Orissa High Court
Salila Pradhan vs Ram Bali Prasad And Another ...... ... on 5 May, 2023
Author: Arindam Sinha
Bench: Arindam Sinha
IN THE HIGH COURT OF ORISSA, CUTTACK
WP(C) No.2459 of 2017
(Through hybrid mode)
Salila Pradhan ....... Petitioner
-Versus-
Ram Bali Prasad and another ...... Opposite Parties
Advocates appeared in the case:
For petitioner - Ms. P.P. Mohanty &
Mr. G.N. Mishra, Advocates
For opposite parties - Mr. Satyabrata Mohanty, Advocate
(for opposite party no.1)
Mr. S.P. Sarangi, Advocate
(for opposite party no.2)
CORAM:
JUSTICE ARINDAM SINHA
JUSTICE SANJAY KUMAR MISHRA
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Date of Hearing: 01.02.2023 and 03.05.2023
Date of Judgment: 05.05.2023
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S.K. MISHRA, J.
1. The Petitioner workman, being aggrieved by the award dated 23rd December, 2016 passed in I.D. Case No.03 of 2015, has approached this Court. Vide the said impugned award, though the Labour Court answered issue no.1 in favour of the petitioner workman holding that the termination of services of the petitioner workman by the present opposite party management no.1, without compliance of section 25-F of the Industrial Disputes Act, 1947, shortly, I.D. Act, 1947, is illegal and unjustified, while answering issue no.2, as to what relief the petitioner workman is entitled to, the Labour Court awarded a lump sum compensation of Rs.1,60,000/- to be just and proper with an observation that the opposite party management no.1 has no work under the opposite party management no.2.
2. As per the statement of claim filed by the petitioner workman before Labour Court, he was engaged as 'Fitter' w.e.f. 30th June, 2008 under the opposite party management no.1, a contractor, in the establishment of the opposite party no.2-employer. Having employee gate number and coverage under the Employees Provident Fund, he was discharging his duty sincerely, honestly, with full dedication. The opposite party management no.1 had issued a gate pass to the petitioner workman, which was extended from time to time. Though the petitioner workman maintained a clean service record having no adverse remark, all of a sudden, on 31st August, 2013, without any reason, the opposite party management no.1 terminated his service by way of refusal of employment. There was no prior notice to the petitioner workman nor he was paid retrenchment compensation prior to such refusal of employment. The opposite party management no.1 Page 2 of 32 WP(C) no.2459 of 2017 has undertaken work from construction period of M/s OSWAL Chemical and Fertilizers Ltd, which was taken over by the M/s IFFCO Ltd., Paradeep, opposite party management no.2.
It is further case of the petitioner workman, other contractors namely, M/s. Unique, M/s S.B. Industries, M/s Kapoor Brothers, M/s J & J, M/s Behera Engineering (P) Ltd. and M/s Rambahadur are executing works along with the present opposite party management no.1. The contract work performed by the opposite party management no.1 is of perennial nature, which is necessary for the industry, trade, business, manufacture or occupation carried on in that establishment and are regular in nature. The petitioner workman was working in the PAP side and the work performed by him, is of perennial nature. After the contract work of the opposite party management no.1 ceased, the said work has been executed by other contractors at present. The retrenched workers of the opposite party management no.1 are working in M/s S.B. Industries, M/s Sakti Contractor and M/s Jaya Maa Tarini Contractor. Therefore, the petitioner workman has a right for his reengagement under the other contractors of the opposite party management no.2. It being the principal employer, is not only responsible to ensure payment of wages to the contract labourers, but also liable to reengage the retrenched workmen of the opposite party management no.1. It is also the case of the petitioner that the contract Page 3 of 32 WP(C) no.2459 of 2017 work of the opposite party management no.1 did not expire in the month of September, 2013. Rather, it continued till January, 2014. The petitioner workman has not received any notice dated 26th August, 2013, as claimed by the opposite party management no.1. He has no knowledge about the alleged meeting held on 12th September, 2013.
The petitioner workman continued till 31st August, 2013 and all of a sudden, without any rhyme or reason, the opposite party management no.1 illegally terminated his service by way of refusal of employment w.e.f. 1st September, 2013, without any prior notice, notice pay or compensation i.e. without compliance of the legal provisions laid down under the I.D. Act, 1947.
It is further case of the petitioner workman, while continuing as such, at the project site of opposite party management no.2, he had rendered uninterrupted service for more than 240 days. The opposite party management no.1 issued gate pass and wage slips to him. He was paid wages from time to time through wage register kept and maintained by the opposite party management no.1, as per the days of work reflected in attendance card. All the statutory records are within the custody of the opposite party management no.1.
It has also been pleaded that the petitioner is a workman and the opposite party managements are industries as defined under the I.D. Act, 1947. The opposite party management no.2 i.e. M/s IFFCO Ltd. Page 4 of 32 WP(C) no.2459 of 2017 Paradeep Unit was formerly known as M/s OSWAL Chemical and Fertilizers Ltd. (OCFL) and the present opposite party management no.1 has been working from construction period (Primary stage) of OSFL till date. The opposite party management no.1 as well all the workmen engaged by it, provided uninterrupted services to the opposite party management no.2. M/s IFFCO Ltd. Paradeep Unit is a large industry and there are more than 2000 employees working in the said industry directly and indirectly. Further, it was pleaded before the Labour Court that action of the managements in terminating the service of the petitioner workman amounts to illegal retrenchment from service and has been brought into effect without compliance of principles of natural justice and in gross violation of statutory provisions enshrined under sections 25-F, G and H of the I.D. Act, 1947. Therefore, the retrenchment of the petitioner workman by way of refusal of employment w.e.f. 1st September, 2013 by the opposite party management no.1 is bad in law and unsustainable in the eye of law and liable to be declared as illegal and unjustified.
It has also been alleged in the claim statement that since the petitioner workman along with others demanded EPF and ESI benefits, which are obligatory on the part of the opposite party management no.1 to provide, the said management bore grudge on the workmen for taking up the demand for coverage under EPF and ESI, Page 5 of 32 WP(C) no.2459 of 2017 so also safety devices before the opposite party management no.2 (IFFCO). Accordingly, a prayer was made to answer the reference in favour of the petitioner workman by directing the opposite management no.1 and or principal management to re-instate the petitioner with full back wages and all consequential service benefits in the interest of justice.
3. Being noticed, the opposite party management no.1 appeared and filed its written statement. Apart from taking various technical pleas as to maintainability of reference, it was pleaded that it is a registered Contractor of the present opposite party management no.2, which is a necessary party to the said reference, being the principal employer. The reference is bad for non-impleadment of management of IFFCO as a party. A stand was also taken in the written statement that the contract of the management was only for one year, which was signed on 4th September, 2012 and the same was operative till 3rd September, 2013 and thereafter, the contract was not extended. Therefore, the termination/retrenchment of the petitioner workman is not coming under the definition of 'retrenchment' in view of section 2(oo) (bb) of the I.D. Act, 1947. Time to time agreements were signed between the opposite party management no.1 and the management no.2 and the last agreement signed in the said regard was on 4th September, 2012 for one year. Thereafter, the said agreement was not Page 6 of 32 WP(C) no.2459 of 2017 further extended and expired from the month of September, 2013. It is also the stand of the opposite party management no.1, it issued a notice on 26th August, 2013 to the workman and copy of the said notice was also marked to the Secretary of Employees' Union, District Labour Office, Jagatsinghpur, DGM Security and the opposite party management no.2, indicating therein that there is no pending work, therefore 53 employees were retrenched w.e.f. 1st September, 2013. It was also informed to all the employees to collect their final dues up to 31st August, 2013 from the opposite party management no.1.
When nobody received the final dues, as informed by the notice dated 26th August, 2013, the opposite party management no.1 on 10th September, 2013 gave a reminder for collecting the dues with copies to the parties as before. Thereafter, a meeting was held between the members of employees union, IFFCO and opposite party management no.1, in which the opposite party management no.1 undertook on 12th September, 2013 that it will re-employ the retrenched employees as and when it is required in future. It again gave further reminder on 13th September, 2013 to all the employees to collect their full and final dues by 16th September, 2013.
Out of the said employees, 13 employees, instead of taking their full and final dues, raised an industrial dispute on 24th April, 2014 before the Conciliation Officer-Cum-DLO, Page 7 of 32 WP(C) no.2459 of 2017 Jagatsinghpur alleging therein the termination of their services to be illegal. The management contractor contested the said dispute before the Conciliation Officer-Cum-District Labour Office, Jagatsinghpur and a settlement was arrived on 13th May, 2014 between the management no.1 and its workmen, vide which it was agreed by the parties that the workmen will receive their full and final dues and they will not demand for reinstatement due to non-availability of work and non-renewal of contract. It was further agreed between the parties, whenever there will be requirement, the opposite party management no.1 will follow the provision of section 25-H of the I.D. Act, 1947.
Subsequently, another group of employees of the management no.1 made a complaint on 19th March, 2014 before the Conciliation Officer alleging therein that their termination to be illegal and a similar settlement was also arrived on 07th May, 2014 between the opposite party management no.1 and its workmen with similar terms and conditions as of the earlier settlement dated 13th May, 2014.
It is further case of the opposite party management no.1 that the petitioner workman and two others did not accept their full and final settlement and sent a notice on 4th July, 2014 through their counsel stating therein that the petitioner was working as 'Fitter' under the opposite party management no.1 and their services were terminated w.e.f. July, 2013. It was further stated that an unlawful agreement was Page 8 of 32 WP(C) no.2459 of 2017 executed on 27th January, 2014 between the petitioner workman and Mr. Nirmal Gupta. Thereafter, the petitioner workman raised an industrial dispute. It was also mentioned in the said complaint that Mr. Gupta is not a competent person on behalf of the management no.1 to execute an agreement with anybody. It is also stated that the petitioner workman was working as 'Helper' under the management w.e.f. 1st June, 2008 to 31st August, 2013 and his service was terminated because of non-renewal/further extension of the contract of the management no.1, which expired w.e.f. 1st September, 2013. There was no work available with the management no.1 to continue the petitioner workman along with others. Therefore, the management no.1 offered all the legal dues, including retrenchment compensation and one month's salary in lieu of notice to the petitioner workman and others by issuing notice to the said effect on 26th August, 2013. Copy of such notice was also marked to the employees union, DLO, Jagatsinghpur and other officials. But the petitioner workman did not receive his legal dues offered by the opposite party management no.1. Thereafter, on 10th September, 2013, 12th September, 2013 and 13th September, 2013, it offered the statutory dues to the petitioner workman, who did not accept the same. The petitioner workman and several others, on 27th January, 2014 kidnapped one Mr. Nirmal Gupta, Site In-charge of the opposite party management no.1 and Page 9 of 32 WP(C) no.2459 of 2017 forcibly, under threat, got signatures of Mr. Nirmal Gupta on some blank papers at Kujang Court premises and they also manhandled Mr. Nirmal Gupta for obtaining his signatures on some blank papers, which was informed to the opposite party management no.2 by letter dated 28th January, 2014. In response to such communication, the Executive Director of opposite party management no.2 wrote a letter dated 30th January 2014 to the opposite party management no.1 to take legal action. The Joint General Manager (HR), IFFCO also vide his letter dated 8th July, 2014 informed the DLO, Jagatsinghpur regarding the incident dated 27th January, 2014. All the workmen, retrenched by the opposite party management no.1, due to non-renewal of contract as well as non-availability of work, have received their full and final payment, except the present petitioner workman and two others. In terms of agreement entered into before the Conciliation Officer-Cum- DLO, Jagatsinghpur, the petitioner workman is also bound by such tripartite agreement made by majority of workmen. It was also contended in the written statement that the opposite party no.1 is ready to pay the legal dues to the petitioner workman, which comes around Rs.1,42,169/-, which includes one month's salary in lieu of the notice period.
That apart, while giving para-wise reply to the averments made in the statement of claim filed by the workman, vide paragraph Page 10 of 32 WP(C) no.2459 of 2017 no.25(c), a stand was taken with regard to legality of the order of reference made by the State Government on the ground of non- impletion of necessary party i.e. present opposite party no.2.
4. In view of such stand of the opposite party management no.1 in its written statement, the petitioner workman filed a petition before the Labour Court to implead the present opposite party no.2 as management no.2 to the said I.D. case. The same being allowed and the newly impleaded management no.2, being noticed, appeared and filed its written statement reiterating the stand taken by the opposite party management no.1 in its written statement. Apart from reiterating the stand taken by the opposite party management no.1, it took a stand that it being the principal employer, an agreement was signed between it and the opposite party management no.1. Accordingly, the opposite party management no.1 is liable and responsible for engagement and payment of the dues to the contract labourers. The opposite party management no.2 has no liability and responsible in the matter. As per section 21 of the Contract Labour (Regulation and Abolition) Act, 1970, shortly, "the CLRA Act, 1970", being the principal employer, it is only obligatory on its part to ensure payment of wages to the contract labourers in the event of failure on the part of the contractor to pay the wages, in terms of section 21 of the CLRA Act, 1970. Page 11 of 32 WP(C) no.2459 of 2017
5. Ultimately, as is permissible under Rule 10 B (4) of Orissa Industrial Disputes Rules, 1957, the petitioner workman filed his rejoinder stating therein that the opposite party management no.1 executed contract work in various sides such as Mechanical Maintenance Job as well as new Jobs in P.A.P. side, D.A.P. side, S.A.P. side, Amonia side, Bagging Plant side, Material Handling, Boiler, Central Workshop (Crane Maintenance) of M/s IFFCO Ltd. There are other contractors namely, M/s Unique, M/s S.B. Industries, M/s Kapoor & Brothers executing work in P.A.P. side, M/s J & J, M/s Behera Engineering (P) Ltd, M/s Ram Bahadur. M/s Prasad & Co. is executing work in S.A.P. side and was a very old Contractor, who was also working under former Management M/s OSWAL, which was taken over by management M/s IFFCO. The opposite party management no.1 was executing the work in different sides and those work are of perennial nature and necessary for industry, trade, business, manufacture, or occupation carried on in that establishment and are regular in nature. The petitioner workman was working as 'Fitter' in P.A.P. side (Phosphoric Acid Plant) side and the said work is of perennial nature. After the contract work of the management no.1 ceased, the said work has been executed by other contractors at present. The retrenched workers of management no.1 are working in M/s Sakti Contractor, Bibhuti Bhusan Pradhan, Dillip Das & Lokanath Page 12 of 32 WP(C) no.2459 of 2017 Sahoo are working in M/s Jay Maa Tarini Contractor. Therefore, the present workman has a right of re-engagement under other Contractors, as the very same job is available with the management no.2.
It is also pleaded in the rejoinder that opposite party management no.2, being the principal employer, is not only responsible to ensure payment of wages to contract labourers but also liable to re-engage the retrenched contract workers of the opposite party management no.1, who have been retrenched due to expiry of work order of the said contractor as the very same work is available and executed through other contractors. The opposite party management no.2 has not filed the agreement with the contractor as well as labour license of the contractor and all relevant documents relating to execution of contract work by the contract labourers and their employment, deliberately to suppress the material facts and irregularities committed by them. The petitioner workman has no knowledge with regard to alleged settlement arrived at between the opposite party management no.1 with the other workers in presence of the Conciliation Officer. It was also pleaded in the rejoinder that the contract of the opposite party management no.1 never expired in September, 2013. Rather, it continued till January, 2014. The petitioner workman has never received any notice dated 26th August, Page 13 of 32 WP(C) no.2459 of 2017 2013 as alleged nor any letter/ information has been received by him with respect to collection of dues from opposite party management no.1. The work order issued in favour of opposite party management no.1 was not renewed by the management opposite party no.2 with malafide intention. The petitioner workman has a right for reemployment in terms of Rule 11 of the Orissa Contract Labour (Regulation and Abolition) Rules, 1975 (Conditions of Service) read with section 25-H of I.D. Act, 1947 under the management no.2 and his termination of service by way of refusal of employment by his employer i.e. management no.1, which is a contractor's establishment of management no.2, is illegal and justified.
6. The Labour Court vide the impugned award, after taking into consideration the pleadings of the parties, so also evidence on record, framed the following issues.
"1. Whether the termination of services of Sri Salila Pradhan, Fitter w.e.f. 01.09.2013 by way of refusal of employment by the employer of M/s. Prasad & Co. Contractor of M/s. IFFCO Ltd., Paradeep having Head Office at 11-B, Strachy Road, Vasant Vihar, Allhabad-211001, Uttar Pradesh is legal and/or justified?
2. If not, what relief Sri Pradhan is entitled to? "
7. While answering issue no.1, the court below held that the termination of services of the petitioner workman by the management no.1 is not covered under section 2(oo) (bb) of I.D. Act, 1947. It further held that the said termination of services of the petitioner- Page 14 of 32 WP(C) no.2459 of 2017 workman by the management no.1, being without compliance of section 25-F of I.D. Act, is illegal and unjustified.
However, while answering issue no.2, as to what relief the petitioner workman is entitled to, the court below awarded a sum of Rs. 1,60,000/- in favour of the petitioner workman in lieu of reinstatement and back wages. The said relief granted, being the subject matter of challenge in the writ petition, allegedly to be perverse, the relevant portion from the findings of issue no.2 is extracted below:
"It is also clear that the 1st party management no.1 has no work under the 1st party management no.2 at present. Hence, the 2nd party workman is not entitled to reinstatement in service under the 1st party management no.1. However, he is entitled to compensation. It is admitted by the 1st party management no.1 at paragraph-22 of its written statement that the 2nd party is entitled to Rs.1,42,169/- including one month salary in lieu of notice. Taking into consideration the period of service of the 2nd party under the 1st party management no.1, a compensation of Rs.1,60,000/- will be just and proper. Hence, 1st party management no.1 is directed to pay a sum of Rs.1,60,000/- to the 2nd party workman within one month of publication of the Award by the Government, failing which he will be entitled to interest @ 9% per annual till it is actually paid to him.
The reference is disposed of accordingly."
8. Ms. Mohanty, learned Counsel for the Petitioner submitted that sufficient evidences were led before the court below to prove that even after September, 2013, the opposite party management no.1 worked in the establishment of opposite party no.2 till October, 2014. Other co- workmen were reengaged in the establishment of the opposite party no.2, the said work of management no.2 being permanent and Page 15 of 32 WP(C) no.2459 of 2017 perennial in nature. Even though the said evidence led by the workman as W.W. no.1 remained untouched during his cross- examination, the Labour Court, while answering issue no.2, as to relief to be granted, failed to take note of the admitted evidence on record as to reemployment of retrenched workman in terms of section 25-H of the I.D. Act, 1947, so also discrimination meted out to the petitioner because of his raising voice against the management for his non-coverage as well as similarly placed workmen under the EPF and ESI Act, so also not providing safety appliances in terms of the Factories Act, 1948.
Learned Counsel for the petitioner workman further submitted that while granting relief, the Labour Court failed to take note of the legal provisions enshrined under Rule 11 of the Orissa Contract Labour (Regulation and Abolition) Rules, 1975 (Conditions of Service), which mandates as to applicability of Chapter V-A and V-B of the I.D. Act, 1947 to the establishment of opposite party management nos.1 and 2 and re-engagement of retrenched contract labourers, as is being provided under section 25-H of the I.D. Act, 1947. She further submitted that it is obligatory on the part of opposite party management no.2 to ensure implementation of the said legal provision as to reengagement of retrenched contract labourers, more particularly when evidence was led to the said effect as to Page 16 of 32 WP(C) no.2459 of 2017 reengagement of similarly placed retrenched contract labourers. That apart, the Labour Court further failed to award compensation over and above the admitted alleged amount due in favour of the petitioner workman, to compensate the said illegal and unjust termination. The opposite party management no.1 admitted in its written statement, so also while leading evidence before the court below that the legal dues payable to the petitioner workman comes around Rs. 1,42,169/- and it is ready and willing to pay the said legal dues. Despite giving a finding against the management no.1 as to its action in terminating the services of the workman w.e.f. 1st September, 2013 to be illegal and unjustified, the court below only awarded a compensation of Rs.1,60,000/, which includes alleged admitted legal dues of the petitioner workman to the tune of Rs.1,42,169/-, though the petitioner workman had worked for a substantial period from 2008 to 2013 and thereafter was debarred from reengagement though is counterparts have been reengaged.
Learned Counsel for the Petitioner also drew attention of this Court as to the provision under Rule-11 of the Orissa Contract Labour (Regulation and Abolition) Rules, 1975 (Conditions of Service) and submitted that since contractor's establishment of opposite party no.2 had engaged more than 120 workmen during the relevant period, as has been admitted by the management witness no.1 during his cross- Page 17 of 32 WP(C) no.2459 of 2017 examination, Chapter V-A and Chapter V-B of the Industrial Disputes Act, 1947 regarding retrenchment, so also re-employment are applicable to the said contractor's establishment. The said provision is extracted below:
"11. Lay-off and Retrenchment, etc. - (1) Chapters V-A and V- B of the Industrial Disputes Act, 1947 regulating lay-off and retrenchments shall apply to contractor's establishment in which fifty or more workmen on an average per working day have been employed in the preceding calendar month. "
(Emphasis supplied)
9. Mr. Mohanty, learned Counsel for the opposite party management no.1, so also Mr. Sarangi, learned counsel for opposite party management no.2 submitted that there is no infirmity in the impugned award and the Labour Court has rightly awarded a lump sum compensation of Rs.1,60,000/- in lieu of reinstatement and back wages to the workman, who is a contract labourer. As the opposite party management no.1 is no more working in the establishment of opposite party management no.2 since 2014, the prayer of the petitioner workman to reinstate or reengage him in terms of section 25-H of the I.D. Act, 1947 is misconceived.
10. Keeping in view of the aforesaid facts, so also submissions made by the learned Counsel for the parties and on examination of evidence on record, it is found that the workman has specifically deposed to justify his prayer for reengagement/ reinstatement as well Page 18 of 32 WP(C) no.2459 of 2017 as reason for disengaging him from employment in contravention of various provisions enshrined under the I.D. Act, 1947. Relevant Paragraphs, so also part of some Paragraphs from examination in- chief of W.W. no. 1 are extracted below:
"7.xxx After our retrenchment Union (IKASU) issued letter dt.24/09/2013 to 2nd party management copy to M/S Prasad & Co to absorb 17 numbers of retrenched workers as assured by IFFCO during discussion where my name was there within those 17 workers. But 16 workers were allowed to work under M/s Prasad & Co after 26/09/2013, but I was not allowed. The copy of letter dt.24/09/2013 of IKASU with annexure A & B are filed herewith be marked as Ext.5.
10. That my retrenchment amounts to illegal retrenchment and has been brought into effect without compliance to the principles of natural justice and gross violation of statutory provisions as stipulated u/s 25 E, G & H of I.D. Act. Therefore my retrenchment by way of refusal of employment w.e.f. 01/09/2013 by the 1st Party management is bad in law and can not be sustained and is liable to be declared as illegal and unjust.
11. That as I along with other co-workers demanded E.P.F., E.S.I benefit and safety devices to which 1st Party Management is under statutory obligation to provide, the Management kept grudge on me and retrenched me when other workers allowed to work.
13. That M/S Prasad & Co continued to work till 31/10/2014 in M/S IFFCO which is evident from Labour License and retrenchment of 52 workers on 17/02/2014 and retrenchment of 10 workers on October, 2014. The copy of application for renewal of licence of Prasad & Co in Form-VII, Copy of settlement dt.13/05/2014 and dt.07/05/2016 and payment Sheet of M/S Prasad & Co regarding full and final payment to its workman obtained from DLO Office, Jagatsinghpur are filed herewith be marked as Ext.9 series.
14. xxx.That the work executed by M/s Prasad & Co is being executed by other contractors namely M/S Unique, M/S S.B. Industries, M/S Kapoor & Brothers, M/S J & J, M/S Behera Engineering (P) Ltd., M/S Ram Bahadur etc. where some of the retrenched workers are allowed to work and I have not been allowed to work. At present Sri Dasharathi Sahoo is working in S.B. Industries, Sanjay Swain and Sumit Hati are working in M/s Sakti Contractor, Bibhuti Bhusan Pradhan, Page 19 of 32 WP(C) no.2459 of 2017 Dilip Das & Lokanath Sahoo are working in M/s Jay Maa Tarini Contractor, who had been retrenched earlier vide letter dt.29.09.2014 by M/S Prasad and Co., and the said letter be marked as Ext.10. 1st Party as well as 2nd Party Management are taking false plea of non-availability of work and non-renewal of work order with malafide intention to debar/ refuse employment to old workers who may claim regular employment under Principal Employer."
(Emphasis supplied)
11. The said evidence led by the workman remained untouched during his cross-examination. Rather, he has reiterated his stand during his cross-examination as to reengagement of his co- workmen/contract labourers under various contractors. Relevant portion from Paragraph-29 of cross-examination of W.W. No.1 is extracted below:
"29.xxx. It is a fact that M/s. Unique, M/s S.B. Industries, M/s Kapoor & Brothers, M/s. J & J, M/s. Berhara Engineering Pvt. Ltd., M/s Ram Bahadur etc. have got their work orders from the 1st party management no.2 directly. It is a fact that some of our retrenched workers are working under the aforesaid contractors.xxx."
(Emphasis supplied)
12. The management witness no.1 for 1st party management no.1, during his cross-examination, stated/admitted as follows:
"26. Since 2006 our Company is working under the IFFCO i.e. management No.2. Some other companies are working under IFFCO. Those are Behera Engineering, SBI, J & J and some other whose name I do not remember now. The first party management no.1 was executing work at PAP, SAP and DAP of the first party management No.2. Our company was engaged for the work of fabrication, erection of pipe and structure work only. There were other contractors executing the similar type of work under the first party management No.2.Page 20 of 32
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27. xxx. Approximately 120 workmen were engaged at that time by the management No.1. There was no interview for engagement of those workmen. No Bio-data were also submitted by them.
28. xxx.
29. The other companies were executing to work similar to the works executed by the first party management No.1 under different work orders.xxx.
30. xxx. I heard that the son of Ram Bali Prasad had got some work under the first party management No.2 but the first party management No.1 has no connection with him. I cannot say whether the name of the company run by the son of Ram Bali Prasad is Jaga Kalia Project Engineering.
31. xxx
32. xxx
33. After a particular work come to an end all the employees were used to be retrenched by keeping some employees for finishing work. At the time of retrenchment, the 1st party management no.1 does not follow the principles of seniority.xxx.
34. xxx.The witness volunteers that about 120 workers were working under the 1st party management no.1 during that period. It is a fact that 1st party management no.1 had got labour license for 150 workers.
35. xxx. It is fact that the management no.1 was performing maintenance work and also taking new work. I cannot say whether the said maintenance work and other work is going on through J & J, SBI, Samantaray Engineering, Maa Manga, Behera Engineer and OSAL. I do not remember the 2nd party was engaged in PAP and belt filter site. I do not know the 2nd party was engaged for preparation of new, elbow, new T, new reducer, new flinch and patch work of tanks. xxx.
36. xxx. It is not a fact that we both the managements joined our hand together and falsely claiming that the work of the 1st party management no.1 came to an end under the 1st party management no.2. It is not a fact that to avoid the rigour of Labour Law the work has been taken in the name of J.K. Project Engineer, which is in the name of the son of the proprietor of 1st party management no.1. It is not a fact that the workers of 1st party management no.1 are utilizing the machineries of the 1st party management no.1 in the work of J.K. Project Engineer.xxx"
(Emphasis supplied) Page 21 of 32 WP(C) no.2459 of 2017 Similarly, the management witness no.1 for management no.2, during his cross-examination, admitted/stated as follows:
14. The 1st party management no.1's company was doing mechanical maintenance work under our management. They were working in 2 to 3 sites, but I cannot say the name of those sites exactly. The other contractors are now doing the works which were performed by the 1st party management no.1 earlier.
Unless I see the record, I cannot say the name of those contractors. The 1st party management no.1 was only engaged for mechanical maintenance work under the 1st party management no.2 It is a fact that the 1st party management no.1 had undertaken more work for repairing of Acid Tanks in PAP Site. There is no reason for non-engagement of the 1st party management no.1 by the 1st party management no.2.xxx.
15. Rambali Prasad is the proprietor of the 1st party management no.1. As I do not know his son I cannot say whether his son has taken work from the 1st party management no.2 in the name of J.K. Project Engineering. Unless I see the record, I cannot say now whether J.K. Project Engineering has got some work under the 1st party management no.2 or not. It is not a fact that the company namely J. K. Project Engineering is executing the work of the 1st party management no.2 now. xxx"
(Emphasis supplied)
13. Despite evidence on record, as quoted above, while answering issue no.2 as to what relief the present petitioner workman is entitled to, though it was well proved/demonstrated by the petitioner workman that the nature of job performed by him is of perennial nature and there was violation of sections 25-F, G and H of the I.D. Act, 1947, the court below erroneously held that as the opposite party management no.1 has no work under the management no.2, the petitioner workman is not entitled to reinstatement in service under the Page 22 of 32 WP(C) no.2459 of 2017 opposite party management no.1 and hence, he is entitled to compensation.
Further, though the alleged admitted unpaid dues of the petitioner workman (as admitted in the written statement) is Rs.1,42,169/-, which the present petitioner allegedly did not receive when he was subsequently approached to accept the said amount towards full and final settlement of his dues, which includes one month's salary in lieu of the notice period, as it seems from the impugned award, the court below only awarded Rs.17,831/- extra over and above the said admitted dues (notice pay and retrenchment compensation) and other dues of the workman, while passing the impugned award.
14. The petitioner workman, though was working as a contract labourer under the opposite party management no.1, from the pleadings of the parties, so also evidence on record as detailed above, it is well proved that the nature of job performed by the petitioner workman is permanent and perennial. Further, there is an admission by the management witnesses during their cross-examination that the management no.1 was working since 2006 without any public tender floated by the management no.2 and the same work is being executed through different contractors. Some of the co-workmen/contract Page 23 of 32 WP(C) no.2459 of 2017 labourers, though accepted the retrenchment compensation and other benefits by entering into tripartite settlements in presence of the Conciliation Officer, the management no.1 agreed to reengage retrenched contract labourers in terms of section 25-H of the I.D. Act, 1947. The said settlements were duly witnessed by the officers of the opposite party management no.2 i.e. Officer (H.R), so also Officer, I.R. of IFFCO management, Paradeep Unit and some of them have been reengaged through the existing contractors. Hence, we are of the view that it was obligatory on the part of the opposite party management no.2 to ensure reengagement of the petitioner through other contractors, who were assigned with the said job/work, as was being done by the opposite party management no.1.
15. The law is well settled that if employer wants to disengage a workman, in terms of Section 25-F of the Act, it is obligatory on the part of the employer to give one month's prior notice or pay in lieu of the notice period, so also retrenchment compensation for each completed year of service and the said payment has to be made simultaneously at the time of retrenchment of the workman. A coordinate Bench of this Court in Shyam Sundar Rout v. Orissa State Road Transport Corporation and others, reported in (1990) 69 CLT 357, held that the payment should be made simultaneously along with the order of retrenchment in order to constitute a single Page 24 of 32 WP(C) no.2459 of 2017 transaction. It was further held that compliance of Section 25-F of the Act is required even if employment is contractual or for a specific term. Paragraph 12 of the said judgment is reproduced below:
"12. The settled position of law is, section 25-F of the Act being a beneficial legislation it has to be strictly complied with and is a mandatory pre-condition. The negative form adopted by the provision, coupled with the use of the work 'until' which introduces the condition, indicates that the conditions must be first satisfied before retrenchment can be validly effected. Non-compliance of section 25-F of the Act renders the order of retrenchment void ab initio. Taking into account all the provisions of law in A.I.R. 1976 S.C.1111, The State Bank of India, v. Shri N. Sundara Money, their Lordships have laid down the dictum that the payment of retrenchment benefits as required under section 25-F(2) of the Act is mandatory and pre-condition to the order of retrenchment. In absence of such compliance it has to be held that the workman continued in service though the order of appointment was for a specific period. xxx."
(Emphasis supplied)
16. Further, in Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya, reported in (2013) 10 SCC 324, at Paragraph-22, the Supreme Court held as follows:
"22. The very idea of restoring an employee to the position which he held before dismissal or removal or termination of service implies that the employee will be put in the same position in which he would have been but for the illegal action taken by the employer. The injury suffered by a person, who is dismissed or removed or is otherwise termination from service cannot easily be measured in terms of money. With the passing of an order which has the effect of severing the employer- employee relationship, the latter's source of income gets dried up. Not only the employee concerned, but his entire family suffers grave adversities. They are deprived of the source of sustenance. The children are deprived of nutritious food and all opportunities of education and advancement in life. At times, the family has to borrow from the relatives and other acquaintance to avoid starvation. These sufferings continue till the competent adjudicatory forum decides on the legality of the action taken by the employer. The reinstatement of such an employee, which is preceded by a finding of the competent judicial/quasi judicial Page 25 of 32 WP(C) no.2459 of 2017 body or Court that the action taken by the employer is ultra vires the relevant statutory provisions or the principles of natural justice, entitles the employee to claim full back wages. If the employer wants to deny back wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. The denial of back wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the employee concerned and rewarding the employer by relieving him of the obligation to pay back wages including the emoluments."
17. In view of the evidence on record as detailed above, so also settled position of law, we are of further view that it is a fit case to set aside the findings/observation, so also relief granted by the Labour Court while answering issue no.2. Accordingly, the relief granted vide issue no.2 is set aside.
18. In view of the averments made in the counter affidavit filed by the opposite party management no.1, a query being made, learned counsel for the petitioner workman confirmed that though the cheque dated 20th January, 2017 for an amount of Rs.1,60,000/- was sent to her client by post, the same was never encashed by the petitioner. Rather, the petitioner filed a misc. case in the present case seeking liberty to encash the said cheque without prejudice to his rights and contentions in the writ petition. However, the cheque has lapsed since long. Undisputedly, the alleged dues of the petitioner workman to the tune of Rs.1,42,169/- is lying with the opposite party management Page 26 of 32 WP(C) no.2459 of 2017 no.1 since September, 2013 i.e. almost for about last 10 years. It would have accrued huge interest had it been kept in shape of fixed deposit in any nationalized Bank.
That apart, there is a specific finding as to non-compliance of section 25-F of the I.D. Act, 1947 by the opposite party management no.1. Also there is an admission by the M.W. no.1, who deposed for the management no.1, as to non-compliance of section 25-G of the I.D. Act, 1947 at the time of retrenching the workers, so also continuance of work even after termination of service of petitioner workman by way of refusal of employment by instructing the security personnel not to allow him to enter into the factory premises w.e.f. 1st September, 2013. Hence, we are of the view that the petitioner workman should be paid Rs. 3,00,000/- (Rupees three lakhs) over and above his admitted dues of Rs.1,42,169/- to compensate him for the period he remained unemployed, so also for illegally terminating him from service in contravention of sections 25-F and G of the I.D. Act, 1947 by the opposite party management no.1.
19. At this stage, it is apt to extract Paragraph 25(c) from the written statement filed by the opposite party no.1 in I.D. Case No.3 of 2015.
Page 27 of 32 WP(C) no.2459 of 2017 " That, the contents of paragraph no.-6 of the statement of claim filed by the workman is not correct, hence denied. It is submitted that the 1st party was a mere contractor and was working under the control and direction of the IFFCO. The payment was also given by the IFFCO, but the workman has not impleaded the IFFCO as party in the present reference, hence he is not entitled for any relief from the present 1st party and the present reference is bad in law in absence of the proper party."
(Emphasis supplied) In view of such stand, as quoted above, opposite party no.2, at instance of the petitioner workman, was impleaded as management no.2 in I.D. Case No.30 of 2015.
20. Section 18 (3) (b) of the I.D. Act, 1947 mandates as to binding effect of a settlement or award. The same is extracted below:
"18. Persons on whom settlements and awards are binding.-
(3) A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-section (3-A) of section 10-A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on -
(a) xxx
(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;"
(Emphasis supplied)
21. Section 21(4) of the CLRA Act, 1970 mandates as to the responsibility of the principal employer for ensuring payment of Page 28 of 32 WP(C) no.2459 of 2017 wages to the contract labourer. Wages, as defined in clause (h) of section 2(1) of the CLRA Act, 1970, read with clause (vi) of section 2 of the Payment of Wages Act, 1936, includes the benefits flowing out of an award.
The said provision under section 21(4) and section 2 (1)(h) of the CLRA Act, 1970, so also relevant portion from the definition of "wages" in clause (vi) of section 2 and section 3(2) of the Payment of Wages Act, 1936 are reproduced below:
Extract from CLRA Act, 1970 "21. Responsibility for payment of wages.-(1) a contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.
(2) Every principal employer shall nominate a representative duly authorized by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.
(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.
(4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.
"2(1) (h) "wages" shall have the meaning assigned to it in clause
(vi) of section 2 of the payment of Wages Act, 1936."Page 29 of 32
WP(C) no.2459 of 2017 Extract from Payment of Wages Act, 1936 "2(vi) "wages" means all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes-
(a) any remuneration payable under any award or settlement between the parties or order of a Court;"
"3. Responsibility for payment of wages.(1) Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed,-
(a) In factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the factories act, 1948 (63 of 1948);
(b) In industrial or other establishment, if there is a person responsible to the employer for the supervision and control of the industrial or other establishment;
(c) xxx
(d) xxx
(e) xxx
(2) notwithstanding anything contained in sub-section (1), it
shall be the responsibility of the employer to make payment of all wages required to be made under this act in case the contractor or the person designated by the employer fails to make such payment."
(Emphasis supplied)
22. Since the opposite party management no.2, because of the specific stand of opposite party management no.1 in its written statement, was impleaded as management no.2 in I.D. Case No.03 of 2015, the award passed in the said case, which is partially set aside as above, is also binding on the opposite party management no.2 in terms of section 18(3) (b) of the I.D. Act, 1947.
Page 30 of 32 WP(C) no.2459 of 2017
23. That apart, in view of the provisions enshrined under section 21(4) of the CLRA Act, 1970 and definition of "wages", as defined in clause (h) of section 2(1) of the CLRA Act, 1970, read with clause
(vi) (a) of section 2, so also section 3(2) of the Payment of Wages Act, 1936, we are of the view that it is also obligatory on the part of the opposite party no.2 to ensure payment of unpaid dues as well as compensation to the petitioner workman.
24. Accordingly, we direct the opposite party management no.1 to pay the petitioner workman Rs.3,00,000/- (three lakhs only) in addition to Rs.1,42,169/- (Total Rs.4,42,169/-) within four weeks hence. The management no.2 is directed to ensure payment of the said amount to the petitioner workman within the stipulated time, as directed. If required, it will pay the said amount at the first instance and recover the same from opposite party no.1 in terms of Section 21(4) of the CLRA Act, 1970, if so advised.
25. So far as reinstating/reengaging the workman in the establishment of opposite party management no.2, in view of the stand of both the managements that management no.1 is no more working in the establishment of management no.2, we direct the opposite party management no.2 to ensure reengagement of the petitioner through other contractors, including the establishment owned by the son of Page 31 of 32 WP(C) no.2459 of 2017 proprietor of opposite party no.1 establishment, if he is working at present, for carrying out the jobs, in which the present petitioner was deployed, at the earliest, preferably within a period of two weeks hence.
26. Accordingly, the writ petition is allowed and disposed of to the extent as detailed above. No order as to cost.
(Arindam Sinha) Judge (S. K. Mishra) Judge P.C.Dash PADMA Digitally signed by PADMA CHARAN CHARAN DASH Date: 2023.05.05 DASH 21:26:16 +05'30' Page 32 of 32 WP(C) no.2459 of 2017