Madras High Court
J. Elangovan vs The Central Government on 3 December, 2010
Author: Chitra Venkataraman
Bench: Chitra Venkataraman
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.12.2010
CORAM:
The Honourable Mrs.JUSTICE CHITRA VENKATARAMAN
Writ Petition No.27449 of 2006
& M.P.No.2 of 2006
1 J. ELANGOVAN
27 RAJI STREET KAMARJAR NAGAR
AYYANPURAM CHENNAI - 23.
2 V. KARTHIKEYAN
NO.60 KANNIAH STREET
AMINJIKARAI CHENNAI - 29.
3 P. BABU
NO.15 II CROSS STREET
BV NAGAR CHENNAI - 114.
4 V. UMAPATHY
THIRUKUPATTU VILLAGE ANJUR POST
SINGAPERUMAL KOIL 603 204.
5 C. KARTHIRAJ
NO.5 SUBRAMANI BHARATHI STREET BALAJI
NAGAR ANAKAPUTHUR CHENNAI - 70.
6 VENKATESAN
NO.22/2 VELAYUTHACHETTY STREET
3 LANE PUDUPET CHENNAI.
7 JOHN
NO.7 III STREET MANGALAPURAM
WEST MAMBALAM CHENNAI 45. .... PETITIONERS
VERSUS
1 THE CENTRAL GOVERNMENT
INDUSTRIAL TRIBUNAL CUM LABOUR COURT
REP. BY ITS PRESIDING OFFICER
I FLOOR B-WING
NO.26 HADDOWS ROAD
SHASTRI BHAVAN
CHENNAI - 06.
2 THE DIRECTOR
INTERNATIONAL AIRPORTS AUTHORITY OF INDIA
MEENAMBAKKAM CHENNAI - 27.
3 M/S. SAI ELEVATORS
T-8 NITHY APARTMENTS
NO.1 THOMAS ROAD
T. NAGAR CHENNAI 17. .... RESPONDENTS
PETITION under Article 226 of The Constitution of India praying for the issuance of Writ of Certiorari calling for the records relating to the award dated 25.04.2006 passed in I.D.No.18 of 2005 by the 1st respondent Tribunal and quash the same in so far as the petitioner herein and hold that the petitioners are direct labour of the 2nd respondent entitled to all benefits granted to regular lift operators.
For Petitioners : Mr.N.G.R.Prasad
for M/s.Row and Reddy
For Respondents: Mr. R.Parthiban R2
-------------
O R D E R
The petitioners herein have filed this Writ Petition as against the award of the Tribunal in I.D.No.18 of 2005 dated 25.04.2006 holding that the petitioners are not entitled to be declared as workers of the second respondent.
2. The petitioners were employed as lift operators in the second respondent Airport Authority of India. Admittedly, their services were taken through the third respondent, who remained ex parte before the Tribunal as well as before this Court. The petitioners contend that having regard to Section 12 of the National Airports Authority of India Act, 1985, the provision of providing lift facility being part of its functioning, the employment of the petitioners through the agency of the third respondent is a sham transaction. Hence, the second respondent, in law, is bound to treat them as their employees with all the service benefits.
3. Under order dated 12.10.2004, the issue now raised was referred to under the Industrial Disputes Act to the Central Government Industrial Tribunal cum Labour Court by the Central Government, Ministry of Labour. The parties herein had filed their claim statement and the counter statement. Evidence was let in by the petitioners herein through one Karthikeyan, who is also a petitioner herein as W.W.1 and on behalf of the second respondent, the Deputy General Manager (Law) of the second respondent was examined as M.W.1. The Tribunal considered the claim of the parties herein by raising the following issues for its consideration:
"(i) Whether the dispute raised by the petitioners against the 1st respondent/Management to declare them as workers of 1st Respondent with effect from the date of their joining of service and for granting all benefits applicable to the employees of 1st respondent is justified?
(ii) To what relief the petitioners 2 to 9 are entitled?"
4. In considering the various evidence of M.W.1 and W.W.1, the Tribunal came to the conclusion that the control and supervision exercised by the second respondent was only to ensure efficiency and quality of work, which is technical in nature and which has to be carried on under technical guidance. Going by the terms of the contract, which was marked as Ex.M.1 dated 12.8.1996, the Tribunal came to the conclusion that the entire control and supervision of the petitioners could not be treated as with the second respondent. The production of attendance register and duty roster did not establish the effective control by the second respondent. Thus the Tribunal came to the conclusion, based on Ex.M.1, that the contract is a genuine contract and there is nothing sham and nominal to reject the contention of the second respondent only to hold that the petitioners are the staff of the second respondent.
5. Principally, the contention of the petitioner rests on the following:
(i) The test for determining as to whether the workers hired through the contractors could be treated as employees of the principal employer rests on nature of activity entrusted. where the nature of work entrusted to the contract workers are integral part of the activity of the establishment, the intervention of an intermediary, the absence of direct relationship between workers and the principal employer and the absence of control by the principal employer, payment of salary by the contractor and maintenance of attendance register by the contractor are not of any consequence. Hence, one has to lift the veil to look at the actual state of affairs governing employment.
(ii) When the nature of job entrusted to the contract worker are the same as the one done by the regular employee, the agreement through which these contract labour are employed is a sham and fit to be rejected.
6. Going by Section 12(3)(o) of the Airport Authority of India Act, the obligation, be it incidental or convenient for the discharge of the function conferred or imposed on the respondent, the providing of a lift facility is an integrated activity. As such, the question of who has control over the contract labour is not of any consequence. Hence, the principle of integration is a relevant consideration to be applied in this case to find out the existence of employer-employee relationship.
7. Before going into the contentions, the principle involved in a matter of this nature needs to be noted.
8. Learned counsel appearing for the petitioners placed reliance on the decisions reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others); (1987) 1 SCC 700 (Catering Cleaners of Southern Railway V. Union of India and another); (1974) 3 SCC 498 (Silver Jubilee Tailoring House and others V. Chief Inspector of Shops and Establishments and another); (2003) 7 SCC 488 (Mishra Chatu Nigam Ltd. and others V. M.Venkataiah and others); (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others) and lastly (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others) only to emphasize that the issue on the sham and nominal character of the contract has to be seen from the point of the integral activity of providing lift service by the second respondent and not by the mere terms of the agreement. In the context of the statutory obligations, the issue like maintenance of log book, attendance register, payment of salary and disciplinary action recite to the background and are not of much relevance to the case. In the circumstances, the view of the Tribunal suffers from fundamental error in its approach.
9. In the decision reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others), the Supreme Court laid the test for determining the workmen employed by the independent contractor to work in employer's factory. The said issue relates to hiring workmen through contractors by an industry manufacturing ropes. The Supreme Court pointed out to the admitted fact that the work done by the contract labour was an integral part of the industry concerned and the workmen were broadly under the control of the Management. In considering the obligation of the Management to treat them as their employees, the Supreme Court pointed out as follows:
"5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor."
10. In the decision reported in (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others), the Apex Court considered the notification issued under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970. The said notification by the Government of West Bengal dealt with prohibiting the employment of contract labour in 16 departments covering 65 jobs in the establishment of Indian Iron & Steel Company Ltd. The list of Departments and the jobs are annexed in the schedule to the notification. One of the Departments related to Brick Department excluding the job of loading and unloading of bricks from the wagons and trucks. On a challenge made by the affected workers that they had been subjected to hostile discrimination so much so that the workmen doing the same job in other departments and allied jobs in the same department had been rescued from the system of contract labour, the Supreme Court pointed out that the bricks handled by the Brick Department were used in furnaces of the company as refractory and incidental to the industry carried on by the company. The petitioners therein were employed as contract labour by the company for the last 15 to 20 years. The Supreme Court further pointed out that even though the petitioners therein were not doing the job of stacking the bricks, there was no denial or any averment or material to show that the job of loading and unloading of bricks was not incidental or alike to the stacking of the bricks; on the other hand, they are one continuous process. That being so, the workers performing these jobs which are of perennial nature, are to be treated alike. The Supreme Court pointed out that the workers doing the job of loading and unloading from the wagons and trucks in the Brick Department are to be treated on par with those who are doing the job of cleaning and stacking in the said Department. The Supreme Court further pointed out that there was no reason as to why others doing the same job should be treated differently.
11. Great emphasis was placed by the learned counsel appearing for the petitioners on this judgment by contending that when the nature of job entrusted to the petitioners are no different from those who are permanently employed and that the operation of lifts is an integral activity of the second respondent herein, there are no grounds to treat these petitioners differently. Given the fact that the work performed by these petitioners, under the contract with the third respondent, are self-same as that of the regular employees, the second respondent cannot act in a discriminatory manner. Hence, it is not possible to engage one set of workers discharging the very same responsibilities as coming under contract labour. He further submits that the provisions contained in Section 12(3)(o) of the Airports Authority of India Act assumes significance. Read in the context of the said provision, the contract itself is sham and nominal.
12. In considering the question as to the integrated activity, the decision reported in (1987) 1 SCC 700 (Catering Cleaners of Southern Railway V. Union of India and another), relied on by the petitioners, also needs to be noted.
13. This decision relates to a case of a contract labour engaged for cleaning catering establishments and pantry cars in Southern Railway. The Supreme Court pointed out that although contract system of employment has been abolished in almost all other Railways, the Southern Railways continued employing contract labour through a private agency for cleaning catering establishment and pantry cars to serve the public better. In considering the claim of the contract labour, the Supreme Court pointed out that the work of cleaning catering establishments and pantry cars is necessary and incidental to the industry or the business of the Southern Railway; the employment is of perennial nature and that the work required employment of sufficient number of whole-time workmen. Thus these factors satisfy the provisions under Section 10(2) of the Contract Labour (Regulation and Abolition) Act, 1970. Considering such factors, instead of issuing a Mandamus, the Supreme Court directed the Central Government to take appropriate action under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 in the matter of prohibiting employment of contract labour in the work of cleaning catering establishments and pantry cars in Southern Railway. The Supreme Court further directed that these workmen, who were previously employed by the contractor on the same wages and conditions of work as are applicable to those engaged in similar work in Western Railway, be absorbed without waiting for the decision of the Central Government.
14. Thus the above-said decision considered the case where the Railway Administration went in for a service to be extended to the travelling public, which does not, per se, come as an integrated activity or out of a statutory obligation.
15. The decision reported in (1974) 3 SCC 498 (Silver Jubilee Tailoring House and others V. Chief Inspect or of Shops and Establishments and another) relates to a case where certain employees claim the status of regular workers in a tailoring house "as employed in the establishment" within the meaning of Section 2(14) of the Shops and Establishments Act. The workers therein attended the shop every day, if there is work. The rate depended upon the skill of the worker and the nature of the work. If there is no work, the employee is free to leave the shop before the shop closes. It was pointed out that almost all the workers therein worked in the shop. Some workers were allowed to take cloth for stitching to their homes on certain days with the permission of the Proprietor of the shop.
16. In considering the question as to whether there existed employer-employee relationship between the workers and the Management, the Supreme Court pointed out that the control test, which is normally adopted for considering the question like this, although it may be an important fact, yet, it is not an exclusive test or a decisive test. The Apex Court pointed out that if the ultimate authority over the performance of the work of the employee rested in the employer so that he was subject to the supervision of the principal employer, that would be sufficient.
17. On the facts of the case, the Supreme Court pointed out that where a person hires out a piece of work to an independent contractor, it follows that even if a person is not wholly employed, but if he is principally employed in connection with the business of the shop, he will be a 'person employed' within the meaning of Sub-Section (14) to Section 2 of the Shops and Establishments Act.
18. The decision reported in (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others) relates to engaging of trained electricians through the instrument of contract in the sub-station to maintain supply of electricity. The Apex Court reiterated that in determining the relationship of employer and employee, even though 'control' test is an important test, it is not the sole test. On a claim made by these persons for regularisation of service, the Supreme Court considered the question as to whether the contract was genuine, sham or camouflage. In deciding such an issue, in paragraph 15 of the judgment, the Supreme Court pointed out that "in determining the relationship of employer and employee, no doubt, "control" is one of the important tests but is not to be taken as a sole test." It observed that "it is necessary to take a multiple pragmatic approach weighing up all the factors for and against the employment instead of going by the sole "test of control". An integrated approach is needed. "Integration" test is one of the relevant tests. It is applied by examining whether the person was fully integrated into the employer's concern or remained apart from and independent of it. The other factors which may be relevant are who has the power to select and dismiss, to pay remuneration, deduct insurance contributions, organise the work, supply tools and materials and what are the "mutual obligations" between them. "
19. The Supreme Court further pointed out that the relationship of employer and employee may exist between him and the servants of such a contractor. The mere fact of formal employment by an independent contractor will not relieve the master of liability where the servant is, in fact, in his employment. In that event, it may be held that an independent contractor is created or is operating as a subterfuge and the employee will be regarded as the servant of the principal employer.
20. In so considering this issue, the Apex Court referred to the decision in the case of Steel Authority of India Ltd. V. National Union Waterfront Workers reported in (2001) 7 SCC 1, where the Supreme Court considered the effect of Section 10 of the Contract Labour (Regulation and Abolition) Act. Ultimately, the Supreme Court held that the existence of a contract would be of material assistance when the question as to the integrated employment aspect comes to surface. In the above circumstances, the nature of the contract, the controlling aspect, or for that matter the mutual obligation, as such, would not be of prime importance in considering the question of employer-employee relationship.
21. In the decision reported in (2001) 7 SCC 1 (Steel Authority of India Ltd. V. National Union Waterfront Workers), the Supreme Court considered the question of automatic absorption of Contract Labour and the establishment of principal employer as a consequence of a abolition notification issued under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970.
22. The judgment referred to series of decisions of the Apex Court on the question of employing contract labour with reference to the integrated approach. In considering the said issue, the Supreme Court considered the earlier decision reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others), which was relied on by the learned counsel appearing for the petitioners. The Apex Court pointed to the contract labour employed in or in connection with the work of the establishment and cases where in discharge of the statutory obligation, the Management engaged the services through contract employment and pointed out as follows:
"107. An analysis of the cases, discussed above, shows that they fall in three classes: (i) where contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited either because the industrial adjudicator/court ordered abolition of contract labour or because the appropriate Government issued notification under Section 10(1) of the CLRA Act, no automatic absorption of the contract labour working in the establishment was ordered; (ii) where the contract was found to be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal employer were held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared the correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining a canteen in an establishment the principal employer availed the services of a contractor the courts have held that the contract labour would indeed be the employees of the principal employer. "
23. When a dispute is raised by any contract labour, the same has to be adjudicated upon by the Industrial Adjudicator to find out:
" Whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/camouflage to evade compliance with various beneficial legislations so as to deprive the workers of the benefit there under. Where the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the establishment concerned subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder."
"6. If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the establishment concerned has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen, he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately, taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications."
24. The decision reported in (2003) 7 SCC 488 (Mishra Dhatu Nigam Ltd. and others V. M.Venkataiah and others) is also a case of contract employment in statutory canteens run by the contractor. The Supreme Court pointed out that where in discharge of a statutory obligation of maintaining a canteen in an establishment the principal employer availed the services of a contractor, the contract labour would indeed be the employees of the principal employer and that such cases do not relate to or depend upon the abolition of contract labour.
25. The decision reported in (2005) 5 SCC 51 (Haldia Refinery Canteen Employees Union v. Indian Oil Corpn. Ltd.), relied on by the respondents, is also a case of statutory canteen. Repelling the contention of the Union that they are to be treated as employees of the Company, the Apex Court pointed out that the workers working in the canteen on contract labour are employees of the company only for the purposes of the Factories Act and are not the employees of the company. The Apex Court pointed out that the supervisory control exercised by the Management was only to ensure that the workers employed were well qualified and capable of rendering the services to the employees of the Management. Thus the Apex Court held the contract employees as not entitled to the relief of treating the contract employees as the workers of the principal employer. So too the decision reported in (2002) 1 SCC 337 (Hari Shankar Sharma Vs. Artificial Limbs Manufacturing Corporation), a case of statutory canteen. While considering the case of International Airport Authority of India giving licence to a private company to be its ground handling agent in respect of export import and transhipment of cargo consignments, the Apex Court held that merely because the contract labour is working under the supervision of the officers of the principal employer, it cannot be taken to be a direct evidence of direct employment under the principal employer. Exercise of some control over the activities of the contract labour while they discharge the service as labourers, is inevitable and such exercise is not sufficient to hold that the contract labour would become the direct employees of the principal employer. The Apex Court rejected the claim of the labour that the agreement was sham and nominal or a camouflage.
26. The decisions above-cited bring out two classes of employment taken on contract labour for performing obligations, namely, one under the statutory compulsion of providing certain services as in the cases referred to in (2002) 1 SCC 337 (Hari Shankar Sharma Vs. Artificial Limbs Manufacturing Corporation), (2003) 7 SCC 488 (Mishra Chatu Nigam Ltd. and others V. M.Venkataiah and others), (2005) 5 SCC 51 (Haldia Refinery Canteen Employees Union v. Indian Oil Corpn. Ltd.), AIR 2009 SC 3063: (2009) 13 SCC 374 (International Airport Authority of India v. International Air Cargo Workers' Union) and the other where, as a matter of obligation which is in contradistinction to a statutory obligation, the services are rendered by engaging contract labour as in the case of Catering Cleaners of Southern Railway V. Union of India and another reported in (1987) 1 SCC 700 and other cases referred to above as cited by the petitioner. In either case, where apart from engaging regular employees, services of contract employees are taken in order to perform the very same duties which are incidental and perennial in nature, an integrated approach needs to be adopted. In such cases, the safest guide to follow is one as stated in the decisions reported in (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others) and (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others), where the Apex Court pointed out that the principle of "integration" would be of relevance to find out whether the relationship of an employer-employee could be introduced for the purpose of conferring benefits on the contract labour. The observations of the Apex court in the decision reported in (1974) 3 SCC 498 (Silver Jubilee Tailoring House V. Chief Inspector of Shops & Establishments) needs to be noted herein:
"29. During the last two decades the emphasis in the field has shifted and no longer rests so strongly upon the question of control. Control is obviously an important factor and in many cases it may still be the decisive factor. But it is wrong to say that in every case it is decisive. It is now no more than a factor, although an important one. "
Yet in every case where the principal employer goes for hiring workmen through a contractor in connection with the work of the establishment, question does arise as to whether the contract is a mere camouflage as has been held in the decision reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others). In the decision reported in (2001) 7 SCC 1 (Steel Authority of India Ltd. v. National Union Waterfront Workers), the Apex Court pointed out "if the answer is in affirmative, the workman will be in fact an employee of the principal employer, but if the answer is in the negative the workman will be a contract labour. "
27. Reiterating the said principles, in the decision reported in (2004) 3 SCC 514 (Workmen of Nilgiri Coop. Mkt. Society Ltd. V. State of T.N. and others), which, in turn, referred to the decision reported in (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others), it was pointed out that the burden of proof lies on the party setting up the plea regarding the existence of employer-employee relationship. The Supreme Court reiterated that the test of organisation or of control and supervision are the only decisive test and different tests have to be applied in different facts and circumstances; ultimately all relevant facts have to be integrated in considering the said question. Although on the facts of the case, the decision may not have a direct bearing, yet, a perusal of the judgment clearly shows, particularly in paragraph 32 that the nature of business is one of the relevant factors in considering the question of employer-employee relationship, particularly when the employees are drawn through a mechanism of contract labour. The Supreme Court pointed out in paragraph 37 as to the relevant factors, as follows:
"37. The control test and the organisation test, therefore, are not the only factors which can be said to be decisive. With a view to elicit the answer, the court is required to consider several factors which would have a bearing on the result: (a) who is the appointing authority; (b) who is the paymaster; (c) who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision; (f) the nature of the job e.g whether it is professional or skilled work; (g) nature of establishment; (h) the right to reject. "
28. In the decision reported in (2000) 4 SCC 245 (Indian Overseas Bank V. I.O.B. Staff Canteen Workers' Union and another) relied on by the learned counsel appearing for the second respondent, the question as to the test to be followed in determining the existence of relationship of employer-employee was considered. In paragraph Nos.17 and 18, the said decision once again pointed out to the various aspects of the tests to be followed that no single or substantive test could be confined or concretised as a fixed formula of universal application in all class or category of cases. Although some common standards could be devised, the mere presence of one or more or their absence of the same cannot, by itself, be held to be decisive of the whole issue, since every case has to be decided on the peculiar aspects of a particular case. That being the position, in order to safeguard the welfare of the workmen, the veil may have to be pierced to get at the realities.
29. Considering the difficulties that may arise in a given case in arriving at a decision and since the standards and nature of tests to be applied in finding out the existence of master and servant relationship cannot be confined to any fixed formula nor is it desirable to lay abstract princples of universal application and each case differs according to the needs of the concern, the proper course as observed by the Apex Court is that in order to safeguard the welfare of the workman, the veil may have to be pierced to get at the realities.
30. The sum and substance as one can discern from these decisions is that the claim of the workmen ultimately rests on looking at the economic reality test as has been propounded in the decision in reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others) and the nature of work to be discharged as being one of incidental and perennial nature.
31. It is not denied by the second respondent herein that the services of the petitioners were the result of an agreement between the second respondent and the third respondent. The evidence of M.W.1 shows that the Airport had six lifts in the year 1995 and all the six were automatic lifts. Out of the six lifts, two were kept for V.V.I.Ps of the public and one for the handicapped persons. Four lift men were regularly employed by them to operate on shift. The two lifts reserved were operated by the four employees manually, even though they are automatic. In the cross examination, the said witness stated that the regular lift operators and the petitioners are doing the same work of operating the lifts and the two lifts reserved for V.V.I.Ps and the handicapped persons are operated by the petitioners too. Admittedly, there is no such thing as a sanctioned strength in the shift system and the contractor used to give a roster for the workers in all the 365 days for 8 hours per day. The evidence further pointed out that the lifts were installed in the Airport for facilitation of the passengers.
32. A specific contention was taken in the counter as well as in the evidence, to state that Section 12(3)(o) of the Airports Authority of India Act does not provide for such facility. The witness further pointed out that there is no prohibition issued by the Government for engaging contract labour and they extracted job specification for lift operators. Nevertheless the witness was quick enough to state that they have no knowledge directly as to what was the qualification of the petitioners, since they were directly appointed by the second respondent.
33. Taking note of the contentions, the Tribunal elaborately referred to the arguments of both sides. Even though a specific issue was raised by the petitioners as regards the core function of the second respondent including providing a lift facility as provided under Section 12(3)(o) of the Airports Authority of India Act and that was denied by the second respondent, admittedly, no decision was rendered by the Tribunal.
34. Section 12(3)(o) of the Airports Authority of India Act reads as follows:
" 12. Functions of the Authority.-
(1) ...
(2) ...
(3) Without prejudice to the generality of the provisions contained in sub-section (1) and (2) the Authority may-
(a) to (n) ...
(o) take all such steps as may be necessary or convenient for, or may be incidental to, the exercise of any power or the discharge of any function conferred or imposed on it by this Act. "
35. As pointed out in the decisions reported in (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others) and (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others), when the establishment has gone in for hiring of contract labour for performing a work of perennial nature and that too incidental to the undertaking, considering the nature of business carried on by the respondents, I do not find any acceptable reason in the contention of the respondents basing solely on the aspect of control and management by relying on the terms of the contract and that the terms of the contract alone would be the decisive factor. Applying the law declared by the Apex Court, taking the integrated approach as a touchstone for ascertaining the status of the petitioners herein, in the background of Section 12(3)(o) of the Airports Authority of India Act providing lift facility which are automatic and two of the automatic lifts are kept exclusively for the facility of its V.V.I.P. passengers and physically challenged persons to be operated manually, and further going by the very evidence of the Management that the permanent employees numbering 4 are working for 8 hours shift only and the contract labour are engaged as lift operators to perform the very same job of the other 4 regular employees, it is clear that by the nature of services rendered by the contract employees, their employment is of a perennial nature. It is not the case of the respondents that engaging contract labour for the 2 automatic lifts is only a temporary measure. Section 11 of the Airports Authority of India Act, specifically provided that "in the discharge of its functions under this Act, the Authority shall act, so far as may be on business principles", if Section 11 and 12 are to have some meaning, then, applying the decision of the Supreme Court in the case of Catering Cleaners of Southern Railway V. Union of India and another reported in (1987) 1 SCC 700 that providing of a lift facility being a incidental facility extended, piercing the veil of the agreement with the third respondent, it stands to reason that the contract labour have to be treated as regular employees of the second respondent herein.
36. As rightly pointed out by the learned counsel appearing for the petitioners, when on the admitted fact herein as evident from the evidence of M.W.1, the contract employees have done nothing less than the regular employees working under the second respondent, it stands to reason that the case of the petitioners fit in well with the decisions of the Supreme Court reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others); (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others); and (2001) 7 SCC 1 (Steel Authority of India Ltd. V. National Union Waterfront Workers). Irrespective of the genuineness of the terms and the bona fides of the terms contained in the contract, the genuineness of going in for contract labour has to be looked at from the integrated approach in employing persons through contract to discharge the very same functions, as have been entrusted to the regular employees of the second respondent.
37. Learned counsel appearing for the second respondent pointed out that all the lifts are automatic, yet two are specifically reserved for V.V.I.Ps as well as physically challenged persons. He further pointed out that the selection process is not through the Management, but was done only by the contractor. Neither the attendance nor the leave is subjected under the control of the Management. Hence, when looking at the terms of the contract, it is clear that the only person who had engaged the services of the contract labour is the contractor and not the second respondent. In the circumstances, the question of piercing the veil, as such, does not arise.
38. It is seen from the facts pleaded that given the necessity of running two lifts only manually, the second respondent went in for a contract with the third respondent for the purpose of repair and maintenance of the lifts available in the Airport. subsequently, the contract workers came before this Court by way of Writ Petition that the contract has to be renewed time and again till the case before the Tribunal came to a natural end. In the above circumstances, learned counsel appearing for the second respondent insisted that the prayer in the Writ Petition does not merit any consideration. He pointed out that the Tribunal had considered the genuineness of the contract and the contention of the petitioners as regards the sham and nominal character of the agreement, the purpose for which the agreement had been entered into as well as on the aspect of control; consequently, the question of lifting the veil, as such, does not arise.
39. I do not agree with the said line of reasoning by the learned counsel appearing for the second respondent. As already pointed out, the issue as to whether the agreement is sham and nominal has to be approached not from the point of the various clauses available therein, but with reference to the obligations of the second respondent providing the lift facility as incidental to the business and the work perennial in character, that whether the second respondent would be justified in just keeping the operators other than the four employees already employed by them as contract labour only. It is not denied by the Management witness that they had not filed any document to show that the sanctioned strength of the lift operators in Chennai Airport is only 4. It is not denied by the witness that the lifts are operated by these contract labourers too and the nature of duties discharged by these petitioners are not less than or more than the four regular employees. It is no doubt true that the selection of these persons are all through the contractor; yet, nevertheless the contractor has to go by the advise or the consultation with the Management Assistant Engineer concerned. Whatever be the merits of the contentions of the second respondent as regards the control on these employees are concerned and the salaries disbursed by the contractor, yet, when providing of lift facility is part of the responsibility of the second respondent falling under Sub-section (3) (o) to Section 12 of the Airports Authority of India Act, the criteria on control and management lose their significance as a test for finding out the employer-employee relationship. The Airport Authority of India being under an obligation to provide such facilities to the passengers reaching the aircraft, the engaging of the petitioners have to be construed as regular employees of the second respondent.
40. In the circumstances, I have no hesitation in allowing the Writ Petition based on the decisions of the Apex Court reported in (1978) 4 SCC 257 (Hussainbhai, Calicut V. The Alath Factory Thezhilali Union, Kozhikode and others); (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others); (2001) 7 SCC 1 (Steel Authority of India Ltd. V. National Union Waterfront Workers) and (2004) 1 SCC 126 (Ram Singh and others V. Union Territory, Chandigarh and others).
41. As already pointed out in the preceding paragraphs, the case herein cannot be compared or tested in terms of those decisions which rejected the case of the contract labour employed for discharge of a statutory obligation as not to be treated as employees of the principal employer. These decisions rested on the facts of the case. Whether there is a statutory obligation or not, the test for finding out the employer-employee relationship, invariably, in all matters, necessarily has to rest on the test as had been propounded in the decisions reported in (1990) (Supp) SCC 668 (Sankar Mukherjee and others v. Union of India and others) and (2001) 7 SCC 1 (Steel Authority of India Ltd. V. National Union Waterfront Workers).
42. In the above circumstances, I have no hesitation in setting aside the order of the Tribunal. Even though the petitioners have taken a specific issue as regards the relevancy of Section 12(3)(o) of the Airports Authority of India Act, the counter filed by the second respondents makes a mere denial of applicability of said provision and the said contention of the petitioner had not received any consideration at the hands of the Tribunal.
43. Learned counsel appearing for the second respondent pointed out that given the fact that the Tribunal has considered the evidence in full, this Court does not sit as an Appellate Court to disturb the findings of the Tribunal to upset the award of the Tribunal.
44. There is no dispute on the well settled proposition of law that where the fact-finding Tribunal had given its decision based on materials, this Court has no jurisdiction to substitute its view, however small the evidence may be, to draw a conclusion. This Court does not sit in appeal over the findings of the Tribunal to substitute its view on the findings based on evidence. However, when there is perversity arising from non-application of mind to the provisions of the Act or to the application of law, this Court has every jurisdiction to correct the same. Given the fact that providing a lift is not a mere facility or convenience to the passengers coming to the Airport but incidental to the nature of business of the second respondent, the device adopted by the second respondent in employing persons, who are discharging no less a duty than what the four permanently employed persons do, the petitioners are justified in their contention that the Management is not justified in treating these petitioners differently as not forming part of their employees' strength.
45. In the above circumstances, I have no hesitation in setting aside the order of the Tribunal, thereby allowing the Writ Petition. The prayer in the Writ Petition, hence, stands answered in favour of the petitioners. Consequently, the petitioners are declared as direct employees of the second respondent and are entitled to all benefits granted to the regular lift operators. Accordingly, the Writ Petition is allowed. No costs. Consequently, M.P.No.2 of 2006 is closed.
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1. THE PRESIDING OFFICER, THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM LABOUR COURT I FLOOR B-WING NO.26 HADDOWS ROAD SHASTRI BHAVAN, CHENNAI - 06.
2 THE DIRECTOR INTERNATIONAL AIRPORTS AUTHORITY OF INDIA MEENAMBAKKAM CHENNAI 27