Airports Authority of India Mumbai vs. Indian Airport Kamgar Union and Others 2011 I LLJ 211

Bombay High Court
Airports Authority Of India vs Indian Airport Kamgar Union & Ors on 10 August, 2010
Bench: R. S. Dalvi
                                             1                            WP.123/2009




                        WRIT PETITION NO. 123 OF 2009

Airports Authority of India, Mumbai                          ...Petitioner
Indian Airport Kamgar Union & Ors.                           ...Respondents

Mr. Shamrao S. Patil with Mr. A.S. Patil, Advocates for Petitioner
Mr. Anand Grover with Ms. Jane Cox, Advocates for Respondent Nos.4 to 6
Mr. Girish S. Kulkarni with Mr. Kiran Kandpile for Respondent No.3
                                    CORAM : SMT. ROSHAN DALVI, J.
                   Date of reserving the order: 7TH JULY 2010
                        Date of pronouncing the order: 10TH AUGUST, 2010


1. The Petitioner is the Airport Authority of India. The Respondent No.1 is its Union. There has been a protractive lis between the parties. A circular was issued by the Government of India, Ministry of Labour, New Delhi deciding not to prohibit the contract labour under the Contract Labour (Regulation and Abolition) Act, 1970 (C.L. Act) on 16th November 1999. This led to its challenge by the Respondent No.1.

2. In an earlier Writ Petition an order came to be passed by consent of the 2 WP.123/2009 parties that Central Government was the appropriate Government with regard to any reference for labour disputes between the parties. The relevant part of the order of the Division Bench of this Court in Writ Petition No.78/2000 runs thus:-

” We are satisfied that following order shall meet the ends of justice:-

1. The appropriate Government, i.e., the Central Government (as agreed to by both the learned counsel) is directed to make a Reference of the following demands to the Industrial Tribunal for adjudication within two months from today:-

(i) Whether the contract between Airport Authority of India and the respondents contractors, is a sham and bogus and is a camouflage to deprive the workers concerned in the petition of benefits available to permanent workmen of Airport Authority of India ?

(ii) Whether the workers concerned in the petition should be declared as permanent workers of Airport Authority of India ?

(iii) What are the wages and consequential benefits to be paid to the workers concerned in the petition ?

2. The petitioners shall apply to the concerned Industrial Tribunal for interim relief within a period of four weeks from the date of notice of Reference till the application for interim relief is decided by the Industrial Tribunal and for a period of four weeks thereafter, respondents are directed to abide by the interim relief granted by this Court, if any. It will be open to respondents to change the contractor but the new contractor shall engage the same workers subject to the order of the Industrial Tribunal.

3. All contentions of parties are kept open to be agitated before the Industrial Tribunal.

                                                                     (underlining supplied)

                                                  3                              WP.123/2009

4. The Industrial Tribunal is expected to hear and decide the Reference expeditiously.

5. Rule is disposed of accordingly.

6. No costs.”

Consequently, a reference was to be filed by the Central Government and had to be considered by the appropriate authority. All the contentions of all the parties were kept open.

3. Reference was made essentially upon the contention that the contract labour was sham, bogus and a camouflage. Its maintainability was challenged. Both aspects have been decided. The Petitioner has challenged its maintainability as well as the impugned Award on merits in this Writ Petition.

4. Mr. Patil on behalf of the Petitioner contends that the individual contract labourers, who were specifically allowed to be contracted in the establishment of the Petitioner under the aforesaid order dated 16th December 2002 could not maintain their respective references because an industrial dispute as defined under Section 2 (k) of the Industrial Disputes Act (I.D. Act) can be brought by only workmen defined under Section 2(s) of the I.D. Act. Contract labourers are not the workmen of the Petitioner though claimed and described as such. They cannot make a reference. The union can make a reference only on behalf of the workmen of the 4 WP.123/2009 Petitioner and not contract labourers. Their case is to be espoused by requisite number of workmen of Respondent No.1 workmen. Nothing of this is done and hence the reference is not maintainable.

5. Mr. Grover on behalf of the Respondents contended that the maintainability of the reference was not in issue since the parties by consent agreed to refer the dispute to the appropriate authority and hence that aspect need not be considered in this Writ Petition. The relevant part of the aforesaid order of the Division Bench of this Court shows that the parties consented only to the extent that the Central Government was the appropriate Government. Since all the contentions were left open the Petitioner cannot be taken to have consented to the reference on behalf of the contract labourers whose case is stated not to have been espoused by the workmen of the Petitioner. The dispute in Reference (CGIT-1) No.14 of 2003 is between the Petitioner and “their workmen” represented by the Respondent No.1. Whether these were the workmen of the Petitioner and whether they were entitled to be represented by the union of the Petitioner or whether they had to maintain their lis either as contract labourers or as workmen would have to be seen. Hence, the Petitioner’s contentions on maintainability shall have to be considered as per the law which is shown to Court.

6. In the case between Workmen of Dimakuchi Tea Estate (Assam Chah Karmachari Sangh) Vs. Dimakuchi Tea Estate 1958 I LLJ S.C (513) of the Apex Court the question of who is a workman itself came up for 5 WP.123/2009 consideration. By the majority judgment rendered by Justice S.K. Das it was held that the word “any person” in the definition of industrial dispute underSection 2(k) of the I.D. Act, 1947 cannot mean “anybody and everybody in this wide world”. Considering the three aspects to which the dispute must relate, it was observed that the person in respect of whom the employer – employee relation never existed or can never possibly exist cannot be the subject matter of a dispute between employer and workmen. It was further observed that the definition clause must be read in the context of the subject matter and scheme of the Act and consistently with the objects and other provisions of the Act. Quoting from Maxwell, th Interpretation of Statutes, 9 Edition, page 55 it was observed that the words must harmonize with the subject as well as of the object of the enactment the legislature had in view. Considering this by setting out the preamble and the purport of the various chapters of the Act the salient provisions of the Act came to be enunciated which inter alia was shown to include collective bargaining. For conceptualising the definition of any person in the definition clause, 4 limitations were set out which inter alia show that the workmen must have a nexus with the dispute either because they were personally interested or because they had taken up the cause of another person in the general interest of labour welfare. Consequently, the workers were held not vitally interested by the reason that they belonged to the trade union in which one of its members’ dismissal was in question which became a matter of general interest to all the workmen in the establishment. Upon examining the definition clause in the light of the limitation set out in the judgment for considering whether a person was a 6 WP.123/2009 workman, it was inter alia observed that the parties to the dispute must be directly or substantially interested therein. It was further observed:

The Act avowedly gives a restricted meaning to the word “workman” and almost all the provisions of the Act are intended to confer benefits on that class of persons who generally answer to the description of workmen. The expression “any person” in the definition clause means, in our opinion, a person in whose employment or non-employment, or terms of employment, or conditions of labour the workmen as a class have a direct or substantial interest – with whom they have, under the scheme of the Act, a community of interest. Our reason for so holding is not merely that the Act makes a distinction between workmen and non-workmen, but because a dispute to be a real dispute must be one in which the parties to the dispute have a direct or substantial interest.

Can it be said that workmen as a class are directly or substantially interested in the employment, non-employment, terms of employment or conditions of labour of persons who belong to the supervisory staff and are, under provisions of the Act, non-workmen on whom the Act has conferred no benefit, who cannot by themselves be parties to an industrial dispute and for whose representation the Act makes no particular provision ? We venture to think that the answer must be in the negative.”

7. In the case of State of Punjab Vs. The Gondhara Transport Co. (P) Ltd. 1975 LAB.I.C. 358 = AIR 1975 S.C. 531 again the definition of industrial dispute came up for consideration. That was a case of dismissal of employees. Out of 60 workmen 18 had sponsored the cause of dismissed workmen. The dispute, therefore, was espoused by only 1/12 of the workmen actually employed in the Company. Out of those 18, 13 were the dismissed workmen themselves. Their cause was, therefore, espoused 7 WP.123/2009 by only 5 other workmen. The proportion of 5/60 (i.e. 1/12) was held not a substantial body of workmen to agitate the industrial dispute.

The workmen may apply for their own cause. They may raise an industrial dispute. If the persons raising the dispute are stated not to be the workmen their case cannot be stated to have been espoused and their dispute, therefore, cannot be taken to be an industrial dispute. In that case the State Government was observed to have been induced to make a reference which was earlier refused to be made. The Company raised the preliminary objection that there was no industrial dispute under Section 2(k) of the I.D Act. Seeing that the cause of the workmen was not espoused by the substantial body of the workmen by merely filing the dispute by the dismissed employees themselves and only 5 other workmen and distinguishing that cause from the cause of Rohtak General Transport Co. (1962) 1 Lab LJ 634 (SC) in which the cause was taken up by the union upon a resolution passed by the employees of the Company supporting the cause of dismissed workmen, it was held that that cause was not of an industrial dispute in which the cause was “espoused”.

8. In the case between K.K. Thilakan & Ors. Vs. FACT Ltd. & Anr. 1992 II LLJ 782 the disputants were not the workmen of the Company; they were stated to be contract workers. They sought employment with the Company. They wanted to be absorbed in the Company. They were employed by a Contractor. Such employment can only be of persons who were outside the establishment. Upon the admitted case that they were contract workers it 8 WP.123/2009 was held that there was no industrial dispute between them and the Company as none could arise unless they were absorbed. Before that could happen they cannot consider the Company as their employer and cannot treat themselves as its workmen. When the jurisdiction to entertain the dispute was challenged it was held that there could not have been any reference for any industrial dispute. It was held that there could be no industrial dispute between the employer and between the persons “seeking” employment.

That was an admitted case of contract labourers. The contract was not challenged. Hence the workers were admittedly the workers of the Contractor, but sought employment by absorption in the Company.

9. In the case of Gujarat Electricity Board Ukai Vs. Hind Mazdoor Sabha AIR 1995 SC 1893 the concept of contract labour came to be considered for the purpose of abolishing the contract labour under Section 10 of the C.L.Act. Whether or not there was a genuine contract was first to be determined. If, as in the case of FACT Ltd. (supra), it was admitted that there was a genuine contract of Contract Labour, Section 10 of the C.L. Act requiring the abolition of the contract labour would come into play. That can be abolished by the appropriate Government and not by the Court.

However, if there was no genuine contract of contract labour and the so called contract was a sham and camouflage, the provisions of C. L. Act will be inapplicable. The workmen of such sham Contractor (who would otherwise be workmen actually of the Company), could raise an industrial9 WP.123/2009 dispute that they should be deemed to be the employees of the principal employer before the Court or the Industrial Adjudicator. To make a grievance that there was no genuine contract under C.L Act and that they were the employees of the principal employer and that they be absorbed by the company and that appropriate service conditions be provided to them etc., such industrial dispute could be raised by the workmen having :

1. a community of interest with contract labour or

2. a substantial interest in the subject matter of the dispute.

Such workmen could apply for a declaration that the contract was sham and they were the direct employees of the principal employer. If the contract is held to be sham, the Industrial Adjudicator would have jurisdiction to adjudicate the industrial dispute. If the contract is held to be genuine, he would refer the dispute to the appropriate Government for abolition of contract labour. This he could do, if the dispute was espoused by the direct workmen of the principal employer or by the disputants themselves of the principal employer.

10.Mr. Patil sought to emphasise the fact that the industrial dispute could be raised only by the direct employees or by the direct workmen of the principal employer espousing the cause or the contract labourers. The persons claiming to be the direct employees, but whose status as such direct employees is disputed, cannot sue as direct employees. They are the contract labourers who may be held to be contract labourers under a sham contract. Until that is done since they are not admittedly direct employees, 10 WP.123/2009 they cannot sue themselves. They also cannot be represented by the Union of the principal employer. Their cause would have to be espoused by the other direct workmen of the principal employer. Mr. Patil, therefore, contends that since in this case the cause of persons taken to be contract labourers is not espoused by a substantial number of direct workmen who have a community of interest with such contract labourers or a substantial interest in the subject matter of the dispute of the contract labourers the reference made would be invalid and the complaint is not maintainable.

11.In the case of Air India Statutory Corporation ETC Vs. United Labour Union & Ors. 1997 1 CLR 292 the case of Gujarat Electricity Board and its aftermath was analysed and lamented. The remedy carved out in Gujarat Electricity Board was observed to be beset with several incongruities and obstacles in the way of contract labour for immediate absorption. The shortcomings in case of espousal of the cause of contract labourers, which was observed not to have been brought to the notice of the Court in the case of Gujarat Electricity Board, were highlighted. It was observed that the union of the Company may not espouse the cause of the contract labourers.

The workmen, on abolition of contract labour system, would have no right to seek a reference under Section 10 of the I.D. Act. The workmen would be kept out of job needlessly awaiting the award and to face delay in enforcement. The management will keep them at bay for absorption. It would be difficult for them to workout their rights. They would be embroiled in a tardy and time consuming process. Years would roll by without wages. They would not be armoured to fight the litigation 11 WP.123/2009 endlessly. Hence, it was observed that though some strides were made in Gujarat Electricity Board (supra) from the completely bleak position enunciated in FACT Ltd. (supra) and Gondhara Transport (supra), it was held that the methodology suggested in Gujarat Electricity Board was unworkable and incorrect in law. It was, therefore, held that once the contract labour was abolished it was the duty of the employer to absorb the workmen in his establishment. They must be declared to be the employees from the effective date. Absorption must, therefore, follow. Setting out the fundamental right, specially the right to life, which included the right to live with dignity, as also the Directive Principles of State Policy enunciated in a chain of judgments, it was held that the absorption followed as a matter of corollary to abolishment of contract labour despite there being no express provision in the C.L. Act. Absorption, it was held, resulted in regularisation of the service as the Contractors so soon as the contract labour stood removed and the direct relationship of employer and employee was created.

However, Mr. Patil argued that this would come about only when contract labour is accepted and the appropriate Government abolishes the contract labour upon procedure prescribed by law under Section 10 of the C.L. Act. Since in this case the contract labour is not abolished and specifically allowed under the order dated 16th November 2002, the employers’ duty to absorb the workmen and regularise their services does not come up. The case of the workmen that the contract labour is sham can only be an industrial dispute under Section 2(k) of the I.D. Act, if the permanent 12 WP.123/2009 workmen would support the cause of the workmen who are stated to be contract labourers, but who contend that that position is sham. Mr. Patil contends that since the persons claiming to be workmen and not contract labourers are not admittedly workmen they must prove first that they are workmen. This they can do only by proving the contract labour to be sham. Before they can prove that they are workmen they cannot be taken to be workmen. Hence, they cannot maintain an industrial dispute themselves directly by making an application in that behalf themselves. They cannot themselves show that they are personally interested in the dispute as workmen because they are not admitted to be workmen or proved to be workmen. Therefore, their case must necessarily be taken up by other workmen. These can be workmen having a nexus with their dispute and having a community of interest or a substantial interest in their dispute. That can only be, if they are represented by a union. The union of the employer cannot represent them because they are not the workmen of the employer and consequently, not members of such union. The other workers can have no nexus with their dispute. Their dispute is personal only to them. It is for them to show that the contract labour is sham and that they are actually workers or for them to accept the contract labour for whatever it is worth and exercise in the direction of getting it abolished by following the procedure established by law under Section 10 of the C.L.

Act, which procedure is already followed.

12.Consequently, though it is observed in Air India (supra) that Gujarat 13 WP.123/2009 Electricity Board “only softened the rough edges” and the case of Dinanath was set aside as a narrow and pedantic view, any which way this nebulous position is seen, if the analogy of Mr. Patil is to be accepted, the dispute of such workmen cannot be agitated as is sought to be done. Much as they may contend that they are workmen, they are, on the date of the application, not indisputably workmen. They must, therefore, get their status and position made clear. Only as and when the contract labour is shown to be sham and they stand in the position of workmen, can they be declared to be workmen and then alone they would be able to agitate the right of absorption or the right of regularisation in the company. But until they are workmen they cannot maintain an action as workmen personally interested in the dispute. Similarly their action cannot be maintained by other workmen and the company because they have no nexus with the dispute, they are not directly or substantially interested in the dispute and they consequently have no community interest. The dichotomous position of the workmen set out in Air India (supra) would, therefore, remain at that in case of persons claiming to be workmen, but taken to be contract labourers.

13.Hence Mr. Patil contends that the reference could, therefore, only have been made in the case of the applicants not by the applicants themselves, but by such number of regular workers supporting them who would have nexus with the dispute and who would demonstrate a substantial interest in their dispute to make it an industrial dispute showing community of interest under the class action brought by them.

14 WP.123/2009

14.It was contended by Mr. Grover on behalf of Respondent No.1 that the entire nebulous, anomalous situation was brought to rest by the Apex Court in the case of Steel Authority of India Ltd. & Ors. Vs. National Union Water Front Workers & Ors. 2001 III CLR 349 (SAIL) in which the Court had to concern itself with the issuance of prohibition notification under Section 10(1) of the C.L. Act. Upon such a notification, it was observed, in paragraph 121(5) at page 386 of the judgment in conclusion that in an industrial dispute brought before it by any contract labourer in regard to his conditions of service the industrial adjudicator would have to consider the question whether the contract was genuine or sham. If it is found to be sham the contract labourers would be treated as the employees of the principal employer, who shall be directed to regularise their service in the concerned establishment as held in the case of Air India (supra). It may be at once stated that the expression used by the Apex Court in paragraph 121(5) is with regard to the industrial dispute “brought before it by any contract labourer in regard to conditions of service”. A person can bring his own dispute before the competent Court. What was contemplated was the industrial dispute brought before the Industrial Adjudicator “by any contract labour”.

15.Mr. Patil would however contend that there is a distinction between a “dispute brought” and a “dispute raised”. The expression “brought”, he contends, is the action in law brought by regular workers supporting those contract labourers to make it a collective dispute as a class action with15 WP.123/2009 community of interest which is an essential of an industrial dispute underSection 2(k) of the I.D. Act held since the case of Dimakuchi Tea Estate in 1958 (supra). An action raised, he contends, would be the action raised by the applicant making the reference himself. Hence for a reference to be made the support of the regular workers who have a substantial interest in the dispute would be a condition precedent and since the applicants are not workmen themselves, they cannot raise an industrial dispute themselves.

16.The plain English Dictionary meaning of the two words “brought” and “raised” must, therefore, also be considered. Whereas the word “brought”

in Concise Oxford English Dictionary, XI Edition at page 178 is shown as “past and past participle of bring” and the word “bring” at page 174 inter alia shows “initiate (legal action)”, the word “raise” does not show any act with regard to legal action. The term “raise” in Black’s Law Dictionary Eighth Edition at page 1287 refers to raising an issue in a pleading, but not raising an action in law.

17.There is, therefore, no distinction, in the two expressions “action brought”

and “action raised” to suggest that the formal is an action brought to the Court of law by some one else on behalf of another and an action raised, is an action in law brought before a Court of law by the party who has raised the dispute or an issue himself or herself. That contention of Mr. Patil, is seen to have been completely made out of the context in which the Apex Court used the expression in paragraph 121(5) of SAIL (supra).

16 WP.123/2009

18.The ultimate conclusion that amenates from the above discussion is that when a contract labourer alleges that he is not a contract labourer, but a direct employee because his contract labour is sham, he can himself bring an action as an industrial dispute in that behalf. If, however, he is held to be a contract labourer under a genuine C.L., the industrial dispute brought by him would not result in any order being passed against the principal employer or the company; he would be held to be an employee only of the Contractor. If on the other hand, he is held not to be a contract labourer as the contract labour is held to be sham, he would be taken to be an employee who had brought the industrial dispute correctly under Section 2(k) of the I.D. Act as a workman having a dispute between himself and his employer connected with his employment and as a workman personally interested in the dispute, the dispute being whether or not he is a contract labourer under a genuine contract of labour. He would fall within the umbrella of the industrial dispute as enunciated in the case of Dimakuchi Tea Estate (supra). The bringing of the dispute by any contract labourer is, therefore, covered under paragraph 121(5) in the case of SAIL. Reference of that dispute is, therefore, maintainable. The dispute has, therefore, been brought for adjudication before the correct Forum. The challenge to the maintainability is, therefore, not sustainable, the case being covered by the case of SAIL (supra).

19.It is true that the Air India case (supra) dealt with the mischief wraught by contract labour which the legislation sought to end by abolition of contract labour in merited cases. That judgment inter alia considered the perennial 17 WP.123/2009 nature of work of the contract labourers itself inconsistent with contract labour upon abolition of such contract labour. Upon such abolition of the contract labour it finally held that the next step was automatic absorption and regularisation of their service. It, therefore, felt that Gujarat Electricity Board only softened the rough edges whilst the case of Dinanath was completely overruled. In that scenario the case of SAIL (supra) held that Air India case was overruled prospectively.

20.In considering the scope of an action to be brought by or on behalf of the applicant by way of a reference, the dispute which was brought before the Apex Court in the case of SAIL (supra) has to be first seen. There were three points for determination before the Apex Court. Those were:

1. The import of the expression “appropriate government” –

we are not concerned with this aspect since in this case it was by consent accepted that the Central Government was the appropriate.

2. The validity of a notification – This was a question of fact with which we are not concerned.

3. The ruling as to whether the validity of the notification would ipso facto confer automatic absorption of contract labourers by the principal employer as held in the case of Air India (supra) – the case of Air India has been overruled 18 WP.123/2009 prospectively.

21.It is in this context that the Apex Court considered the various defences under the C.L.Act including the definition of the contract labour and workmen. In paragraph 70 of the judgment it is observed that by definition the term ‘contract labour’ is a species of workmen. Under that definition a workman shall be so deemed when the contingencies set out in the definition are present. In paragraph 20 the Court has considered the two ways in which the workmen may be hired; he may be hired by an employer or by the contractor. If he is hired by the employer, there will exist a master and servant relationship. If he is hired by the contractor, it could be under two circumstances:

(a) a contract which is sham and camouflage in which case he would be taken to be hired by the employer himself and

(b) the contract which is not a sham, but a real contract of labour in which case the workman would be a contract labourer.

22.Since it is held that by definition a contract labourer is a species of workmen, in paragraph 121(5) the consequence of the prohibition notification under Section 10(1) of C.L. Act is stated. Since it is held in that judgment that the workmen cannot be ipso facto absorbed and 19 WP.123/2009 regularised in the service of the principal employer, the Industrial dispute can be brought before the Industrial Adjudicator “by any contract labourer”

in regard to the conditions of service. This would be a dispute brought or a dispute raised. There is no difference between the two. So far as the maintainability is concerned, therefore, the action in law would be maintainable by such contract labourer who is a species of workmen.

Consequently, therefore, when the contract itself is alleged to be sham that species of workmen can bring an action themselves since they have a direct interest in the industrial dispute and they are personally interested therein.

Alternately, since they are a species of workmen, Union can also represent them.

23. This conclusion can be tested by a situation which would be created, if such an interpretation is not given to the term “workmen”. The situation which would amenate will be as follows.

The workmen allege that they are not contract labourers though the management alleges that they are. They contend that the contract is sham and bogus. They seek to prove that as a question of fact; they alone would make a reference in that behalf. They are not direct workmen of the employer. Hence, they are not members of any union. No union can espouse their case (as observed in paragraph 61 in the case of Air India (supra) (since the contract labour gets into service of the principal employer, the union of the existing employees may not espouse their cause for reference under Section 10 of the I.D. Act.). The other workers have no nexus with 20 WP.123/2009 the dispute; they are neither directly nor substantially interested therein. In fact the contract labourers would be their competitors. They would not take up the case of such contract labourers. In such a scenario no person can prove that a contract for contract labour is sham or bogus. They would be left without a legal remedy. They can only be the workmen of the contractor and since on their contention the contract is sham, they would not claim to be the employees of the contractor. If they cannot bring a dispute to the competent court by way of reference, which would be subject to the proof that the contract is indeed sham as they allege, who would ? And who can ? It is in this nebulous position that the observations in the case of Air India (supra) shows that Gujarat Electricity Board only softened the rough edges of their pitiable plight in paragraph 61 thus:

“….. the management would always keep them at bay for absorption. It would be difficult for them to work out their right.

Moreover, it is a tardy and time consuming process and years would roll by. Without wages, they cannot keep fighting the litigation endlessly. The right and remedy would be a teasing illusion and would be rendered otiose and practically compelling the workman at the mercy of the principal employer”.

It is, therefore, that the Apex Court concluded that the remedy in Gujarat Electricity Board case was unsatisfactory and the shortcomings were not brought to the attention of the Court. It is, therefore, that that part of the judgment was held incorrect. That part of the judgment in the case of Air India (supra) has not been set aside in the case of SAIL (supra).

24.Upon considering these facets it can be concluded that reference was 21 WP.123/2009 maintainable, it having been made by the species of workmen who are shown to be employed as contract labourers and who on proof of the contract as sham must be taken to be workmen employed by the principal employer for the industrial dispute in which they have a direct interest.

25.This has been specifically held in the case of Steel Authority of India Ltd.

Vs. Union of India & Ors. 2006 III CLR 659 following the case of SAIL (supra) and for the purpose of making reference it has been held in paragraph 13 that the jurisdiction would be with the Industrial Adjudicator to determine the issue whether the contract is sham or not, thus:

“When, however, a contention is raised that the contract entered into by and between the management and the contractor is a sham one, in view of the decision of this Court in Steel Authority of India Limited (supra), an industrial adjudicator would be entitled to determine the said issue. The industrial adjudicator would have jurisdiction to determine the said issue as in the event if it be held that the contract purportedly awarded by the management in favour of the contractor was really a camouflage or a sham one, the employees appointed by the contractor would, in effect and substance, be held to be direct employees of the management.

In that judgment the case of A.P.S.R.T.C and Ors. Vs. G. Srinivas Reddy and Ors. (2006) 3 SCC 674 in paragraph 14 has been referred to and accepted which holds thus:-

“…The only remedy of respondents, as noticed above, is to 22 WP.123/2009 approach the Industrial Tribunal for declaring that the contract labour system under which they were employed was a camouflage and therefore, they were, in fact, direct employees of the Corporation and for consequential relief.”

26.In that case however, the workers were represented by the same union espousing their cause in the Labour Court as well as in the Writ proceedings. Earlier they had contended that they were employees of the Contractor. Hence, their case that the contract was sham was held to be a mutually destructive plea and accordingly impermissible in law on principles of estoppel, waiver and acquiescence in common law. Mr. Patil contends that a position of Respondent No.1 is the same; they having applied for abolition of contract labour and failed, they much later contended that those contracts were sham.

27.The case of the Respondents initially was for abolition of the contract labour. The contract labour was not abolished, in fact it was allowed with regard to plumbing, carpentry, masonry, drain operation and pump repairing work. Consequently, for maintenance aspects of the Petitioner contract labour legally prevails. The contract labourers thereafter sought to contend that the contract labour is sham, bogus and camouflage entered into by the nominees of the Petitioner who were the Petitioner’s stooges. The reference essentially deals with the evidence of the parties with regard to whether or not the contract labour was sham.

28.The impugned award has considered the evidence and upheld the 23 WP.123/2009 contention of the contract labourers that the contracts were sham. These contract labourers are Respondents 4,5 and 6 in the Petition who are not parties to the reference and had not independently taken out any proceeding against the Petitioner. The Petition, therefore, challenges the impugned award dated 26th May 2008 Exhibit-Z to the Petition on two counts (1) holding that the contracts were not sham and (2) granting permanency to the contract labourers in Reference (CGIT-2) No. 56/2007 with other ancillary reliefs. The Reference having been seen to be maintainable, the case of Respondent No.1 on merits is to be appreciated.

29. The contracts entered into by the Petitioner with the contractors are admitted. In fact the terms and conditions mentioned in the contract are set out by the witnesses on behalf of Respondent No.1 and interpreted by the parties.

30.The concept of contract labour must be first understood. For the peripheral activities of an industry – which is not its main activity or an activity of a perennial nature – contract labour is permitted unless in an application made under procedure established by the Law being the C.L. Act it is abolished by the appropriate authority. Such contract labour would, therefore, be labour provided by contractors to various organisations. The contractor, therefore, makes payment of the salary and all other benefits like P.F., bonus etc., to its own labourers. These are sent out to various industries. They may be attached to any industry for a length of time or for very short period. They are not qualified workmen 24 WP.123/2009 who get regular employment under the procedure established by law for being employed in any Government or public sector undertaking or as per the procedure of any Corporation. They need not have the requisite qualifications. They are unqualified workers who are given work in various industries. The material aspect to consider is that such labourers would not be able to have an avenue upon to him for being appointed in any industry in its normal course as its regular workmen in the labour force. The modality of contract labour, therefore, throws upon the doors of employment under the contract, but in industry to such unskilled workers who would otherwise be denied any opportunity of work in any industry.

Being the employees/labourers/workmen of the contractor their wages and /or salaries cannot be given by the industrial establishment. However, in view of the work that they do for the industrial establishment, their supervision and control with regard to the quality of their work, their attendance etc. would come under the purview of the officers of the industrial establishment.

31.In the light of this situation the evidence which has been led on behalf of the contract labourers would have to be appreciated.

32.The oral evidence of the contract labourers shows that they are members of the Respondent union employed as plumbers, masons, helpers and belders for maintenance of various Terminals at the Airport in Mumbai. They have sought to show that they are indispensable and the Airport terminal building cannot be maintained without them. They carry out work of 25 WP.123/2009 urgent nature. They are provided materials, instruments and apparatus to work with (Who provides these is not deposed). The officials of the Petitioner supervise their work. Some of them work in four shifts. They are issued entry passes or tokens. They sign the attendance register/muster rolls which are countersigned by the Petitioner’s officer and which are kept in his custody. They work on the airport premises. The contractor does not oversee their work. They do the same work as the permanent workmen who are plumbers, carpenters, masons, helpers and belders. They receive daily wages. They are not given the salary or statutory benefits by the Petitioner. The supervisory and disciplinary control is with the Petitioner’s officers. The officers maintain the documentation including duty roasters. They issue instructions for work.

They are given airport passes instead of the identity cards issued to permanent workers. They keep the maintenance register and maintain a check of the terminal building, oversee their work and make reports upon the complaints received. The officers prepare their wage-bill. They have to apply for leave to the officers of the Petitioner. They are given only “leave of absence”. They have to mention in writing that they intend to go on leave and their wages are deducted “by the management”. They perform identical duties as the permanent workmen. They rely upon an office note dated 2nd July 2001 showing that they are employed because “contract workers are more efficient and easy to control than the departmental labour”.

    33.They   have   not   shown   their   qualifications   for   work.     In   the   cross 

                                                 26                                WP.123/2009

examination they admit that they do not know the qualifications of the other such labourers. They did not come through the Employment Exchange or apply upon the advertisement in the newspaper. They did not appear for any written test. They are not issued any appointment order by the Petitioner. They admit that no complaint was lodged by them against the contractor. The contractor makes payment of their salary as well as the statutory benefits. They admit that the Petitioner never issued charge-sheet or memo to any of them.

34.This is the essence of their evidence. It may at once be mentioned that in any contract for appointing labour the contractors form a nodal point for providing various persons who are skilled or unskilled labourers to various industries as and when they make a demand. The contractors pay their wages and salary and give them the statutory benefits. The labourers work in the industrial establishment. Hence they are supervised, and naturally so, by the officers of that industrial establishment and not by the contractor who only provides the labour force. Similarly, their muster is kept by the officers of the industrial establishment. It is based upon the muster roll that they would be paid their wages or salary. Hence, it is the duty of the establishment to maintain the documentation like record of their attendance, duty roasters, muster rolls etc., the same goes for their leave, because if they are absent from their work they cannot be paid their daily wages or monthly salary. It is only the industrial establishment who would maintain their record and handover to the contractor to enable him to make payment for the work done or to refuse payment for the work not 27 WP.123/2009 done. It is, therefore, immaterial that the contractor never visits them at their place of work; he does not require to. The materials that would be used by them in the work may be provided by the contractor or the industrial establishment which is depending on the type of work required. The entry pass given to them as against the identity card for the permanent workers is for identification and for access to an area where otherwise they would not be able to obtain access. It is meant not only for security, but for distinction between the types of workers and labourers in the establishment. It is natural that they would work on the premises of the establishment; they need not and cannot work on the premises of the contractor. The fact that they are given salary / wages and statutory benefit by the contractor is an incident of contract itself. It does not matter whether they work in some or all the shifts. Their work would be required in some or all the shifts. The various conditions in the contracts between the contractor and the Petitioner would itself demonstrate the requirement of a valid contract. Upon the complaints of the customers the Housekeeping and Maintenance Department would get the work done by the contract labourers. Hence, a check of the terminal building by them is a necessary condition precedent as well as subsequent to their work. What is of essence is that they have no qualifications and would otherwise not have been employed, they cannot be employed as permanent workmen in the normal course and hence, they are not issued appointment letters. Similarly, what is noticeably striking is that they are not issued any memos or charge-sheet also as the permanent workers.

                                                     28                                WP.123/2009

    35.The   substance   of   their   evidence   must,   therefore,   be   seen.     Despite   the 

supervision and control and despite the documentation maintained for such supervision and control, they are the workers supplied by the contractor, who would otherwise not be able to secure any employment whatsoever for the work they do for the establishment of the Petitioner.

36.It may be added that the culture of Contract Labour has thrown open the doors of contractual and commercial establishments to unqualified and unskilled workers who would otherwise not be able to obtain any employment in an industry. The Contract Labourers’ action is misdirected and ill advised. Upon the part of the judgment in the case of Air India (supra) relating to their absorption and regularisation being set aside prospectively, they would not even be able to be absorbed ipso facto in the Petitioner’s establishment even if the contracts are held to be sham. Consequent upon the case of Umadevi Nambiyar Vs. T.C. Sidhan (2004) 2 SCC 321 they cannot be ipso facto regularised if they are found to be lacking in the requisite qualifications and if they are not employed as per procedure established by law under which permanent employees doing similar work are employed even if they are held to be the workmen of the Petitioner. The Industrial Establishment may not renew the contract supplying these labourers.

37.The limits of the writ jurisdiction of the High Court, which is not an appellate jurisdiction, permits this Court to see only the error apparent on the face of the record to be corrected by a writ. In this case the award has 29 WP.123/2009 proceeded to consider the agreement sham on the seminal aspect that the relevant documentation was maintained by the officers of the Petitioner including the leave record of the contract labourers, the duties of the contract labourers were of a permanent nature and similar to those of the permanent employees at the industrial establishment itself and that the entire supervision and control was of the officers of the Petitioner though the wages and statutory benefits were shown to be paid by the contractors. Considering these aspects as incidents of permanent employment the award has allowed the reference and consequently, directed to treat the contract labourers as permanent employees to be given the statutory benefits at par with the Petitioner’s own employees. The basis of the award in coming to such conclusion proceeds on a fundamentally erroneous premise. Despite the specific allowance of contract labour in the work of civil maintenance including the work of plumbing, masons, helpers, belders and carpenters by the Central Government, it proceeds on a premise that the nature of the work of the contract labourers brings them within the scope of “workmen” under the I.D. Act. That basis suffers from a fundamental error and disregards the ground-realities of such work making it in fact counter productive for the very persons in whose favour apparently and ostensibly the relief is granted. The award is, therefore, required to be and is set aside.

38.Rule is made absolute accordingly.

39.The order is stayed for 4 weeks.


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