Madras High Court
The Manager vs The Labour Inspector on 10 February, 2017
Author: M.Govindaraj
Bench: M.Govindaraj
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 10.02.2017
RESERVED ON : 24.11.2016
PRONOUNCED ON : 10.02.2017
CORAM
THE HONOURABLE MR.JUSTICE M.GOVINDARAJ
W.P.(MD) No.453 of 2011
and
M.P.(MD) Nos.1 & 2 of 2015
1.The Manager
The Poompuhar Shipping Corporation Ltd.,
Kanyakumari Ferry Service
rep.by its present Manager
Kanyakumari Post-629 702
Kanyakumari District
2.The Poompuhar Shipping Corporation Ltd.,
rep.by its present Chairman and
Managing Director
692, Anna Salai, Nanthanam
Chennai-600 035 ... Petitioners
-vs-
1.The Labour Inspector
Nagercoil
Authority under the Tamilnadu
Industrial Establishments (Conferment
of Permanent Status to Workmen) Act, 1981
Parvathavarthini Street
Ramavarmapuram, Nagercoil
2.T.Suresh
3.P.Regu Prakash
4.K.Neelakandan
5.T.Ilayaraja
6.M.Subash Sankar
7.N.Murugan
8.A.Ravi
9.A.Arokya Antony Arun
10.K.Tamil Balan
11.A.Ramesh
12.M.Anbarasan
13.K.Monickavasagam
14.P.Manikandan
15.S.Gnanaguru Subbiah ... Respondents
PRAYER: Writ Petition is filed under Article 226 of the Constitution of India
for issuance of writ of certiorari to call for the records on the file of the
first respondent in Na.Ka.No.832/2009, dated 29.10.2010 and to quash the
same.
!For Petitioners : Mr.K.V.Subramanian, Senior Counsel
for Mr.P.Thirumahilmaran
For Respondents : Mr.S.Kumar, A.G.P., for R1
Mr.M.Ajmalkhan, Senior Counsel
for Mr.H.Arumugam for R2 to R14
R15 ? No appearance
Mr.V.Kannan for proposed respondent
:ORDER
The prayer in this writ petition is for a certiorari to quash the order passed, in Na.Ka.No.832/2009, dated 29.10.2010, by the first respondent.
2. The petitioner / Poompuhar Shipping Corporation Ltd., is a Public Sector Undertaking of Tamil Nadu Government carrying Shipping Operations for Tamil Nadu Electricity Board and Shipping Coal from various Ports in India. In addition to the cargo handlings, in order to promote tourism and pilgrimage, they have established ferry service in Kanyakumari. They have been ferrying tourists and pilgrims from the shore to Vivekananda Rock Memorial and Ayyan Thiruvalluvar Statue, without any profit motive and only as a service for community. The Tamil Nadu Maritime Board, Chennai, has granted a licence for the ferry service of the petitioner-Corporation and regulated their ferry service. They are governed by the Service Rules framed by the Government of Tamil Nadu vide G.O.(D) No.750, Labour and Employment, dated 09.08.1994. They have employed managerial office staff, operating staff and security staff for carrying out their ferry operation in Kanyakumari. As per their Service Rules, the recruitment in service is by (i) direct recruitment, after calling for candidates from the Employment Exchange / advertising vacancy in Newspapers, (ii) Deputation from Central and State Government and (iii) By contract.
3. The Government of Tamil Nadu, vide G.O.Ms.No.212, Personnel and Administrative Reforms (P) Department, dated 29.11.2001, banned fresh recruitment of workers in service in the State Public Sector Undertakings / Boards. In order to meet the exigencies of the requirement for running ferry service and the requirements prescribed by the Tamil Nadu Maritime Board, the petitioner-Corporation engaged casual labourers through contractors. Accordingly, during 2003, they had called for tenders by furnishing job-wise requirements. The contractors submitted their quotations by specifying the nature of job as well as the minimum wage requirements for each category. Thereafter, the petitioner-Corporation had accepted the lowest tender. As per the tender conditions, the successful contractor would supply the manpower as per requirement from time to time within the period of contract and the contract period is one year and it would be terminated at the end of the contract period and new quotation would be called for every year.
4. According to the petitioner-Corporation, the fifteenth respondent was the successful contractor from 2003-2004 to 2008-2009 and he was allowed to supply the casual labourers. Thereafter, from 2009-2010, other contractors were selected through open tender and they were supplying the required casual labourers. During the contract period, the fifteenth respondent had supplied the required manpower and he had employed his own persons. He had maintained all the required labour records. He being the employer of the respondents 2 to 14 and others, had registered himself under the Employment Provident Funds and Miscellaneous Provisions Act (hereinafter, it may be called as ?the E.P.F. Act?), with Code No.TN75250 with the Office of the Regional Provident Fund Commissioner, Nagercoil and he had been paying the contribution for all the employees including the respondents 2 to 14. He had also taken Accident Group Insurance for his employees with M/s.New India Assurance Company, Nagercoil. He had also registered his name under the Employees State Insurance Act (hereinafter, it may be called as ?the E.S.I.Act, with Code No.66/30680/67, with the Regional Office, Tirunelveli and he had paying contribution to the E.S.I.Operation. Thus, factually and for all practical purposes, the fifteenth respondent is the direct employer of the respondents 2 to 14 and others.
5. The petitioner-Corporation would further submit that the fifteenth respondent had not furnished the name and address of the employees, who were deputed by him, to them. In order to ascertain the total manpower supplied in each category, the fifteenth respondent had informed the petitioner- Corporation about the number of persons supplied in each category and it was entered in the register maintained by the petitioner-Corporation.
6. The petitioner-Corporation would further submit that while the matter stood thus, a Union called ?Kumari Mavatta Thozhilalar Munnettra Sanga Peravai? raised an industrial dispute, on 06.08.2007, before the Assistant Commissioner of Labour, Conciliation, Nagercoil, demanding permanent status for 20 alleged contract workers including the respondents 2 to 14. A notice was issued for conciliation proceedings. The petitioner-Corporation filed their objections on 16.10.2007 and subsequently, the conciliation proceedings were abandoned. Thereafter, the respondents 2 to 14 along with others claimed conferment of permanent status, under Section 3 of the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 (hereinafter, it may be called as ?the Act?), before the first respondent, on the ground that they had worked 480 days in two consecutive years, namely, 2007 to 2008. Another 11 persons, represented by Poompuhar Shipping Corporation Employees Union, also filed application, dated 16.11.2009, claiming permanent status.
7. The petitioner-Corporation would further submit that they had filed their objections, but the first respondent refused to give ample opportunity to them, rather directed the respondents 2 to 14 to produce the details of work done by them and after conducting enquiry, the first respondent, by the impugned order in Na.Ka.No.832/2009, dated 29.10.2010, has declared the respondents 2 to 14 as permanent workers, under the Act, as they have continuously worked for 480 days in 24 calender months from 01.04.2007 to 31.03.2009, through the fifteenth respondent / Contractor and directed the petitioner-Corporation to pay all the monetary benefits to them within a period of 30 days from the date of receipt of that order. Aggrieved by the same, the petitioner-Corporation is before this Court.
8. The learned Senior Counsel appearing for the petitioner-Corporation would submit that the petitioner-Corporation would not come under the definition of ?Establishment? under Section 2(6) or ?Commercial Establishment? under Section 2(3) or ?Shop? under Section 2(16) of the Tamil Nadu Shops and Establishments Act, 1947 (hereinafter, it may be called as ?T.N.S.E.Act? and therefore, the petitioner-Corporation cannot be brought under T.N.S.E.Act and consequently, the provisions of the Act do not apply to them. Secondly, there is an exemption, under Section 4 of T.N.S.E.Act in respect of the State Government Establishments as well as State Government Undertakings. Thirdly, the petitioner-Corporation is not notified by the Government under Section 2(3)(g) of the Act as an ?Industrial Establishment?. Fourthly, conferment of permanent status to workmen, under Section 3 of the Act would be applicable only to the workmen, who directly employed in an Industrial Establishment and it would not be applicable to the workmen, who engaged through Contractors. The respondents 2 to 14 were admittedly engaged through the fifteenth respondent / Contractor and therefore, any relief of permanent shall be claimed against the fifteenth respondent / Contractor and not against the petitioner-Corporation. Fifthly, the direct employer alone is liable to register his employees under the E.P.F. & M.P., Act and E.S.I.Act and liable to submit returns and liable to pay contributions. Admittedly, the fifteenth respondent had registered his establishment under E.P.F.&M.P.Act with Code No.75250 and under E.S.I.Act with Code No.65/30680/67. Therefore, the contention that the respondents 2 to 14 were directly employed, through the fifteenth respondent / Contractor is not sustainable and further the first respondent has failed to conduct the enquiry fairly and properly and the conferment of permanent status has been decided in favour of the respondents 2 to 14 in a biased manner. There are lot of discrepancies in the facts and figures, basis on which, the first respondent declared the respondents 2 to 14 as permanent workers. In support of his contentions, the learned Senior Counsel has placed reliance upon the following decisions:
i. Dena Nath & Ors. v. National Fertilizers Ltd., & Ors., reported in 1992-I-LLJ-289;
ii. Reserve Bank of India v. Workmen, reported in (1996) 3 SCC 267; iii. HTL Ltd. vs. Deputy Chief Inspector of Factories, 4th Division and Ors., reported in 1998 1 MLJ 194;
iv. Justine L. v. Registrar of Co-operative Societies, reported in 2003-I- LLJ-284;
v. A.Umarani v. Registrar, Coop. Societies, reported in (2004) 7 SCC 112; vi. Manager, Reserve Bank of India v. S.Mani, reported in (2005) 5 SCC 100; vii. Himmat Singh v. I.C.I. India Ltd., reported in 2008-II-LLJ-643 (SC);and viii. Bengal Nagpur Cotton Mills v. Bharat Lal, reported in (2011) 1 SCC 635.
9. Per contra, the learned Senior Counsel appearing for the respondents 2 to 14 would submit that conferment of permanent status to the employees, who worked for a period of 480 days in a period of twenty four calender months in an industrial establishment is a statutory obligation under Section 3(1) of the Act, which reads as follows:
?3.Conferment of permanent status to workmen.--(1) Notwithstanding anything contained in any law for the time being in force every workman who is in continuous service for a period of four hundred and eighty days in a period of twenty-four calendar months in an industrial establishment shall be made permanent.?
10. Section 2(3)(e) of the Act, reads as follows:
?an establishment as defined in clause (6) of section 2 of the Tamil Nadu Shops and Establishments Act, 1947 (Tamil Nadu Act XXXVI of 1947)?.
11. Section 2(6) of T.N.S.E.Act, 1947, reads as follows:
?establishment means a shop, commercial establishment, restaurant, eating- house, residential hotel, theatre or any place of public amusement or entertainment and includes such establishment as the [State] Government may by notification declare to be an establishment for the purposes of this Act.?
12. The learned Senior Counsel appearing for the respondents 2 to 14 further submitted that a reading of Section 3(1) of T.N.S.E.Act, it could be seen that notwithstanding anything contained in any law for the time being in force every workman who is in continuous service for a period of four hundred and eighty days in a period of twenty four calender months in an industrial establishment shall be made permanent.
13. The learned Senior Counsel appearing for the respondents 2 to 14, accordingly, relied on his entire arguments on the following questions of law:
(i) Whether the petitioner-Corporation is an Industrial Establishment?
(ii) Whether the respondents 2 to 14 are entitled to claim permanent status?
14. The learned Senior Counsel appearing for the respondents 2 to 14 would further submit that as per Section 2(6) of T.N.S.E.Act, the State Government shall, by notification, declare a shop, commercial establishment, restaurant, eating-house, residential hotel, theatre or any place of public amusement or entertainment as Establishment. Accordingly, the petitioner-Corporation would fall under the category of ?any place of public amusement or entertainment? as the petitioner-Corporation is involved in the business of tourism for the entertainment of public at large. Further, as the petitioner-Corporation have been collecting Rs.20/- per head from the tourists for the purpose of transporting them, they shall be constructed as ?Commercial Establishment? and their contention that they are not doing business is not acceptable.
15. The learned Senior Counsel appearing for the respondents 2 to 14 relied on Section 4 of T.N.S.E.Act, which deals with appointment of Inspector for the purpose of conferment of permanent status and Rule 6 of the T.N.S.E.Rules deals with maintenance of registers by employers. According to the provisions, every employer of an industrial establishment should maintain a register of workmen in Form 1 and should produce the register whenever it is required by the Inspector having jurisdiction over the industrial establishment. But, the petitioner-Corporation has failed to do so. Therefore, the findings of the first respondent cannot be found fault with. Therefore, the contentions of the learned Senior Counsel appearing for the respondents 2 to 14 are that the petitioner-Corporation is an Establishment as defined under Section 2(6) of T.N.S.E.Act and the first respondent has jurisdiction under Section 4 of the Act to confer permanent status in favour of the respondents 2 to 14.
16. The second limb of the argument of the learned Senior Counsel appearing for the respondents 2 to 14 was that as to whether the petitioner-Corporation can take advantage of the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter, it may be referred to as ?C.L.(R.A.) Act?).
17. Section 7 of C.L.(R.A.) Act deals with registration of certain establishments, which reads as follows:
?7.Registration of certain establishments.--(1) Every principal employer of an establishment to which this Act applies shall, within such period as the appropriate Government may, by notification in the Official Gazette, fix in this behalf with respect to establishments generally or with respect to any class of them, make an application to the registering officer in the prescribed manner for registration of the establishment:
Provided that the registering officer may entertain any such application for registration after expiry of the period fixed in this behalf, if the registering officer is satisfied that the applicant was prevented by sufficient cause from making the application in time. (2)If the application for registration is complete in all respects, the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration containing such particulars as may be prescribed.?
18. Section 9 of C.L.(R.A.) Act deals with effect of non-registration, which reads as follows:
?9. Effect of non-registration?No principal employer of an establishment, to which this Act applies, shall--
(a) in the case of an establishment required to be registered under section 7, but which has not been registered within the time fixed for the purpose under that section,
(b) in the case of an establishment the registration in respect of which has been revoked under section 8, employ contract labour in the establishment after the expiry of the period referred to in clause (a) or after the revocation of registration referred to in clause (b), as the case may be.?
19. Section 12 of C.L.(R.A.) Act deals with licensing of contractors, which reads as follows:
?12.Licensing of contractors.--(1) with effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.
(2) Subject to the provisions of this Act, a licence under sub-section (1) may contain such conditions including, in particular, conditions as to hours of work, fixation of wages and other essential amenities in respect of contract labour as the appropriate Government may deem fit to impose in accordance with the rules, if any, made under section 35 and shall be issued on payment of such sum, if any, as security for the due performance of the conditions as may be prescribed.?
20. According to Section 12 of C.L.(R.A.) Act, the labour contractor shall register himself and obtain a licence from the Labour Department. But, the fifteenth respondent / Contractor is not a licensed contractor and therefore, the benefits of the Act is not applicable to the petitioner as well as the fifteenth respondent. Further, as per Rule 74 of C.L.R.A.Rules, every principal employer shall maintain, in respect of each registered establishments, a register of contractors in Form XII and as per Section 29 of C.L.(R.A.) Act, every employer shall maintain records containing the details of the contract labour employees, nature of the work performed by them, rates of wages paid to them and such other particulars. In sofar as the petitioner-Corporation is concerned, they have not produced such records before the first respondent.
21. The learned Senior Counsel appearing for the respondents 2 to 14, in support of his contentions, has placed reliance upon the following decisions:
i. Ram Kumar Misra v. State of Bihar, reported in (1984) 2 SCC 451; ii. V.Elayaperumal v. SBI, reported in (2007) 2 MLJ 886; iii. Hindustan Petroleum Corporation Ltd. v. The Presiding Officer, Central Government Labour Court-cum-Industrial Tribunal, reported in 2008 (4) CTC 819;
iv. Maharashtra SRTC v. Casteribe Rajya Parivahan Karmachari Sanghatana, reported in (2009) 8 SCC 556; and v. R.Lakshmi v. Chief Engineer (Personnel), TNEB, reported in (2012) 6 MLJ
480.
22. Heard both sides and perused the materials produced.
23. The admitted facts are that the petitioner-Corporation is an Undertaking of the Government of Tamil Nadu carrying cargo shipping operations for Tamil Nadu Electricity Board and shipping coal from various Ports in India. In addition to the shipping business, in order to promote the tourism and pilgrimage, they have been running ferry service ferrying the tourists and pilgrims from the shore to Vivekananda Rock Memorial and Ayyan Thiruvalluvar Statue. The Tamil Nadu Maritime Board, Chennai, has granted a licence for the ferry service to the petitioner-Corporation and regulated their ferry service. They are governed by the Service Rules framed by the Government of Tamil Nadu vide G.O.(D) No.750, Labour and Employment, dated 09.08.1994. They have employed managerial office staff, operating staff and security staff for carrying out their ferry operation in Kanyakumari. As per their Service Rules, the recruitment in service is by (i) direct recruitment, after calling for candidates from the Employment Exchange/ advertising vacancy in Newspapers, (ii) Deputation from Central and State Government and (iii) By contract.
24. In sofar as the ferry service is concerned, it is not the core business of the petitioner-Corporation and therefore, recruitment cannot be made as there were no substantive vacancies for the same. It is an incidental service rendered by the petitioner-Corporation and it is stated that since the ferry service is being done without any profit motive, the third method of recruitment of by contract cannot be adopted in view of G.O.Ms.No.212, Personal and Administrative Reforms (P) Department, dated 29.11.2001, whereby and whereunder, the Government of Tamil Nadu had imposed a ban on fresh recruitment. Therefore, no recruitment could be made for operating ferry service. In such exigencies, the manpower was availed through Contractors. The fifteenth respondent was one of such contractors supplying manpower for operating ferry service. Accordingly, the fifteenth respondent supplied manpower as required by the petitioner-Corporation. By the end of the month, the petitioner would pay the wages to the Contractors on the basis of the bills submitted by them. The Contractor was at liberty to send anybody to work as per the requirement and therefore, it cannot not be said that a same person was engaged continuously to do a particular work. Any X, Y or Z can be sent by the Contractor and the petitioner-Corporation is not concerned with any particular worker of their choice.
25. The petitioner-Corporation called for tenders furnishing job-wise requirements and in support of the same, they have produced certain quotations submitted by various Contractors and in sofar as the fifteenth respondent is concerned, between 2003 and 2009, he was the successful contractor for supplying the required casual labourers and 2009 onwards another Contractor was engaged. In sofar as the respondents 2 to 14 are concerned, they are the employees of the fifteenth respondent and they have no privity of contract with the petitioner-Corporation. In order to prove the same, the learned Senior Counsel relied upon the conduct of the fifteenth respondent in registering himself under the provisions of E.P.F. & M.P., Act and E.S.I.Act and the Group Insurance for his employees with M/s.New India Assurance Company, Nagercoil. The respondents 2 to 14 had also submitted their Service Certificates obtained from the fifteenth respondent in support of their claim of conferment of permanent status. Therefore, it could be seen that the respondents 2 to 14 were infact employed by the fifteenth respondent.
26. The petitioner-Corporation is a principal employer and the fifteenth respondent is the Contractor supplying manpower. The learned Senior Counsel appearing for the petitioner-Corporation relied on the Certificate given by the fifteenth respondent, namely, M/s.Guru Engineering Works. On perusal of the same, it is seen that it is registered under the Partnership Act.
27. The learned Senior Counsel appearing for the petitioner-Corporation took this Court through the length and breadth of the Contract Labour (Regulation and Abolition) Act, 1970. According to the said Act, the requirement of registration of the principal employer under Section 7 and the licenced contractor under Section 12 will not change the nature of the relationship between the petitioner and the fifteenth respondent. In sofar as the non-compliance of the provision will result in penal consequence, which is explained under Chapter-VI. Section 23 of the said Act deals with contravention of provisions regarding employment of contract labour, which is extracted hereunder:
?23.Contravention of provisions regarding employment of contract labour.-- Whoever contravenes any provision of this Act, or of any rules made thereunder prohibiting, restricting or regulating the employment of contract labour or contravenes any condition of a licence granted under this Act, shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to one thousand rupees, or with both, and in the case of a continuing contravention with an additional fine, which may extend to one hundred rupees for every day during which such contravention continues after conviction for the first such contravention.?
28. Section 25 of the said Act deals with offences by companies, which is extracted hereunder:
?25.Offences by companies.--If the person committing an offence under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the offence is attributable to any neglect on the part of any director, manager, managing agent or any other officer of the company, such director, manager, managing agent or such other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.?
29. Further, under Section 28 of the said Act, the appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be inspectors for the purposes of the said Act and define the local limits within which they shall exercise their powers under the said Act. In sofar as the first respondent is concerned, he is not an Inspector notified under the said Act and he is not empowered to act as an Inspector in respect of the contract labourers under the said Act.
30. The learned Senior Counsel appearing for the petitioner-Corporation would vehemently argue that the contentions of the respondents 2 to 14 are not legally sustainable. The ?establishment? is defined under Section 2(e) of C.L.(R.A) Act itself. According to Section 2(c) of C.L.(R.A) Act, ?Contractor? in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than 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. According to Section 2(e) of C.L.(R.A) Act, ?establishment? means (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. According to Section 2(g) of C.L.(R.A) Act ?principal employer? means (i) in relation to any office or department of the Government or a local authority, the head of that office or department or such other officer as the Government or the local authority, as the case may be, may specify in this behalf. Therefore, when the ?establishment? is defined under C.L.(R.A) Act itself, it need not borrow explanation from the other Acts. Hence, the Tamil Nadu Shops and Establishments Act, 1947 has no application to the case on hand and hence, the petitioner-Corporation would not fall under the purview of the Act 46 of 1981 and if there is any contravention to the Rules, it would be governed by C.L.(R.A) Act.
31. The learned Senior Counsel appearing for the petitioner-Corporation would further submit that since the ban was lifted much later, the averment that the respondents 2 to 14 were engaged as contract labourers directly by the petitioner-Corporation is totally misconceived. On the other hand, their engagement by the fifteenth respondent has been amply proved. Even assuming that there was no registration of principal employer under Section 7 and licencing of contractor under Section 12 of the Act, whether the persons so appointed by the employer by contract would be deemed to be employees of the principal employer was came to be questioned in Dena Nath's case (cited supra), wherein the Hon'ble Supreme Court, while dealing with Sections 7, 9, 12, 23 and 25(2) of C.L.(R.A) Act, has held that it is not for the High Courts to enquire into the question and decide whether the employment of contract labour in any process, operation or in any other work in any establishment should be abolished or not. It is a matter for the decision of the Government after considering the matter as required to be considered under Section 10 of the Act. The only consequence provided in the Act where either the principal employer or the labour contractor violates the provisions of Sections 9 and 12 respectively is the penal provision as envisaged under the Act for which reference may be made to Sections 23 and 25 of the Act. In a writ petition the High Court could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer.
32. In Himmat Singh's case (cited supra), the Hon'ble Supreme Court relying on the decision in Steel Authority of India Ltd. v. Union of India and Others, reported in (2006) 12 SCC 233, has held that the workmen whether before the Labour Court or in writ proceedings were represented by the same union. A trade union registered under the Trade Unions Act is entitled to espouse the cause of the workmen. A definite stand was taken by the employees that they had been working under the contractors. It would, thus, in our opinion not lie in their mouth to take a contradictory and inconsistent plea that they were also the workmen of the principal employer. To raise such a mutually destructive plea is impermissible in law. Such mutually destructive plea, in our opinion, should not be allowed to be raised even in an industrial adjudication. Common law principles of estoppel, waiver and acquiescence are applicable in an industrial adjudication.
33. In sofar as the respondents 2 to 14 are concerned, they took support of the Service Certificates issued by the fifteenth respondent for the purpose of counting their continuous service before the first respondent. In sofar as their plea that they have served under the fifteenth respondent for 480 days is concerned, they joined together and claimed permanency under the principal employer, all the more they can get permanent status only with the fifteenth respondent.
34. In Justin's case (cited supra), it is observed that any appointment, which is made illegally, merely on the passage of time and completion of the stipulated period of 480 days under the Permanency Act of 1981 or 24 days under the Industrial Disputes Act, 1947, an indefeasible right accrues to an employee cannot be accepted. There is lot of difference between irregularity and illegality. Irregular is something which is done in an authorised manner but while doing so, there is some procedural irregularity. Illegality is altogether different. An action is illegal if it is contrary to law. In the instant case, the petitioner-Corporation is governed by G.O.(D) No.750, Labour and Employment, dated 09.08.1994. According to the same, the cadre strength have been defined. Appointments cannot be made over and above the cadre strength. By the order of the first respondent, the permanent appointment is issued over and above the cadre strength, which is not within the cadre strength and the permanent employees can be appointed only against the substantive vacancy and in the absence of specific vacancy, they cannot be appointed. Therefore, conferment of permanent status is not automatic to the case on hand.
35. The respondent Corporation is engaged in a different business, the substantive vacancies were available with regard to its core business and the incidental service done by them, does not involve creation of posts. Hence, it can be inferred there are no substantive vacancies against which the employees can be absorbed or conferred with permanent status.
36. In Mani's case (cited supra), it is held that initial burden of proof is on the workmen to show that they had completed 240 days of service. Onus of proof does not shift to employer nor is the burden of proof on the workman discharged, merely because employer fails to prove a defence or an alternative plea of abandonment of service. Filing of affidavit of workman to the effect that he had worked for 240 days continuously or that the workman had made repeated representations or raised demands for reinstatement, is not sufficient evidence that can discharge the said burden.
37. In the instant case, even though a repeated statement was made that the respondents 2 to 14 were engaged through the fifteenth respondent and they had continued as workers under the petitioner-Corporation, the service certificates produced by them proves contrary. They have not discharged their burden of proving that they were directly engaged by the petitioner- Corporation.
38. In Bharat Lal's case (cited supra), service agreement between the principal employer and the contractor was whether sham and nominal came to be discussed. The two well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. In these contexts, the Supreme Court relied on the decision in Airport Authority of India v. International Air Cargo Workers' Union, reported in (2009) 13 SCC 374, wherein it is held that:
?38.....if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor.
39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor.?
39. In the instant case, admittedly the casual labourers were engaged through the Contractor. For all statutory benefits, the employees were entitled under the Contractor. In other words, the right to regulate the employment was with the Contractor, even though the employees worked under the directions of the principal employer.
40. In HTL Ltd's case (cited supra), this Court has followed the decisions referred above and decided against the conferment of permanent status.
41. In sofar as the second limb of the arguments of the learned Senior Counsel appearing for the petitioner-Corporation is that the attempt made by the respondents 2 to 14 amounts to back door entry. Relying on the decision in Umarani's case (cited supra), it was argued that in cases, where regularization was sought for in favour of the irregular appointees of the Co-operative Societies, it was held that when appointments were made in contravention of mandatory provisions of the Act and statutory rules framed thereunder and in ignorance of essential qualifications, the same would be illegal and cannot be regularised by the State and the State cannot invoke power under Article 162 of the Constitution of India to regularize such appointments nor the State can issue order of regularization under Sections 170 and 182 of Tamil Nadu Co-operative Societies Act, 1983.
42. Further, the Supreme Court in various decisions has held that when many of the youths waiting at the doors of the Employment Exchanges, appointments through back-door is in violation of Articles 14 and 16 of the Constitution of India. The decision in Umarani's case also deprecates the back-door engagement through contractors and appointments without following the mandatory procedures of the recruitment rules. In the instant case, the petitioner-Corporation has been doing coal business of cargo shipping and transportation of coal to Tamil Nadu Electricity Board among doing business of tourism. As stated by them, it is only a service of ferrying tourists without any profit motive. They would not fall under the purview of Section 2(6) of T.N.S.E.Act as it is not a place of public entertainment or public amusement as contended by the learned Senior Counsel appearing for the respondents 2 to 14.
43. In Ram Kumar Misra's case (cited supra), Bhagalpur and Sultanganj ferries were carrying on business or trade of plying ferries across the Ganges. The core business itself is ferrying the people of commercial places. Therefore, while they were carrying on business or trade of plying ferries, they were construed as 'establishment' in Section 2(6) of the Bihar Shops and Establishments Act, 1953. But, in the instant case, the core business of the petitioner-Corporation is not ferry service. But, it is only a service to transport the tourists from shore to Vivekananda Rock Memorial and Ayyan Thiruvalluvar Statue. The shore as well as the Vivekananda Rock Memorial and Ayyan Thiruvalluvar Statue may be considered as a place of entertaining. But, the ferry service of the petitioner-Corporation cannot be treated as entertaining to bring it under the purview of T.N.S.E.Act.
44. At this state, the decision in Casteribe Rajya Parivahan Karmachari Sanghatana's case (cited supra) relied on by the learned Senior Counsel for the respondents 2 to 14 has to be looked into as to whether it would be applicable to the instant case on hand. In the said case, the Supreme Court, while dealing with Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, has explained the purpose and object of the said Act. In that Corporation, the posts of Cleaners and Sweepers were existing and each and every category had very much vacancies and persons were employed as casual labouers and were paying paltry sum as wages. Whereas, some employees in the respondent Corporation were designated as Swachhak and they were getting such higher salary than the employees covered by the complaint. The employees covered by the complaints were previously paid Rs.10.50 per day, and the same mode of payment was converted in the piece rate basis. Therefore, it was considered the non-payment of fair wages as unfair labour practice and exploiting the labours when vacancies were available without giving them permanency is also unfair labour practice. In that context, it was held that:
?30. The question that arises for consideration is: have the provisions of MRTU & PULP Act denuded of the statutory status by the Constitution Bench decision in Umadevi?. In our judgment, it is not.
31. The purpose and object of MRTU & PULP Act, inter alia, is to define and provide for prevention of certain unfair labour practices as listed in Schedule II, III and IV. MRTU & PULP Act empowers the Industrial and Labour Courts to decide that the person named in the complaint has engaged in or is engaged in unfair labour practice and if the unfair labour practice is proved, to declare that an unfair labour practice has been engaged in or is being engaged in by that person and direct such person to cease and desist from such unfair labour practice and take such affirmative action (including payment of reasonable compensation to the employee or employees affected by the unfair labour practice, or reinstatement of the employee or employees with or without back wages, or the payment of reasonable compensation), as may in the opinion of the Court be necessary to effectuate policy of the Act.
32. The power given to the Industrial and Labour Courts under Section 30 is very wide and the affirmative action mentioned therein is inclusive and not exhaustive. Employing badlis, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent employees is an unfair labour practice on the part of the employer under item 6 of Schedule IV. Once such unfair labour practice on the part of the employer is established in the complaint, the Industrial and Labour Courts are empowered to issue preventive as well as positive direction to an erring employer.
33. The provisions of MRTU & PULP Act and the powers of Industrial and Labour Courts provided therein were not at all under consideration in the case of Umadevi. As a matter of fact, the issue like the present one pertaining to unfair labour practice was not at all referred, considered or decided in Umadevi1. Unfair labour practice on the part of the employer in engaging employees as badlies, casuals or temporaries and to continue them as such for years with the object of depriving them of the status and privileges of permanent employees as provided in item 6 of Schedule IV and the power of Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench.
34. It is true that the case of Dharwad District PWD Literate Daily Wage Employees Assn. arising out of industrial adjudication has been considered in Umadevi1 and that decision has been held to be not laying down the correct law but a careful and complete reading of decision in Umadevi1 leaves no manner of doubt that what this Court was concerned in Umadevi was the exercise of power by the High Courts under Article 226 and this Court under Article 32 of the Constitution of India in the matters of public employment where the employees have been engaged as contractual, temporary or casual workers not based on proper selection as recognized by the rules or procedure and yet orders of their regularization and conferring them status of permanency have been passed.
35. Umadevi is an authoritative pronouncement for the proposition that Supreme Court (Article 32) and High Courts (Article 226) should not issue directions of absorption, regularization or permanent continuance of temporary, contractual, casual, daily wage or ad-hoc employees unless the recruitment itself was made regularly in terms of constitutional scheme.
36. Umadevi does not denude the Industrial and Labour Courts of their statutory power under Section 30 read with Section 32 of MRTU & PULP Act to order permanency of the workers who have been victim of unfair labour practice on the part of the employer under item 6 of Schedule IV where the posts on which they have been working exists. Umadevi cannot be held to have overridden the powers of Industrial and Labour Courts in passing appropriate order under Section 30 of MRTU & PULP Act, once unfair labour practice on the part of the employer under item 6 of Schedule IV is established.?
45. In the same decision, the Supreme Court relying on the decision in State of Maharashtra v. R.S.Bhonde, reported in (2005) 6 SCC 751 has reiterated the legal position that status of permanency cannot be granted when there were no posts and also following the decision in India Drugs ^ Pharmaceuticals Ltd. v. Workmen, reported in (2007) 1 SCC 408, it is held that creation and abolition of posts and regularisation are purely executive functions vide P.U.Joshi v. Accountant General, reported in (2003) 2 SCC 632. Hence, the Court cannot create a post where none exists. Also, we cannot issue any direction to absorb the respondents or continue them in service, or pay them salaries of regular employees, as these are purely executive functions. This Court cannot arrogate to itself the powers of the executive or legislature. There is broad separation of powers under the Constitution and the judiciary, too, must, know its limits.
46. In another case, in Aravali Golf Club v. Chander Hass, reported in (2008) 1 SCC 683, it is held that the court cannot direct the creation of posts. Creation and sanction of posts is a prerogative of the executive or legislative authorities and the court cannot arrogate to itself this purely executive or legislative function, and direct creation of posts in any organisation. This Court has time and again pointed out that the creation of a post is an executive or legislative function and it involves economic factors.
47. In Casteribe Rajya Parivahan Karmachari Sanghatana's case (cited supra), the Supreme Court has clearly held that Uma Devi's case relates to granting permanent status to employees, who were working as casual workers / daily wagers and whose appointments were made without following the procedure prescribed in General Standing Order 503 on non-existent posts is unsustainable in law.
48. As per Uma Rani's case, no direction could be given for creation of posts. Therefore, it cannot be said that the petitioner-Corporation shall create posts and confer permanent status to the workers. In other words, this Court cannot direct the petitioner-Corporation to confer permanent status to the respondents 2 to 14 in non-existing posts.
49. To sum up, C.L.(R.A.) Act by itself contains the definition of establishment and provides penal provision for violation of the statutory provisions therein. As held by the Hon'ble Supreme Court only because of certain violation of the statutory requirements, the casual workers cannot become permanent employees of the principal employer and claim permanent status. Secondly, conferment of permanent status can be given to an employee under whom he is directly employed. In the instant case, it is amply proved that the respondents 2 to 14 were engaged by the fifteenth respondent and from the service certificates and other beneficial provisions under E.S.I.Act., it is clearly seen that they are direct employees of the fifteenth respondent and they are entitled to permanency against the fifteenth respondent and not against the petitioner-Corporation. Thirdly, even assuming that the petitioner-Corporation has not produced any records relating to the casual labourers, that will not confer any right to get permanent status without creation of posts or substantive posts. In the absence of any vacancy, permanency cannot be directed to be given in favour of the workers. Therefore, for the foregoing reasons, this Court is of the view that the impugned order passed by the first respondent is liable to be set aside.
50. Before parting with the case, this Court makes it clear that the order passed in this writ petition shall not be construed as an embargo against respondent nos.2 to 14 for their future consideration by the petitioners. As contended, the ferrying service, though not a core business, is a perennial feature in the ensuing years also. The Government in all probabilities will continue the same. In such an event, the Government / Departments of the Government / Public Sector Undertakings, has a duty to create posts, rather than exploiting labourers. Though Courts cannot arrogate itself in the executive function of creating posts, can direct the executive to give preference to the well experienced respondent nos.2 to 14 considering their long service in the event of creation of posts and selection, by relaxing the age and educational qualifications as one time measure.
51. In the result, the writ petition is allowed and the impugned order passed, in Na.Ka.No.832/2009, dated 29.10.2010, by the first respondent, is set aside. No costs. Consequently, connected miscellaneous petitions are closed.
To:
The Labour Inspector, Nagercoil, Authority under the Tamilnadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, Parvathavarthini Street, Ramavarmapuram, Nagercoil.
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