Supreme Court - Daily Orders
Esi Corporation vs Fci Workers Union on 19 November, 2019
Bench: Uday Umesh Lalit, Indu Malhotra
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.8841-8842 OF 2019
(Arising out of SLP (Civil) Nos.7211-7213 of 2019)
ESI CORPORATION Appellant
VERSUS
FCI WORKERS UNION & ORS. Respondents
O R D E R
Leave granted.
These appeals question the judgment and order dated 06.11.2017 passed by the High Court of Judicature at Madras, Madurai Bench, in CMA (MD) No.534 of 2017 and CMP (MD) Nos.5730 & 7713 of 2017.
The instant proceedings arose out a show-cause notice issued by the ESI Corporation as to why benefit of the notification dated 20.07.2009 be not extended to 52 employees working with Food Corporation of India at Tuticorin, Tamil Nadu.
Signature Not VerifiedDigitally signed by MUKESH KUMAR Date: 2019.11.27 18:16:35 IST Reason: 2 The notice was challenged on the grounds inter alia that the activity conducted by the Food Corporation of India would not come within the expression “warehousing” as detailed in said notification and that said 52 workers were actually part of what is referred to as “Direct Payment System” work force.
The Labour Court, Tirunelveli having held in favour of the ESI Corporation, the appeal at the instance of the Workers’ Union was considered by the High Court.
Before the High Court, the learned counsel appearing on behalf of the Food Corporation of India accepted that the status of those 52 employees was not as “casual workers” or “contract employees”. The matter was considered by the High Court as under:
“17. Shri Vijaya Kumar, learned counsel for the food Corporation of India fairly admitted that DPS employees cannot be termed as casual labour or contract workers. A casual worker in the very nature of things is employed for the day. There is no permanency attached to his status. On the other hand, the DPS worker has been conferred with a certain status. They are conferred with a number of benefits such as Gratuity, Bonus, Production linked incentives, leave etc., more than anything else, there is even a scheme for compassionate appointments. In other words, if a DPS employee dies in harness, his dependent is given appointment on compassionate grounds. Therefore, by no stretch of imagination can he be called as casual or contract labour.3
18. When once it is concluded that the DPS employees are not casual or contract labour, they are automatically out of the purview of the notification dated 20.07.2009, I therefore answer the third question of law in favour of the appellant. I hold that the DPS workers of Food Corporation of India, are not covered by the notification dated 20.07.2009.” The High Court thus allowed the appeal and held that the DPS employees could not be treated as casual or contract labour and that they were out of the purview of the notification dated 20.07.2009.
In this appeal challenging the decision of the High Court, we have heard Mr. Mahesh Srivastava, learned counsel for the appellant ESI Corporation, Mr. Ajit Pudussery, learned counsel for respondent no.3 Food Corporation of India , and, Mr. C.U. Singh, learned Senior Counsel for respondent nos.1 and 2, FCI Workers Union.
At the outset, we may note the stand taken by the Food Corporation of India in paragraphs 3 and 4 of its counter affidavit, which is to the following effect:
“3. I say that as per notification dated 20.09.2009 issued by the Ministry of Labour the provisions of Employees’ State Insurance Act, 1948 were made applicable to the establishments specified in column (1) and stipulated in area specified in column (2) and to the category of employees specified in column (3) of the schedule. Perusal of the schedule shows that warehousing is one of the establishments mentioned in Column (1) but the category of workers to whom the provisions of ESI Act will apply has been restricted to “All casual and contract workers”.4
Therefore, the basic requirement for application of the said notification to DPS workers is that they should be either casual or contract workers. In this regard, it may be pertinent to mention here that out of nearly 1800 depots of Food Corporation of India, 226 depots have been notified by Central Government under section 10 of Contract Labour (R&A) Act, 1970 thereby prohibiting engagement of contract workers in the said notified depots. There are some other depots where engagement of contract labour was prohibited by way of settlements under the pressure of strikes and agitations by the labour unions. Presently, there are 297 depots where handling work is carried through Regular labours and the work in remaining depots is carried through contract labour. Initially, the contract labour used to be regularised under Departmental Labour System (DLS) which carries pay scales, allowances and incentives. As the work at depots is of sporadic nature, the handling cost under DLS was found to be exorbitantly high since it involves huge idle wages when there is no work and huge incentive amount when there is sudden spurt of work like arrival of rake for loading/unloading. Therefore, after 1991, wherever contract workers were to be regularised upon prohibition of contract labour system, the contract workers were regularised under Direct Payment System (DPS).
4. The contract workers after regularisation under DPS no longer remains contract workers. As rightly claimed in their affidavit before Hon’ble Madras High Court in this case by FCI Workers Unions and rightly held by the Hon’ble Court vide impugned judgment dated 06.11.2017, the DPS workers are regular and permanent workers of FCI and by no stretch of imagination the DPS workers can be treated as contract or casual workers. The DPS workers enjoy various service benefits which leave no scope for doubt that they are regular employee of FCI. Some of the main benefits are listed below:
- Security of tenure as the age of superannuation is 60 years.
- Assured monthly wages on piece rate basis for the work performed during the month subject to minimum guaranteed wages.5
- Even when there is no work in the depot on a particular day, the wages are guaranteed as per the “A” area rates declared by Central Govt./State Govt. (whichever is higher) under Minimum Wages Act. If the DPS workers handle more work, they are paid more wages in terms of piece rate for each bag handled. In this way DPS workers have assured wages as well as scope for earning more by handling more work as per availability.
- In case of death of a DPS worker or his retirement on medical grounds, his Kith & Kind are entitled to compassionate appointment in his place as per Rules applicable to employees of Government of India.
- Provident Fund – CPF as per FCI (CPF) Regulations.
- Ex-gratia in lieu of Bonus.
- Productivity Linked Incentive (PLI)
- Gratuity as per Payment of Gratuity Act.
- Compensation under Workmen’s Compensation Act.
- Employees’ Pension Scheme 1995 w.e.f. 16.11.1995.
- Benevolent Fund Scheme.
- In addition to this they are provided with medical facility “First Aid Facility” in case of injury while on duty and indoor hospital treatment in empaneled hospitals of FCI.
- OTA – Admissible as per shops & Esst. Act or @ 1.1 of hourly earnings.
- Festival Advance.
- Uniform.
- Paid Weekly Off and Sick Leave – 10 days/year.” 6 Mr. C.U. Singh, learned Senior Counsel invited our attention to the decision of this Court in Workmen of Food Corporation of India v. Food Corporation of India, (1985) 2 SCC 136 para 201, to submit that the Workers’ Union has been engaged in long drawn proceedings against the Management seeking permanency of the work force employed with the Food Corporation of India. As a result of continuous efforts on the part of the Union, the contract workers engaged through the middlemen/contractors, have now been given the status of Direct Payment System workers where the middlemen/contractors are completely kept out and there is direct relationship of the workers with the Food Corporation of India.
It is further submitted that as is evident from the counter affidavit filed on behalf of the Food Corporation of India, various benefits are extended to the DPS workers and, therefore, if those very workers are bracketed and considered to be the contract labour/contract workers or casual workers, the benefits which are otherwise available to such work force may stand denied.
1 Para 20. In view of the discussion, this appeal has to be allowed and the award of the Tribunal rejecting the reference and denying the benefit must be quashed and set aside and an award be made that the aforementioned 464 workmen who had become the workmen of the Corporation continued to be the workmen employed by the Corporation and shall be entitled to all the rights, liabilities, obligations and duties as prescribed for the workmen by the Corporation. A formal award to that effect shall be made by the Tribunal.
7We see force in the submission advanced by Mr. C.U. Singh. It is accepted that since 1991 wherever contract workers were to be regularized upon prohibition of contract labour system, such persons have been regularized in Direct Payment System. In the circumstances, we see no reason to take any different view in the matter.
We, therefore, dismiss these appeals. No costs.
.................................J. [UDAY UMESH LALIT] .................................J. [INDU MALHOTRA] NEW DELHI;
NOVEMBER 19, 2019
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ITEM NO.11 COURT NO.6 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition for Special Leave to Appeal (C) Nos.7211-7213/2019 (Arising out of impugned final judgment and order dated 06-11-2017 in CMAMD No.534/2017, 06-11-2017 in CMPMD No.5730/2017, 06-11-2017 in CMPMD No.7713/2017 passed by the High Court Of Judicature At Madras At Madurai) ESI CORPORATION Petitioner(s) VERSUS FCI WORKERS UNION & ORS. Respondent(s) (IA No.117279/2019 – FOR PERMISSION TO FILE ADDITIONAL DOCUMENTS/ FACTS/ANNEXURES) Date : 19-11-2019 These matters were called on for hearing today. CORAM :
HON'BLE MR. JUSTICE UDAY UMESH LALIT HON'BLE MS. JUSTICE INDU MALHOTRA For Petitioner(s) Mr. Mahesh Srivastava, Adv.
Mr. Vaibhav Manu Srivastava, AOR For Respondent(s) Mr. C.U. Singh, Sr. Adv.
Mr. Rana Mukherjee, Sr. Adv.
Mr. R.R. Kumar, Adv.
Ms. Manjula Gupta, AOR Ms. Daisy Hannah, Adv.
Mr. Ajit Pudussery, AOR Mr. Vijayan K., Adv.
Mr. Ajeet Singh Verma, Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeals are dismissed, in terms of the signed order.9
Pending application(s), if any, shall stand disposed of.
(MUKESH NASA) (SUMAN JAIN)
COURT MASTER BRANCH OFFICER
(Signed Order is placed on the File)