Andhra HC (Pre-Telangana)
C.M.D. Singareni Collieries vs Kota Posham And Ors. on 21 April, 1989
Equivalent citations: (1995)IIILLJ740AP
JUDGMENT Jayachandra Reddy, J.
1. The Chairman and Managing Director of Singareni Collieries Co. Ltd., Ramagundam Division, Godavari Khani, Karimnagar District, is the appellant in all these writ appeals and they are filed against a common order of the learned single Judge passed in a batch of writ petitions.
2. The question that arises for consideration is whether the Singareni Collieries Co. Ltd., hereinafter referred to as "the Company", is bound under law to absorb all the contract labour as 'Badli Fillers'. The Contract labours filed several writ petitions and it was contended before the learned single Judge that the contract labour who were working as Hamalies in the Company for over five years and were given training in loading the stored material, should be absorbed as Badli Fillers, on regular basis, under the Contract Labour (Regulation and Abolition) Act, 1970, without insisting on their names being sponsored by the Employment Exchange. The learned single Judge allowed the writ petitions and the decision of the learned single Judge is questioned in these writ appeals.
3. It is submitted by the learned counsel for the appellant-Company that all the Contract labours were working under a contractor without being sponsored by the Employment Exchange, that the contractor pays daily wages to the labour, that the Company has no supervisory control over them and that it is open to the contractor to use the labour in other works and in other establishments also. Even otherwise, the Company cannot appoint anybody unless sponsored by the Employment Exchange and there is a direction that the Company should appoint only those persons sponsored by the Employment Exchange, as Badli Fillers.
4. On the other hand it is contended by the learned counsel for the respondents, viz., the contract labour, that the Badli Fillers and the contract labours do the same type of work, except that the Badli'Fillers work in the mines, whereas the contract labour work on the surface, and that the Company need not appoint only those persons sponsored by the Employment Exchange. It is further submitted that the Company is the employer of the contract labour and the contractor is only a middleman. It is also submitted that these labourers come under the definition of "employees" and that there is 'master and servant' relationship and after the coming into force of the Contract Labour (Regulation and Abolition) Act, 1970, hereinafter referred to as "the Act", these contract labour become regular employees. It is further submitted that in the view of the judgment of the Supreme Court in Union of India v. N. Hargopal 1987 (1) LLJ 545, it is no more obligatory on the part of the Company to appoint only those persons sponsored by the Employment Exchange.
5. Before we proceed to consider the relevant provisions of law and the decisions cited, we shall refer to the averments in the affidavit, and the counter-affidavit. In the affidavit filed on behalf of the petitioners it is stated that all the writ petitioners are contract labour working as Hamalis "Muccaddams" in the area stores of the Company and the nature of work is to load and unload store material like explosives, cement, timber, iron, etc., and all the petitioners were given training by the respondent-Company For certain period and though the petitioners are working under the contractors to undertake the works of the Company, they are governed by the A.P. Contract Labour (Regulation and Abolition) Rules, 1971 and they are all treated by the Company on par with the regular employees. But the only difference is that the petitioners are paid daily wages. It is further averred that the contract labour are also issued service certificates and that in the year 1979, some of the contract labour were appointed in the posts of Badli Fillers. But strangely the Company refused to absorb them on the ground that their names were not sponsored by the Employment Exchange, which act is illegal and discriminatory.
6. In the counter-affidavit filed by the 2nd respondent, viz., the General Manager of the Company, it is stated that though some of the contract labourers were given surface training by way of safety and also provided with helmets, etc., they do not become regular employees, that the Company has no direct relationship with the contract labour, that the contract labour are paid wages by the contractor on daily basis and that after the judgment of the Supreme Court in Hargopal's case (1 supra) the Company is considering only the candidates sponsored by the Employment Exchange for interview to fill up the posts of Badli Fillers. It is further stated that the writ petitioners as a matter of fact, have no right to be absorbed and that they are not the regular employees of the Company.
7. We shall not proceed to consider the various contentions. The learned counsel for the respondents, viz., the contract labour, relied on certain provisions of the Act. In Section 2(b) it is mentioned that a workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. Section 2(c) defines "contractor" as to mean a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to the establishment through contract labour or who supplied contract labour for any work of the establishment. Section 2(g) defines "principal employer" as follows:-
"2. (g) "Principal employer" means-
(i) in relation to any office or department of the Government or a local authority, the head of that office or department or such other officer of the Government or the local authority, as the case may be, may specify in this behalf.
(ii) in a factory, the owner or occupier of the factory and where a person has been named as the manager of the factory under the Factories Act, 1948, the person so named.
(iii) in a mine, the owner or agent of the mine and where a person has been named as the manager of the mine, the person so named.
(iv) in any other establishment, any person responsible for the supervision and control of the establishment" -
In 2(i) we get the definition of "workmen", which reads thus "2(i):- "Workmen" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or unskilled manual, supervisory technical or clerical work for hire or reward, whether the terms of employment be express or implied, but does not include any such person-
(A) who is employed mainly in a managerial or administrative capacity; or (B) who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or (C) who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the Principal Employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer".
Section 7 provides for the registration of certain establishments and lays down that every principal employer of an establishment to which the Act applies shall within such period as the appropriate Government may, By notification in the Official Gazette, fix in this behalf with respect to establishments, make an application to the registering officer in the prescribed manner for registration of the establishment. Section 10 provides for the prohibition of employment of contract labour in respect of certain establishments. Section 12 provides for the licensing of contractors; and Sections 16 to 20 deal with the facilities to be provided to these contract labour by the Principal Employer. Section 21 lays down that a.contractor shall be responsible for payment of wages to each worker employee by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed, and 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.
8. The learned counsel also referred to a letter (No. 537-646 Jabalpur) dated 1-2-1985 from the Director of Mines Safety, Jabalpur addressed to the Managers of all Coal Mines and Metal Mines, asking them to confirm whether the names of (1) persons employed on handling and transporting mineral upto the point of despatch, (2) persons employed on gathering and transporting of sand to the mine, (3) persons employed in operations or services relating to the development of the mine, (4) persons employed in operation of loading of minerals for despatching the same within the premises of the mine and (5) persons employed in any office of the mine, (whether employed directly or through contractors) have been entered in Form-B Register. Relying on the above quoted provisions of law and the letter, the learned counsel submits that all the contract labour come within the meaning of "employees" and there is a 'master and servant relationship between the company and the employees and they should be absorbed as Badli Fillers without going to the Employment Exchange.
9. We shall first consider the contention of the learned counsel for the appellant-Company viz., that these contract labour are not regular employees and at any rate, unless they are sponsored by the Employment Exchange, as things stand now, they cannot be appointed as Badli Fillers. In this connection reliance is placed on the judgment of the Supreme Court in Hargopal's case (1 supra). In the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 '(Employment Exchanges Act') for short 'employer' is defined to mean any person who employs one or more other persons to do any work in an establishment for remuneration and includes any person entrusted with the supervision and control of employees in such establishment. "Establishment" is defined in Section 2(e) as follows:
"2(e):- "Establishment" means-
(a) any office, or
(b) any place where any industry, trade, business or occupation is carried on":-
In Section 2(f) "Establishment in public sector" is defined as to mean an establishment owned, controlled or managed by a Government or a department of the Government, a Government company, a Corporation (including a co-operative society) established under a Central or a State Act, and a local authority. Section 4 of the Employment Exchanges, (Compulsory Notification of Vacancies) Act, lays down that after the commencement of that Act, the employer in every establishment in public sector, before filling up any vacancy in any employment in that establishment, notify that vacancy to such Employment Exchanges as may be prescribed. Section 7 provides for penalties which the employer has to suffer in case he fails to notify the vacancies as required under Section 4. In Hargopal's case (1 supra), the Supreme Court considered the meaning of ''establishment in public sector" as defined in Section 2(f) of the Employment Exchanges Act, and held that the Government offices are also included in the expression "establishment in public sector". Then examining the scope of Section 4 of the Employment Exchanges Act, their Lordships held that the said Act does not oblige any employer to employ those persons only who have been sponsored by the Employment Exchanges. It was also contended before their Lordships that the instructions issued by the Government that in the case of Government Departments and the establishments in public sector, the field of choice should, in the first instance, be restricted to candidates sponsored by the employment exchanges, offend Articles 14 and 16. Repelling this contention, their Lordships observed that the object of recruitment to any service or post is to secure the most suitable person who answers the demands of the requirements of the job, and that in the case of public employment, it is necessary to eliminate arbitrariness and favouritism and introduce uniformity of standards and orderliness in the matter of employment, and there has to be an element of procedural fairness in recruitment. Then their Lordships observed thus:-
"If a public employer chooses to receive applications for employment where and when he pleases, and chooses to make appointments as he likes a grave element of arbitrariness is certainly introduced. This must necessarily be avoided if Articles 14 and 16 have to be given any meaning. We, therefore, consider that instance of recruitment through employment exchanges advances rather than restricts the rights guaranteed by Articles 14 and 16 of the Constitution. The submission that Employment Exchanges do not reach everywhere applies equally to whatever method of advertising vacancies is adopted. Advertisement in the daily press, for example, is also equally ineffective as it does not reach everyone desiring employment. In the absence of a better method of recruitment, we think that any restriction that employment in Government Department should be through the medium of employment exchanges does not offend Articles 14 and 16 of the Constitution."
At this stage, it may be mentioned that after the judgment of the Supreme Court in Hargopal's case (1 supra), the Government issued G.O. Ms. No. 172, LEN & TE (Enrol.) Department, dated 11-5-1987. In the first two paragraphs of this G.O. there is a reference to the High Court's judgment and ultimately to the judgment of the Supreme Court dated 13-4-1987 in Hargopal s case (1 supra) and in paragraphs 4 and 5 a direction is given which reads thus :-
"The final judgment of Supreme Court is delivered on 13th April, 1987. The Supreme Court in its judgment upheld the view that in the absence of a better method of recruitment any restriction that employment in Government Departments should be through the medium of Employment Exchanges does not offend Articles 14 and 16 of the Constitution.
5. In view of the above orders of Supreme Court, Government hereby cancel the orders issued in the Memo seventh read above banning fresh appointments and direct that the orders issued in the G.O first and second read above shall be implemented as already ordered in the G.O sixth read above.
Earlier to that, in G.O. Ms. No. 535, Employment and Social Welfare (G) Department, dated 28-6-1975, orders have been issued that recruitment be made through the employment exchanges and that in case of violation of the provisions of the Employment Exchanges (Compulsory Notification of Vacancies) Act, the Director of Employment & Training will take action against the defaulters. So, it is this G.O. that is directed to be implemented as per the orders in G.O. Ms. No. 172 after the Supreme Court delivered the judgment in Hargopal's case (1 supra). The learned counsel for the appellants, therefore, submits that the Company has no choice but to employ only those candidates sponsored by the Employment Exchanges. We see considerable force in this submission.
10. In Hargopal's case (1 supra) their Lordships, after explaining the scope of Section 4 of the Employment Exchanges Act, considered the submission whether the departmental instructions to the effect that the employment should be through Employment Exchanges offend Articles 14 and 16 of the Constitution and held that they do not. Therefore, it is open to these establishments to choose the media of Employment Exchanges for filling up vacancies and G.O. Ms. No. 172 is in accordance with the ratio laid down by the Supreme Court, and the Company cannot be compelled to deviate from the procedure they have to adopt under G.O. Ms. No. 172 and appoint persons other than those sponsored by the Employment Exchanges.
11. The learned counsel for the contract labour strenuously contended that the provisions of the Act apply to these contract labour and consequently they become employees and the Company comes within the meaning of employer and therefore it is only a question of absorbing the contract labour for which the Company need not go through the media of Employment Exchange. We are unable to agree. We have examined the provisions of the Act carefully. "Employer" as such is not defined. On the other hand, the definition of principal employer" denotes the existence of a middle man, viz., the contractor. Therefore, there is no direct 'master and servant' relationship between the Company and these contract labour. It may be that the contract labour come under the definition of employees within the restricted meaning as mentioned in the Act ; but that does not mean that they are the regular employees. At this stage we may usefully refer to a decision in A.P. Dairy Development Co-op Federation v. K. Ramulu 1989 I C.L.R. 407 wherein a Division Bench of this Court considered the scope of some of the provisions of the Act. There the question was whether the employees of a contractor appointed on a contract basis in the A.P. Dairy Development Co-operative Federation, are entitled to be absorbed in regular service of the Federation. The Division Bench held thus:-
"Neither the Act nor the Rules provide that upon the abolition of the contract labour the said labour should be directly absorbed by the principal employer. Nor is there any provision that pending decision upon an application under Section 10 by workers, the said workers should continue to be engaged by such principal employer"
Therefore, it cannot be contended that the contract labour should continue to be engaged by any such principal employer,
12. The learned counsel for the contract labour however placed considerable reliance on some of the judgments to which we shall presently refer. In Maharashtra Sugar Mills Ltd. v. State of Bombay; 1951 (2) LLJ 299, some of the provisions of the Bombay Industrial. Relations Act were considered and it is observed that where the contractors engaged by a company were under the responsibility of employing responsible servants for carrying on the operation entrusted to them and those servants or coolies were to be paid wages by the contractor, and if thought necessary by the company directly, and the contract labour got the same amenities from the company as the muster roll labour, the persons employed by the contractor were 'employees' within the meaning of the said Act. we have examined the judgment. In that Act "employer" is defined and it is an inclusive definition. However, the question in the instant case as already mentioned, is different, viz., when fresh appointments are being made by the Company, whether it should go through the media of Employment Exchange. In Gasliton Colliery v. Its Workmen 1954 (1) LLJ, 144, distinguishing this judgment of the Supreme Court it is held differently, as under:
"Where the management entrusted the execution of particular work to a contractor, workmen employed and paid by the such contractor are not the workmen of the management as no relationship of employer and employees subsist between such workmen and the management".
It cannot, therefore, firmly be said that all such workmen employed through a contractor become the employees of the Company.
13. The learned counsel, however, lastly submitted that since these contract labours have been working for the last five years, they are entitled to be absorbed- Reliance is placed on Catering Cleaners of Southern Railway v. Union of India, 1987 (1) LLJ 345. In that case. Section 10 of the Act came up for consideration. The workers concerned there were employed through contractor in the Catering Department of the Railway. They styling themselves as catering cleaners of the Southern Railway filed a writ petition that the contract system should be abolished and they should be absorbed on regular basis. The Supreme Court after considering the provisions of the Act, to which we have already referred, refrained from straightway issuing a writ of Mandamus as prayed for. Their Lordships of the Supreme Court however noted that all the relevant factors mentioned in Section 10(2) appear to be satisfactorily accounted for and required the Government to consult the Central Board or the State Board to take action under section 10 and abolish the system and regularise the services of those employees. In Daily Rates Casual Labour employed under P & T Departments v. Union of India, 1988(1) LLJ 370 the Supreme Court considered the case of casual labourers in the Posts and Telegraphs Department. Taking into consideration their service conditions, their Lordships noted that many of them have been working continuously, and required the Government to prepare a scheme for absorbing them. U.P. Income-tax Dept. Contingent Paid Staff Welfare Association v. Union of India', 1988 1 CLR 124 is yet another case where some such suitable directions were given in respect of the casual labour who were working continuously for more than one year as Class IV employees in the Income-tax Department.
14. Lastly, reliance is placed on Piara Singh, Government Senior Secondary School, Sirsa v. State of Haryana 1988 (4) SLR 739 wherein Punjab and Haryana High Court considered the scope of sponsorship by employment exchange. The High Court referred to the judgment of the Supreme Court in Hargopal s case (1 supra), and observed thus:
"Therefore, while we agree that the appointment should be made as far as possible even on ad hoc basis from the candidates sponsored by the employment exchanges, but if appointment from some other source is made, that would not be considered to be bad".
Relying on this judgment and some of the judgments of the Supreme Court mentioned above, the learned counsel pleaded that the case of these casual labourers who have been working for number of years has to be considered sympathetically.
15. We may at this juncture point out that we are unable to agree with the learned single Judge that all these labourers employed through a contractor have to be absorbed without going to the employment exchange. The learned single Judge has referred to the judgment of the Supreme Court in Catering Cleaner's case (5 supra) and directed that they should be absorbed. The learned Judge observed that the petitioners are not freshers and they have been already working though on daily wages, and therefore their names need not be sponsored by the employment exchange. As already discussed by us, in Hargopal's case (1 supra), the Supreme Court made it clear that an establishment can choose the media of employment exchange for filling up vacancies and any direction given by the Government that the filling up of vacancies in the offices should be through the employment exchange is not illegal, and in conformity with this ratio G.O. Ms. No. 172 was issued by the Government. Consequently, all the public undertakings have chosen to make the recruitment from out of the candidates sponsored by the employment exchanges, which is perfectly valid.
16. For all the reasons, the orders of the learned single Judge in all the writ petitions are set aside and the writ appeals are allowed. However, it is open to all the contract labourers employed through the contractor to register themselves with the employment exchange. While filling up the vacancies of Badli Fillers, the Company may bear in mind that such of those candidates who have already worked as contracl labourers including the present respondents, and who have also been sponsored by the employment exchange, have to be given due weightage and preference in view of their experience.
17. The writ appeals are accordingly allowed.
No costs.