Case: Indian Petrochemicals Corporation Ltd Vs. Shramik Sena

2. C.A. No. 1855/98 is an appeal filed by the workmen against thed order of the High Court of Bombay. Both the appeals having been clubbed together, are heard and disposed of by this common judgment3. The workmen referred to above, filed the above writ petition before the High Court of Bombay for a declaration that the workmen whose names are shown in Ex. `A annexed to the said petition, are the regular workmen of the management and are entitled to have the sames and service conditions as are applicable to regular workmen of the management. It was further prayed that a direction be given to the management to absorb the workmen listed in the said Ex. `A with effect from the actual date of their entering into the service of the canteen of the management and to pay them all consequential benefits including arrears of wages etc4. According to the workmen, the workers listed in Ex. `A to the petition are working in the canteen of the management in its factory at Nagothane, District Raigad in the State of Maharashtra, and the management was treating them as persons employed on contract basis through a contractor named M/s Rashmi Caterers, who was impleaded in the writ petition as respondent No. 5. It was contended on behalf of the above workmen that the factory of the management where the workmen are employed, is governed by the provisions of the Indian Factories Act, 1948 (for short `the Factories Act), and the canteen where the said workmen are employed is a statutory canteen established by the management as required under the said provisions of the Act. It is further contended that the said canteen is maintained for the benefit of the workmen employed in the factory and the management had direct control over the said workmen and that respondent No. 5, though shown as a contractor, has no control over the management, administration and functioning of the said canteen. The canteen is a part of the establishment of the management and the workers working in the canteen are the workmen of the said management. The further contention of the workmen was that the work carried on by them in the said canteen is perennial in nature and the canteen is incidental to and is connected with the establishment of the management. Therefore, the said workmen are regular workmen of the said management. The management is denying the said workmen the status of its regular employees and was treating them as contract employees contrary to the statutory provisions and judicial pronouncements of this Court5. On behalf of the management, it was contended before the High Court that it is a public sector undertaking and it cannot appoint any person in contravention of the recruitment policy which requires the management to follow a roster system. Therefore, apart from the fact that the workmen were not in the regular employment of the said management, the absorption or regularisation of the services of the said workmen would contravene Article 16(4) of the Constitution, and would also contravene the reservation policy which is applicable for recruitment in the establishment managed by it6. A perusal of the pleadings before the High Court shows that the petitioning workmen based their claim primarily on the ratio of the decision rendered by this Court in the case of Parimal Chandra Raha and others v. Life Insurance Corporation of India and others, 1995 Supp.(2) SCC 611 : 1995(3) SCT 248 (SC) (hereinafter referred to as Rahas case) without elaborately setting out the facts necessary for the purpose of ascertaining the true nature of employment of the workmen. The management also seems to have proceeded on the basis that the dictum in Rahas case, did apply to the facts of the case and hence defended against the prayer for regularisation on the grounds of recruitment policy and reservation orders without placing necessary factual matrix regarding the nature of employment7. The High Court in its judgment impugned in these appeals also proceeded on the basis of Rahas case upholding the contention of the workmen that in all establishments where canteens are maintained as a requirement of a statute, (namely, Section 46 of the Factories Act) the workmen working in the said canteen ipso facto became the regular workmen of the management. In the said view of the matter, the High Court allowed the writ petition, holding that since the workmen whose names were found in Annexure `A to the petition are working in the statutory canteen of the management, they are entitled to be absorbed in the employment of the said management8. While so disposing of the writ petition, the High Court gave the following directions in regard to absorption of the employees :Respondent No. 1 should absorb the employees listed in Exhibit A to the petition, in its employment subject to their fulfilling the following conditions :(a) At the time of initial appointment the workmen should be complying with the minimum and the maximum age limits prescribed under the policy of the Corporation;(b) They must be medically fit according to the standards prescribed by the Corporation;(c) Those who were appointed prior to the filing of the writ petition must have three years minimum service to their credit on the date of the present judgment;(d) Those who were appointed during the pendency of the writ petition must have four years of minimum service to their credit on the date of the present judgment;(e) All those who are not absorbed in the service of the Corporation for any of the reasons indicated above, their cases shall be considered in accordance with the provisions of the Industrial Disputes Act, 1947 when fresh recruitment to the canteen staff is made by the Corporation;All the workmen who are not absorbed for any of the conditions enumerated above, shall be given retrenchment compensation in accordance with law9. Being aggrieved by the said judgment and order of the High Court, as stated above, the management has preferred C.A. No. 1854/98 and being aggrieved by the conditions imposed while directing the absorption of the employees, on behalf of the workmen C.A. No. 1855/98 is preferred before this Court.

Court's reasoning:
16. It is clear from this definition that a person employed either directly or by or through any contractor in a place where manufacturing process is carried on, is a `workman for the purpose of this Act. Section 46 of the Act empowers the State Government to make rules requiring any specified factory wherein more than 250 workers are ordinarily employed to provide and maintain a canteen by the occupier for the use of the workers. It is not in dispute, pursuant to this requirement of law, the management is providing canteen facilities wherein the respondent employees are working. Hence, it is fairly conceded by the learned counsel for the management that the respondent workmen by virtue of the definition of the `workman under the Act, are the employees of the appellant management for purposes of the ActIt is to be noted that in Rahas case this Court did not specifically hold that the deemed employment of the workers is for all purposes nor did it specifically hold that it is only for the purpose of the Factories Act. However, a reading of the judgment in its entirety makes it clear that the deemed employment is only for the purpose of the Factories Act. This Court in Rahas case relied upon an earlier judgment of this Court in M.M.R. Khan and others v. Union of India and others, 1990 Suppl. SCC 191. Ae Bench of this Court considering the provisions of the Factories Act held that by virtue of Section 46 of the said Act the factories covered by the said Act are obliged to provide canteen services and termed such canteens as statutory canteens. In para 6 of the said judgment while referring to an earlier judgment of this Court in C.A. No. 368/78, this Court held thus :The Act referred to in the aforesaid order obviously means the Factories Act. Therefore, what was confirmed by this Court was the declaration given by the Calcutta High Court that the employees of the statutory canteens were railway employees for the purposes of the Factories Act20. Thereafter, in the said judgment (Khans case), this Court at para 20 proceeded to consider the question as to whether staff employed in the statutory canteen in the railway establishment, industrial or, are railway employees or notAnd concluded thus at para 28 :Thus the relationship of employer and employee stands created between the railway administration and the canteen employees from the very inception. Hence, it cannot be gainsaid that for the purposes of the Factories Act the employees in the statutory canteens are the employees of the railways. The decisions of the Calcutta and Madras High Courts (supra) on the point, therefore, are both proper and valid. (emphasis supplied)21. Thereafter, of course, in the said case, this Court on facts came to the conclusion, the employees concerned therein were in fact employees of the establishment22. If the argument of the workmen in regard to the interpretation of Rahas case is to be accepted then the same would run counter to the law laid down by a larger Bench of this Court in Khans case (supra). On this point similar is the view of anothere Bench of this Court in the case of Employers in relation to the Management of Reserve Bank of India v. Workmen, 1996(3) SCC 267 : 1996(2) SCT 678 (SC). Therefore, following the judgment of this Court in the cases of Khan and R.B.I. (supra), we hold that the workmen of a statutory canteen would be the workmen of the establishment for the purpose of the Factories Act only and not for all other purposes23. Having held that the workmen in these appeals are the respondents workmen for the purposes of the Factories Act, we will now deal with the next question arising in this appeal as to whether from the material on record it could be held that the workmen are, in fact, the employees of the management for all purposes24. Before answering this question, we would like to observe that, normally, this being a question of fact, this Court would have been reluctant to examine this question which in the ordinary course should be first decided by ag tribunal. However, as stated above, in this case parties have filed detailed affidavits and documents which, in our opinion, are sufficient for us to decide this question without the need for any oral evidence25. Though the canteen in the appellants establishment is being managed by engaging a contractor, it is also an admitted fact that the canteen has been in existence from inception of the establishment. It is also an admitted fact that all the employees who were initially employed and those inducted from time to time in the canteen have continued to work in the said canteen uninterruptedly. The employer contends that this continuity of employment of the employees, inspite of there being change of contractors, was due to an order, made by the Industrial Court, Thane, on 10th of November, 1994 wherein the Industrial Court held that these workmen are entitled to continuity of service in the same canteen irrespective of the change in the contractor. Consequently, a direction was issued to the management herein to incorporate appropriate clauses in the contract that may be entered into with any outside contractor to ensure the continuity of employment of these workmen. The management, therefore, contends that the continuous employment of these workmen is not voluntary. A perusal of the said order of the Industrial Court shows that these workmen had contended before the said court that the management was indulging in an unfair labour practice and in fact they were employed by the Company. They specifically contended therein that they are entitled to continue in the employment of the Company irrespective of the change in the contractor. The Industrial Court accepted their contention as against the plea put forth by the management herein. The employer did not think it appropriate to challenge this decision of the Industrial Court which has become final. This clearly suggests that the management accepted as a matter of fact then are permanent employees of the managements canteen. This is a very significant fact to show the true nature of respondents employment. That apart, a perusal of the affidavit filed in this Court and the contract entered into between the management and the contractor clearly establishes :(a) The canteen has been there since the inception of the appellants factory(b) The workmen have been employed for long years and despite change of contractors the workers have continued to be employed in the canteen(c) The premises, furniture, fixture, fuel, electricity, utensils etc. have been provided for by the appellant(d) The wages of the canteen workers have to be reimbursed by the appellant(e) The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of the contract between the appellant and the contractor(f) The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the appellant(g) The workmen have the protection of continuous employment in the establishment26. Considering these factors cumulatively, in addition to the fact that the canteen in the establishment of the management is a statutory canteen, we are of the opinion that in the instant case, the27. At this stage, it is necessary to note another argument of Mr. Andhyarujina that in view of the fact that there is no abolition of contract labour in the canteen of the appellants establishment, it is open to the management to manage its canteen through a contractor. Hence, he contends that by virtue of the contract entered into by the management with the contractor, then cannot be treated as the employees of the management. This argument would have had some substance if in reality the management had engaged a contractor who was wholly independent of the management, but we have come to the conclusion on facts that the contractor in the present case is engaged only for the purpose of record and for all purposes the workmen in this case are in fact the workmen of the management. In the background of this finding, the last argument of Mr. Andhyarujina should also fail.