IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:06.06.2011 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION NO.5234 of 2011 and M.P.No.1 of 2011 .. Sanmina SCI Thozhilalar Sangam Affiliated with Podhu Thozhilalar Sangam (Registration No.504/CPT) No.296, Gandhi Road Kanchipuram 631 501. .. Petitioner vs. 1.Commissioner of Labour DMS Compound Teynampet, Chennai 600 006. 2.Assistant Commissioner of Labour Irunkattukottai SIPCOT Irunkattukottai, Sriperumbudur Kanchipuram District. 3.Sanmina SCI India Pvt., Ltd., rep. By its Managing Director OZ-1, SIPCOT HI-Tech SEZ Oragadam, Sriperumbudur Taluk Kanchipuram District. .. Respondents Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of certiorarified mandamus Calling for the records of the 3rd respondent paper notification published in the Daily Dina Thanthi on 20.02.2011 and quash the same and consequently direct the 3rd respondent to resolve the workers demand. For petitioner : Mr.N.G.R.Prasad for M/s.Row & Reddy For respondents : Mr.Vijayanarayanan,Sr.Counsel for M/s.Gupta & Ravi for R.3 https://hcservices.ecourts.gov.in/hcservices/ ORDER The writ petition is directed against the notification published by the third respondent in ‘Dina Thanthi’ dated 20.2.2011 and for a consequential direction against the third respondent to resolve the workers demand. 2. As per the notification issued by the newspaper, the third respondent asked for applications for appointment of persons on contract basis for Sanmina SCI Electronics Corporation and Nokia Simens Network, situate at Oragadam, fixing the educational qualification as Plus Two, ITI pass for men and women in the age limit between 19 and 28 years on a monthly salary of Rs.5600/- with food and transport facilities free, with a condition to work on contract basis in Nokia calling for applications from men and women who have passed 10th Standard, Plus Two failed in the age group of 19 to 25 years. 3. The writ petitioner is a Thozhilalar Sangam, which is a Union registered under the Trade Unions Act, in which the workers of the third respondent Company are its members. The list of workers is furnished in the typed set of papers. The third respondent has got a factory inside the Irungattukottai SIPCOT, which is engaged in the manufacture of parts supporting mobile signal and parts of mobile tower and server and it is a multi-national company. (a) It is stated that out of 700 workers in the third respondent, nearly 200 workers are in the petitioner Union. The third respondent is 100% export oriented company, enjoying the concessions of the Government. According to the petitioner Union, the third respondent is adopting various unfair labour practice methods like, engaging contract workers in the place of regular workers. (b) On 28.7.2010, the petitioner union made a charter of demands to the management and since there was no settlement, there was a strike notice issued on 8.9.2010 and thereafter, the third respondent management, according to the petitioner, started unfair labour practice by threatening workers to call off strike. (c) It is stated that as per the advice given by the Joint Commissioner of Labour, Chennai, the petitioner Union has called off the strike and reported for work and in spite of it, the problems were not solved. Therefore, on 27.1.2011, the petitioner Union issued a second strike notice proposing to go on strike on 10.2.2011 https://hcservices.ecourts.gov.in/hcservices/ or any day thereafter and the issue was relating to Basic Pay, D.A., H.R.A., other allowances, etc. Since there was a threatening attitude by the third respondent, the petitioner Union went on strike on 15.2.2011. (d) Pending the same, the third respondent issued the present notification in the newspaper on 20.2.2011, calling for persons to work on contract basis. According to the petitioner, this is an unfair labour practice under clauses (6) and (10) of Schedule-V to the Industrial Disputes Act, 1947. It is stated that the third respondent is insisting the workers to give an undertaking to the effect that they will not indulge in strike and this is also an unfair labour practice. (e) While the permanent workers are on strike, the third respondent is recruiting contract workers by issuing public notification, which is disobedience to the labour legislation. The Madras Export Promotion Zone (MEPZ) took an exception to the peaceful demonstration of the petitioner on 16.2.2011. The MEPZ authorities also removed the articles at the behest of the third respondent and therefore, the present writ petition is filed challenging the notification on various grounds including that the peaceful demonstration cannot be obstructed by the third respondent; that the demonstration outside the factory premises and inside the MEPZ compound cannot be obstructed and such obstruction would be against the judgement of the Supreme Court in B.R.Singh and others v. Union of India and others [(1989) 4 SCC 710] since the right of demonstration is a democratic right of the trade Union; that the act of the third respondent is contrary to the law and various judgments and the third respondent is trying to implement the notification, which will affect the rights of the workers and therefore, the present writ petition has been filed. 4.In the counter affidavit filed by the third respondent, it is stated that the writ petition is not maintainable as the third respondent is not a State or authority under Article 12 of the Constitution of India, but it is a private limited company and the third respondent is not performing any statutory or public duty. (a) On merits, it is stated that the petitioner has no locus standi to represent the employees of the third respondent and it is not having representative character. It is stated that overwhelming majority of the workers of the third respondent are not members of the petitioner Union and only a handful of employees under the banner of the petitioner are indulging in illegal activities. (b) It is stated that the third respondent is a wholly owned subsidiary of Sanmina SCI incorporated in the State of https://hcservices.ecourts.gov.in/hcservices/ California, United States and it has factories throughout the world and the third respondent which is incorporated in India has its factory at SIPCOT HITECH Special Economic Zone at Oragadam. (c) It is stated that the products manufactured by the third respondent are used in critical areas like telecommunication, defence, multimedia, enterprise computing energy and power sectors. The third respondent also manufactures base stations for 2G and 3G Spectrum telecommunication. The supply to the Telecom Industry is time bound in view of the fact that the Telecom Lincensees will have to roll out their services within the time prescribed in the licence granted to them and start using the spectrum allocated to them, failing which they will be liable for all consequences to the Telecom Regulatory Authority. (d) The third respondent also manufactures several critical equipments, which are supplied to the army and air force for use in ground as well as air borne radars. Therefore, the functioning of the third respondent is in public interest and it is also vital for the security of the country. (e) The third respondent commenced production at Oragadam in the year 2009 and salary paid to the workmen is above the wages paid by other establishments located in other regions and the wages is also being increased from 1.2.2011. It is stated that the third respondent has also obtained a certificate of registration for engagement of contract labour in non-core areas and entered into contract with several contractors who provide the necessary services engaging their own labour. (f) It is stated that a handful of workmen formed the petitioner Union and they instigated and threatened the majority of workmen, who are not even its members with the intention to create industrial unrest and in December, 2010, they started creating disturbances in the canteen, falsely complaining that the quality of food served is not as per the standards. It was, in those circumstances, the contractor who was entrusted with the canteen was removed and the same has been entrusted to the workmen themselves to conduct the canteen. Since there was no opportunity to cause further disturbances, according to the third respondent, they started threatening the women employees from reporting for work. (g) On 15.2.2011 some workmen indulged in stay-in-strike for a period of two days and thereafter, at the intervention of some authorities, they were removed from the factory premises and a dispute was raised before the Joint Commissioner of Labour alleging that they had given a notice of strike. In January, 2011, there was a manifold increase in the demand for products manufactured by the third respondent from the Telecom and Defence sectors and that https://hcservices.ecourts.gov.in/hcservices/ necessitated the induction of additional man power on emergency basis. (h) It is in order to scale up the production, it was decided to recruit additional employees and since substantial workmen employed through contractors in non-core areas were readily available, it was decided to consider them for employment and after evaluating their suitability, the third respondent recruited 200 workmen on its rolls. It is stated that the third respondent also recruited trainees in order to impart training on a sustained basis so that a trained man power would be available to be tapped in the event of increase in man power requirements. (i) It is stated that the third respondent anticipated that it would require additional man power of as much as 800 employees in various roles. The prayer to quash the publication made in the newspapers, according to the third respondent, is not maintainable and even the advertisement has not been issued by the third respondent and the same has been issued by one of the contractors for recruitment of manpower not only in respect of the third respondent, but also with respect to other companies and it is stated that the third respondent has not issued the impugned advertisement, nor did they require any contractor to issue any such advertisement. (j) It is also stated that the advertisement itself clearly shows that the recruitment is done by the contractor to fulfill the requirements of man power in pursuance of contract with various establishments. It is denied that the third respondent is engaging contract workers in the place of regular workers and indulging in unfair labour practice and the allegation is totally false. Further, the allegation that the third respondent has tried to break the peaceful demonstration by the workers is false. However, it is stated that the petitioner has no right to hold the demonstration in front of factory gate to prevent ingress and egress and when once large majority of workmen did not wish to participate in such an activity, it was improper for the petitioner Union to indulge in the demonstration. (k) It is stated that even though the activities of the petitioner are unlawful, there has been periodical negotiations with the entire group of workmen and several welfare measures are being implemented. It is denied that the management is involved in any unfair labour practice. It is also denied that pending strike, the third respondent has issued the notification calling for contract workers. https://hcservices.ecourts.gov.in/hcservices/ (l) It is specifically stated that the third respondent has not issued the impugned advertisement but, on the contrary, it has been published by the contractor concerned pursuant to his contract. It is also stated that only few employees abstained from the work and large workmen continue to work. It is stated that MEPZ authorities have acted only in the best interest of the third respondent and some of workmen have stopped the buses carrying the workmen to the factory premises, threatened and intimidated them. It is stated that as many as 50 employees were prevented from entering the factory premises taking advantage of the stay granted by this Court and therefore, it is prayed that the interim order of stay granted by this Court must be vacated. 5. It is the contention of Mr.N.G.R.Prasad, learned counsel for the petitioner Union that the very purpose of advertisement is to replace the existing permanent workers by the contract workers and that would amount to unfair labour practice, especially when the demands of the petitioner Union are still pending. He would refer to Schedule I to the Industrial Disputes Act,1947 to show that the conduct of the third respondent would amount to unfair labour practice. It is his submission that the conduct of the third respondent in indirectly calling for such appointment would amount to the breach of constitutional integrity. He would rely upon the judgment of the Supreme Court in Harjinder Singh vs. Punjab State Warehousing Corporation [(2010) 3 SCC 192] apart from the judgments in Standard Vacuum Refining Company of India Ltd., vs. Their Workmen and another (1960 (2) LLJ 233) and People's Union for Democratic Rights and others vs. Union of India [AIR 1982 SC 1473]. According to the learned counsel, nearly 68 persons have been appointed on contract basis and that will be opposed to law. He would also rely upon the judgment in Jaipur Zila Sahakari Hoomi Vikas Bank Ltd., vs. Ram Gopal Sharma and others [(2002) 2 SCC 244]. 6. On the other hand, Mr.Vijay Narayan, learned senior counsel appearing for the third respondent would submit that the prayer in the writ petition is not maintainable and the petitioner Union wanted to quash the newspaper advertisement not issued by the third respondent. According to him, it is a contractual matter which cannot be entered into by this Court under Article 226 of the Constitution of India. Even if the writ petition is allowed, according to him, there cannot be any interim order as claimed by the petitioner for injunction against the third respondent from recruiting any workman since the advertisement has not been issued by the third respondent. According to the learned senior counsel for the third respondent, even if the third respondent has issued https://hcservices.ecourts.gov.in/hcservices/ such advertisement, no writ will lie. It is stated that the strike has been called off unconditionally by the workmen and the question whether all permanent workers had joined the company in 2008 as contract labourers is not a subject matter of the writ petition and the dispute regarding the question of fact cannot be decided under Article 226 of the Constitution of India. It is submitted that 1350 persons are working including permanent and contract labourers and only a handful of workers are staying out. According to the learned senior counsel, the contract labourers have no right under the Industrial Disputes Act and section 33 of the Industrial Disputes Act does not apply to the contract labour, by relying upon the judgment in [AIR 2001 SC 3527]. According to him, there is no statutory right on the part of the petitioner and there is no violation of any provision of the Act which is also not the case of the petitioner. According to the learned senor counsel, the Contract Labour Rules give certain permissions. As far as concession is concerned, the learned senior counsel submitted that the third respondent is having abundant concessions as per the policy of the Government, which cannot be tainted to be illegal. He would rely upon the judgments in G.Bassi Reddy vs. International Crops Research Institute and another [(2003) 4 SCC 225], Lt.Col.M.J.Reddy vs. The Deputy High Commissioner, British Deputy High Commission, Chennai [2010 (3) CTC 834], ICICI Bank Ltd., vs. Lakshminarayanan [2009 (1) CTC 22] and Management of GE Power Controls Pvt., ltd., vs. Workmen of GE Power Controls Private Ltd., [2005 (1) LLN 285]. 7. On a reference to the impugned advertisement, there is absolutely nothing to show that the same has been issued by the third respondent. However, the contents of the advertisement show that the advertisement seeks to make appointment on contract basis also in respect of the third respondent company apart from many other companies like, Nokia, etc. For proper appreciation, it is relevant to extract the impugned advertisement: "Ml;fs; njit brd;id mUnf Xuflk; gFjpapy; cs;s Sanmina Sci vyf;l;uhdpf;!; epWtdj;jpw;Fk;. Nokia Simens Network epWtdj;jpw;Fk; xg;ge;j mog;gilapy; gzpg[hpa Mz;fs;. bgz;fs; njit/ fy;tp jFjp +2. ITI njh;r;rp/ taJ tuk;g[ 19 Kjy; 28 tiu. khjr; rk;gsk; U:/5600. czt[. g!; trjp ,ytrk; kw;Wk; Nokiatpy; xg;ge;j mog;gilapy; gzpg[hpa Mz;fs;. bgz;fs; njit 10th, +2 Fail. taJ tuk;g[ 19 Kjy; 25 tiu/ https://hcservices.ecourts.gov.in/hcservices/ ehs; 21/02/2011. neuk; fhiy 10/00 kzp Kjy; khiy 5/00 kzp tiu neh;Kf njh;t[ eilbgWk; ,lk;: SRM ncwhl;ly; (gp) ypkpbll;. bghj;njhp. jhk;guk; br';fy;gl;L ,ilna (g!; ,uapy; ,w';Fkplk; (bghj;njhp) fh";rpg[uk; khtl;lk; 603 203. bry;: 99418 12929 / 93809 32830" 8. The third respondent in the counter affidavit, in no uncertain terms, states that it has not given the said impugned advertisement and the same appears to have been issued by one of the contracts of man power. On facts, it is clear that there is nothing to show that the permanent employees of the third respondent company are either going to be removed or replaced by such contract employees. The third respondent in the counter affidavit has also stated that the intention of the third respondent is not to remove any of its permanent employees. It is also categorically stated by the third respondent in the counter affidavit that at no point of time, the contract workmen were engaged in the place of regular workers. If the petitioner Union when it consists of any number of workmen who are the permanent workers, raises any dispute regarding the conditions of service and for that purpose, resorts to any method which is prescribed under the Industrial Disputes Act, the same is different. But, the petitioner has filed the present writ petition challenging the advertisement on surmises that the permanent workmen of the third respondent company in which some of the members of the petitioner Union are working, are likely to be replaced by the contract workers. On the specific stand taken by the third respondent in the counter affidavit that it does not desire to replace any of its permanent workmen, in my considered view, the writ petitioner has no grievance as on date. Even assuming that the third respondent by issuing the advertisement through the third party contractor, has taken steps to replace the permanent workmen, the petitioner Union has got definite right and remedy available under the Industrial Disputes Act and therefore, in my considered view, the present writ petition is premature. 9. As far as the claim of the petitioner to have agitation in peaceful manner is concerned, the same, if it is permissible under the Industrial Disputes Act, cannot be certainly obstructed, but, as on date, on the specific stand taken by the third respondent company in the counter affidavit, I am of the very firm view that the writ petition has been filed based on surmises. https://hcservices.ecourts.gov.in/hcservices/ 10. The judgment of the Supreme Court in Standard Vacuum Refining Company of India Ltd., vs. Their Workmen and another (1960 (2) LLJ 233), on which the reliance was placed by the learned counsel for the petitioner has no relevance to the facts of the present case. That was relating to abolition of contract labour system and an attempt was made for the purpose of replacing the permanent workmen by virtue of contract labour system. But, that is not the case on hand. 11. In the absence of the third respondent having issued the impugned advertisement and on the specific stand raised in the counter affidavit of the third respondent disowning the same, the judgment of the Supreme Court in Andi Mikta Sadguru Shree Mukherjee Vandas Swami Suvarana Jayanthi Mahotsav Smarak Trust vs. V.R.Rudani [(1989) 2 SCC 691], which was relied upon by the learned counsel for the petitioner has no application. 12. Again, the judgment in Mathura Refinery Mazdoor Sangh vs. IOC Ltd., [(1991) 2 SCC 176] on which reliance was placed by the learned counsel for the petitioner, relates to casual labourers and the decision of the Tribunal holding that the labourers employed by the contractors were not Refinery employees and they were working under the contractors. It was held that their termination was justified, but, with a suggestion by way of relief for consideration by Advisory Board about continuation of contract labour system in the Refinery. Certainly, the said judgment is not applicable to the facts of the present case. 13. The judgment in National Federation of Railway Porters, Vendors and Bearers vs. Union of India [(1995) Suppl. 3 SCC 152] relates to absorption of contract labourers as per the provisions of Contract Labour (Abolition and Regulation) Act, 1972 and the same is not applicable to the facts of the present case. On the facts of the case, we are not concerned with the above said Act and it is also not even the case of the petitioner Union. 14. Further, law is well established in respect of the principle of laissez faire which has been reiterated in Harjinder Singh vs. Punjab State Warehousing Corporation [(2010) 3 SCC 192] by the Hon’ble Mr.Justice G.S.Singhvi in the following paragraphs: https://hcservices.ecourts.gov.in/hcservices/ " 27. In 70s, 80s and early 90s, the courts repeatedly negated the doctrine of laissez faire and the theory of hire and fire. In his treatise: Democracy, Equality and Freedom, Justice Mathew wrote: “The original concept of employment was that of master and servant. It was therefore held that a court will not specifically enforce a contract of employment. The law has adhered to the age- old rule that an employer may dismiss the employee at will. Certainly, an employee can never expect to be completely free to do what he likes to do. He must face the prospect of discharge for failing or refusing to do his work in accordance with his employer’s directions. Such control by the employer over the employee is fundamental to the employment relationship. But there are innumerable facets of the employee’s life that have little or no relevance to the employment relationship and over which the employer should not be allowed to exercise control. It is no doubt difficult to draw a line between reasonable demands of an employer and those which are unreasonable as having no relation to the employment itself. The rule that an employer can arbitrarily discharge an employee with or without regard to the actuating motive is a rule settled beyond doubt. But the rule became settled at a time when the words ‘master’ and ‘servant’ were taken more literally than they are now and when, as in early Roman Law, the rights of the servant, like the rights of any other member of the household, were not his own, but those of his paterfamilias. The overtones of this ancient doctrine are discernible in the judicial opinion which rationalised the employer’s absolute right to discharge the employee. Such a philosophy of the employer’s dominion over his employee may have been in tune with the rustic simplicity of bygone days. But that philosophy is incompatible with these days of large, impersonal, corporate employers. The conditions have now vastly changed and it is difficult to regard the contract of employment with large-scale industries and government enterprises conducted by bodies which are created under special statutes as mere contract of personal service. https://hcservices.ecourts.gov.in/hcservices/ Where large number of people are unemployed and it is extremely difficult to find employment, an employee who is discharged from service might have to remain without means of subsistence for a considerably long time and damages in the shape of wages for a certain period may not be an adequate compensation to the employee for non-employment. In other words, damages would be a poor substitute for reinstatement. The traditional rule has survived because of the sustenance it received from the law of contracts. From the contractual principle of mutuality of obligation, it was reasoned that if the employee can quit his job at will, then so too must the employer have the right to terminate the relationship for any or no reason. And there are a number of cases in which even contracts for permanent employment i.e. for indefinite terms, have been held unenforceable on the ground that they lack mutuality of obligation. But these cases demonstrate that mutuality is a high-sounding phrase of little use as an analytical tool and it would seem clear that