Central Administrative Tribunal - Delhi
Sh. Krishan Lal Srivastava And Ors. vs I.C.A.R. And Anr. on 1 July, 1999
JUDGMENT N. Sahu, Member (A)
1. The applicants are security guards in National Bureau of Plant Genetic Resources, Pusa Campus, New Delhi. A tender was given to one M/s. Ultra Security Services in 1996 to supply trained security personnel for the security of the building and area under the respondents. According to the applicants, this appointment through a middleman is a form of exploitation and violates Contract Labour (Regulation and Abolition) Act, 1970 prohibiting employment through contractor of middleman in Govt. Departments. They rely on the following decisions :
(i) Air India Statutory Corporation v. United Labour Unions and Ors., 1996(6) SLR 233 = 1997(3) SLJ 21 (SC).
(ii) Union of India and Ors. v. Subir Mukharji and Ors., 1982(2) SLR 718. (iii) R.K. Panda v. Steel Authority of India, 1995(6) SLR 665 = 1994(3) SLJ 227 (SC). (iv) Satyajit Majumdar and Ors. v. Union of India and Ors., 1995(8) SLR 258 = 1996 (1) SLJ 259 (Calcutta--CAT).
2. Learned Counsel for the applicants argues that the work in the National Bureau is of perennial nature and satisfies all the tests of Section 10(2) of the Contract Labour Act. He urges that the employer is under statutory obligation to absorb the contract labour and a pay-scale be prescribed for these absorbed labourers like Class D employees.
3. The respondents have questioned the jurisdiction on the ground that the applicants are employed by a registered contractor which is an independent agency for looking after the security of the premises. They rely on a decision of this Tribunal in the case of Rail Yatri Niwas, New Delhi Mazdoor Union v. Union of India, (O.A. 1099/98) where also the applicants were the employees of a contractor to whom the contract had been given by the railways. The Tribunal held that it had no jurisdiction because the applicants are not Govt. servants and are not employed by the Govt. There is no employer-employee relationship between the applicants and the respondents.
4. It is also urged that it is bad for non-joinder of parties inasmuch as the contractor M/s. Ultra Security Services has not been made a party. The security work is not a dominant work of respondent no. 2. It is an ancillary, independent work. There is no notification for abolition of contract labour in any particular industry. There was no notification of the Central Govt. abolishing the contract labour in respect of I.C.A.R. In Rail Yatri Niwas case, there was no notification abolishing contract labour in respect of railways which is also another point that persuaded the Tribunal to dismiss the application.
5. The applicants refuted all the preliminary objections. It is not necessary that there should be a direct employer-employee relationship as the principal employer alone is legally answerable. All the applicants are to be treated as the direct employees of the respondents. The nature of work is admittedly perennial. It is asserted that the Central Govt. is the appropriate Govt. and the notification published by the Central Government under Section 10 is applicable in this ease. It is further submitted that the notification covers "watching" of a building. As Delhi is a Union Territory, Central Government is the appropriate Govt. It is therefore prayed that the applicants should be absorbed as direct employees. It is further mentioned that even after the status-quo order, the respondents removed the applicants from their job. Learned Counsel for the applicants further cited a decision in the case of Secretary, H.S.E.B. v. Suresh and Ors., 1999(2) Scale 315. In this case, the work of keeping the plants and stations clean and hygienic is awarded to a contractor. Stipulation was that it can engage 42 Safai Karamcharis for a period of one year. The Safai Karamcharis claimed that they are entitled to be absorbed permanently on completion of 240 days in a year. In this case, the Supreme Court felt that there was no genuine contract system prevailing at the relevant time. It was a genuine contract system then obviously it had to be abolished as per Section 10 of the Contract Labour (Regulation & Abolition) Act. This case is not applicable to the facts of the present case.
6. Learned Counsel for the respondents Shri A.K. Sikri had strenuously urged that the appropriate Government for the I.C.A.R. is the Govt. of NCT of Delhi and not the Central Government. The labour disputes of I.C.A.R. are referred by the Delhi Administration and adjudicated by the labour courts established by it. It is next contended that I.C.A.R is an autonomous society registered under the Societies Registration Act, 1860 with its own set of rules and byelaws. It is an independent legal entity. Deciding cases of similar autonomous bodies, it has been held that the Central Government is not the appropriate Govt. Shri Sikri brought to my notice the following two decisions :-
(i) National Thermal Power Corporation Ltd. v. Industrial Tribunal (I) U.P. Allahabad, (1992) Lab. 1C. 984 (All)
(ii) State Trading Corporation of India Ltd. v. Commercial Tax Officer, (1964) 4 SCR 99.
7. According to Shri Sikri, the notification passed by the Central Government dated 9.12.76 does not apply. The said notification under Section 10(1) of the Contract Labour Act is worded as under :-
"The Central Government after consultation with the Central Advisory Contract Labour Board, hereby prohibits employment of contract labour on and from the 1st March, 1997, for sweeping, cleaning, dusting and watching of buildings owned or occupied by establishments in respect of which the appropriate Government under the said Act is the Central Government.
Provided that this notification shall not apply to the outside cleaning and other maintenance operations of multistoreyed buildings where such cleaning or maintenance operations cannot be carried out except with specialised experience."
8. The N.B.P.G.R., Pusa Campus obtained sealed tenders of for security arrangements as per specifications. The security services are for the entire premises and experimental crop fields. It is clearly laid down that the personnel so provided by the Agency will not be employees of the Bureau and there will be no employer-employee relationship between the Bureau and the personnel so provided. The agency shall be wholly responsible for paying the monthly salary, leave benefits and weekly offs to the personnel deployed and the Bureau will not be responsible for meeting any expenditure in this regard. There will be only periodical inspection by the designated officers of the Bureau. Even the essential items like torches, lathis, whistles etc. will be provided by the Agency at its own cost. The term of contract is for one year. The agency will submit monthly pre-receipted bills. The contract can be terminated by giving one month's notice on either side. In case of any loss or damage done to the property of the Bureau, the damages will be recovered from the agency the there shall be a security deposit for this purpose by the successful tenderer. The chart of duties to be performed by the deployed security personnel is listed in sub-para 11 of the contract. There is, therefore, considerable force in the contention that there is no employer-employee relationship between the applicants and the respondents. There is no notification according to the respondents of the Central Government abolishing the engagement of security personnel in the research Institutes. There is no illegality in the award of such tenders for supplying security personnel by a security agency.
9. The Contract Labour Act is an Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. It applies to every establishment in which 20 or more workmen are employed as contract labour. It applies to every contractor who employs 20 or more workmen, The Act does not apply to establishments in which work performed is only of intermittent of casual nature. In the definition clause, "appropriate Government" has been defined, "contractor" is defined and "establishment" is defined. I shall extract the definition of the word contractor:-
"contractor", in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor."
In Section 2(b) of the Act, it is defined that a workman shall be deemed to be employed as "contract labour." or in connection with the work of an establishment when he is hired through a contractor.
10. I am of the considered view that the provisions of the Contract Labour (Regulation & Abolition) Act do not apply to the applicants case. The Act does not apply to supply of services. The services supplied are specialised services. Security is a specialised service, The applicants are not contract labour. The Bureau is not a place where any industry, it ade, business, manufacture or occupation is carried on. It is a scientific research centre. It is not a case where labour is supplied by a contractor for the conduct, of the dominant activity of the Bureau. The Act does not think of curbing or controlling supply of services. The applicants are not hired through contractor. It is necessary to understand that hiring through a contractor is different from supplying specialised services.
11. Let us take certain instances. Let us assume a contract between any establishment and a computer firm for maintenance of its software. The computer firm has specialised persons who undertake to ensure smooth working of computers for which its tenders for servicing are approved. To take second example, let us take the case of a firm which has specialised mechanics to lookafter and do servicing of air-conditioners, refrigerators and fax machines. These are highly specialised and skilled jobs. Every important Government office under takes an annual contract with the firms supplying such specialised services. Let-us take a third instance : let us take a case of a firm which employs several persons and sends its specialists for doing the job of photocopying and keeping the photocopiers in good condition. These are all annual contracts run by these undertakings. Is the contract Labour Act applicable to such cases? The answer is "no" because workmen should be hired through a contractor. The applicants are not suppliers of contract labour. They are suppliers of services. This is an important concept to be understood.
12. If Shri Hati's contentions are to be accepted, then every Govt. department has to take into its direct employment all the Data Entry Operators, System Assistants, Software Assistants, supplied by the computer firm. Computerisation having come to stay, it throws up perennial work. These system assistants, data entry operators, software assistants would be perennially required and hence according to Shri Hati, a contract between the principal employer and the computer firm for supplying such services would have to be questioned and the appropriate Government may be moved for the abolition of this contract labour so that these persons shall be employed directly. The same logic would hold good in the other two instances cites by me, namely, mechanics looking after servicing of air-conditioners, refrigerators, fax machines and photocopiers. There are any number of service contracts which has increased manifold in the present days. 21st century will see more such increases, will it be correct to designate them as workmen and their services as contract labour; I am afraid the basic purpose of the Contract Labour (Regulation & Abolition) Act, 1970 has not been understood while filing this application. Hon'ble Mr. Justice Majumdar in his separate judgment in the case of Air India Statutory Corporation v. United Labour Union (supra), while agreeing with the main judgment of the Supreme Court delivered by Hon'ble Mr. Justice Ramaswamy, stated as under :-
"Engagement of contract labour has been found to be unjustified by a catena of decisions of this Court. When the work is of perennial nature and instead of engaging regular workmen, the system of contract labour is resorted to, it would only be for fulfilling the basic purpose of securing monetary advantage to the principal employer by reducing expenditure on work force. It would obviously be an unfair labour practice and is also an economically shortsighted and unsound policy, both from the point of view of the undertaking concerned and the country as a whole. Such a system was tried to be put to an end by the legislature by enacting the Act but when it found there are certain activities of establishment where the work is not of perennial nature then the contract labour may not be abolished but still it would be required to be regulated so that the lot of the workmen is not rendered miserable. The real scope and ambit of the Act is to abolish contract labour system as far as possible from every establishment. Consequently, on abolition which is the ultimate goal, the erstwhile regulated contract labour cannot be thrown out of establishment as tried to be submitted on behalf of the management taking resort to the express language of Section 10 of the Act. Such a conclusion reached by the two-member Bench in Dena Nath case, flies in the face of the very scope and ambit of the Act and frustrates the very scheme of abolition of contract labour envisaged by the Act. Such a conclusion, with respect, cannot be countenanced, as it results in a situation where relatives of the patient are told by the operating surgeon that operation is successful but patient has died."
13. In thecase of Air India Statutory Corporation (supra), the substance of the Act and the nature and purpose of the provisions have been clearly explained by the Hon'ble Supreme Court which is extracted as under :
"As seen, the object is to regulate the contract labour so long as the contract labour is not perennial. The labour is required to be paid the prescribed wages and are provided with other welfare benefits envisaged under the Act under direct supervision of the principal employer. The violation visits with penal consequences. Similarly, when the appropriate Government finds that the employment is of perennial nature etc. contract system stand abolished, thereby, it intended that if the workmen were performing the duties of the post which were found to be of perennial nature on par with regular service, they also require to be regularised. The Act did not intend to denude them of their source of livelihood and means of development, throwing them out from employment. As held earlier, it is a socio-economic welfare legislation. Right to socio-economic justice and empowerment are constitutional rights. Right to means of livelihood is also constitutional right. Right to facilities and opportunities are only part of and means to right to development. Without employment or appointment, the workmen will be denuded of their means of livelihood and resultant right to life, leaving them in the lurch since prior to abolition, they had the work and thereby earned livelihood. The Division Bench in Dena Nath's case has taken too narrow a view on technical consideration without keeping at the back of the mind the constitutional animations and the spirit of the provisions and the object which the Act seeks to achieve. The operation of the Act is structured on an inbuilt procedure leaving no escape route. Abolition of contract labour system ensures right to the workmen for regularisation of them as employees in the establishment in which they were hither to working as contract labour through the contractor. The contractor stands removed from the regulation under the Act and direct relationship of "employer and employee" is created between the principal employer and workmen, Gujarat Electricity's case, being of the co-ordinate Bench, appears to have softened the rough edges of Dena Nath's ratio. The object of the Act is to prevent exploitation of labour. Section 7 and Section 12 enjoin the principal employer and the contractor to register under the Act, to supply the number of labour required by the principal employer through the contractor; to regulate their payment of wages and conditions of service and to provide welfare amenities, during subsistence of the contract labour.
The failure to get the principal employer and the contractor registered under the Act visits with penal consequences under the Act. The object, thereby, is to ensure continuity of work to the workmen in strict compliance of law. The conditions of the labour are not left at the whim and fancy of the principal employer. He is bound under the Act to regulate and ensure payment of the full wages, and also to provide all the amenities enjoined under Sections 16 to 19 of the Act and the rules made thereunder. On abolition of contract labour, the intermediary, i.e. contractor, is removed from the field and direct linkage between labour and principal employer is established. Thereby, the principal employer's obligation to absorb them arises. The right of the employee for absorption gets ripened and fructified. If the interpretation in Dena Nath's case is given acceptance, it would be an open field for the principal employer to freely flout the provisions of the Act and engage workmen in defiance of the Act and adopt theprinciple of hire and fire making it possible to exploit the appalling conditions in which the workmen are placed. The object of the Act, thereby gets rudely shattered and the object of the Act easily defeated. Statutory obligations of holding valid licence by the principal employer under Section 7 and by the contractor under Section 12 is to ensure compliance of the law. Dena Nath's ratio falls foul of the constitutional goals of the trinity; they are free launchers to exploit the workmen. The contractor is an intermediary between the workmen and the principal employer. The moment the contract labour system stands prohibited under Section 10(1), the embargo to continue as a contract labour is put an end to and direct relationship has been provided between the workmen and the principal employer. Thereby, the principal employer directly becomes responsible for taking the services of the workmen hitherto regulated through the contractor. The object of the penal provisions was to prevent the prohibition of the employer to commit breach of the provisions of the Act and to put an end to exploitation of the labour and to deter him from acting in violation of the constitutional right of the workmen to his decent standard of life, living, wages, right to health etc."
14. The Act is contemplated in the background of an industrial society in which labour is supplied either directly or through contractors. After the second world war, a phenomenal growth of large scale industries made it necessary to safeguard the rights of a workman. There has been a long history of exploitation of labour in a capitalist framework. In a socialist pattern of society, legislation has increasingly come on the anvil to protect the rights of workmen, prevent their exploitation and promote their welfare. Several labour legislations have been brought into the statute book by Parliament. In all these, the main thrust is to ensure through appropriate statutory mechanisms, the well-being, safety, welfare of the workers. It is in this background that the Contract Labour Act, 1970 has decided to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and "for matters connected therewith". For this purpose, licensing officers are to be appointed by the appropriate Governments. There is also a system of licensing of contractors. Unless the licence is issued by the licensing officer, no contractor shall undertake or execute any work through contract labour. The licence may contain such conditions as to hours of work, fixation of wages and other essential amenities. There are provisions for revocation, suspension and amendment of licences. Where it is a case of regulation of contract labour, chapter 5 requires the welfare and health of contract labour to be ensured. There is also the provision of registration of establishments employing contract labour. The employer shall make an application to the Registering officer for registration of his establishment. If it is not registered, no employer can employ contract labour. These are the provisions contained in Sections 6, 7, 8 and 9 of the Act. Thereafter comes Section 10. The prohibition of employment of contract labour under Section 10(1) can only come after the appropriate Government is satisfied that all the relevant four factors in Section 10(2), from (a) to (d), are applicable.
15. There is a lack of basic understanding by the applicants in seeking relief in this case. The applicants are not contract labourers. It is a service contract. Security in the modern context is a specialised job requiring highly skilled training. The performance of security job is a service like any other service which any person, concern, establishment can undertake.
16. M/s. Ultra Security Service has been undertaking the job of security not only to the buildings but to several other concerns. It is not supplying contract labour, it has entered into a contract of securing building which is a different concept from that of supplying contract labour. The basic idea is that the contractor who supplies the labour as contract labour makes profit out of supplying human beings for service. There has been exploitation in the process. The contractor made his own profit out of what ought to have been paid to the contract labour. This should not be identified with or confused with the supply of service. Supplying expertise is different from supplying contract labour. A security guard for instance requires years of intensive training before he is drafted for security in a bank or in an establishment. Somebody who has undertaken to train such people and offering their services, cannot be equated with a contractor supplying contract labour just as a computer firm supplying software assistants, programmers, system assistants, data entry operators, networking operators cannot also be equated with a contractor supplying labour. They should not be identified with or confused with supplying contract labour. If we apply the Contract Labour Act into such areas, it will result in devastating consequences. The service sector will be obliterated because all those persons whom the suppliers of such services has drafted, will be treated as a workman and in course of time, if there is perennial work, he being the contractor, will be asked to disappear and the workmen will compel direct employment as a permanent member of the establishment. This is to say the least not what is intended in the Contract Labour Act. It is a perversion of what is thought of as a measure of social welfare legislation for the workmen who are seen to be exploited by the contractor himself and by the principal employer, later. They constitute the weaker section of the society. Most of them are unskilled and ignorant. They consider themselves to be lucky if they can keep their body and soul together for which they were required to put long hours of strenuous physical work. It is to protect such people and to prevent their exploitation that the Contract Labour Act of 1970 was passed. If three decades later, all highly skilled professionals arc to be treated as just workmen and any establishment is treated as an industry, this piece of legislation will end up as not a progressive legislation for the welfare of the downtrodden but as an anachronism.
17. I, therefore, hold that the arguments of Shri Hati are totally misplaced and the Act does not apply to a service contract and a service contract is not a labour contract. It is not necessary for me to examine other contentions of the rival Counsel. Mr. Sikri' s contention that the Central Government is not the appropriate Government does not seem to me to be wholly acceptable in view of the Supreme Court decision in Air India Statutory Corporation's case (supra) wherein it is held as under :
"The appropriate Government is the Central Government from the inception of the Act. The notification published under Section 10 on 9.12.1976, therefore, was in exercise of its power as appropriate Government. So it is valid in law. There is no substance in the contention that the relevant factors for abolition of the contract labour system in the establishment of the appellant was not before the Central Advisory Board before its recommendation to abolish the contract labour system in the establishment of the appellant. The minutes of the Board do show and the unmistakable material furnished do indicate that the work in all the establishments including those of the appellants, is of perennial nature satisfying all the tests engrafted in Section 10(2) of the Act. Accordingly, on finding the work to be of perennial nature, it had recommended and the Central Government had considered and accepted the recommendation to abolish the contract labour system in the aforesaid services. Having abolished it, the Central Government was denuded of its power under Section 10(1) to again appoint the Mobile Committee to go once over into the selfsame question and the recommendations of the latter not to abolish the contract labour system in the above services and the acceptance thereof by the Central Government are without any legal basis and, therefore non est"
18. It is not necessary also for me to examine the correctness of the ratio in the case of Rail Yatri Niwas (supra) by another Single Bench here. May be the contractor and the applicants are employer and employee. But what they seek in effect is their continuous engagement just like any other casual labour. In view of my discussion above, since what is supplied is not merely labour but a service, the alleged offender in question is a private party and, therefore, there are.no service guarantees which are violated.
19. With regard to the prohibition to employ contract labour under Section 10(1) of the Act, I hold that the 1976 notification deals merely with watching a building and does not deal with security. The 1976 notification is not a all time landmark. It is necessary to review the situation, every time some new facts come into play in respect of services mentioned in the said notification. Finally aresearch activity conducted by the Bureau does not come within the definition of an establishment as defined under Section 2(e) because the Bureau's research activity is not industry, trade, business, manufacture or occupation. Finally, under the Industrial Disputes Act, the definition of industry in Section 2(j) excludes educational, scientific, research or training institutions. Thus the Bureau is excluded from the operation of the Industrial Disputes Act.
20. For the above reasons, I do not find any merit in this O.A. and it is accordingly dismissed. No costs.