Andhra HC (Pre-Telangana)
Steel Plant Canteen Employees Union, ... vs Chairman-Cum-Managing Director, ... on 17 January, 2001
Equivalent citations: 2001(1)ALD537, 2001(1)ALT665
Author: Elipe Dharma Rao
Bench: Elipe Dharma Rao
JUDGMENT
1. These two writ petitions can be disposed of by this common judgment as the issue involved is to treat the petitioners in both the writ petitions as the regular employees of the respondent viz., Visakhapatnam Steel Plant (for brevity VSP) and to pay the pay and allowance with effect from the date of filing of the writ petitions.
2. Writ Petition No.14296 of 1992 was filed by the workers working in statutory canteens established and run by VSP through contractor and the Writ Petition No.26581 of 1996 was filed by the workers working in non-statutory canteens established and run in the premises of VSP through contractor. Out of 37 petitioners in WP No.14296 of 1992, 4 left the service and 2 expired and out of 83 petitioners in WP No.26581 of 1996, 6 left the service and two petitioners expired.
3. The petitioners in Writ Petition No.14296 of 1992 submitted that the petitioners 14 to 21 are working in the canteen at Blast Furnace, petitioners 15 to 20 are working in the canteen of RMHS, petitioners 21 to 26 are working in the canteen at Steel Melting Shop, petitioners 27 to 31 are working in the canteen at Training and Development and petitioners 32 to 37 are working in the canteen at Project Office. According to the petitioners, there are about 17000 workers working in VSP and it is a Public Sector Undertaking under the control of Central Government and it is State under Article 12 of the Constitution of India and that also comes within the definition of Factory, as per Section 2(m) of the Factories Act and is also occupier of the factory, as defined under Section 2(n) of the Factories Act. Therefore, the first respondent is under an obligation to provide and maintain canteen as contemplated under the Factories Act. It is further susbmitted that the State Government has issued G.O. Ms. No.11 dated 12-2-1990 Women Welfare, Child Development and Labour Department, prohibiting contract labour and directing the Principal Employer to absorb the persons working in the canteen. It is submitted that all the petitioners are working for considerable length of time and they are having 4 to 8 years of service. The petitioners also relied on the judgment of the Supreme Court in M.M.R. Khan and others v. Union of India, , to demonstrate that the workers working in the canteen established under the statutory obligation should be treated as the employees of the Principal Employer. Following the above said judgment, it is submitted that this Court in WP No.12806 of 1988 and Batch, directed the occupier of the factory to treat the workers working in the canteen as its own regular employees and give all the consequential reliefs including increments, arrears of pay and allowance, etc. It is further submitted that as per Section 46 of the Factories Act, obligation rests on the first respondent to provide and maintain canteens. Accordingly, it is maintaining the canteens. Therefore, the workers working in the canteens established by the first respondent have to be treated as regular employees of the first respondent. Therefore, they are entitled to the benefit on par with regular employees as per the provisions of the Factories Act and the judicial pronouncements of the Apex Court and this Court.
4. In Writ Petition No.26581 of 1996, there are as many as 83 petitioners. According to them, they are working in non-statutory canteens run in the premises of VSP. It is also mentioned that there are 18000 employees working in VSP situated over an extent of 9000 acres and there are 500 to 2000 workers working in each section of the project. It is further stated that they were paid very low wages comparatively with the workers working in VSP by the contractors of the canteens. Therefore, the petitioners herein sought the same relief to treat them as the employees of the respondent project and extend the benefits for which they are entitled to according to the service conditions of the first respondent employees.
5. The 1st respondent filed counter-affidavit in both the writ petitions stating that the respondent-company is a registered company under the Companies Act and having its factory at Visakhapatnam and they engaged in the business of manufacturing and sale of steel and therefore, the project is a commercial establishment carrying on business in competition with other business concerns in the open market and it is not carrying out any Governmental or sovereign functions nor violated any statutory provisions or any public law provisions. The first respondent is not a State or authority nor an instrumentality of the State as contemplated under Article 12 of the Constitution of India, therefore, the writs are not maintainable against the first respondent under Article 226 of the Constitution of India. The petitioners have not alleged any violation of the statutory provision of the public law or any contractual terms. Therefore, they are not entitled to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India before this Court. It is further stated, as admitted by the petitioners they are the contract labourers working under various contractors, as such there is no relationship of whatsoever nature between the first respondent and the petitioners muchless the relationship of employer and employee or master and servant. There is no privity of contract between the first respondent and the petitioners, therefore, the petitioners have no claim or demand whatsoever nature against the first respondent, muchless any cause of action against the first respondent. If the petitioners have any claim, it has to be made against the respective contractors under whom they are working. Therefore, they can not make any claim against the first respondent and there is no obligation on the part of the first respondent to provide any employment or to absorb the petitioners into the first respondent-company. Therefore, the present claims in both the writ petitions are totally misconceived, baseless, untenable and unsustainable, as such liable to be rejected. According to the respondents, it is providing canteen facility to all the employees within and nearer to the project premises. It is further submitted that there are 15 canteens which cater to the needs of all the employees, that as the preparation of the food and snacks and serving them to the employees of the factory involves specialized knowledge, experience and skill, the said work was entrusted to various agencies or competent persons who possess the said specialized knowledge on contract basis. It is further stated that normally the said work is entrusted for a specific period of two years after due negotiations and after reducing the terms of the same into a written contract entered into between such specialised agencies and the first respondent-company and the specialised agencies who are employing their own labour for carrying out the work undertaken by them, the petitioners are claiming to be employed under some of such contractors. It is stated that the facility of canteen to workmen is provided as a welfare measure and the 1st respondent is engaged in manufacturing and sale of steel and thus the work of providing the canteen facility is not the primary or ordinary work of the first respondent and such facility can always be provided through a contract, Therefore, the petitioners cannot claim any regularisation or for any employment or post under the first respondent project as a matter of fact. Therefore, the claim of the petitioners is liable to be rejected.
6. The first respondent further stated that the company has its own procedure for recruitment and employing persons on regular basis. The procedure involves either requesting Employment Exchange to sponsor the suitable candidates who fulfil the educational and other qualifications, specified by the first respondent-company in respect of the vacancies that require to be filled up or by giving advertisements in leading newspapers calling for applications from the candidates who possess the educational qualifications, and after conducting written test and interview, the candidates will be appointed initially on probation and thereafter they are confirmed in the service as per Rules and Regulations prescribed by the Company and no person can claim any employment or post giving go-bye to the said procedure or through back door methods into the respondent-company. It is further stated that the petitioners union is put to strict proof that they are members of the said union and its existence and registration, in the absence of which the petitioner has no locus standi to file any such petition and on this ground also the writ petitions are liable to be dismissed. The respondent No.1 also put the petitioner to proof that they are working in the canteen at Blast Furnace, RMHS, Steel Melting Shop, Training and Development Center and Project Officers. The respondent also denied that the first respondent is the occupier of the factory as defined under Section 2(n) of the Factories Act. It is further submitted that Section 46 of the Factories Act provides for maintenance of canteen by the factory in which more than 250 workers are employed and this obligation under the Factories Act is only to provide the canteen facility and is being fully complied with by the first respondent-company. It is also stated that it is the discretion of the first respondent company either by employing its own labour or by awarding such work to an independent contractor from time to time and by calling tenders and after scrutinizing the same. The maintenance of canteens through the independent contractors is in vogue in almost all the factories irrespective of whether their strength is more than 250 employees or not. The said practice is prevalent in most of the establishments. Therefore, the said persons engaged by the independent contractor cannot claim absorption in the first respondent-company and their claim is liable to be rejected.
7. In respect of the Government Order abolishing the contract labourers issued by the State Government, the respondent submitted that they have filed a writ petition WP No.5722 of 1990 questioning the said G.O. and obtained interim direction on 20-4-1990 to the effect to continue the existing arrangement for running the canteen in the premises of the respondent project. The respondent denied the length of service of the petitioners and also stated that they are not aware of the judgment in Writ Petition No.12806 of 1988 and Batch.
8. The respondents further contended that merely because there is an obligation to maintain a canteen, it does not mean that the persons working under the contractor in the said canteen are entitled to be treated as regular employees of the first respondent. Therefore, the petitioners are not entitled to the relief.
9. The same contentions were raised in the counter filed in Writ Petition No.26682 of 1996. It is also admitted in this counter that the company is maintaining seven statutory canteens consisting of 26000 Sq. Ft. area, and the other 6 canteens in plant and 2 outside, cannot be considered as a statutory canteen and such contract labourers engaged by them will have no right of any nature and is not entitled for any relief, that the present method of running the canteen is benefiting all the workmen and the same is evident from the settlement dated 27-11-1996 and in the interest of the employee and at their request the system is being continued. It is further stated that respondent company has identified for the administrative convenience seven canteen situated at Coke and Coal Chemical Division, Raw Material Handling Plant, Thermal Power Plant, Blast Furnace, Steel Melting Shop Light and Medium Merchant Mill and Auxiliary Shop, as statutory canteens and the remaining cantees situated in various other places are in existence for the convenience of the employees working in the divisions nearer to the canteens and infact the respondent project is not in an obligation to provide such facility and such canteens will not be statutory canteens. It is also stated that as per the provisions of the Factories Act, the respondent project is not in an obligation to provide and maintain such facility and as per the Factories Act the respondent-project has to provide 26000 Sq. Ft. area for the purpose of providing canteen facility and the same is complied with by providing the area of 26000 Sq. Ft.
10. On the basis of the above facts and circumstances of the case, the learned Counsel for the petitioners submitted that as many as 18000 workers are working in the project and as per Section 46 of the Factories Act, the State Government may make rules requiring that in every specified factory wherein more than 250 workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers and the canteens shall be established in the space provided by the occupier i.e., the first respondent herein and the said canteens are statutory canteens and the other canteens which are run in the premises of the first respondent herein for the use of the workers in the project premises are called non-statutory canteens, therefore, the workers working in the above said two types of canteens are entitled to be treated as workers of the first respondent, as per the provisions of the Factories Act. Therefore, the action of the respondent in not treating them as the employees of the first respondent-Company is in violation of the provisions of Factories Act, Constitution of India and contrary to the judicial pronouncements of the Apex Court and other High Courts.
11. It is further submitted that as admitted by the first respondent under the statutory obligation under Section 46 and as per the provisions of the Factores Act, for the use of workmen established 7 statutory canteens, atleast the first respondent should have treated them as employees of the company and extended benefits for which they are entitled under the Service Rules and even though the petitioners are making restless efforts to convince the first respondent to treat them as employees of their project, but the first respondent has not taken any steps to extend the benefits conferred on the petitioners under the Factories Act. It is further contended that it is an obligation on the part of the first respondent to provide canteens for its employees works extending 250, and as on today as many as 18000 workers are working in the first respondent project. Therefore, to cater to the needs of the workers, it is an obligation on the part of the first respondent to establish as many as canteens required under Section 46 of the Act for the use of the workers of the first respondent. In support of these contentions, the learned Counsel for the petitioners has placed reliance on a decisions M.M.R. Khan and others v. Union of India and others, , Parimal Chandra Raha and others v. Life Insurance Corporation of India and others, AIR 1995 SC 1666, Karri Pothu Raju and others v. N.T.P.C. Limited Ramagundem Rep. by its Genera! Manager and others, (DB), M/s. Bharat Heavy Plates and Vessels Limited, Visakhapatnam Rep. by its Managing Director v. BHPV canteen employees union, Rep. by its General Secretary, S. Nukaraju and others, (DB).
12. On the other hand the learned Standing Counsel for the first respondent submitted that the Company has established as many as seven statutory canteens as per the provisions of Section 46 of the Factories Act. Rule 65 contemplates that the Occupier of every factory notified by the State Government and wherein more than 250 workers are ordinarily employed shall provide in or near the place an adequate canteen according to the standards prescribed under the above said Rules. It is further submitted that as per Rule 66 of the A.P. Factories Rules, 1950 framed by the State Government under Section 46 of the Factories Act, the First respondent has to provide dining hall and it shall accommodate at a time atleast 30% of the workers working at a time, and in each shift of the project, 3500 workers are working, therefore, based on the above said Rule, the first respondent has provided seven canteens in an area of 26000 Sq. Ft. and thus the first respondent has acted within the provisions of the Act by providing canteen facility to the workers working in the project in shift system. There are no directions issued by the Central Government, which is the appropriate Government, abolishing contract labour in the canteen of the first respondent. Moreover, the G.O. issued by the State Government is not applicable to the first respondent factory, as it is established under the control of the Central Government. Therefore, the petitioners cannot claim to treat them as employees of the first respondent organisation. By virture of the G.O. issued by the State Government, the contract labour system in the first respondent project can not be abolished unless the Central Government abolishes the Contract Labour system in the respondent organisation and the working in the canteens cannot be treated as workers of the first respondent organisation. It is further contended that the workers working in the non-statutory canteens have to establish that they are under the control of the principal employer and not the contractor. It is also contended that most of the petitioners are working in non-statutory canteens, therefore, judgment relied on by the petitioners and the law laid down by the Supreme Court and the High Court are not applicable to the petitioners' case and he placed reliance on Indian Petrochemicals Corporation Limited and another v. Shramik Sena and others, and Employers in Relation to the Management of Reserve Bank of India v. Workmen, .
13. From the facts and circumstances of the case, it is evident that the petitioners in Writ Petition No. 14296 of 1992 are working in the canteens established and run either directly or through contractors, by the respondent as per Section 46 of the Factories Act and the petitioners in Writ Petition No.26581 of 1996 are working in the canteens permitted and approved by the respondent which are run by the contractors nearer to the place of work of the employees of the VSP, therefore, they are seeking the relief to direct the respondents to treat them as regular employees of the respondents and to pay the services benefits to them on par with the regular employees of the respondents.
14. On the other hand, the contention of the learned Counsel for the respondents is three fold firstly, that the VSP is a company registered under the Companies Act manufacturing and selling steel and therefore, it is not an authority or instrumentality of the State under Article 12 of the Constitution of India, therefore, the writ petition is not maintainable, Secondly, the State Government under G.O. Ms.No.11, dated 12-2-1990 Women Welfare, Child Development and Labour Department, did not abolish the contract labour in VSP, therefore, the question of regularising the services of the petitioners does not arise and lastly it is contended that as per the requirement of Section 46 of the Factories Act, they have established 7 canteens to cater to the needs of its employees and as contemplated under Rules 65 and 66 of the A.P. Factories Rules, 1950 it is the obligation of the respondents to establish and provide dining hall and its accommodation at a time shall be atleast 30% of the workers working at a time and in each shift of the project 3500 workers are working therefore, based on the said Rules, the first respondent has established and provided seven canteens covering an area of 26000 Sq. Ft. Ultimately it is submitted that the respondents are not liable to regularize the services of the workers who are working in statutory canteens established and run by the respondent either directly or through contractors and the workers who are working in non-statutory recognised canteens also and to pay the service benefits on par with the regular employees of the respondents.
15. It is too late to contend that the VSP is registered Company under Companies Act and it is not an instrumentality of the Union Government and it is not an authority under Article 12 of the Constitution of India and the writ petitions filed by the petitioner are not maintainable. Though the respondent project is engaged in the business of manufacture and sale of steel, which is a commercial establishment carrying on business in competition with other business concerns in the open market, the Union Government has control over its business and activities and it is also having considerable shares in the respondent unit. Therefore, it cannot be gain said that the respondent is not a State within the meaning of Article 12 of the Constitution of India. Therefore, I hold that the respondent project is a State within the meaning of Article 12 of the Constitution of India and the writ petition filed by the petitioners is maintainable.
16. The Supreme Court in MMR Khan's case (supra), has classified the canteens into three categories firstly, Statutory Canteens. These canteens are provided compulsorily in view of the provisions of Section 46 of the Factories Act, 1948. Since the Act admittedly applies to the establishments concerned and the employees working in the said establishment exceed 250. Secondly, Non-Statutory Recognised Canteens. These canteens are run in establishments which may or may not be governed be the Act but which admittedly employ 250 or less than 250 employees and hence, it is not obligatory on the Employer to maintain. However, they are set-up a staff welfare measure where the employees exceed 100 in number. These canteens are established with the prior approval and recognition of the employer as per the procedure contemplated under the Rules and Regulations of the Establishment; and thirdly, Non-Statutory Non-Recognized canteens. These canteens are run at establishments under the second category above but employ 100 or less than 100 employees and are established without the prior approval or recognition of the employer.
17. Insofar as the main issue involved in these two writ petitions is concerned, the regularisation of the services of the petitioners working in statutory and non-statutory recognized canteens, established and run by the respondents either directly or through contractors is concerned, a Division Bench of this Court held in Pothu Raju's case after scrutinising MMR Khan's case, Dena Nath's case, Parimal Chandra's case, Bharat Heavy Electricals Limited Workers Association v. Union of India, . The Reserve Bank of India's case (supra), that there are two propositions emerging; whereas under the provisions of the Factories Act, it is statutory obligation on the employers to provide and maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the management and secondly, where although it is not the statutory obligation to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment, has found approval and has been consistently held to be the correct proposition and view of law.
18. Similar view was expressed by the Apex Court in Indian Petrochemicals Corporation's case wherein their Lordships after considering Parimal Chandra Raha's case (supra) MMR Khan's case (supra) and Reserve Bank of India's case (supra) held that the workmen of statutory canteens would be workmen of the establishment for the purpose of the Factories Act only and not for any other purposes. Insofar as the workmen working in the non-statutory recognised canteens are concerned, they are not entitled for regularization of their services as the canteens are not established and run by the respondent as mandated by Section 46 of the Factories Act. The respondents have permitted and approved the contractors to establish the canteens nearer to the place of their work to facilitate the workers to have a canteen. Therefore, following the decision of a Division Bench of this Court in Pothu Raju's case and the decision of Supreme Court in Indian Petrochemicals Corporation's case (supra), I hold that the petitioners who are working in the seven statutory canteens established and run by the respondents either directly or through contractors, i.e., at Coke and Coal Chemical Division, Raw Material Handling Plant, Thermal Power Plant, Blast Furance, steel Melting Shop, Light and Medium Merchant Mill and Auxiliary Shop, are employees of the establishment for the purpose of the Factories Act and not for any other purpose.
19. Insofar as the contention of the respondents that they have no obligation to treat the workmen working in statutory canteen on part with the regular employees of the respondent-establishment as the State Government under G.O. Ms. No.11 has not abolished Contract Labour is concerned, the Supreme Court has considered the scope and ambit of the Contract Labour (Regulation and Abolition) Act, 1970 in Dena Nath's case; wherein their Lordships have held that the Act merely regulates the employment of contract labour in certain establishment and provides for its abolition in certain circumstances. The Act does not provide for total abolition of contract labour, but it provides for abolition by the appropriate Government in appropriate cases Section 10. It is not, therefore, for the Court to inquire into the question and decide whether the employment of contract labour in any process, operation or in any other work in any establishment should be abolished or not. It is a matter for the decision of the Government after considering the matter, as required to be considered under Section 10. The only consequences provided in the Act where either the principal employers or the labour contractor violates the provisions of Sections 9 and 12 respectively is the penal provision, contained in Sections 23 and 25. Therefore, in the proceedings under Article 226 of the Constitution merely because contractor or the employer had violated any provision of the Act or the Rules, the Court could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer.
20. The Act as can be seen from the scheme of the Act merely regulates the contract labour in certain establishments and provide for its abolition in certain circumstances and it does not provide for a total abolition of the contract labour, but provides for abolition by appropriate Government in appropriate cases under Section 10 of the Act. Treating and regularising the services of the workers working in the Statutory Canteens established and run by the employer, does not depend upon the abolition of the Contract Labour System by the appropriate Government under Section 10 of the Contract Labour (Regulation and Abolition) Act when the employer has established the canteen under statutory obligation contemplated under Section 46 of the Factories Act, but it forms as part of the establishment either it is run by the employer himself or by or through a contractor, it will become part of the establishment of the employer and the workers working in the statutory canteens will become the employees of the establishment. Therefore, the contention of the respondent that the appropriate Government has not abolished the Contract Labour System in VSP, therefore, there is no obligation on the part of the respondents to treat the workers working in the statutory canteens established and run by the respondent, is not tenable in law; and accordingly rejected. On the other hand, the petitioners have placed their claim on the basis of the provisions of the Factories Act and the Rulings of the Supreme Court and this Court. As can be seen from the above Ruling of the Supreme Court and this Court, it is abundantly clear that the respondents are under an obligation to provide canteen service to the workers working in its establishment under Section 46 of the Factories Act where there are more than 250 workers employed. As defined under Section 2(n) of the Factories Act, the respondent-project is the Occupier of the factory. Section 2(1) of the Factories Act defines Worker, as a person employed directly or by or through any agency (including a contractor) with or without the knowledge of the principal employers, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process, but does not include any member of the armed forces of the union.
21. It is clear from the above definitions that the person employed directly or by or through any contractor in any place where manufacturing process is carried on, is a workman for the purpose of Factories Act. Therefore, under Section 46 of the Factories Act, the State Government made Rules requiring its occupier to provide and maintain canteen in specific factories where more than 250 employees are workings for their use. It is not in dispute that the respondents have provided seven canteens to for the use of its employees.
22. Rule 65 of the Rules and other sub-rules therein spell out how the occupier shall submit to the approval of the Chief Inspector, plant and site plan of the building to be constructed or adopted for use as a canteen, how the canteen building shall be maintained, how records will be maintained and all the facilities to be provided in the canteen. Rule 65 contemplates that every occupier of the factory notified by the State Government and wherein more than 250 workers are ordinarily employed shall provide in or near the factory an adequate canteen according to the standards prescribed in the Rules. To satisfy the statutory obligation under Section 46 read with Rule 65 of the Rules, since there are more than 250 workers working in the respondent organization, as admitted by themselves, it has established 7 canteens for the use of workers who are more than 18000, in an area of 26000 Sq. Ft. For the benefit of the employees it has approved and permitted to establish and run canteens by contractors for the use of workers nearer to their place of work.
23. Therefore, following the decision of the Supreme Court and this Court referred to above and for the foregoing reasons. I hold that the workers working in the above seven statutory canteens which were established under statutory obligation and run by the respondent either directly or through contractor, are workmen of the establishment for the purpose of the Factories act only.
24. In the result, the Writ Petition No.14296 of 1992 is allowed the Writ Petition No.26581 of 1996 is dismissed. No costs.