Case: M/S. The Abu Marble Mining Private Limited Vs. The Regional Directors

accordingly held that the employees working at the site were not covered by the definition of "employee" under Section 2(9).On the other hand, on behalf of the respondents, their learned counsel has firstly placed reliance in the judgment of ESIC Vs. Premier Timber Supplies, 1991 1 CLR 669 to contend that even temporary employees as well as causal employees are covered. There can be no dispute that they will be covered if the employees are employed by the principal employer in work connected with or incidental to the work of the factory. In M/s. Siddheshwar & Co., Hubli Vs. ESIC, 1998 LAB I.C.157, the issue before the learned Single Judge of the Karnataka High Court was whether casuals employed would be covered. The learned Judge observed that even if the employees are unidentified today or not was irrelevant and in the light of that, dismissed the Appeal preferred by the company. In Poona Industrial Hotel Ltd., Vs. I.C. Sarin & Anr., 1980, LAB I.C., 100, the question before the Division Bench of this Court was whether in view of the fact that the kitchen fell within the definition of "factory", the other establishment would also be covered and the employees working in the hotel fell within the definition of "employee" under Section 2(9). One of the arguments advanced was that at the highest, it is employees working in the kitchen alone who would be covered and not in the other premises. The learned Division Bench observed as under:"There is not only geographical unity, but unity of ownership between the hotel and the kitchen in which food for the guests of the hotel is manufactured. In these circumstances, we do not see how kitchen can be carved out as a separate geographical or legal entity and treated as separate premises from the hotel as a whole. On the contrary, on the facts of this case it is inevitable that the kitchen must be treated as part of the hotel in view of the main function which has been assigned to it viz., The preparation of food for the purpose of catering to the needs of the patrons accommodated in the hotel."9. Considering all these judgments, we now come back to the facts of this case. We have earlier noted the evidence on record. From the evidence on record, what is clear is that the contractor was only doing the work of laying tiles/marble. Even the polishing work at the site, from the evidence of Sharma, was not done by the contractor. It was done either by the company or given on contract. The work of the factory, as has come in the evidence, was processing marble stones which was cutting, polishing and finishing, according to size. As pointed out earlier, the employees to be covered have either to be working under the supervision of the principal employer or his agent and doing work, which is ordinarily part of the work of the factory or establishment. From the evidence nothing has been placed on record to show that the appellant principal employer was supervising the work of the immediate employer i.e. the contractor. The only evidence that has come on record is that it is the person who had given the contract to the appellant who was supervising the work. This cannot be said to be supervision by the employer. The test of supervision must be the test as laid down by the Apex Court in the case of CESC Ltd. & Ors. (supra). Those tests are, therefore, not satisfied. We have also earlier noted that the immediate employer or the contractor cannot also be said to be the agent of the appellant as the immediate contractor was engaged by the principal employer to carry out the work of laying of the marble and paying to him consideration on the piece rate basis. The test of the agent again, as contained in the provisions of Section 182 of the Indian Contract Act and as laid down in CESC Ltd. & Ors. (supra) are not satisfied. The contractor is not working under the supervision of the "principal employer or his agent. The immediate employer will not fall within head (b) as split up and seen in paragraph 3.10. The other test to be applied is whether the work of laying, even in a case of a complete contract can be said to be incidental to the work of the factory or establishment. The work of the factory, as has come in evidence, is cutting, polishing and finishing. It is only when a complete contract is taken, the principal employer is required to carry out also the work of laying or fixing the marble. Merely because the establishment is a "factory" it does not mean that even contractors employees engaged by an employee would necessarily fall within the definition of "employee" under Section 2(9). They must do work incidental to the purpose of the factory. The work of the factory has been spelt out earlier. Merely because the material is supplied at the site and that is laid by the contractor i.e. Immediate employer it cannot be said that, that would be work which is incidental to the work of the factory or for the purpose of the factory. Incidental for the purpose of the factory would mean that it has some connection with the ordinary work of the factory. That is not the evidence in the instant case. The work of the factory is cutting and polishing marble. Head "c" of the definition of employee in paragraph 3 will also not be attracted.11. We are clearly, therefore, of the opinion that on the material on record there was nothing to show that the employees engaged by the immediate employer fell within the extended definition of "employee" within the meaning of Section 2(9) of the ESIC Act. We are, therefore clearly of the opinion that the learned Single Judge erred in law in holding that the test of supervision and agency had been satisfied.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. Considering all these judgments, we now come back to the facts of this case. We have earlier noted the evidence on record. From the evidence on record, what is clear is that the contractor was only doing the work of laying tiles/marble. Even the polishing work at the site, from the evidence of Sharma, was not done by the contractor. It was done either by the company or given on contract. The work of the factory, as has come in the evidence, was processing marble stones which was cutting, polishing and finishing, according to size. As pointed out earlier, the employees to be covered have either to be working under the supervision of the principal employer or his agent and doing work, which is ordinarily part of the work of the factory or establishment. From the evidence nothing has been placed on record to show that the appellant principal employer was supervising the work of the immediate employer i.e. the contractor. The only evidence that has come on record is that it is the person who had given the contract to the appellant who was supervising the work. This cannot be said to be supervision by the employer. The test of supervision must be the test as laid down by the Apex Court in the case of CESC Ltd.Ors. (supra). Those tests are, therefore, not satisfied. We have also earlier noted that the immediate employer or the contractor cannot also be said to be the agent of the appellant as the immediate contractor was engaged by the principal employer to carry out the work of laying of the marble and paying to him consideration on the piece rate basis. The test of the agent again, as contained in the provisions of Section 182 of the Indian Contract Act and as laid down in CESC Ltd.Ors. (supra) are not satisfied. The contractor is not working under the supervision of the "principal employer or his agent. The immediate employer will not fall within head (b) as split up and seen in paragraph 3.10. The other test to be applied is whether the work of laying, even in a case of a complete contract can be said to be incidental to the work of the factory or establishment. The work of the factory, as has come in evidence, is cutting, polishing and finishing. It is only when a complete contract is taken, the principal employer is required to carry out also the work of laying or fixing the marble. Merely because the establishment is a "factory" it does not mean that even contractors employees engaged by an employee would necessarily fall within the definition of "employee" under Section 2(9). They must do work incidental to the purpose of the factory. The work of the factory has been spelt out earlier. Merely because the material is supplied at the site and that is laid by the contractor i.e. Immediate employer it cannot be said that, that would be work which is incidental to the work of the factory or for the purpose of the factory. Incidental for the purpose of the factory would mean that it has some connection with the ordinary work of the factory. That is not the evidence in the instant case. The work of the factory is cutting and polishing marble. Head "c" of the definition of employee in paragraph 3 will also not be attracted.11. We are clearly, therefore, of the opinion that on the material on record there was nothing to show that the employees engaged by the immediate employer fell within the extended definition of "employee" within the meaning of Section 2(9) of the ESIC Act. We are, therefore clearly of the opinion that the learned Single Judge erred in law in holding that the test of supervision and agency had been satisfied.