Contract Labour (Regulation and Abolition) Act, 1970: Notification dated 24.4.1990 issued under the Act, 1970 – Exemption from its applicability to BHEL – Held: BHEL, insofar as their UP operations are concerned, in Haridwar, in particular, are exempted from the applicability of the Notification – Labour laws. Contract Labour (Regulation and Abolition) Act, 1970: Termination of worker – Award of reinstatement by Labour Court – Labour Court based its finding on direct relationship between the parties on the gate passes issued by the appellant, and on a concession made by the appellant’s representative – Held: Evidence showed that the gate passes were issued only at the request of the contractor for the sake of security and safety and also from administrative point of view – This evidence was missed by Labour Court when it arrived at a conclusion that a direct relationship ought to be inferred from this fact – Moreover there was nothing to show that the work performed by the contract labour was ordinarily part of the industry of appellant – Labour Court’s award is perverse and is set aside in exercise of jurisdiction under Art.226 – Constitution of India – Art.226 – Uttar Pradesh Industrial Disputes Act, 1947.
Contract Labour (Regulation and Abolition) Act, 1970: Whether employed labourers were direct or contractual employees – Held: Principal employer cannot be said to control and supervise the work of the employee merely because he directs the workers of the contractor ‘what to do’ after the contractor assigns/ allots the employee to the principal employer – In the instant case, evidence led on behalf of appellant showed that no wages were ever been paid to workers by appellant – Workers themselves admitted that there was no appointment letter, provident fund number or wage slip from appellant insofar as they were concerned – Further, it was also specifically pointed out that the names of 29 workers were on the basis of a list provided by the contractor in a bid that was made consequent to a tender notice by appellant – Therefore, there was nothing on facts to show that the contract labour that was engaged, even de hors a prohibition notification, was in the facts of the instant case ‘sham’ – Thus, Labour court erred in holding that the alleged contract with the contractor was “sham”.
Concession: Where a question is a mixed question of fact and law, a concession made by a lawyer or his authorised representative at the stage of arguments, cannot preclude the party for whom such person appears from re-agitating the point in appeal – Concession on mixed questions of fact and law cannot decide cases as the evidence as a whole has to be weighed and inferences drawn therefrom.
Words and phrases: Expression ‘control and supervision – Meaning of, in the context of contract labour – Labour laws.
Allowing the appeals, the Court
HELD: 1.1 The Award of the Labour Court sets down notification dated 24.04.1990 that was issued under the 1970 Act. A reading of the said notification makes it clear that the appellant, insofar as their UP operations are concerned, in Haridwar, in particular, are exempted from the said notification. Despite this, however, the Labour Court went on to apply the said notification, which would clearly be perverse. The Labour Court based its finding on direct relationship between the parties only on the gate passes being issued by the appellant, and on a concession made by the appellant’s representative. The said gate passes were issued, as has been stated by the appellant’s witness, only at the request of the contractor for the sake of safety and also from the administrative point of view. The idea was security, as otherwise any person could enter the precincts of the factory. This evidence was missed by the Labour Court when it arrived at a conclusion that a direct relationship ought to be inferred from this fact alone. [Paras 10-11][513-B-F]
1.2 Where a question is a mixed question of fact and law, a concession made by a lawyer or his authorised representative at the stage of arguments cannot preclude the party for whom such person appears from re-agitating the point in appeal. It would be perverse to decide based only on a concession, without more, that a direct relationship exists between the employer and the workmen. Equally perverse is finding that the extended definition of ‘employer’ contained in the Act would automatically apply. The extended definition is contained in section 2(i)(iv) of the Uttar Pradesh Industrial Disputes Act. In order that section 2(i)(iv) apply, evidence must be led to show that the work performed by contract labour is a work which is ordinarily part of the industry of BHEL. On the facts of the instant case, that no such evidence was, in fact, led. Consequently, this finding is also a finding directly applying a provision of law without any factual foundation for the same. [Paras 13-15][514-F, G; 515-B, E, F]
2. In the instant case, the contractor pays the workmen their wages. Secondly, the principal employer cannot be said to control and supervise the work of the employee merely because he directs the workmen of the contractor ‘what to do’ after the contractor assigns/ allots the employee to the principal employer. The Labour Court’s Award being perverse ought to have been set aside in exercise of jurisdiction under Article 226. The workmen have themselves admitted that there is no appointment letter, provident fund number or wage slip from BHEL insofar as they are concerned. Apart from this, it is also clear from the evidence led on behalf of BHEL, that no wages were ever been paid to them by BHEL as they were in the service of the contractor. Further, it was also specifically pointed out that the names of 29 workers were on the basis of a List provided by the contractor in a bid that was made consequent to a tender notice by BHEL. There is nothing on facts to show that the contract labour that is engaged, even de hors a prohibition notification, is in the facts of this case ‘sham’. [Paras 20, 23, 25, 26][520-A, D-F] Basti Sugar Mills Ltd. v. Ram Ujagar and Ors. [1964] 9 SCR 838; Steel Authority of India Ltd. And Ors. v. National Union Waterfront Workers and Ors. (2000) 7 SCC 1 : [2001] 2 Suppl. SCR 343; Swami Krishnanand Govindanand v. Managing Director, Oswal Hosiery (Regd.) (2002) 3 SCC 39 : [2002] 2 SCR 1; C.M. Arumugam v. S. Rajgopal (1976) 1 SCC 863 : [1976] 3 SCR 82; General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lala and Another 2011 (1) SCC 635; Balwant Rai Saluja and Another v. Air India Limited and Others (2014) 9 SCC 407 – relied on.
Calcutta Port Shramik Union v. Calcutta River Transport Association and Others (1988) Supp SCC 768 : [1988] Suppl. SCR 1034; Pepsico India Holding Private Limited v. Grocery Market and shops Board and Others (2016) 4 SCC 493 : [2016] 2 SCR 305; Harjinder Singh v. Punjab State Warehousing Corporation (2010) 3 SCC
192 : [ 2010] 1 SCR 591; Steel Authority of India Ltd. And Others (2001) 7 SCC 1 : [2001] 2 Suppl. SCR 343 – held inapplicable.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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