Madras High Court
M/S Nlc Tamilnadu Power Limited vs The Tamilnadu Min Uzhiyar Mathiya ... on 30 April, 2021
2025:MHC:593
WP.No.12039 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
ORDERS RESERVED ON : 23.01.2025
ORDERS DELIVERED ON : 04.03.2025
Coram:
THE HONOURABLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.P. No.12039 of 2021
and W.M.P.No.12809 of 2021
M/s NLC Tamilnadu Power Limited
Represented by its Chief Executive Officer
Project at Harbour Estate, Tuticorin – 628 004
Having Registered Office at #135,
E.V.R. Periyar High Road, Kilpauk
Chennai – 600 010. ... Petitioner
Vs.
1.The Tamilnadu Min Uzhiyar Mathiya Amaippu
Represented by its Secretary
No.145/1A, Ettaiyapuram Road
Tuticorin – 628 002.
2.The Deputy Chief Labour Commissioner (Central)
Authority under Rule 25(2) (v) (a) & (b) of CL (R&A) Act, 1970
5th Floor, Shastri Bhawan, Chennai – 600 006. ... Respondents
Prayer: Writ Petition is filed under Article 226 of the Constitution of India for
issuance of a Writ of Certiorari, calling for the entire records of the 2nd
respondent relating to the impugned order in No.M.20/1/2019-B1 (File
Page No.1/48
https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm )
WP.No.12039 of 2021
No.20/01/2019) dated 30.04.2021 and quash the same in so far as the directions
given in Paragraph No.12 (ii) to (vii) and the consequent findings in the
impugned order being illegal, contrary to and in complete derogation of the
provisions of CL (R&A) Act, 1970 and the Rules made thereunder, excessive
exercise power, violation of principles of natural justice, arbitrary and whimsical
exercise of power and to pass such further or other order.
For the Petitioner : Mr.Yashodh Varadhan
Senior Counsel
Assisted by Mr.N.Nithianandam
For the Respondents : Mr.V.Ajoy Khose for R1
Mr.K.S.Jaya Ganesh
Senior Panel Counsel for R2
O R D E R
A.The Writ Petition:
This writ petition challenges the impugned award issued by the Deputy Chief Labour Commissioner (Central), who is the authority under the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 'the Act'), on 30.04.2021. It seeks to quash the award concerning the directions provided in paragraph No. 12 (ii) to (vii) and to assert that the consequent findings in the award are illegal, contrary, and in complete derogation of the Page No.2/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 provisions of the Act and the rules established thereunder, and for further orders.
In the challenged award, the 2nd respondent considered the application of the 1st respondent – Union as per rule 25 (2) (v)(a) of the Contract Labour (Central) Rules, 1971 (hereinafter referred to as 'the Central Rules'). After conducting an inquiry and evaluating the cases of both parties, it granted the following reliefs in paragraph No. 12, which is extracted hereunder:
“ORDER
(i). The Claim of the Claimant Union for the payment of same and similar wages under the provision of Rule 25(2)(v)(a)&(b) is DISMISSED.
(ii). However, all contract workers employed in the "Coal Handling System" of the Establishment of the Respondent shall be paid the Minimum wages being paid to the contract workers who handle coal anywhere in India, as ordered by the Coal India Ltd., and also being paid by NLCIL in it's Coal Unit at Talabira, Odhisha. Such wages of the High Power Committee is to be paid with effect from 01-06-2021 and also at the rates as and when revised by the Coal India Ltd., This Minimum wage shall consist of Basic, VDA etc., as being paid in Coal India Ltd.,
(iii). All contract workers employed in the "other Divisions" of the Establishment of the Respondent shall be entitled for the "Settlement wages" as being paid to the contract workers employed in the NLC Thermal Power Station at Neyveli Campus.
(iv). From the very first day of employment, all contract workers employed in the Establishment of the Respondent shall also be entitled for the Group Insurance Coverage on par with the contract workers employed in the NLC Thermal Power Station at Neyveli campus.
(v). The rate of wages in the tender documents shall be provided Page No.3/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 accordingly to enable the contractor concerned to smoothly pass such minimum benefits to the eligible workers.
(vi). The Chief Executive Officer of the Respondent should be informed of and satisfied before stopping any contract worker from employment in order to guard against such frequent complaints of change of contract workers with a view to extract money. Also the particulars such as name, designation, date of joining, date of cessation, division, reason(s) for stoppage etc., need to be entered by the Head of the HR Department in a prescribed Register and the same should be initialed by the said C.E.O and also made available to the Officers of this Authority whenever demanded.
(vii). The above Order shall come into effect from 1.6.2021.” Aggrieved by the same, the Management has filed the present Writ Petition.
B.Case of the Management:
2. The case of the Management is that on 10.05.2019, the trade union submitted a petition to the Management demanding wage parity for contract workers, based on the Judgment of the Hon'ble Supreme Court in C.A.No.213 of 2013 dated 26.10.2016. Subsequently, on 20.05.2019, the trade union submitted a similar petition to the 2nd respondent, demanding wage parity for contract workers. The 2nd respondent issued a notice to the Management on 23.05.2019, Page No.4/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 scheduling the inquiry for 31.05.2019. Thereafter, the Management requested an adjournment on 25.08.2019, and the matter was adjourned multiple times for filing a counter. The Management filed a detailed counter on 04.07.2019, to which the trade union responded with a rejoinder on 29.08.2019. The Management replied to the rejoinder on 23.12.2019, specifically emphasizing that the aforementioned Judgment of the Supreme Court does not apply to the facts and circumstances of the present case.
2.1. Thereafter, on 27.01.2020, the authority conducted an inquiry in the presence of the representatives from Management and the trade union. Management provided all necessary information as requested by the authority. In fact, during the proceedings, the authority examined certain matters that are contrary to the law. The authority failed to recognize that it is the responsibility of the trade union to establish their locus standi to maintain the dispute.
2.2. Without any justification whatsoever on 15.04.2021, the authority also inspected the plant of the Management. In fact, the 1st respondent – the trade union is in no way connected to the Management or the contract workers Page No.5/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 engaged by the contractors of the Management. The credentials of the trade union have not been disclosed to the Management or the authority. It is a total stranger and has no locus to maintain the alleged grievance regarding the contract workers engaged by the contractors of the Management. Although the issue of locus standi was raised as a preliminary issue during the hearings, it was not considered by the authority. Despite the pleadings and arguments being completed in January 2021, the authority passed the impugned order only on 30.04.2021, on the date of his retirement. The award was passed in complete violation of the provisions of the Act and the Rules made thereunder.
2.3. As a matter of fact, although the authority had entertained the petition filed by the trade union, which cannot be considered under Rule 25(2)(v)(a) of the Contract Labour (Regulation and Abolition) Central Rules, 1977, while correctly dismissing the claim petition, the authority had overstepped its scope and powers by granting certain reliefs as if the petition had been filed under Section 25(2)(v)(b) of the Rules, which violates the intent and scope of the said rule. The authority's power under this rule is quasi-judicial in nature; therefore, it is expected that the authority follows a judicious approach in adjudication and Page No.6/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 decision-making. However, without considering the substantive pleadings and evidence, the authority decided the matter based on its own assumptions and presumptions, contrary to the materials on record. The authority failed to recognize that there was no disagreement regarding the type of work performed by the contract workers, which is necessary for the authority to establish jurisdiction to adjudicate and decide the matter. Furthermore, there were no complaints from any of the contract workers employed through the contractors in the Management, as contemplated in the said Rule. In the absence of any disagreement as outlined under the proviso to the said Rule or any complaint by the relevant contract worker, the entire adjudication and decision of the authority were unwarranted. Based on these and various other grounds mentioned in the affidavits filed in support of the Writ Petition, the Management has therefore approached this Court to challenge the award.
C.Case of the Workmen:
3. The Writ Petition was resisted by the Workmen by filing a detailed counter affidavit.
Page No.7/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 3.1. It is stated that the Neyveli Lignite Corporation Limited, now renamed NLC India Limited (shortened to 'NLCIL'), is fully owned by the Government of India and is engaged in lignite and coal mining, as well as generating electricity through thermal power stations not only in Neyveli but also in various locations across India. Regarding the present management in Tuticorin, there are three categories of employees: the executive category, the supervisory category, and the labour category. In addition to these three categories of regular employees, management also employs contract labour through societies and individual contractors.
3.2. The NLCIL also engages permanent employees and contract workers. Wages are paid according to the settlement from time to time. The last such settlement was regarding wage revision under Section 12 (3) of the Industrial Disputes Act on 07.08.2020. Proceedings were issued on 19.08.2020 to implement the benefit to the contract labourers as provided in the said settlement.
3.3. As far as the current Management is concerned, it is a joint venture with TANGEDCO, holding equity shares in the ratio of 89:11. This coal-based Page No.8/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 thermal power project started in 2009, with commercial production beginning in 2014. There are two units operating, each with a capacity of 500 megawatts. The current Management is thus a subsidiary of NLCIL. Across both units, there are approximately 1,500 workers. Of these, only 220 are regular workers, while the remaining 1,280 are contract labourers. These labourers, who work under contractors, are categorized into five groups: Supervisors, Highly Skilled, Skilled, Semi-skilled, and Unskilled. The operations begin with the receipt of coal from the port to the coal yard and continue through ash handling resulting from electricity generation. Contract workers perform tasks at the coal yard, stacker, coal bunker, furnace, boiler, demineralization plant, turbine, cooling water pump house, ash handling area, generators, substations, etc., across all divisions. Work in all divisions must proceed simultaneously and operates around the clock, seven days a week, throughout the year. Rather than hiring regular employees, there is a practice of engaging these workers through contractors as a means to deny them benefits, exploit their labour for lesser wages, and avoid compliance with the provisions of the Factories Act. Page No.9/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 3.4. Once the union started raising disputes, as a retaliatory measure, 40 contract laborers were prevented from working. During the conciliation proceedings, a settlement was reached between the trade union and the contractors, in which those workers were reinstated. However, the contractors did not come forward to resolve the other issues. In this context, since there was no positive response from the management, the trade union filed a petition on 20.05.2019 before the 2nd respondent, seeking directions for equal wage payments and to establish the conditions of service for the contract labourers employed by the management. The management raised issues of maintainability and also claimed that the contract workers were not performing the same and similar work as their regular counterparts, asserting that their work was not regular or perennial but only occasional and sporadic. Furthermore, it was stated that they were engaged strictly on a need basis. Even while settlement talks were ongoing regarding the NLCIL employees, the petitioner-union requested to be included in those discussions to ensure that the settlement would also apply to the existing units in Tuticorin. However, this was not accomplished. Page No.10/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 3.5. After inquiry, the 2nd respondent authority duly passed an award by dismissing the petitioner's claim under Rule 25 (2) (v) (a) and allowing it under rule 25 (2) (v) (b) of the Central Rules. The 2nd respondent authority considered the pleadings and the nature of work performed by both regular workers and contract workers, in both the present Management as well as in the NLCIL, and concluded that their conditions are similar and they are performing comparable work under the same Management. Subsequently, the authority determined that out of the 12 factors, 6 factors were found to be on equal footing between the contract labourers and the regular workmen. It then assessed the scope of power. The authority also took into account the wages paid in the coal handling system of Coal India Limited at its coal units in Thalabira and Odisha, as established by the high-powered committee.
3.6. In addition to the wages paid in the coal handling system, it considered the payment of wages in the NLCIL thermal power station at Neyveli. Thereafter it held that the minimum benefits required by law can be extended to the contract labourers. The argument that the Management is a separate entity was rejected concerning the current adjudication and the wages paid. The unit is Page No.11/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 fully owned by NLCIL, a Government of India undertaking, and even the minor share was held by TANGEDCO, which means they should be model employers. The 2nd respondent authority possesses suo motu power to set wage rates, holidays, hours of work, and other conditions of service independently, even without any petition or application from the contract labourers and accordingly passed the orders granting the benefits and the operative portion of the order is extracted supra.
D. The Submissions:
4. Heard, Mr. Yasodh Varadhan, the learned Senior Counsel appearing on behalf of the petitioner – Management; Mr. V. Ajoy Khose, the learned counsel appearing on behalf of the Workmen/1st respondent; and Mr. K. S. Jaya Ganesh, the learned Senior Panel Counsel appearing on behalf of the 2nd respondent.
4.1. The learned Senior Counsel appearing on behalf of the petitioner contends that the present Management is a company incorporated under the provisions of the Indian Companies Act and is a distinct entity in all respects. It Page No.12/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 was established following the approval of the President of India dated 12.05.2008. It is a joint venture between M/s NLCIL and TANGEDCO, with a shareholding ratio of 89:11. Although the present Management is a subsidiary of NLCIL, they are entirely different entities for all purposes, including their Board of Directors, operations, and business management. NLCIL cannot be directly compared with the Management herein. A corporate services agreement exists between the Management and NLCIL, under which employees of NLCIL are deployed on a second-month basis. Service charges are collected by NLCIL for these services, pursuant to the corporate service agreement. Therefore, NLCIL serves merely as a service provider to the present Management, with no other connection between them.
4.2. The Management herein, in addition to employing regular employees, also engages private contractors for certain identified sporadic works on a contract basis. The award of contracts is conducted through an open tender system. The Management has duly obtained a license under the Act. Contract awards are strictly compliant with the provisions of the Act and the Rules made thereunder. The statutory wages and other benefits payable to contract workers Page No.13/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 are provided by the respective contractors in accordance with the notifications issued by the Ministry of Labour from time to time. There have been no complaints whatsoever from any of the contract workers employed by the contractors regarding the statutory wages and applicable benefits owed to them to date. There is no disagreement concerning the type of work, wages payable, etc., to the contract workers by the respective contractors as of now.
4.3. While the regular employees of the Management operate the power plant, the contract workers carry out other sporadic tasks assigned to them during their respective contract agreements. There is no master-servant relationship between the Management and the contract workers. There are other thermal power plants situated in Tuticorin, and the benefits paid to the contract workers by the Management are significantly higher than those of their counterparts. The 1st respondent—trade union is a complete stranger to the Management and has no representative character. The parity of wages is claimed concerning the regular employees performing perennial work, as held by the Hon'ble Supreme Court of India in C.A No.213 of 2013. However, nothing in that judgment applies to the present facts of the case. Thus, without any rationale, the authority entertained Page No.14/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 the petition. In fact, the petitioner—Management is not a necessary party to the proceedings; it is only the respective contractors who are proper parties in said proceedings. The very issue of notice under Rule 25(2) (v) (a) and (b) of the Rules to the Management is incorrect. Despite the reply filed by the Management, the 2nd respondent authority proceeded to conduct the inquiry. The initial burden is on the trade union to prove the allegations. However, the 2nd respondent authority took it upon himself to delve into issues contrary to the law and made the award based on presumptions and surmises. While the pleadings and other inquiries were conducted, the 2nd respondent scheduled the inspection just days before his retirement. Following an arbitrary and whimsical spot inspection, without providing further opportunity for the Management to contest the alleged findings, the impugned award was passed. In fact, the impugned award was received on 10.05.2021, despite being dated 30.04.2021, the retirement date of the officer concerned. It is inconceivable that the order was issued on that date. The order was rife with numerous illegalities and inconsistencies, and the authority exceeded its jurisdiction. Rule 25 (2) (v) (a) and (b) of the Act must be read in conjunction with Section 12 of the Act. Together, they govern the granting of licenses to contractors with the stated Page No.15/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 conditions. According to the rules, any proceedings contemplated therein shall be initiated only against the contractors/licensees/employers. In the present case, proceedings were initiated against the principal employer alone, lacking any supporting material, which is impermissible and contrary to the rules.
4.4. With this background, Mr. Yasodh Varadhan, the learned Senior Counsel, submits that firstly, the 2nd respondent authority, having categorically dismissed the alleged claims made under rule 25 (5) (a) of the Act, should not have issued the impugned directions. Furthermore, he submits that the entire adjudication and issuance of the impugned award occurred in the absence of the contractors/employers of the contract workers and without impleading them as respondents; thus, the entire claim is illegal and not maintainable. Thirdly, he submits that the 1st respondent – trade union lacks locus standi to raise the dispute. There was absolutely no complaint from any of the contract labourers, and the current trade union has no connection to the petitioner – Management, nor does it possess any representative character.
Page No.16/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 4.5. The learned Senior Counsel representing the petitioner submits that the manner in which the above enquiry was conducted was defective, improper, and illegal, violating the principles of natural justice. He further asserts that the authority should have recognized that nothing contained in the Supreme Court's order in C.A.No.213 of 2013 applies to the facts and circumstances of the present case. The authority, without acknowledging the nature of the enquiry, whimsically noted that, if necessary, he would visit the plant in the hearing notes dated 27.01.2020. Since the trade union did not discharge the initial burden, it was not the authority's responsibility to gather materials to support the Workmen's case. While the enquiry remained dormant from January 2020 for about 1 year and 4 months, just 15 days before his retirement, the enquiry was scheduled for 15.04.2021. Contrary to the notice of enquiry, a spot inspection was conducted on 15.04.2021, and the authority arbitrarily examined some selected individuals at the workplaces according to his whims. The findings reached during the inspection remained unknown to the petitioner— Management, and no opportunity was given to the Management to contest or explain the facts that the authority allegedly discovered in his inspection. The Page No.17/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 impugned award, dated 30.04.2021, was received only after the officer's retirement, specifically on 10.05.2021. Thus, the entire order issued by the authority violates the principles of natural justice. The authority should not have passed the order on the day of his retirement, which indicates the bias on the authority's part. Consequently, the order is liable to be set aside.
4.6. The learned Senior Counsel would further submit that there is no similarity between the works performed by the contract workers of the present Management and those of the workers in NLCIL or Coal India Limited. The authority compared the incomparables. No opportunity was given to the Management to present its views. The identical industries, specifically similar thermal power plants in Tuticorin, were deliberately not considered, which violates Rule 25 of the Act. The authority is empowered to consider only the same and similar kinds of work in similar employments. Coal India Limited is involved in coal mining, whereas the present Management focuses on power generation. In NLCIL, due to the long-standing relationship and the periodic 12 (3) settlements made between both sides, wages are paid. Many of the contract workers are also land donors. Therefore, considering the peculiar facts and Page No.18/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 circumstances of the case, there have been periodic wage revisions that resulted in the current wage position, which cannot be compared to the newly formed thermal power station at Tuticorin. The experience of those workers greatly exceeds that of the current workers, and the authority overlooked these details while granting the benefits. The authority ought to have made comparisons with other power plants operated by the State of Tamil Nadu in Tuticorin itself.
4.7. The learned Senior Counsel would also submit that many findings and conclusions in the impugned award are perverse, illogical, and based on his own presumptions. When the unit began operations in the middle of 2015, the assertion that these laborers have been employed for more than 7 and 10 years cannot be correct. The authority's finding that the Management is under the universal control and supervision of NLCIL is also erroneous. The authority failed to consider that the rate of wages was not notified by the Ministry of Labour and Employment for power plant industries. In this case, the authority could have, at best, taken the issue up with the Ministry of Labour and Employment to get it resolved. Without doing so, the second respondent authority erred in adopting the wages of NLCIL and Coal India Limited, thereby Page No.19/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 issuing erroneous directions. Among the contract laborers, there is no disparity in wage rates. Overall, the impugned award suffers from various material irregularities and is thus liable to be set aside.
4.8. In support of his submissions, the learned Senior Counsel would rely on the judgment of the Hon'ble Supreme Court of India in Uttar Pradesh Rajya Vidyut Utpadan Board and Another Vs. Uttar Pradesh Vidyut Mazdoor Sangh1 specifically on paragraph Nos. 10 and 11, concerning the similarity in the kind of work and the nature of duties and responsibilities that should be considered. The decree of similarity should also be taken into account, along with the qualitative differences. Furthermore, the learned Senior Counsel would rely on the judgment of the Hon'ble Supreme Court of India in Steel Authority of India Limited and Another Vs. Jaggu and Others2 focusing on paragraph Nos. 30 and 43, to assert that the burden primarily lies on the trade union to establish that the duties performed were the same and similar, and mere assertion is not sufficient. The learned Senior Counsel would also refer to the judgment of the Hon'ble Supreme Court of India in Bharat Heavy Electricals Limited Vs. Mahendra Prasad 1 (2009) 17 SCC 318 2 (2019) 7 SCC 658 Page No.20/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Jakhmola and Others3 to argue that there is no jural relationship between the contract laborer and the Management, and in the absence of such a relationship, the claim should have been made only against the contractors.
4.9. Per contra, Mr. Ajoy Khose, the learned counsel representing the 1 st respondent, stated at the outset, when the matter was brought up for admission regarding the wages owed, that this Court directed the Management to pay Rs. 100/- per head as an interim measure, a directive that was also confirmed by the order dated 15.11.2023 in W.A.No.1667 of 2021. However, this directive was not complied with, and in fact, the Contempt Petition is still pending in Cont.P.No.59 of 2025, which is also listed and heard alongside the Writ Petition.
4.10. Regarding locus standi, the learned counsel submits that many of the contract labourers are members of the petitioner union. The union has represented them on earlier occasions, raised disputes, and reached a settlement with the petitioner, management, and contractors concerning the same organisation. Therefore, in the absence of any provision in the Act or the Rules 3 (2019) 13 SCC 82 Page No.21/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 indicating that only recognized trade unions can raise the issue, the Management's plea lacks substance and the same has been duly considered and rejected by the authority. The counsel asserts that the Management engages contractors who supply more than 20 contract labourers. Consequently, according to Section 1 (4) (a) (b) of the Act, the rules apply to both the Management and the contractors. The Management is required to obtain registration under Section 7 of the Act, and each contractor must obtain a license under Section 12 (1) of the Act. Under Section 12(2) of the Act, the licensing authority is authorized and mandated to prescribe conditions related to hours of work, wage fixation, and other amenities for contract labor, as deemed fit by the appropriate government in accordance with the rules.
4.11. The Central Government, under various provisions of rule 25(2) of the Central Rules, prescribe and impose various conditions of service, amenities, working hours, and the payment of wages per the settlement that is higher than the minimum wages. More specifically, rule 25(2)(v)(a) of the Central Rules imposes a condition that if the workmen employed by the contractor perform the same or similar kind of work as that of the workmen directly employed by the Page No.22/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 principal employer of the establishment, the wage rates, holidays, hours of work, and other conditions of service for the contractor's workmen shall be the same as those applicable to the workmen directly employed by the principal employer. In case of any dispute or disagreement regarding the above issue, powers are expressly vested with the Deputy Commissioner of Labour (Central) to resolve such disputes or disagreements. Similarly, the authority is vested with powers under rule 25(2)(v)(b) of the Act to specify on its own the wage rates, holidays, hours of work, and conditions of service for the contract labour. Therefore, the 2 nd respondent, being the authority notified as per the rules, rightly passed the award.
4.12. The Management itself is part of NLCIL and the Thermal Power Stations, and shall be considered part of the same establishment. The contract labourers employed in both units perform the same and similar work as the regular employees. Therefore, this constitutes an exercise of power under rule 25 (2) (v) (b) of the Act, requiring the authority to consider the wages and other benefits paid to the contractors' workmen in similar establishments. The role played by the authority is specified in the statute, not merely to decide adversarial disputes simpliciter.
Page No.23/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 4.13. The union's claim represents only the employees' interests. It is unnecessary for individual employees to raise a dispute as well. Even in the absence of any dispute, the authority is obligated to exercise its power. Aside from technical objections, Management cannot specify how the award is erroneous or biased. The judgment of the Hon'ble Supreme Court of India in State of Punjab and Others Vs. Jagjit Singh and Others 4 is referenced solely to highlight the principles and points that must be considered when granting equal pay for equal work. Regarding contract labourers, the statute prescribes specific guidelines. In this case, no direction has been issued regarding wages compared to the regular employees of NLCIL; however, it is determined that 1/30 of the th basic and dearness allowance granted to the regular employees of both NLCIL and Coal India Limited must be paid. The 2 respondent authority has also nd balanced the interests of both sides equitably and moulded the relief accordingly. The failure to cite a specific provision in the trade union's claim statement does not render the claim non-maintainable. When minimum wages applicable to the industry are assessed and paid in similar establishments like NLCIL, Neyveli, 4 (2017) 1 SCC 148 Page No.24/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 and Coal India Limited—especially when the authority has not mandated payment of 1/30th or 1/26th of the entry-level wages of regular workers, and has instead mandated payment at only the midpoint between minimum wages and the daily wages payable to regular employees, along with directions that only skill- based category wages should be paid to the contract labourers — it cannot be deemed erroneous.
4.14. As against the order of the 2nd respondent, an appeal is available, and since the appeal remedy was not exhausted within the prescribed limitation period of 30 days, the Writ Petition is not maintainable. To support these arguments, the learned counsel relies on the Judgment of the Hon'ble Supreme Court of India in M/s Gammon India Ltd. and Others Vs. Union of India and Others5, specifically referencing paragraphs 30 and 31 to illustrate the authority given to the 2nd respondent.
4.15. The learned counsel will rely on the Judgment of the Hon’ble Supreme Court of India in Y.K. Metha and Others Vs. Union of India and 5 (1974) 1 SCC 596 Page No.25/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Others6, specifically on paragraph No. 11, to argue that two different wings of the same Ministry cannot be discriminated against in matters of pay. The learned counsel will also refer to the Division Bench Judgment of this Court in Workmen of Brook Bond India Limited, By Secretary, Coimbatore District Thozhilalar Sangam Vs. The Industrial Tribunal, Chennai and Others7 regarding the preliminary objection about the petitioner union maintaining the dispute, relying on paragraph No. 3 of the said Judgment. This is to argue that even a minority union or an unrecognized union, when raising a dispute related to industrial peace that affects the rights of the workmen, will be considered. The learned counsel will refer to the Judgment of the Hon’ble Supreme Court of India in Employees of Tannery and Footwear Corporation of India and Another Vs. Union of India and Others8, emphasizing the conditions of duties and responsibilities related to the principle of equal pay for equal work. Additionally, the learned counsel will refer to the Judgment of this Court in Airport Authority of India Vs. Deputy Chief Labour Commissioner and Others9, specifically paragraph Nos. 36 to 39, to discuss the nature of power under rule 25 (2) (v) (b) 6 (1988) Suppl SCC 750 7 (1989) 2 LLN 699 8 1991 Supp (2) SCC 565 9 (2013) SCC OnLine Mad 2380 Page No.26/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 of the Central Rules and the necessity to pay minimum wages.
4.16. The learned counsel would rely on the judgment of the Division Bench of the Karnataka High Court in the case of Food Corporation of India, represented by its Chairman and Managing Director vs. Food Corporation of India Workers Union and Others W.A.No.743 of 2020 dated 15.11.2024. It is the duty placed upon the 2nd respondent to take note of the conditions of service prevailing in similar employments for the purpose of the determination as contemplated in the rule.
E. The Questions:
5. I have considered the rival submissions made on either side and perused the material records of the case.
5.1. The following questions arise for consideration in the instant case.
(i) Is the petition filed by the trade union maintainable?
(ii) Are the contractors a necessary party, and did the 2 respondent nd Page No.27/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 authority err in deciding the issue in their absence?
(iii) Is the exercise of power by the 2 respondent—authority, nd invoking Rule 25 (v) (b) of the Central Rules even while dismissing the petition under Rule 25 (v) (a), appropriate?
(iv) Is there a violation of the principles of natural justice in the enquiry?
(v) Are the wages ordered by the second respondent sustainable? F. Question No.(i):
6. The preliminary objection is raised on two premises. Firstly, it is alleged that the 1st respondent/trade union lacks representative character concerning the petitioner - Management. In this regard, it is specifically pleaded that many of the contract labourers are members under the trade union. The form E filed on behalf of the trade union demonstrates that it operates in the electricity, construction, generation, and distribution industries. Secondly, it is stated that on a prior occasion, the petitioner union raised an industrial dispute which resulted in 40 contract Workmen losing their employment. During the conciliation Page No.28/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 proceedings with the very true union, the contractors working under the petitioner – Management entered into a 12 (3) settlement, and the Workmen were reinstated into service. In this context, the Division Bench of this Court in the Management of Brooke Bond Pvt. Limited Vs. Workmen10, while considering the representation of trade unions in reference to industrial disputes under Section 2 (k) of the Act, held that an industrial dispute could be raised even by a minority union or an unrecognized union. Furthermore, a comprehensive reading of the entire Act and the Rules made thereunder reveals that it is not merely about application and decision-making, but rather a duty cast upon the authority to address these issues. Consequently, they possess suo motu power even in the absence of a complaint from the petitioner trade union. The Act or the Rules do not even mandate that individual Workmen must file a complaint. Therefore, the question of maintainability raised, both regarding the representative character and the lack of a dispute raised by individual contract labourers, lacks merit. G. Question No.(ii):
7. It may be an ideal situation in which the 1st respondent – trade union 10 (1965) SCC Online SC 79 Page No.29/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 could have included the contractors as respondents, or the 2 nd respondent – authority could have involved them during the inquiry. There can be no dispute that they would be proper parties to the case. However, the question is whether they are necessary parties and whether the issue could have been decided in their absence. In this regard, it can be observed from the nature of the contract entered into by the Management that the amounts payable to the contractor are based on the wages prevalent in the industry as prescribed by the Management. This is not a case where the complaint is made against the contractor for appropriating the amounts released by the Management for themselves without adequately paying the Workmen. That is not even the Management's position. Therefore, when considering what the correct wages are with reference to the particular industry, it is the principal employer – Management – that is the necessary party, and the mere absence of the contractor will not prevent the authority from proceeding. The contractors have no say in this matter. If the rate is prescribed for the specific industry, the Management is obliged to pay the contractors, who are in turn obligated to disburse the same to the Workmen. The issues at stake include whether the Management is part of the NLCIL and whether units of the NLCIL and Coal India Limited are comparable. These questions must be addressed by Page No.30/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 the Management and not by the contractors. Consequently, after examining the core issues involved in the dispute and considering the facts and circumstances of the case, it cannot be concluded that merely because the contractors were not expressly named as parties, the award should be set aside. Accordingly, I answer the question.
H. Question No.(iii):
8. Section 12 of the Act reads as hereunder:-
“Licensing of contractors.— (1) With effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer. (2) Subject to the provisions of this Act, a licence under sub-
section (1) may contain such conditions including, in particular, conditions as to hours of work, fixation of wages and other essential amenities in respect of contract labour as the appropriate Government may deem fit to impose in accordance with the rules, if any, made under section 35 and shall be issued on payment of such fees and on the deposit of such sum, if any, as security for the due performance of the conditions as may be prescribed.” 8.1. Section 35 of the Act empowers the appropriate government to frame rules to fulfill the purposes of the Act. The Central Government has framed the Page No.31/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Contract Labour (Regulation and Abolition) Central Rules, 1971. It is essential to extract Rule 25 (2) (v) (a) and (b) of the Central Rules, which reads as follows:
“Forms and terms and conditions of licence.— (1) Every licence granted under sub-section (1) of section 12 shall be in Form VI.
(2) Every licence granted under sub-rule (1) or renewed under rule 29 shall be subject to the following conditions, namely:—
(i) the licence shall be non-transferable;
(ii) the number of workmen employed as contract labour in the establishment shall not, on any day, exceed the maximum number specified in the licence;
(iii) save as provided in these rules, the fees paid for the grant, or as the case may be, for renewal of the licence shall be non- refundable;
(iv) the rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act, 1948 (11 of 1948), for such employment where applicable and where the rates have been fixed by agreement, settlement or award, not less than the rates so fixed;
(v) (a) in cases where the workman employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work: Provided that in the case of any disagreement with regard to the type of work the same shall be decided by 1 [the Deputy Chief Labour Commissioner (Central)]
(b) in other cases the wage rates, holidays, hours of work and conditions of service of the workmen of the contractor shall be such as may be specified in this behalf by 1 [the Deputy Chief Labour Commissioner (Central)];
Page No.32/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Explanation.—While determining the wage rates, holidays, hours of work and other conditions of services under (b) above, the Deputy Chief Labour Commissioner (Central) shall have due regard to the wage rates, holidays, hours of work and other conditions of service obtaining in similar employments;” 8.2. The nature of power conferred on the authority is discussed in paragraphs 30 and 31 of the judgment in the case of M/s Gammon India Ltd. and Others (cited above), and the relevant paragraphs are extracted below:
“30. The provisions contained in Central Rule 25(2)(v)(b) are challenged as unreasonable. Rule 25(2)(v)(a) states that wages, conditions of service of workmen who do same or similar kind of work as the workmen directly employed in the principal employer's establishment shall be the same. In case of disagreement with regard to type of work, it is provided that the same shall be decided by the Chief Labour Commissioner whose decision shall be final. Rule 25(2)(v)(b) states that in other cases, the wage rates, holidays and conditions of service of the workmen of the contractor shall be such as may be specified by the Chief Labour Commissioner. There is an explanation to this clause that while determining wages and conditions of service under Rule 25(2)(v)(b) the Chief Labour Commissioner shall have regard to wages and conditions of service in similar employment. This is reasonable.
31. The complaint against Rule 25(2)(v)(b) is that there is no provision for appeal. It is not difficult to determine and decide cases of this type. The Commissioner of Labour has special knowledge. It will be a question from statute to statute, from fact to fact as to whether absence of a provision for appeal makes the statute bad. The provisions contained in Rule 25(2)(v)(b) refer to wages, hours of work and conditions of service in similar employment. A provision for appeal is not inflexible. The issue is simple here. A long drawn procedure may exceed the duration of Page No.33/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 employment of the workmen. A proper standard is laid down in the explanation to Rule 25(2)(v)(b). The absence of a provision for appeal is not unreasonable in the context of provisions here.
The Commissioner shall have due regard to the wages of workmen in similar employment's. The parties are heard and the Commissioner of Labour who is specially acquainted with the conditions, applies the proper standards. There is no unreasonableness in the Rules.” 8.3. The Division Bench of the Karnataka High Court, in the case of Food Corporation of India Workers Union and Others (cited supra), held as follows in paragraph No. 22:
“22.............It is therefore, clear that even if the contention that the depots are different establishments for the purpose of the Rules is accepted, there is a duty cast upon the authority to take note of the conditions of service obtaining in similar employments for the purpose of the determination as contemplated in the relevant Rule.” 8.4. In this regard, the following is the prayer portion from the petition submitted by the trade union.
“cr;r ePjp kd;w jPh;g;gpd; mog;gilapy;
NTPL mdy; kpd; epiyaj;jpy; epue;ju jd;ik tha;e;j gzpfspy; gzpahw;Wk; xg;ge;j bjhHpyhsh;fSf;F rk ntiyf;F rk Cjpak;
tH';fpl ntz;Lbkd nfl;Lf; bfhs;fpnwhk;/” Page No.34/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 8.5. Thus, the claim was not simply in reference to the permanent Workmen alone; rather, the prayer was to confer equal pay for equal work concerning the contract labourers whose work is perennial in nature. Therefore, when the core dispute was submitted, and in the further rejoinder, the NLCIL Workmen are compared, it cannot be said that the 2 respondent authority nd suddenly exercised power and fixed the wages. As a matter of fact, the notice of hearing categorically mentioned Rule 25 (v) (a) and (b) of the Central Rules. The relevant portion of the notice dated 16.01.2020 is extracted for ready reference:
“Take notice that hearing is fixed at 11.30 Hrs. on 27.1.2020 in this Office at the above mentioned address under Rule 25 (2) (v) (a) & (b) of the Contract Labour (Regulation & Abolititon) Central Rules, 1971.” 8.6. Furthermore, based on numerous pleadings and the inquiry records, it is clear that the issue of establishing equal pay in relation to similar employment and industries was very much at hand. Therefore, the objection raised by the Management, which claims that the 2 respondent authority exceeded its nd jurisdiction, is untenable. The authority has not deviated from the dispute or decided any new issue. The matter was clearly under consideration, and both Page No.35/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 sides have submitted their pleadings and materials. Accordingly, the question is answered.
I. Question No.(iv):
9. The various dates of the enquiry and the opportunities given to the Management are detailed while narrating the case of the Management in paragraph No. 2. The basis for pleading the violation of principles of natural justice is that, upon concluding the enquiry, when the authority decided to inspect, the notice of hearing did not explicitly mention this decision. Furthermore, after the inspection, no additional opportunity for hearing was provided to the Management regarding the gathered materials. In this regard, it is evident that the authority's power is not merely to resolve an adversarial dispute; rather, it serves as the licensing authority. It is the responsibility of the licensing authority to ensure that the wages directed under Rule 25(v) (a) & (b) are paid. Thus, the authority has a statutory duty, and the nature of the envisaged enquiry is also inquisitorial.
Page No.36/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 9.1. When Management contends that only permanent workmen are employed in core activities and that contract laborers are sporadically engaged in non-perennial jobs, it is the authority's duty to verify the truth of these claims. Therefore, when the authority, based on Management's position, comes to a conclusion by inspecting and determining the factual situation, there is no need to grant another opportunity to Management. The Management had not demonstrated that any specific finding made during the inspection is incorrect. The principles of natural justice are not rigid formulas or mere formalities. Management is constrained by the prevailing facts. As rightly argued on behalf of the workmen, when Management imports coal through Tuticorin Airport and transports it from the yard to the power station, and when contract labourers work in every department, especially considering that two units employ over 1500 people, of which only 200 are identified as permanent employees, this alone suggests that the engagement of these workers through contractors is merely a subterfuge to evade obligations under various labour welfare statutes.
9.2 It is essential to refer the judgment of the Hon'ble Supreme Court of India in Bhilwara Dudgh Utpadak Sahakari Samiti Limited vs. Vinod Kumar Page No.37/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Sharma dead by Los and others11 and the relevant portions read thus:
“2. In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end.
3. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the workmen concerned are not their employees but are the employees/workmen of a contractor, or that they are merely daily-
wage or short-term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalisation/liberalisation in the name of growth cannot be at the human cost of exploitation of workers.” 9.3. Thus, it becomes essential to check on the facts that are pleaded by the parties. The jurisdiction vested in the respondent is unique and a statutory duty is vested in the authority. The authority also has the powers of investigation under section 13(2) of the Act and powers of inspection under Section 28(2) of the Act. In this regard, it is apt to refer to the judgment of Hon’ble Supreme Court of India, In Union of India Vs. Vipan Kumar Jain12, while considering the fact that 11 (2011) 15 SCC 209 12 (2005) 9 SCC 579 Page No.38/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 the same officer happened to collect certain details, it is held as follows:
“6.The several sections which have been cited by the appellants would show that the assessing officer has, either directly or by virtue of his appointment or authorisation by a superior authority under the Act, been given the power of gathering information for the purposes of assessment. The mode of gathering such information may vary from the mere issuance of a notice under Section 142 to the more intrusive method of entry and search envisaged under Sections 133-A and 133-B and seizure under Section 132. The appellants are also correct in their submission that in the absence of any challenge to any of these provisions, it was not open to the High Court to have disabled the assessing officer from discharging his statutory functions. What the High Court has done is to read limitations into the Act and to qualify the jurisdiction of the assessing officer and the powers of the authorities empowered to appoint the assessing officer as an authorised officer under Section 132 without any foundation for such conclusion being laid in any manner whatsoever by the writ petitioners.” 9.4 While considering a similar nature of jurisdiction, the Hon’ble Supreme Court of India in Krishnadatt Awasthy Vs. State of M.P.13, held as follows :
“17. It must be borne in mind that when a statute specifies the procedure for administrative decision making, the principles of natural justice supplement but do not substitute the statutory procedure. However, even if the statute does not provide for the administrative procedure, the authorities are bound to make decisions in adherence to the principles of natural justice.
13 2025 SCC OnLine SC 179 Page No.39/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 …
30. It must also be emphasized that the nemo judex rule is subject to the rule of necessity and yields to it. In J Mohapatra v. State of Orissa, the Court recognized that the doctrine of necessity serves as an exception to the rule against bias. In a matter like this, the doctrine of necessity would also be squarely attracted since the statute explicitly mandates the composition of the selection Committee, as outlined in Schedule II of the Rules. The doctrine of necessity recognizes that decision- making bodies need to function even in circumstances where potential conflicts of interests may arise. Here as earlier noted, the concerned members recused and did not award any marks. It must however be borne in mind that the doctrine of necessity is an exception and must be applied bearing in mind the circumstances in a given case. The size of the jurisdiction must also be taken into account for the application of the doctrine of necessity. In this regard, Forsyth and Wade have noted that in small jurisdictions, qualified persons may be few in number and likely to be known to the parties “ (Emphasis supplied) 9.4. Therefore, I do not see any violation of the principles of natural justice, and in the enquiry, ample opportunity has been given to both the workmen and the management. When the authority, before passing orders, decides to verify the facts for himself and inspects the unit, this should not be grounds to reopen the entire enquiry, especially since the petitioner – Management has submitted all its written submissions and the arguments were also closed. Further, no exercise was carried on behind the back of the Page No.40/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 management and it was very much present during inspection. In light of this, considering the peculiar nature of the jurisdiction conferred on the authority in exercising its powers, it cannot be said that there is a violation of the principles of natural justice.
J. Question No.(v):
10. The question is whether the authority was right in granting the benefits in the award by comparing with the contract laborers working at NLCIL and Coal India Limited in Thalabira and Odisha. There is no dispute regarding the region -cum- industry principle that envision that the work should be of the same and similar kind, and the wages should be comparable in similar employments. Firstly, it is acknowledged on behalf of the petitioner – Management that it is a subsidiary of NLCIL. Thermal power generation in its units in Neyveli or Tuticorin cannot be considered dissimilar. The activities of the workmen in handling coal or performing other duties in similar boilers, furnaces, and other units are essentially the same. Since coal handling involves moving coal from the yard to the unit, the authority has taken into account the comparable wages Page No.41/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 concerning coal handling and has not considered the wages related to mining at Coal India Limited. Therefore, it is indeed a similar establishment and similar work. Thus, it cannot be said that the 2nd respondent authority compared with dissimilar establishments or non-comparable services. When the contract labourers complain about the higher wages being paid in a similar establishment, the Management contends that this should be compared with another thermal power station located in Tuticorin, which pays even a lesser amount. The purpose of exercising power is to ensure that fair wages are paid to contract labourers and that contract labor employment does not exploit the workmen. Therefore, if another industry in Tuticorin pays even less, it is for those workmen to raise the issue, and it is also necessary for the 2nd respondent to consider that unit; the Management cannot argue for a comparison with the same. In fact, certain legal considerations are in play, as TANGEDCO holds 11% shares to have a mutual stake in coal import, energy production, etc. NLCIL holds 89% of shares in the current Management and is governed by officials delegated from NLCIL. Merely because a service agreement is entered into as a legal formality does not create a differentiation. In making an industrial adjudication, the industrial adjudicator typically investigates to ascertain who is in charge of the Page No.42/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Management. The mention of a special purpose vehicle and NLC India Limited entering into a contract, essentially with itself through the current Management, which it holds 89% for various purposes and formalities, is pertinent. However, when it comes to an industrial adjudicator, they will always look into who the principal employer is, who is extracting the work, and with whom the workmen are claiming a relationship. Therefore, the exercise of power to compare NLCIL as a similar industry must be assessed from this viewpoint. In light of this, I do not find any illegality in the award passed by the 2 respondent authority.
nd 10.1. The operative portion of the order passed by the second respondent is extracted supra. The authority had balanced the interests of both sides. As a matter of fact it is only the minimum that was ordered to be paid.
10.2. The Hon'ble Supreme Court of India, in the judgment of Jaggo Vs. Union of India14, held as follows, and it is essential to extract paragraphs 22 to 25 and 27, which read as follows:-
“22. The pervasive misuse of temporary employment 14 (2024 SCC OnLine SC 3826) Page No.43/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 contracts, as exemplified in this case, reflects a broader systemic issue that adversely affects workers' rights and job security. In the private sector, the rise of the gig economy has led to an increase in precarious employment arrangements, often characterized by lack of benefits, job security, and fair treatment.
Such practices have been criticized for exploiting workers and undermining labour standards. Government institutions, entrusted with upholding the principles of fairness and justice, bear an even greater responsibility to avoid such exploitative employment practices. When public sector entities engage in misuse of temporary contracts, it not only mirrors the detrimental trends observed in the gig economy but also sets a concerning precedent that can erode public trust in governmental operations.
23. The International Labour Organization (ILO), of which India is a founding member, has consistently advocated for employment stability and the fair treatment of workers. The ILO's Multinational Enterprises Declaration6 encourages companies to provide stable employment and to observe obligations concerning employment stability and social security. It emphasizes that enterprises should assume a leading role in promoting employment security, particularly in contexts where job discontinuation could exacerbate long-term unemployment.
24. The landmark judgement of the United State in the case of Vizcaino v. Microsoft Corporation7 serves as a pertinent example from the private sector, illustrating the consequences of misclassifying employees to circumvent providing benefits. In this case, Microsoft classified certain workers as independent contractors, thereby denying them employee benefits. The U.S. Court of Appeals for the Ninth Circuit determined that these workers were, in fact, common-law employees and were entitled to the same benefits as regular employees.
The Court noted that large Corporations have increasingly adopted the practice of hiring temporary employees or independent contractors as a means of avoiding payment of employee benefits, Page No.44/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 thereby increasing their profits. This judgment underscores the principle that the nature of the work performed, rather than the label assigned to the worker, should determine employment status and the corresponding rights and benefits. It highlights the judiciary's role in rectifying such misclassifications and ensuring that workers receive fair treatment.
25. It is a disconcerting reality that temporary employees, particularly in government institutions, often face multifaceted forms of exploitation. While the foundational purpose of temporary contracts may have been to address short-term or seasonal needs, they have increasingly become a mechanism to evade longterm obligations owed to employees. These practices manifest in several ways:
Misuse of "Temporary" Labels: Employees engaged for work that is essential, recurring, and integral to the functioning of an institution are often labeled as "temporary" or "contractual," even when their roles mirror those of regular employees. Such misclassification deprives workers of the dignity, security, and benefits that regular employees are entitled to, despite performing identical tasks.
Arbitrary Termination: Temporary employees are frequently dismissed without cause or notice, as seen in the present case. This practice undermines the principles of natural justice and subjects workers to a state of constant insecurity, regardless of the quality or duration of their service.
Lack of Career Progression: Temporary employees often find themselves excluded from opportunities for skill development, promotions, or incremental pay raises. They remain stagnant in their roles, creating a systemic disparity between them and their regular counterparts, despite their contributions being equally significant.
Using Outsourcing as a Shield: Institutions increasingly resort to outsourcing roles performed by temporary employees, effectively replacing one set of exploited workers with another. This practice not only perpetuates exploitation but also demonstrates a deliberate effort to bypass the obligation to offer regular employment.Page No.45/48
https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 Denial of Basic Rights and Benefits: Temporary employees are often denied fundamental benefits such as pension, provident fund, health insurance, and paid leave, even when their tenure spans decades. This lack of social security subjects them and their families to undue hardship, especially in cases of illness, retirement, or unforeseen circumstances.
........
........
27. In light of these considerations, in our opinion, it is imperative for government departments to lead by example in providing fair and stable employment. Engaging workers on a temporary basis for extended periods, especially when their roles are integral to the organization's functioning, not only contravenes international labour standards but also exposes the organization to legal challenges and undermines employee morale.
By ensuring fair employment practices, government institutions can reduce the burden of unnecessary litigation, promote job security, and uphold the principles of justice and fairness that they are meant to embody. This approach aligns with international standards and sets a positive precedent for the private sector to follow, thereby contributing to the overall betterment of labour practices in the country.” 10.3. Therefore, guided by the perspective envisioned by the Hon'ble Supreme Court of India, I believe that when the authority has indeed determined that the contract labourers performing similar work should receive the wage difference calculated by the authority and has issued directions to alleviate the exploitative circumstances to some extent, it is not for this Court to interfere in the matter.
Page No.46/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 K. The Result:
11. Accordingly, having found no merit, this Writ Petition is dismissed. No costs. Consequently, the connected miscellaneous petition is closed.
04.03.2025 Neutral Citation :Yes Jer To The Deputy Chief Labour Commissioner (Central) Authority under Rule 25(2) (v) (a) & (b) of CL (R&A) Act, 1970 5th Floor, Shastri Bhawan, Chennai – 600 006.
Page No.47/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm ) WP.No.12039 of 2021 D.BHARATHA CHAKRAVARTHY, J., Jer W.P. No.12039 of 2021 04.03.2025 Page No.48/48 https://www.mhc.tn.gov.in/judis ( Uploaded on: 05/03/2025 01:00:08 pm )