undertakethesaidjobonthetermsand
conditionssetouthereunder:
I.Detailsofthejobtobegiven:
II. Compensation:
Contd….
ANDWHEREAStheCompanywantstogive
andtheContractorhasagreedto
undertakethesaidjobonthetermsand
conditionssetouthereunder:
I.Detailsofthejobtobegiven:
II. Compensation:
LABOUR CONTRACT –AGREEMENT FORM
Contd….
a)TheContractorwillbepaidcompensation
onjobbasis;
b)TheContractoragreedtoexecute/fulfill
anddischargejobsagreeduponbyhim
efficientlyandtothefullsatisfactionofthe
Companywithinthestipulatedtime;
Contd….
a)TheContractorwillbepaidcompensation
onjobbasis;
b)TheContractoragreedtoexecute/fulfill
anddischargejobsagreeduponbyhim
efficientlyandtothefullsatisfactionofthe
Companywithinthestipulatedtime;
III.Rawmaterialandmachineryetc:
a)TheCompany,iffoundnecessary,shallgive
machineryrequiredforthepurposeofexecutionof
workentrustedtothecontractorandthe
Contractorshallberesponsibleforthesameforits
useandhastomaintainandtoupkeepthesame
inproperorder.
b)Inrespectoftherawmaterials,theContractor
shallmaintainproperregisterandgiveaccountof
therawmaterialsconsumed byhimandthe
balanceistobereturnedtotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
a)TheCompany,iffoundnecessary,shallgive
machineryrequiredforthepurposeofexecutionof
workentrustedtothecontractorandthe
Contractorshallberesponsibleforthesameforits
useandhastomaintainandtoupkeepthesame
inproperorder.
b)Inrespectoftherawmaterials,theContractor
shallmaintainproperregisterandgiveaccountof
therawmaterialsconsumed byhimandthe
balanceistobereturnedtotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
a)Intheeventtherawmaterialhasnot
beenfullyconsumed,thebalanceaccount
ofthesameistobegiventotheCompany
andindefault,theCompany istobe
reimbursedthepaymentofthesame.
b)Similarlyanydamageorlosscausedto
theequipmententrustedtotheContractor,
theContractorshallreimbursethepayment
ofthesametotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
beenfullyconsumed,thebalanceaccount
ofthesameistobegiventotheCompany
andindefault,theCompany istobe
reimbursedthepaymentofthesame.
b)Similarlyanydamageorlosscausedto
theequipmententrustedtotheContractor,
theContractorshallreimbursethepayment
ofthesametotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Rights and Obligations ofthe
Contractor:
a)Toperformthejobasperthe
assignment,detailsofwhicharegivenin
theagreement.
b)Toreceivethepayment fromthe
principalemployerforperformanceofthe
job.
Contd….
Rights and Obligations ofthe
Contractor:
a)Toperformthejobasperthe
assignment,detailsofwhicharegivenin
theagreement.
b)Toreceivethepayment fromthe
principalemployerforperformanceofthe
job.
c)TheContractorshalldecidethenumberof
workmenrequiredforthecompletionofthejob.
Hewillreviewhisworkastothenumberof
workmenrequiredfromtimetotimei.e.decrease
orincreasetheworkforceofhisjob.
d)TheContractorshalldecidethemodeand
mannerofworktobedonebyhisworkmen.The
Contractorshallexclusivelysuperviseandcontrol
theworkofallworkmenengagedbyhim.
e)TheContractorshalldecidetheworking
conditionsofhisworkmenandshalldecideabout
theirsalaryandotherserviceconditionsand
paymentthereof.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
workmenrequiredforthecompletionofthejob.
Hewillreviewhisworkastothenumberof
workmenrequiredfromtimetotimei.e.decrease
orincreasetheworkforceofhisjob.
d)TheContractorshalldecidethemodeand
mannerofworktobedonebyhisworkmen.The
Contractorshallexclusivelysuperviseandcontrol
theworkofallworkmenengagedbyhim.
e)TheContractorshalldecidetheworking
conditionsofhisworkmenandshalldecideabout
theirsalaryandotherserviceconditionsand
paymentthereof.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
LABOUR CONTRACT –AGREEMENT FORM
Contd….
f)TheContractoralsowilldecideandtake
disciplinaryactionagainsttheworkmanif
heisfoundtohavecommittedanyactsof
misconductsandtakedisciplinaryactionas
deemednecessaryincludingdischargeor
dismissalaftercompliancewiththelabour
law.Heshallalsodecideaboutthe
retrenchmentetc.
g)TheContractorshallpaywagestohis
workmenonorbefore7
th
ofeverymonth
Contd….
f)TheContractoralsowilldecideandtake
disciplinaryactionagainsttheworkmanif
heisfoundtohavecommittedanyactsof
misconductsandtakedisciplinaryactionas
deemednecessaryincludingdischargeor
dismissalaftercompliancewiththelabour
law.Heshallalsodecideaboutthe
retrenchmentetc.
g)TheContractorshallpaywagestohis
workmenonorbefore7
th
ofeverymonth
LABOUR CONTRACT –AGREEMENT FORM
Contd….
h)TheContractorshallcomplywiththe
followingactsoranyotherLabourLaws:
1. Employees’StateInsuranceAct;
2. ProvidentFundAct;
3. TheMinimumWagesAct;
4. TheFactoriesAct;
5. ThePaymentofWagesAct;
Contd….
h)TheContractorshallcomplywiththe
followingactsoranyotherLabourLaws:
1. Employees’StateInsuranceAct;
2. ProvidentFundAct;
3. TheMinimumWagesAct;
4. TheFactoriesAct;
5. ThePaymentofWagesAct;
LABOUR CONTRACT –AGREEMENT FORM
Contd….
6. MaternityBenefitAct;
7. ContractLabour(Regulation&Abolition)
Act,1970.
8. Anyotherlabourlaw.
i)IncaseContractorcontravenesanyprovisionsof
thelaw,andtheCompanysuffersanydamageor
lossorharmduetoanyactsofcommissionor
omissionoftheContractor,theContractoris
boundtoindemnifytheCompany.TheContractor
shallalsoberesponsibleforthedischargeofall
legalliabilitiestowardstheCompanyandalsofor
observingalllawsandGovernmentrulesrelating
tolabourlaws.
Contd….
6. MaternityBenefitAct;
7. ContractLabour(Regulation&Abolition)
Act,1970.
8. Anyotherlabourlaw.
i)IncaseContractorcontravenesanyprovisionsof
thelaw,andtheCompanysuffersanydamageor
lossorharmduetoanyactsofcommissionor
omissionoftheContractor,theContractoris
boundtoindemnifytheCompany.TheContractor
shallalsoberesponsibleforthedischargeofall
legalliabilitiestowardstheCompanyandalsofor
observingalllawsandGovernmentrulesrelating
tolabourlaws.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
j)TheContractorshallberesponsiblefordamageor
losstotheCompanycausedduetothenegligence
oftheworkmenemployedbyhimandshallbe
assessedanddeterminedbytheCompany.
k)TheContractorshallsubmitthebillstothe
Companyalongwithdocumentsofperformanceof
workaspercontractandshallbepaidonthebasis
ofthosedocuments.
Contd….
j)TheContractorshallberesponsiblefordamageor
losstotheCompanycausedduetothenegligence
oftheworkmenemployedbyhimandshallbe
assessedanddeterminedbytheCompany.
k)TheContractorshallsubmitthebillstothe
Companyalongwithdocumentsofperformanceof
workaspercontractandshallbepaidonthebasis
ofthosedocuments.
l)TheContractorshallnotdisclosetoanyone
regardingtheinformation,formulaeofthe
Companyadverselyaffectingtheinterestofthe
Company.
m) TheContractorshall,attheexpiryorthe
terminationofthecontractaftercompletionof
termsofextension,ifany,handoverthevacant
possessionofthepremisestotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
regardingtheinformation,formulaeofthe
Companyadverselyaffectingtheinterestofthe
Company.
m) TheContractorshall,attheexpiryorthe
terminationofthecontractaftercompletionof
termsofextension,ifany,handoverthevacant
possessionofthepremisestotheCompany.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Rights and Obligations ofthe
Company:
i)ToprovidetheContractorarticlesagreedto
provideasmentionedintheagreement.
ii)TomakethepaymenttotheContractoron
thedetailsgivenbyhimoftheworkdone
attherateagreed upon onor
before.__________
Contd….
Rights and Obligations ofthe
Company:
i)ToprovidetheContractorarticlesagreedto
provideasmentionedintheagreement.
ii)TomakethepaymenttotheContractoron
thedetailsgivenbyhimoftheworkdone
attherateagreed upon onor
before.__________
iii)Todeducttheamountfromthebillsofthe
Contractorproportionatelytothedefective
job/work/performance.
iv)TocheckupwhethertheContractorhaspaid
salarytohisworkmen andalsohavemade
paymentinrespectofprovidentfund,ESIorany
otherstatutorydues.
V) TheCompanywillhaverighttodeductIncome
taxorTDSasapplicablefromtimetotime.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Contractorproportionatelytothedefective
job/work/performance.
iv)TocheckupwhethertheContractorhaspaid
salarytohisworkmen andalsohavemade
paymentinrespectofprovidentfund,ESIorany
otherstatutorydues.
V) TheCompanywillhaverighttodeductIncome
taxorTDSasapplicablefromtimetotime.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Miscellaneous
ThisContractofAgreementcomesintoforcewith
effectfrom__________ andshallremaininforce
foraperiodof11monthsi.e.till___________ .
However,,thisContractofAgreementshallbe
liabletobeterminatedattheexpiryoftheterms
ofthecontractandineventitistobeextended,it
shallbedonebymutualconsentinwriting.
Notwithstandinganythingcontainedhereinabove,
thisContractofAgreementcanbeterminated
earlierthantheperiodagreeduponbygivingone
month’snoticetotheContractorwithoutassigning
anyreasonthereforeandwithoutprejudicetothe
rightsoftheCompany torecoveranymoney
becomingdueunderthisContractofAgreement.
Contd….
Miscellaneous
ThisContractofAgreementcomesintoforcewith
effectfrom__________ andshallremaininforce
foraperiodof11monthsi.e.till___________ .
However,,thisContractofAgreementshallbe
liabletobeterminatedattheexpiryoftheterms
ofthecontractandineventitistobeextended,it
shallbedonebymutualconsentinwriting.
Notwithstandinganythingcontainedhereinabove,
thisContractofAgreementcanbeterminated
earlierthantheperiodagreeduponbygivingone
month’snoticetotheContractorwithoutassigning
anyreasonthereforeandwithoutprejudicetothe
rightsoftheCompany torecoveranymoney
becomingdueunderthisContractofAgreement.
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Incaseofanydispute/grievancearisingoutof
underthisContractofAgreement,thesameshall
bemutuallydiscussedandsettled,failingwhichit
shallbereferredtoarbitrationofaSingle
ArbitratorundertheprovisionsofConciliationand
ArbitrationActandthevenueofarbitrationshall
beat_____________ andArbitrator’sdecision
shallbefinalandbindingonboththeparties.
TheContractorhasacceptedandagreedand
hereinconfirmsthatheshallabideandiswillingto
executetheworkassignedtohiminaccordance
withthetermsandconditionsofthisContractof
AgreementandinturntheCompanyalsoagreesto
engage theContractorwitheffectfrom
_______________ .
Contd….
Incaseofanydispute/grievancearisingoutof
underthisContractofAgreement,thesameshall
bemutuallydiscussedandsettled,failingwhichit
shallbereferredtoarbitrationofaSingle
ArbitratorundertheprovisionsofConciliationand
ArbitrationActandthevenueofarbitrationshall
beat_____________ andArbitrator’sdecision
shallbefinalandbindingonboththeparties.
TheContractorhasacceptedandagreedand
hereinconfirmsthatheshallabideandiswillingto
executetheworkassignedtohiminaccordance
withthetermsandconditionsofthisContractof
AgreementandinturntheCompanyalsoagreesto
engage theContractorwitheffectfrom
_______________ .
SIGNEDANDDELIVERED)
Forandonbehalfof )
____________.
___________________ )
Inthepresenceof )____________
LABOUR CONTRACT –AGREEMENT FORM
Contd….
Forandonbehalfof )
____________.
___________________ )
Inthepresenceof )____________
LABOUR CONTRACT –AGREEMENT FORM
Contd….
LABOUR CONTRACT –AGREEMENT FORM
Contd….
SIGNEDANDDELIVERED )
Forandonbehalfof )
____________.
___________________ )
Inthepresenceof )____________
Contd….
SIGNEDANDDELIVERED )
Forandonbehalfof )
____________.
___________________ )
Inthepresenceof )____________
GUIDELINES FOR THE EMPLOYER
Guidelines for the Employer in respect of
genuine contractor.
1.AnemployeeoftheCompanyshouldnotbemadeas
acontractor.beanindependentcontractor.Asfar
aspossible,thepreferenceshouldbegiventoa
contractor,whohasgotthecontractinsimilar
concernofthesametype.
Guidelines for the Employer in respect of
genuine contractor.
1.AnemployeeoftheCompanyshouldnotbemadeas
acontractor.beanindependentcontractor.Asfar
aspossible,thepreferenceshouldbegiventoa
contractor,whohasgotthecontractinsimilar
concernofthesametype.
2.Ifthecontractorhassimilartypeofcontractin
differentconcerns,thenheshouldtrytotransfer
theemployeesfromoneestablishmenttoanother
establishment.Hencethecontractemployees
shouldbetransferable.Thisisawithaviewthat
thecontractorshouldnotemploythecontract
workmeninthesameestablishmentfornotmore
thanacertainstipulatedperiod.
3.Thecontractorshallselectandappointthe
workmenwithoutanyinterferenceoftheCompany.
Thesupervisionandcontrolontheworkmenof
contractorwillbesolelybytheContractor.Hence
theCompanywillnothavesupervisionandcontrol
overthecontractor’sworkmen.
GUIDELINES FOR THE EMPLOYER
Contd….
differentconcerns,thenheshouldtrytotransfer
theemployeesfromoneestablishmenttoanother
establishment.Hencethecontractemployees
shouldbetransferable.Thisisawithaviewthat
thecontractorshouldnotemploythecontract
workmeninthesameestablishmentfornotmore
thanacertainstipulatedperiod.
3.Thecontractorshallselectandappointthe
workmenwithoutanyinterferenceoftheCompany.
Thesupervisionandcontrolontheworkmenof
contractorwillbesolelybytheContractor.Hence
theCompanywillnothavesupervisionandcontrol
overthecontractor’sworkmen.
GUIDELINES FOR THE EMPLOYER
Contd….
GUIDELINES FOR THE EMPLOYER
Contd….
4.Ifthecontractworkmenarelargeinnumber,
thecontractorshouldengageasupervisorsand/or
supervisorsforsupervising,directingand
controllingtheworkofhisemployees.
5.Thecontractorshalldeterminethemode,
methodandmannerofworking.TheCompany
shallnotinterfereinregardtothesame.
6.Thecontractorshallemploytheworkforce
accordingtohisrequirementbutheshallnotin
anycaseexceedthenumberofworkmenshownin
thelicenseordoanyotherworkwhatisnotgiven
inthelicense.
Contd….
4.Ifthecontractworkmenarelargeinnumber,
thecontractorshouldengageasupervisorsand/or
supervisorsforsupervising,directingand
controllingtheworkofhisemployees.
5.Thecontractorshalldeterminethemode,
methodandmannerofworking.TheCompany
shallnotinterfereinregardtothesame.
6.Thecontractorshallemploytheworkforce
accordingtohisrequirementbutheshallnotin
anycaseexceedthenumberofworkmenshownin
thelicenseordoanyotherworkwhatisnotgiven
inthelicense.
7.SimilarlyEmployershallregisteritselfunderthe
ContractLabour(Regulation&Abolition)Act,
1970
8.TheContractorshallsubmitmonthlyprintedbillto
theCompanyforpaymentoftheworkdoneby
him1
st
dayoffollowingmonthandtheprintedbill
shouldbesignedundertheRubberStamp.
9.TheEmployerhastoensurethattheContractoris
payingtheworkmenminimum wagesandthe
paymenttothemismadeonorbefore7
th
ofevery
monthinpresenceoftherepresentativesofthe
Company who shallalsosignonthe
master/register.(Rule21ofCLRA)
GUIDELINES FOR THE EMPLOYER
Contd….
ContractLabour(Regulation&Abolition)Act,
1970
8.TheContractorshallsubmitmonthlyprintedbillto
theCompanyforpaymentoftheworkdoneby
him1
st
dayoffollowingmonthandtheprintedbill
shouldbesignedundertheRubberStamp.
9.TheEmployerhastoensurethattheContractoris
payingtheworkmenminimum wagesandthe
paymenttothemismadeonorbefore7
th
ofevery
monthinpresenceoftherepresentativesofthe
Company who shallalsosignonthe
master/register.(Rule21ofCLRA)
GUIDELINES FOR THE EMPLOYER
Contd….
10.TheContractorshalldeducttheincometaxas
perincometaxactoranyotherlawapplicable
fromtimetotimefrompaymentmadetohis
workmen
11.TheContractorshallpayhisowntaxesasper
provisionsofstatutoryacts.
12.TheContractshallbegivenforthejobtobe
doneandratesofjobshallbepaidtocontractoras
permutualagreedbasis.
GUIDELINES FOR THE EMPLOYER
Contd….
perincometaxactoranyotherlawapplicable
fromtimetotimefrompaymentmadetohis
workmen
11.TheContractorshallpayhisowntaxesasper
provisionsofstatutoryacts.
12.TheContractshallbegivenforthejobtobe
doneandratesofjobshallbepaidtocontractoras
permutualagreedbasis.
GUIDELINES FOR THE EMPLOYER
Contd….
GUIDELINES FOR THE EMPLOYER
Contd….
13.TheCompany shallensurewhilemaking
paymenttothecontractorthatthecontractorhas
paidtheemployees’providentfundandESI
contributionsdeductionbothofemployeesandthe
contractorontime(alongwithcopyofchallan
paid).
14.TheCompany shallcheckupthatthe
Contractorsrenewshislicensefromtimetotime.
15.TheContractorshalldecideaboutthe
disciplinaryactiontobetakenagainsthis
employeesincaseofanyactsofmisconducts
committedbyhisemployees.
Contd….
13.TheCompany shallensurewhilemaking
paymenttothecontractorthatthecontractorhas
paidtheemployees’providentfundandESI
contributionsdeductionbothofemployeesandthe
contractorontime(alongwithcopyofchallan
paid).
14.TheCompany shallcheckupthatthe
Contractorsrenewshislicensefromtimetotime.
15.TheContractorshalldecideaboutthe
disciplinaryactiontobetakenagainsthis
employeesincaseofanyactsofmisconducts
committedbyhisemployees.
GUIDELINES FOR THE EMPLOYER
Contd….
16.TheCompanyshallseethatifpossiblethe
Contractorhasobtainedseparatecodenumbersof
Employees StateInsuranceandEmployees
ProvidentFundundertherespectiveActs.
17.Itispreferablethatthecontractorshavetheir
ownESI/PFCodes.However,intheabsenceof
contractorshavingESI/PFcodes,merelybecause
theprincipalemployerremitsESI/PFcontributions
inrespectofcontractlabour,itcannotbe
construedthattheyareemployersofprincipal
employer.
Contd….
16.TheCompanyshallseethatifpossiblethe
Contractorhasobtainedseparatecodenumbersof
Employees StateInsuranceandEmployees
ProvidentFundundertherespectiveActs.
17.Itispreferablethatthecontractorshavetheir
ownESI/PFCodes.However,intheabsenceof
contractorshavingESI/PFcodes,merelybecause
theprincipalemployerremitsESI/PFcontributions
inrespectofcontractlabour,itcannotbe
construedthattheyareemployersofprincipal
employer.
18.TheContractorsshallmaintainnecessary
recordssuchasidentifycard,attendanceregister
andotherstatutoryregistersthroughhisstaffand
notbythestaffofthecompany.
19.TheContractworkmenshalldothespecific
workofthecontractandnotanyotherworkofthe
Company.
20.ContractLabourersarenottobeemployedfor
doingperennialandpermanentnatureofjobsof
theCompany.
GUIDELINES FOR THE EMPLOYER
Contd….
recordssuchasidentifycard,attendanceregister
andotherstatutoryregistersthroughhisstaffand
notbythestaffofthecompany.
19.TheContractworkmenshalldothespecific
workofthecontractandnotanyotherworkofthe
Company.
20.ContractLabourersarenottobeemployedfor
doingperennialandpermanentnatureofjobsof
theCompany.
GUIDELINES FOR THE EMPLOYER
Contd….
GUIDELINES FOR THE EMPLOYER
Contd….
21.ContractLabourersshouldnotbeemployedfor
doinganymainactivityoftheCompany.
22.Employershouldensurethatheshouldnot
engagecontractlabouronthesameoperationson
whichheisemployinghisowndirectlyrecruited
labour,otherwisethecontractlabourcanclaimthe
samewagesonparwithregularworkmen
(Supposein1machine,4aredirectworkmen,and
2arecontractlabourers,the2contractlabourers
couldclaimthesamewagesdrawnbyregular
workmen.
Contd….
21.ContractLabourersshouldnotbeemployedfor
doinganymainactivityoftheCompany.
22.Employershouldensurethatheshouldnot
engagecontractlabouronthesameoperationson
whichheisemployinghisowndirectlyrecruited
labour,otherwisethecontractlabourcanclaimthe
samewagesonparwithregularworkmen
(Supposein1machine,4aredirectworkmen,and
2arecontractlabourers,the2contractlabourers
couldclaimthesamewagesdrawnbyregular
workmen.
GUIDELINES FOR THE EMPLOYER
Contd….
Rule25(V)(a)ofCLRARules:-
“Incaseswheretheworkman employedbythe
contractorperformthesameorsimilarkindof
workastheastheworkmen directlyemployed
bytheprincipalemployeroftheestablishment,
thewagesrates,holidays,hoursofworkand
otherconditionsofserviceoftheworkmen of
thecontractorshallbethesameasapplicable
totheworkmen directlyemployed bythe
principalemployeroftheestablishmentonthe
sameorsimilarkindofwork.”
Contd….
Rule25(V)(a)ofCLRARules:-
“Incaseswheretheworkman employedbythe
contractorperformthesameorsimilarkindof
workastheastheworkmen directlyemployed
bytheprincipalemployeroftheestablishment,
thewagesrates,holidays,hoursofworkand
otherconditionsofserviceoftheworkmen of
thecontractorshallbethesameasapplicable
totheworkmen directlyemployed bythe
principalemployeroftheestablishmentonthe
sameorsimilarkindofwork.”
GUIDELINES FOR THE EMPLOYER
Contd….
23.RotationofcontractLabourfromone
establishmenttoanotherispreferable/
helpfultoemployers.ContractLabourers
cannotsaythattheyaredirectlyrecruited
byPrincipalemployer.TheContractoris
himselftransferringworkmen fromone
establishmenttoanother.
24.Havecontractors/specifyincontracts
thatcontractorcantakeupworkforother
employers
Contd….
23.RotationofcontractLabourfromone
establishmenttoanotherispreferable/
helpfultoemployers.ContractLabourers
cannotsaythattheyaredirectlyrecruited
byPrincipalemployer.TheContractoris
himselftransferringworkmen fromone
establishmenttoanother.
24.Havecontractors/specifyincontracts
thatcontractorcantakeupworkforother
employers
Risks involved in vendoring out
products/components: -
a.Itshouldnotbeashamarrangement.
b.Economicallyviable;
c.NodirectSupervisionshouldbedone.
d.Shouldnotbeatthecostofkeepingown
labouridle,
e.Jobsrequiringhighskillsandnotpossessedby
ourownemployeescanbevendoredout
products/components: -
a.Itshouldnotbeashamarrangement.
b.Economicallyviable;
c.NodirectSupervisionshouldbedone.
d.Shouldnotbeatthecostofkeepingown
labouridle,
e.Jobsrequiringhighskillsandnotpossessedby
ourownemployeescanbevendoredout
CONCLUSIONS
1.Nounreasonablerestrictionscanbeplacedon
employerstomanagebusinessinbestpossibleand
economicalmanner.(inherentright)
2.While engaging Contract Labour through
Contractors,thereshouldbenoexploitationof
labour;fixminimumwages,complywithStatutory
requirements.
3.Owingtooureconomybeingexposedtoglobal
competitionwhereMNC’sarecompeting;there
shouldbeleastpossiblefettersonthefreedomof
employerstomangeitsbusinessinthebest
possiblemanner.
1.Nounreasonablerestrictionscanbeplacedon
employerstomanagebusinessinbestpossibleand
economicalmanner.(inherentright)
2.While engaging Contract Labour through
Contractors,thereshouldbenoexploitationof
labour;fixminimumwages,complywithStatutory
requirements.
3.Owingtooureconomybeingexposedtoglobal
competitionwhereMNC’sarecompeting;there
shouldbeleastpossiblefettersonthefreedomof
employerstomangeitsbusinessinthebest
possiblemanner.
Case Law 17
SupremeCourtin
GhatgeandPatilConcerns’Employees’
Union
V/s
GhatgeandPatil(Transport)(P)Ltd.,
1968ILLJ566
SupremeCourtin
GhatgeandPatilConcerns’Employees’
Union
V/s
GhatgeandPatil(Transport)(P)Ltd.,
1968ILLJ566
Facts
Atransportcompanymadearrangementswithits
driverswhojoinedtheservicevoluntarilyandagreed
toworkonthevehiclesoncontractbasis.The
driversdiditvoluntarilybecausethetermswere
morefavourablethanthetermsoftheirprevious
employment.Thereisnobarinlawtothe
introductionofthissystem.Thepresentcaseisnot
analogoustothecaseofcontractlabourwhere
employmentoflabourthroughacontractoror
middlemanputthelabouratadisadvantagen
collectivebargainingandrobbedlabourofoneofits
mainweaponsinitsarmoury.
Atransportcompanymadearrangementswithits
driverswhojoinedtheservicevoluntarilyandagreed
toworkonthevehiclesoncontractbasis.The
driversdiditvoluntarilybecausethetermswere
morefavourablethanthetermsoftheirprevious
employment.Thereisnobarinlawtothe
introductionofthissystem.Thepresentcaseisnot
analogoustothecaseofcontractlabourwhere
employmentoflabourthroughacontractoror
middlemanputthelabouratadisadvantagen
collectivebargainingandrobbedlabourofoneofits
mainweaponsinitsarmoury.
Held
“Apersonmustbeconsideredfreetoso
arrangehisbusinessthatheavoidsa
regulatory law and itspenal
consequenceswhichhehas,withoutthe
arrangement, nopropermeans of
obeying.”
“Apersonmustbeconsideredfreetoso
arrangehisbusinessthatheavoidsa
regulatory law and itspenal
consequenceswhichhehas,withoutthe
arrangement, nopropermeans of
obeying.”
The Contract Labour (Regulation
and Abolition)
Act, 1970
Presented By:
Bharat G.Goyal
Advocate.
and Abolition)
Act, 1970
Presented By:
Bharat G.Goyal
Advocate.
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