IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08 .02.2011 CORAM THE HONOURABLE Mrs. JUSTICE R.BANUMATHI W.P.Nos.11475 & 11476 of 2003 W.P.No.11475/2003: Larsen and Toubro Limited, Mylam Road, Sedarapet, Pondicherry-605 111. ... Petitioner Vs. 1.The Presiding Officer, II Addl. District Labour Court, Pondicherry. 2.M.Boothanathan 3.K.Selvam 4.Ramalingam ... Respondents W.P.No.11476/2003: Larsen and Toubro Limited, Mylam Road, Sedarapet, Pondicherry-605 111. ... Petitioner Vs. 1. The Presiding Officer, II Addl. District Labour Court, Pondicherry. 2.D.Ramesh 3.D.Kolanjinathan ... Respondents PRAYER: Writ Petitions filed under Article 226 of Constitution of India praying to issue a Writ of Certiorari or any other Writ or direction in the nature of Writ to call for records relating to the Award dated 31.1.2003 in I.D.Nos.54 & 59/2001 on the file of Labour Court, Pondicherry. For Petitioner : Mr.Sanjoy Mohan for M/s.S.Ramasubramaniam Associates For Respondents : Mr.S.Ayyadurai in 2 to 4 W.P.No.11475/2003 Respondent : Mr.V.Prakash, 2 to 3 Senior Counsel for M/s.K.Ramkumar in W.P.No.11476/2003 https://hcservices.ecourts.gov.in/hcservices/ COMMON ORDER Petitioner seeks Writ of Certiorari to quash the Award of the Labour Court in I.D.Nos.54 and 59 of 2001 dated 31.1.2003 whereby the Labour Court, Pondicherry directed the Petitioner- Management to reinstate the Respondents-Workmen w.e.f. 21.8.1998 with half back wages and with continuity of service and other attendant benefits. 2. Since common points arise for consideration, both the Writ Petitions were taken up together and disposed of by this Common Order. For convenience, the Writ Petitioner is referred as Petitioner-Management and Workmen are referred as 2nd Respondent- Workmen. 3. Briefly stated case of 2nd Respondent-Workmen is that Petitioner-Management is running a factory in manufacturing electrical products in Pondicherry. 2nd Respondent-Workmen acquired ITI technical qualification and they were in continuous service of Petitioner-Management as casual labourers for the period indicated infra. Though, 2nd Respondent-Workmen were engaged as casual labourers, they were treated as permanent workmen in all aspects and the work was extracted from them like any other permanent workmen. Further case of 2nd Respondent-Workmen is that after they had put in service for the period stated infra, Petitioner- Management resorted illegal method of obtaining certain documents signed by them and issuing orders as if they have been appointed as trainees. Totally, 31 workmen were given training agreement and out of them, 25 only absorbed and the remaining workmen including 2nd Respondent-Workmen were denied the job. After conciliation efforts failed, 2nd Respondent-Workmen raised the Industrial Disputes. 4. As per G.O.Rt.No.173/2001/AIL/L dated 21.9.2001 and as per G.O.Rt.No.179/2001/AIL/L dated 03.10.2001, Industrial Disputes were referred to the Labour Court for adjudicating the following:- 1.Whether the non-employment of 2nd Respondent-Workmen – M.Boothanathan, Selvam, Ramalingam, D.Ramesh and D.Kolanjinathan by the Petitioner-Management of M/s.Larsen & Toubro Limited, Pondicherry is justified or not? 2.To what relief/benefits the said workmen are entitled to? 3.To compute the relief, if any, awarded in terms of money if it can be so computed? 5. Petitioner-Management resisted the Industrial Disputes contending that 2nd Respondent-Workmen worked as contract labourers through contractor during the intermittent intervals. According to the Petitioner-Management, 2nd Respondent-Workmen were having no qualification and therefore, by the order dated 08.7.1996, they https://hcservices.ecourts.gov.in/hcservices/ have been appointed as trainees imposing condition that appointment is subject to their passing apprenticeship examination in the first attempt. As per the contract, training period is for two years and no assurance was given to the 2nd Respondent-Workmen for permanent work. According to Petitioner-Management, after the expiry of training period, their services would automatically cease and after the expiry of training, the 2nd Respondent-Workmen were ceased to attend the factory. Case of Petitioner-Management is that 2nd Respondent-Workmen cannot be compelled to take trainees on regular basis despite their inefficiency found during the training period and Petitioner-Management prayed for dismissal of the Industrial Disputes. 6. In the Labour Court, in I.D.No.54/2001, on the side of 2nd Respondent-Workmen Exs.A1 to A7 were marked and on the side of Petitioner-Management, Exs.B1 to B36 were marked. Like wise in I.D.No.59/2001, on the side of 2nd Respondent-Workmen, Exs.A1 to A42 were marked and on the side of Petitioner-Management, Exs.B1 to B14 were marked. No oral evidence was adduced on either side. 7. Upon consideration of evidence, Labour Court held that 2nd Respondent-Workmen were having requisite experience and qualification (ITI) and they have been working for a long period with the Petitioner-Management. Labour Court upheld that Petitioner-Management was not justified in treating the 2nd Respondent-Workmen as mere trainees and subsequently terminating their services in violation of Sec.25-F of Industrial Disputes Act without any notice and without any compensation. Labour Court further held that appointing the 2nd Respondent-Workmen as trainees and training measures were resorted to by the Petitioner-Management is only a device to summarily terminate them without assigning any reason. Pointing out that 2nd Respondent-Workmen have put in 240 days service in a year, Labour Court held that they shall be deemed to be worked in continuous service and they are entitled to reinstatement w.e.f. 21.8.1998 and ordered reinstatement with half back wages with continuity of service and other attendant benefits. 8. In both the Industrial Disputes, the Labour Court framed the following points for consideration:- 1.Whether those three petitioners were working continuously as casual labourers for several years under the respondent management and if so, whether the respondent management subsequently treated those three petitioners as trainees unjustifiably and ultimately terminated them from service under the guise of inefficiency of the petitioners during the training period and on the ground of expiry of contract? 2.Whether the petitioners are entitled for reinstatement? 3.To what relief? https://hcservices.ecourts.gov.in/hcservices/ 9. Taking strong objection as to the above points framed by the Labour Court, Mr.Sanjoy Mohan, learned counsel for Petitioner- Management interalia contended that the points framed by the Labour Court as to whether engagement of the individuals as trainees was justified or not was in excess of jurisdiction of the powers conferred on a Labour Court under Sec.2-A of I.D. Act. In support of his contention, learned counsel for Petitioner placed reliance upon 2006(11) SCALE 567 [Bharat Heavy Electricals Ltd. v. Anila and others]. 10. Mr.V.Prakash, learned Senior Counsel for 2nd Respondent- Workmen in W.P.No.11476/2003 has submitted that the spirit of the Award is that the Management has treated the contract casual labourers as trainees and that their termination is in violation of Sec.25-F of I.D. Act and mere fact that Labour Court has gone into the question of Contract Labour (Regulation & Abolition) Act would not affect the correctness of the Award of Labour Court. Placing reliance upon 2010-II LLJ 175 (Mad) [Management of Bata India Limited, Hosur 635 126 and another v. Presiding Officer, Industrial Tribunal Tamil Nadu Chennai 600 104 and others], it was further submitted that exercising jurisdiction under Article 226 of Constitution of India, the finding of Labour Court can be interfered only to correct the error or law and not otherwise. 11. Mr.S.Ayyadurai, learned counsel for 2nd Respondent- Workmen in W.P.No.11475/2003 has submitted that the alleged offer of employment dated 08.7.1996 issued to 2nd Respondent-Workmen were only as trainees but they were not given any training in the so called period of training and appointing the workmen as trainees was a clear act of unfair labour practice. It was further submitted that services of 2nd Respondent-Workmen was orally terminated by the Management at the end of the alleged training only with a view to deny the permanent status to them and upon consideration of materials on record, Labour Court has rightly ordered reinstatement with half back wages. In support of his contention, learned counsel has placed reliance upon 1970-I LLJ 241 [The Pilot Pen Company (India) Private Limited v. The Presiding Officer, Additional Labour Court, Madras and another] and 1983-I- LLJ 30 [Hutchaiah v. Karnataka State Road Transport Corporation]. 12. Upon consideration of the Award of the Labour Court and submissions of the Counsels, the following points arise for determination in these Writ Petitions:- 1.Whether by considering the question of status of 2nd Respondent-Workmen, Labour Court exceeded its jurisdiction by widening the scope of Sec.2-A of I.D. Act? 2.Whether Labour Court was right in considering the question as to the Contract Labour (Regulation and Abolition) Act, 1970 and whether Labour Court erred in saying that the provision of Contract Labour (Regulation and Abolition) Act, 1970 has not been complied with? https://hcservices.ecourts.gov.in/hcservices/ 3.Whether the Labour Court has committed an error of jurisdiction when it proceed to consider the Apprentice Act which had no application to the case on hand? 13. Point No.2:- Case of 2nd Respondent-Workmen is that Petitioner-Management continuously engaged them as casual labourers and even though, they have been employed as casual labourers and in all aspects, they have been performing the work as that of any permanent workmen. Particulars of period during which the 2nd Respondent-Workmen were engaged as casual labourers and the nature of duties discharged by them are as under:- W.P.No. & I.D.No. Name of employee Period worked as casual labour Nature of work W.P.No.11475/03 I.D.No.54/2001 1) M.Boothathan 2) K.Selvam 3) V.Ramalingam 8.3.95 to 8.7.96 1992 to 8.7.96 10.11.95 to 8.7.96 Galvanising Quality control Quality control W.P.No.11476/03 I.D.No.59/2001 1) D.Ramesh 2) D.Kolanjinathan 21.11.95 to 8.7.96 1.9.94 to 8.7.96 Turner Machine operator 14. According to Petitioner-Management, on application of 2nd Respondent-Workmen [Kolanjinathan dated 12.5.1994 (Ex.B1 in I.D.No.59/2001) and D.Ramesh dated 20.11.1995 (Ex.B2 in I.D.No.59/2001), by the order dated 08.7.1996, 2nd Respondent- Workmen were offered employment as "trainees" which during the first year of training at the stipend of Rs.900/- and during the second year at the stipend of Rs.1000/- per month. 15. By the order dated 08.7.1996 even though 2nd Respondent- Workmen were said to be appointed as trainees, before the Labour Court, the 2nd Respondent-Workmen had produced the ESI cards showing their date of entry into Petitioner-Management as - Kolanjinathan on 1.9.1994; Ramesh on 21.12.1995; Boothathan on 08.3.1995 and Ramalingam on 10.11.1995 [Exs.A27, A28 in I.D.No.59/2001 and Exs.A3 in I.D.No.54/2001]. In the ESI cards [ Exs.A27, A28 in I.D.No.59/2001 and Exs.A3 in I.D.No.54/2001, the employer Code Number is shown as "13433". In all the ESI cards, the employer Code number is shown as "13433" which is the Code number of Petitioner-Management. From the ESI cards produced by the 2nd Respondent-Workmen, Labour Court has held that 2nd Respondent- Workmen have been working even prior to 08.7.1996 i.e. the date of appointing as "trainees". 16. In so far as ESI cards and Identity cards, the Petitioner-Management contended that 2nd Respondent-Workmen were working as casual labourers under the contractor and ESI cards containing Code No.13433 was issued for being engaged as they have been working intermittently through the contractor. Upon consideration of the contention of Petitioner-Management, Labour Court observed that under the Contract Labour (Regulation and Abolition) Act, 1970, the principal employer should get his establishment registered under the said Act for engaging contract https://hcservices.ecourts.gov.in/hcservices/ labourers and that the said contractor should have licence with details of contract labourers and in the absence of such clear arrangements effected under the special enactment, the principal employer would be deemed to be the employer and the contract labourers would be deemed to be directly as workers under the principal employer. Labour Court further observed that in the absence of details about the contractors, the 2nd Respondent-Workmen who were working as casual labourers under the contract, Petitioner-Management shall be deemed to be the employer relating to the workmen. 17. On a careful consideration, this Court is of the view that Labour Court committed an error in arriving at those findings. The Labour Court was not right in saying that in the absence of clear arrangements and documents, the casual labourers would be deemed to be directly as workers under the principal employer is not correct. 18. Assailing the reasoning of Labour Court, learned counsel for Petitioner-Management contended that Labour Court erred in saying that since the Contract Labour (Regulation and Abolition) Act had not been complied with. It was further contended that Labour Court failed to appreciate that there was no pleading to the effect that the provisions of Contract Labour (Regulation and Abolition) Act had not been complied with and the finding of the Labour Court is per se erroneous. 19. Ofcourse, it was nobody's case that the provisions of Contract Labour (Regulation and Abolition) Act had not been complied with. No allegation or oral evidence was let in to substantiate the plea that the Contract Labour (Regulation and Abolition) Act had not been complied with. Labour Court misconstrued the provision of Contract Labour (Regulation and Abolition) Act finding that in the absence of details about the contractor, the 2nd Respondent-Workmen who were then working as casual labourers shall be deemed to be the workmen under the principal employer is erroneous. 20. Labour Court also misconstrued the provisions of the Act merely because principal employer has not produced the documents or that they have not been complied with certain provisions, 2nd Respondent-Workmen do not automatically become the employees under the principal employer. There are well recognised tests to determine whether contract labourer is under the direct employment of the principal employer. Since the said issue is not raised before the Labour Court, we need not elaborate upon the same. 21. Labour Court erred in saying that in the absence of such clear arrangements effected under the special enactment, the principal employer would be deemed to be the employer and the contract labourers would be deemed directly as workers under the principal employer. Even though, Labour Court has observed that the provisions of Contract Labour (Regulation and Abolition) Act https://hcservices.ecourts.gov.in/hcservices/ has not been complied with, the said finding does not form a basis of the Award. In my considered view such an erroneous finding of the Labour Court does not affect the correctness of the Award and Point No.2 is answered accordingly. 22. Point No.1:- In their Petitions, 2nd Respondent-Workmen have categorically stated that prior to their appointment as trainees, they were engaged as casual labourers and they were discharging the work like any other permanent workmen. Even though Petitioner-Management has taken the plea that 2nd Respondent-Workmen have been intermittently engaged through the contractor, Petitioner-Management has not come out with the details of contractors. Labour Court took the view that services of the workmen was orally terminated by the Management at the end of the period of alleged training with a view to deny them permanent status. Labour Court further held that taking the 2nd Respondent- Workmen as trainees and the alleged training measures were only as a device to summarily terminate the services of the 2nd Respondent- Workmen without complying the provisions of Sec.25-F of I.D. Act. 23. Learned counsel for Petitioner-Management has submitted that in exercising jurisdiction of the powers under Sec.2-A of I.D. Act, the issue before the Labour Court is whether non-employment of the individual concerns was justified or not and while so, Labour Court went into the question beyond the jurisdiction by framing an issue as to whether engagement of 2nd Respondent-Workmen as trainees was justified or not. It was further submitted that sitting in jurisdiction under Sec.2-A of I.D. Act, Labour Court cannot go into the question that could be decided only in a reference under Sec.10 of I.D.Act. Placing reliance upon 2006 (11) SCALE 567 [Bharat Heavy Electricals Ltd. v. Anila and others], it was contended that there is a difference between an individual dispute under Sec.2-A of I.D. Act whereas Sec.2(i) of I.D. Act covers a wider field. In the said decision, the Supreme Court observed as under:- "13. .... There is a difference between an individual dispute which is deemed to be an industrial dispute under Section 2-A of the said 1947 Act on one hand and an industrial dispute espoused by the union in terms of Section 2(i) of the said 1947 Act. An individual dispute which is deemed to be an industrial dispute under Section 2-A concerns discharge, dismissal, retrenchment or termination whereas an industrial dispute under Section 2(i) covers a wider field. It includes even the question of status. This aspect is very relevant for the purposes of deciding this case. In the case of Radhey Shyam and another v. State of Haryana and another, 1998 II LKLJ 1217, it has been held after considering various judgments of the Supreme Court that, Section 2-A contemplates nothing more than to declare an individual dispute to be an industrial dispute. It does not amend the definition of industrial dispute set out in Section 2(k) of the Industrial Disputes Act, 1947 (which is similar to https://hcservices.ecourts.gov.in/hcservices/ Section 2(i) of the said 1947 Act). Section 2-A does not cover every type of dispute between an individual workman and his employer. Section 2-A enables the individual worker to raise an industrial dispute, notwithstanding, that no other workmen or union is a party to the dispute. Section 2-A applies only to disputes relating to discharge, dismissal, retrenchment or termination of service of an individual workman. It does not cover other kinds of disputes such as bonus, wages, leave facilities etc." 24. It is fairly well settled that individual dispute under Sec.2-A of I.D. Act concerns discharge, dismissal, retrenchment or termination whereas Sec.2(i) of I.D. Act covers wider field. In the instant case, even though, the issue related to non-employment of 2nd Respondent-Workmen, the parties did raise an issue as to the status of 2nd Respondent-Workmen. In I.D.No.59/2001, the 2nd Respondent-Workmen have clearly averred that they have been offered employment by the Petitioner-Management as casual labourers and after undergoing a thorough process of selection and interview, they were appointed as casual labourers and that they have been placed on par with the other permanent workers on the aspects of job responsibilities. 2nd Respondent-Workmen further averred that taking advantage of fiduciary relationship and the commanding position, Petitioner-Management took the signature of the 2nd Respondent-Workmen in sending the documents and issued the order dated 08.7.1996 as if the 2nd Respondent-Workmen were appointed as "trainees". 25. Before the Labour Court, Management has filed counter denying the offer of employment by the Management in the capacity of casual labourers. Petitioner-Management took a stand that 2nd Respondent-Workmen accepted the offer of "trainee" and having accepted the offer as trainee, the 2nd Respondent-Workmen cannot turn round and contend that they have been previously employed as casual labourers. 26. Considering the averments in the Petition and the counter-affidavit, it is clear that prior employment of 2nd Respondent-Workmen was specifically pleaded and Petitioner- Management has also traversed the said pleading. When the plea had been specifically pleaded by the Workmen and traversed by the Petitioner-Management and when the parties produced evidence on that issue, framing of point for determination as to whether the status of workmen and the finding of the Labour Court on that point cannot be said to be in excess of jurisdiction. When the parties went on trial knowing fully well and when they were required to prove and when they have adduced evidence in support of their respective pleas and when the evidence was considered by the Labour Court, Petitioner-Management cannot turn round and contend that Labour Court exceeded its jurisdiction in widening the scope of Sec.2-A of I.D. Act. It is pertinent to note that in its counter- affidavit, Petitioner-Management has not raised any plea that Labour Court has no jurisdiction to go into the status of the 2nd https://hcservices.ecourts.gov.in/hcservices/ Respondent-Workmen. There is no force in the contention that exercising jurisdiction under Sec.2-A of I.D. Act, Labour Court exceeded its jurisdiction in considering the status of the 2nd Respondent-Workmen and Point No.1 is answered accordingly. 27. Point No.3:- In the offer of employment as trainee, it was stated that the appointment is subject to passing of apprenticeship examination in the first attempt and production of certificate to that effect. Learned counsel for Petitioner- Management has submitted that this was not the case covered by Apprentice Act. Considering the clause in the order of appointment as trainee, Labour Court held that the provisions of Apprentice Act has to be considered in the light of the fact established in the case. Adverting to the same, Labour Court proceeded to examine the point whether Management complied with the provisions of the Apprentice Act and further observed that Petitioner-Management could not produce any evidence that it has complied with the provisions of Apprentice Act. Learned counsel for Petitioner- Management has submitted that this was not the case covered by Apprentice Act and while so, Labour Court proceeded to hold that engagement of traineeship was not in accordance with the Apprenticeship Act. It was further submitted that in the said process, Labour Court has failed to appreciate that it was nobody's case that the training was under Apprentice Act. Learned counsel would further contend that all the parties have agreed that Model Standing Orders were applicable to the establishment and that in terms of that Act and Model Standing orders, engagement of trainees was permitted. Learned counsel would further contend that by examining the question of compliance of the provision of Apprentice Act, Labour Court has committed a serious error of jurisdiction when proceeded to consider the case as one covered by the Apprentice Act, 1961. 28. No doubt, question of application of Apprentice Act was not raised before the Labour Court. Case of Management was that by the offer of employment dated 08.7.1996, 2nd Respondent-Workmen were taken as trainees and based upon their performance appraisal, the 2nd Respondent-Workmen were unsuccessful and they were relieved as per the terms of the Act. According to Petitioner-Management, one of the important features of the contract was that the training period of two years will automatically come to an end and no pay or retrenchment compensation will be payable to the trainees. It is seen from the documents Exs.B11 to B14 in I.D.No.59/2001 and Exs.B5 to B36 in I.D.No.54/2001, no training measures seem to have been imparted to the 2nd Respondent-Workmen. But the performance appraisal would clearly show that the 2nd Respondent-Workmen were doing the works of permanent nature. Based upon the materials available on record, Labour Court has rightly held that offer of training was only a device to summarily terminate the 2nd Respondent-Workmen without assigning any reason. https://hcservices.ecourts.gov.in/hcservices/ 29. While speaking about the powers under Article 226 of Constitution of India, in (1997) 1 SCC 134 [Ramniklal N. Bhutta and another v. State of Maharashtra and others], the Supreme Court observed as follows:- "10. .... The power under Article 266 is discretionary. It will be exercised only in furtherance of interests of justice and not merely on the making out of a legal point. And in the matter of land acquisition for public purposes, the interests of justice and the public interest coalesce. They are very often one and the same. Even in a civil suit, granting of injunction or other similar orders, more particularly of an interlocutory nature, is equally discretionary. The Courts have to weigh the public interest vis-a-vis the private interest while exercising the power under Article 226 – indeed any of their discretionary powers. It may even be open to the High Court to direct, in case it finds finally that the acquisition was vitiated on account of non-compliance with some legal requirement that the persons interested shall also be entitled to a particular amount of damages to be awarded as a lumpsum or calculated at a certain percentage of compensation payable. ....." 30. Dealing with the powers of the High Court against the orders of the Tribunal, in (2000) 7 SCC 522 [Shama Prashant Raqje v. Ganpatrao and others], the Supreme Court held that the High Court under Article 226 of Constitution of India cannot convert itself into a Court of appeal and examine the facts for correctness of the decision as to whether the view is proper or not. In Paragraph (5), the Supreme Court observed as follows:- 5. .... Undoubtedly, in a proceeding under Articles 226 and 227 of the Constitution the High Court cannot sit in appeal over the findings recorded by a competent Tribunal. The jurisdiction of the High Court, therefore, is supervisory and not appellate. Consequently, Article 226 is not intended to enable the High Court to convert itself into a