High Court · 2012

Order

While W.P.No.26942 of 1999 is filed by HMT Bearings Limited Contract and Casual Labour’s Union (hereinafter called as the ‘Union’) seeking a direction for regularization of the services of the members of the Union based on the report dated

12.05.1998 of the Assistant Labour Commissioner, Ranga Reddy District, and the report of the Regional Labour Commissioner, A.P, Hyderabad

(first respondent); W.P. No.27023 of 1999 is filed by HMT Bearings Limited (hereinafter called as the ‘Company’) to declare all the proceedings, leading upto and including the report dated 24.12.1999 of the first respondent, as illegal; to direct the first respondent to undertake the role of the Conciliation Officer in terms of the Industrial Disputes Act; and to send his report to the Government. It would suffice, for the purposes of disposal of both these Writ Petitions, if reference is made to the proceedings of the Assistant Commissioner of Labour, Ranga Reddy District, Circle-I dated 12.05.1998, and the proceedings of the Regional Labour Commissioner, A.P, Hyderabad (first respondent) dated

24.12.1999. By his proceedings dated 12.05.1998, the Licencing Authority, under the Contract Labour (Regulation and Abolition) Act, 1970, referred to various judgments of the Supreme Court and this Court and, placing reliance on the judgment of the Supreme Court in Air India Statutory Corporation v. United Labour Union [1] , held that the contract labourers, annexed to the order, should be treated as the workmen of M/s.HMT Bearings Limited from the date of their first employment in the Company. Subsequently the first respondent, by his letter dated

24.12.1999, addressed to the Registrar of this Court, stated that, as per the directions of this Court in W.P.No.4773 of 1996 dated 23.02.1999, a report was being sent in compliance with the aforesaid order of this Court. It is useful, in this context, to refer to the order passed by this Court in W.P.No.4773 of 1996 dated 23.02.1999. This Court, on the representation of both the Counsel that the issue involved had already been referred to the first respondent, observed that, since the matter had already been referred to the Conciliation Officer, the Writ Petition be disposed of with a direction to him to dispose of the matter within a period of three months. Neither did this Court call for a report from the first respondent, nor was he justified in sending a report directly to the Registrar of this Court. Be that as it may, the first respondent, placing reliance on the notification No.779(E) dated 09.12.1976 of the Government of India, and on Air India Statutory Corporation1, held that engagement of contract labour by the Company was sham; there was nothing to adjudicate; the Company had been advised to comply with the directions in Air India Statutory Corporation1; and to take appropriate action. Dr.P.B.Vijay Kumar, Learned Counsel for the Company, would draw attention of this Court to the Constitution Bench judgment of the Supreme Court in Steel Authority of India Limited v. National Union Water Front Workers [2] in support of his contention that, the earlier judgment in Air India Statutory Corporation1 has since been overruled; reliance placed by the first respondent thereupon was of no avail; and his proceedings, advising the Company to comply with the directions in Air India Statutory Corporation1, does not necessitate compliance. In Steel Authority of India Limited2 the Supreme Court observed:- The upshot of the above discussion is outlined thus: (1) (a) Before January 28, 1986, the determination of the question whether Central Government or the State Government, is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression appropriate Government as stood in the CLRA Act, on the answer to a further question, is the industry under consideration carried on by or under the authority of the Central Government or does it pertain to any specified controlled industry; or the establishment of any railway, cantonment board, major port, mine or oilfield or the establishment of banking or insurance company? If the answer is in the affirmative, the Central Government will be the appropriate Government; otherwise in relation to any other establishment the Government of the State in which the establishment was situated, would be the appropriate Government, (b) After the said date in view of the new definition of that expression, the answer to the question referred to above, has to be found in clause (a) of Section 2 of the concerned Central Government Industrial Disputes Act; company/undertaking or any undertaking is included therein eo nomine, or (ii) any industry is carried on (a) by or under the authority of the Central Government, or (b) by railway company; or (c) by specified controlled industry, then the Central Government will be the appropriate Government otherwise in relation to any other establishment, the Government of the State in which that other establishment is situated, will be the appropriate Government. (2) (a) A notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government : (1) after consulting with the Central Advisory Board or the State Advisory Board, as the case may be, and; (2) having regard to (i) (i) conditions of work and benefits provided for the contract labour in the establishment in question; and (ii) other relevant factors including those mentioned in sub-section (2) of Section 10; (b) inasmuch as impugned notification the Central Government on December 9, 1976 does not satisfy the afore-said requirements of Section 10, it is quashed but we do so prospectively i.e. from the date of this judgment and subject to the clarification that on the basis of this judgment no order passed or no action taken giving effect to the said notification on or before the date of this judgment, shall be called in question in any tribunal or court including a issued by High Court if it has otherwise attained finality and/or it has been implemented. (3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under sub- section (1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment; (4) We over-rule the judgment of this court in Air India Statutory Corporation prospectively and declare industrial that any direction adjudicator/any court including High Court, for absorption of contract labour following the judgment in Air India Statutory Corporation, shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final. issued by any (5) On issuance of prohibition notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder. (6) If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications. It is evident therefrom that the earlier judgment in Air India Statutory Corporation1 was overruled prospectively, and the Supreme Court declared that, any direction issued by any industrial adjudicator or any Court including this Court for absorption of contract labour following the aforesaid judgment should be held good; and the same shall not be set aside on the basis of Steel Authority of India Limited2 in cases where such a direction had been given effect to, and had become final. Since the order of the first respondent has neither been implemented by the Company nor has any direction been issued by this Court to do so, the proceedings of the first respondent dated 24.12.1999 has not attained finality and, consequently, it is the judgment in Steel Authority of India Ltd. which is applicable. As the first respondent has relied on the judgment in Air India Statutory Corporation1 which has since been overruled and, though given prospective application, would apply to the present case in view of the law laid down in Steel Authority of India Limited2 (para 125 extracted hereinabove), the proceedings dated 24.12.1999 of the first respondent, and all proceedings prior thereto, which placed reliance on Air India Statutory Corporation1 must be and is, accordingly, set aside. It is indeed curious that the first respondent should forward a report to the Registrar of this Court, when he was not even directed to do so. The first respondent, acting as a Conciliation Officer under Industrial Disputes Act, empowered to send his report only the appropriate Government. Ends of justice would be met if both the Writ Petitions are disposed of directing the first respondent to forward his report to the Central Government within one month from the date of receipt of a copy of this order. The Central Government shall, within three months from the date of receipt of the report from the first respondent, take an appropriate decision whether or not to refer, the dispute raised, for adjudication before competent Tribunal. The Writ Petitions stand disposed of accordingly. However, in the circumstances, without costs. RAMESH RANGANATHAN,J Date:04.10.2012 [1] [2] 1997 (9) SCC 377 2001 SCC (L&S) 1121