Andhra HC (Pre-Telangana)
Ferro Alloys Corporation Limited And ... vs Government Of Andhra Pradesh And Ors. on 4 June, 2002
Equivalent citations: 2002(4)ALD501, [2003(96)FLR160], (2002)IIILLJ392AP
JUDGMENT S.R. Nayak, J.
1. The unsuccessful petitioners in WP Nos.1866 of 1989, 13628 of 1990, 9596 of 1990, 2313 of 1990, 13426 of 1994, 4968 of 1990, 4410 of 1990, 13515 of 1990 and 6207 of 1991 have filed WA Nos.94 of 2000, 1058 of 2000 and 2039 to 2044 of 1999 respectively assailing the validity and correctness of the order of the learned single Judge dated 27-9-1999 dismissing the above writ petitions. The petitioner in WP No. 1866 of 1989, viz., M/s. Ferro Alloys Corporation Limited, who is the appellant in WA No.94 of 2000, has assailed the validity and legality of G.O. Ms. No. 914, Labour, Employment and Technical Education (Lab.II) Department dated 24-8-1978 issued by the Government of Andhra Pradesh in exercise of the power conferred by Sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (for short, the Act), abolishing contract labour in M/s. Ferro Alloys Corporation Limited, Garividi, Srikakuiam District, in certain operations mentioned in the said notification. M/s. Ferro Alloys Corporation Limited, in the same writ petition, has also assailed the avidity and legality of G.O.Ms.No.915 Labour, Employment and Technical Education (Lab.II) Department dated 24-8-1978 issued by the Government directing the Management of M/s. Ferro Alloys Corporation Limited to absorb the persons employed through contract labour in the newly fixed compliments subject to suitability. The petitioners in the other writ petitions have assailed the validity and legality of the Government Order, G.O. Ms. No.11, Women's Development, Child Welfare and Labour (Lab.II) Department dated 12-2-1990 issued by the Governor of Andhra Pradesh in exercise of the power conferred by Sub-section (1) of Section 10 of the Act prohibiting employment of contract labour in all operation of canteens required to be provided under the Factories Act, 1948 and directing the principal employer of such Factories to absorb the canteen workers employed by the contractors.
2. Before the learned single Judge, it was contended on behalf of the petitioners that the work involved in the 10 operations set out in the impugned notification, G.O. Ms. No. 914 dated 24-8-1978 are not perennial in nature and those operations are intermittent and dependant on the availability of lorries and their requirement. Assailing the validity of G.O. Ms. No. 11, dated 12-2-1990, it was contended that the Government ought not to have prohibited contract labour in canteens in all factories and establishments in which canteens are required to be maintained under the Factories Act, 1948 without first satisfying itself about the existence of the conditions specified under Clauses (a) to (d) of Sub-section (2) of Section 10 of the Act. It was also contended that the Advisory Board did not consider the conditions of industrial establishments/factories before recommending abolition of contract labour. It was contended that the reasons assigned by the Advisory Board are untenable and the Advisory Board did not give any personal hearing to the individual establishments and, therefore, the impugned G.O.Ms.No. 11 dated 12-2-1990 is contrary to principles of natural justice.
3. The learned single Judge, finding no merit in the above contentions of the petitioners, by the common order impugned in these batch of writ appeals, dismissed the writ petitions.
4. The main contention advanced by Sri K. Srinivasa Murthy and Sri C.R. Sridharcm, learned Counsel appearing for the appellants while assailing the validity of the impugned notifications is that omni-bus notifications like the impugned notifications are quite contrary to the requirements of Section 10 of the Act and also the binding judgment of the Constitution Bench of the Apex Court in Steel Authority of India Limited and Ors. v. National Union Waterfront Workers and Ors., , and there is total lack of application of mind on the part of the Government is issuing the impugned notifications, and on that short ground itself the impugned notifications cannot be sustained and they are liable to be quashed. The learned Counsel would maintain that the learned single Judge is not justified in dismissing the writ petitions. In addition to these common submissions, Sri C.R. Sridharan, learned Counsel appearing for the parties who have assailed the validity and legality of G.O.Ms.No. 11 dated 12-2-1990, by which contract labour in canteens of all factories is abolished, would contend that the Government is not entitled to issue such omnibus notification under Section 10 of the Act abolishing contract labour in canteens of all the factories without examining the fact-situation obtaining in individual canteens maintained by the factories with reference to the conditions specified in Clauses (a) to (d) of Sub-section (2) of Section 10 of the Act. The learned Counsel would maintain that mere exploitation of labour cannot be a conclusive test or condition for determining whether contract labour system in a particular factory or unit should be prohibited or not, though such a test or condition may be an important test or condition. According to the learned Counsel, before issuing notification under Section 10 of the Act prohibiting contract labour, the Government is required to examine whether it would be possible to employ full-time workmen for running the canteen and/or whether there is exploitation of contract labour and, therefore, such an investigation is required to be made with reference to each and every factory and establishment, and it is not open for the State Government to issue a general notification prohibiting contract labour in canteens of all factories.
5. Learned Government Pleader for Labour, on the other hand, would support the impugned notifications and maintain that before issuing the impugned notifications, the Government had applied its mind, and taken into consideration the recommendations of the Advisory Board and all relevant materials which are germane to the decision-making and, therefore, it could not be said that the Government did not apply its mind and it has issued omni-bus notifications.
6. Section 10 of the Act reads as follows:
"10. Prohibition of employment of contract labour :-- (1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the central board or, as the case may be, a state board, prohibit, by notification in the official gazette, employment of contract labour in any process, operation or other work in any establishment.
(2) Before issuing any notification under Sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as--
(a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;
(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment;
(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ considerable number of whole-time workmen.
Explanation :--If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final."
7. The Supreme Court in Steel Authority of India case (supra) on construction of the provisions of Section 10 of the Act and speaking about the essential steps that should be taken by the appropriate Government before issuing the notification under Sub-section (1) Section 10 of the Act, held--
"A careful reading of Section 10 makes it evident that Sub-section (1) commences with non-obstante clause and overrides the other provisions of the CLRA Act in empowering the appropriate Government to prohibit by notification in the official gazette, after consultation with central advisory board/state advisory board, as the case may be, employment of contract labour in any process, operation or other work in any establishment. Before issuing notification under Sub-section (1) in respect of an establishment the appropriate Government is enjoined to have regard to: (i) the conditions of work; (ii) the benefits provided for the contract labour; and (iii) other relevant factors like those specified in Clauses (a) to (d) of Sub-section (2). Under Clause (a) the appropriate Government has to ascertain whether the process, operation or other work proposed to be prohibited is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; Clause (b) requires the appropriate Government to determine whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment; Clause (c) contemplates a verification by the appropriate Government as to whether that type of work is done ordinarily through regular workmen in that establishment or an establishment similar thereto; and Clause (d) requires verification as to whether the work in that establishment is sufficient to employ considerable number of whole-time workmen. The list is not exhaustive. The appropriate Government may also take into consideration other relevant factors of the nature enumerated in Sub-section (2) of Section 10 before issuing notification under Section 10(1) of the CLRA Act.
The definition of 'establishment' given in Section 2(e) of the CLRA Act is as follows:
"In Clause (e) - "establishment" is defined to mean - (i) any office or department of the Government or a local authority, or (ii) any place where any industry, trade, business, manufacture or occupation is carried on."
The definition is in two parts : the first part takes in its fold any office or department of the Government or local authority - the Government establishment; and the second part encompasses any place where any industry, trade, business, manufacture or occupation is carried on - the non-Government establishment. It is thus evident that there can be plurality of establishments in regard to the Government or local authority and also in regard to any place where any industry, trade, business, manufacture or occupation is carried on.
Now, reading the definition of 'establishment' in Section 10, the position that emerges is that before issuing notification under Subsection (1) an appropriate Government is required to: (i) con - suit the Central Board/ State Board; (ii) consider the conditions of work and benefits provided for the contract labour and (iii) take note of the factors such as mentioned in Clauses (a) to (d) of Subsection (2) of Section 10, referred to above, with reference to any office or department of the Government or local authority or any place where any industry, trade, business, manufacture or occupation is carried on. These being the requirement of Section 10 of the Act, we shall examine whether the impugned notification fulfils these essentials."
In that case, the impugned notification dated 9-12-1976 issued by the Central Government which was the appropriate Government read as under:
"S.O No.779(E) 8/9-12-1976 in exercise of the power conferred by Sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (37 of 1970) the Central Government after consultation with the central advisory contract labour board hereby prohibits employment of contract labour on and from the 1st March, 1977, for sweeping, cleaning, dusting and watching of buildings owned or occupied by the establishments in respect of which the appropriate Government under the said Act is the Central Government.
Provided that this notification shall not only apply to the outside cleaning and other maintenance operations of multi-storied buildings where such cleaning or maintenance operations cannot be carried out except with specialized experience".
8. The Supreme Court commenting upon the above notification, and dealing with the question whether that notification fulfilled the essentials of Clauses (a) to (d) of Sub-section (2) of Section 10 of the Act, held--
"A glance through the said notification, makes it manifest that with effect from March 1, 1977, it prohibits employment of contract labour for sweeping, cleaning, dusting and watching of buildings owned or occupied by establishment in respect of which the appropriate Government under the said Act is the Central Government. This clearly indicates that the Central Government had not adverted to any of the essentials, referred to above, except the requirement of consultation with the central advisory board. Consideration of the factors mentioned above has to be in respect of each establishment, whether individually or collectively, in respect of which notification under Sub-section (1) of Section 10 is proposed to be issued. The impugned notification apart from being an omnibus notification does not reveal compliance of Sub-section (2) of Section 10. This is ex facie contrary to the postulates of Section 10 of the Act. Besides it also exhibits non-application of mind by the Central Government. We are, therefore, unable to sustain the said impugned notification dated December 9, 1976 issued by the Central Government."
9. In the light of the above judgment of the Supreme Court, let us have a glance through the impugned notifications in this batch of cases. G.O. Ms. No.914, Labour, Employment and Technical Education (Lab.II) Department dated 24-8-1978 issued under Section 10 of the Act by the Governor of Andhra Pradesh, reads as follows:
"GOVERNMENT OF ANDHRA PRADESH Contract Labour (Regulation and Abolition) Act, 1970 - Recommendation of the Board for Abolition of Employment of Contract Labour system in Ferro Alloys in Garividi, Srikakulam District - Abolition - Orders -Issued.
Labour, Employment and Technical Education (Lab.II) Department.
G.O.Ms.No.914, Dated 24-8-1978.
Read the following;
1. G.O.Ms.No.940, Employment and Social Welfare (T) Department, dated 29-10-1975.
2. From the Commissioner of Labour Lr. No.G4/449999/76, dated 28-7-1977.
3. From the Commissioner of Labour Lr.No.G4/41440/77, dated 30-8-1977.
ORDER:
The following Notification will be published in the Andhra Pradesh Gazette:
NOTIFICATION In exercise of the power conferred by Subsection (1) of Section 10 of the Contract Labour (Regularization and Abolition) Act, 1970 (Act No.37 of 1970), the Governor of Andhra Pradesh hereby, after consultation with the State Board prohibits employment of contract labour in M/s Ferro Alloys Corporation, Garividi, Srikakulam District, in the following operations:
1. Loading and unloading in lorries.
2. Bagging the raw materials into Ore Bin.
3. Ore Bins and scrapping work in Ferro Chrome Plant.
4. Tilting the tubs carrying discarded slag and other ways.
5. Collection and feeding back of raw-materials slipped if any at feeding and transfer plant.
6. Collection of raw materials fallen and scattered in between the rail tracks, roads and yard inside the factory.
7. Packing the finished goods.
8. Separation of metal over flowing into slag cakes from the furnaces.
9. Resisting the metal and collection of scrapped material including metal furnaces breaking and screening slack power picking.
10. Carrying coke into conveyor belt and repairing of machinery, relining of furnaces, ladies lining, brick lining of line kilns etc. Sd/- D.S.R.Somayaju Deputy Secretary to Government."
There is no need to extract G.O. Ms. No. 915 dated 24-8-1978, because, it is only a consequential Government Order issued in pursuance of G.O.Ms.No. 914, dated 24-8-1978, directing the Management of M/s. Ferro Alloys Corporation Limited to absorb persons employed through contract labour system in the 10 operations mentioned in the notification, G.O.Ms.No. 914.
10. G.O.Ms.No. 11, Women's Development, Child Welfare and Labour (Lab.II) Department dated 12-2-1990 reads as follows:
"GOVERNMENT OF ANDHRA PRADESH Contract Labour (Regulation and Abolition) Act, 1970 - Recommendations of the Board for prohibition of employment of contract labour in canteens in all Factories and Establishments - Orders - issued.
Women's Development, Child Welfare and Labour (Lab.II) Department.
G.O.Ms.No. 11, Dated 12th February, 1990.
Read the following:
Letter No. 55730/87-88, dated 9-12-1988 of the Chairman, Andhra Pradesh State Advisory Contract Labour Board. ORDER:
The following Notification will be published in the Andhra Pradesh Gazette:
NOTIFICATION In exercise of the power conferred by Subsection (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (Act No.37 of 1970), the Governor of Andhra Pradesh hereby, after consultation with the State Advisory Contract Labour Board prohibits employment of contract labour in all operation of canteens required to be provided under the Factories Act, 1948. In view of the above, Government hereby appeal to the Principal employer of such factories to absorb the canteen workers hitherto employed by the Contractor on the factory rolls. (BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH) Sd/- J.S. Sarma, Ex-Officio Secretary to Government."
11. It is trite that the impugned notifications in these cases are substantially similar to the notification issued by the Central Government which was impugned in Steel Authority of India case (supra). G.O.Ms.No. 914 dated 24-8-1978 prohibits employment in 10 operations in the establishment of M/s. Ferro Alloys Corporation Limited, whereas G.O. Ms. No.11, dated 12-2-1990 prohibits employment of contract labour in canteens of all factories and establishments. We do not find any consideration on the part of the appropriate Government, of the factors mentioned in Clauses (a) to (d) of Sub-section (2) of Section 10 of the Act or any other relevant factors. As held by the Supreme Court in Steel Authority of India case (supra), consideration of the factors mentioned in Clauses (a) to (d) of Sub-section (2) of Section 10 of the Act or other relevant factors has to be in respect of each establishment, whether individually or collectively, in respect of which notification under Sub-section (1) of Section 10 of the Act is proposed to be issued. Similar view was taken by the Supreme Court in L&T MC Neil Limited v. Government of Tamil Nadu, 2001 (1) Supreme 414 also. In that view of the matter, the impugned notifications should be held to be omni-bus notifications, which do not reveal compliance of Sub-section (2) of Section 10 of the Act and, therefore, they are ex-facie contrary to the postulates of Section 10 of the Act. The impugned notifications do not exhibit application of mind on the part of the appropriate Government. If that is so, the impugned notifications cannot be sustained solely on the ground of non-compliance of Sub-section (2) of Section 10 of the Act and also the binding judgment of the Apex Court in Steel Authority of India case (supra). In that view of the matter, there is no need for us to deal with the other contentions advanced by Sri C.R. Sridharan in detail and, therefore, they are left open to be agitated at an appropriate stage. Suffice it to state that as held by the Supreme Court in Hari Shankar Sharma and Ors. v. Artificial Limbs Manufacturing Corporation and Ors., 2002-I-LLJ 237, assuming that Section 46 of the Factories Act shall apply to the petitioners, it cannot be said as an absolute proposition of law that whenever in discharge of statutory mandate, a canteen is set up or other facilities are provided by an establishment, the employees of the canteen or such other facility become the employees of the establishment. It would depend on how the obligation is discharged by the establishment. It may be carried out wholly or substantially by the establishment itself or the burden may be delegated to an independent contractor. There is nothing in Section 46 of the Factories Act, nor has any provision of any other statute which provides for the mode in which the specified establishment must set up a canteen. Where it is left to the discretion of the concerned establishment to discharge its obligation of setting up a canteen either by way of direct equipment or by employment of contractor, it cannot be postulated that in the latter event, the persons working in the canteen would be the employees of the establishment. Therefore, even assuming that the petitioners are specified industries within the meaning of Section 46 of the Factories Act, 1948, this by itself would not lead to the inevitable conclusion that the employees in the canteen are the employees of the petitioners-appellants. In the event of the Government proceeding to abolish contract labour in canteens set up by factories/establishments, it is trusted, it will be well advised to bear in mind, the above observations as well as the following observations of the Supreme Court in the case of Hari Shankar Sharma (supra) "...Factories Act and the previous decisions on the issue, that the workmen of a statutory canteen would be the workmen of the establishment only for the purpose of the Factories Act and not for all other purposes unless it was otherwise proved that the establishment exercised complete administrative control over the employees serving in the canteen. See also Bharat Fritz Werner Limited v. State of Karnataka, ."
11. In the result and for the foregoing reasons, we allow the writ appeals and set aside the common order of the learned single Judge dated 27-9-1999 insofar as the appellants are concerned and allow WP Nos. 1866 of 1989, 13628 of 1990, 9596 of 1990, 2313 of 1990, 13426 of 1994, 4968 of 1990, 4410 of 1990, 13515 of 1990 and 6207 of 1991 and quash the impugned Government Orders, G.O. Ms. No.914, Labour, Employment and Technical Education (Lab.II) Department dated 24-8-1978, G.O. Ms. No. 915, Labour, Employment and Technical Education (Lab.11) Department dated 24-8-1978 and G.O. Ms. No. 11, Women's Development, Child Welfare and Labour (Lab.II) Department dated 12-2-1990, with no order as to costs.