Kerala High Court
Kerala State Coir Corporation Ltd. vs Industrial Tribunal And Ors. on 16 November, 1998
Equivalent citations: (1999)ILLJ1022KER
Author: J.B. Koshy
Bench: J.B. Koshy
ORDER Om Prakash, C.J.
1. This appeal is directed against the impugned judgment dated November 29, 1994.
2. Petitioner appellant herein sought quashing of Ext. P3 award rendered by the Industrial Tribunal. Industrial dispute was referred to the Tribunal challening the termination of service of 11 security staff in the Kerala State Coir Corporation Ltd., Alleppey (hereinafter referred to as 'the management'). By Ext. P3 award, the Tribunal declared the termination of service of the Security Guards as nullity. The Tribunal directed that the Security Guards (workmen) will be deemed to be in service as if there was no "retrenchment" and that they will be entitled for wages for the period in which they were illegally kept out from service.
3. Before the Tribunal, the management seriously disputed the relationship of employer and employee between itself and the workmen. The contention of the management was that the workmen were employed by the contractors who supplied the former to the management and that wages of the workmen were paid to the Contractor and not to the workmen directly. This is how the appellant contended that no reference of industrial dispute was maintainable.
4. The Tribunal rejected the contention of the management and held as under:
"The evidence adduced in this dispute would show that these workmen concerned were initially put to the service of the management as early as in 1981. Even after the termination of contract with Ex-servicemen Industrial Guards (EIG) these workers continued their service as security guards. The union contends that at the instance of management, they had to form an association for their continued employment under the Corporation. Subsequently, while continuing service, they formed a charitable society. Whatever be the effect of these transformations, the fact was that they were continuing as Security Guards. Thus, it is clear that as on the date of termination with effect from April 9, 1988, the workmen concerned herein had more than one year of continuous service. So long as their status as workmen is not in dispute while retrenching them, the formalities contemplated in Section 25-F should have been complied with by the management Corporation...............
12. From Ext. Wl, it can be seen that the mandatory requirements as contemplated in Sub-clauses (b) and (c) of Section 25-F were not complied with. Therefore I hold that the termination effected as illegal and the workmen are entitled for reinstatement in service with the benefit of backwages."
5. Aggrieved by the award, the management sought quashing of the same in the original petition. The learned Judge held as under:
"6. .................. The word 'employed' in the Section would postulate a master and servant relationship, no matter who supplied the person employed. The test of employment is whether the person employed is under the control and supervision of the employer. Mode of payment, whether it was direct or through any other agency, does not normally determine the status of the person as workman. There is no dispute that eleven persons were rendering security service and it was the petitioner who allotted the work to those 11 persons and controlled them and 3 decided the nature of work they had to render. The society's role was only to supply the persons to do the work. In such a situation those persons would be workmen falling within the purview of Section 2 (s) of the I.D. Act."
6. Relying on Hussainbhai v. Alath Factory Thozhilali Union, (1978 -II-LLJ-397) (SC) the learned Judge concluded that "there is no scope for interference with the award in challenge under Article 226 of the Constitution." This is how the original petition was dismissed.
7. Aggrieved, the management has come up in appeal.
8. From Ext. P3 award, it is amply clear that the Tribunal proceeded on the premise that the status of workmen was never in dispute. We are unable to find out the basis of such understanding of the Tribunal. The management all through disputed that security Guards were employed by contractors from time to time and that the latter supplied the former to the management and that payment of wages was always made to the contractors. The management consistently denied the relationship of employer and employee between it and the Security Guards. Without answering such question, the Tribunal straight away proceeded to say that the management failed to establish the formalities contemplated by Section 25-F and, therefore, termination of the workmen was bad in law.
9. Exactly identical controversy came up before us in W.A. No. 441 of 1992 (Workmen of Keltron Controls, Aroor v. Executive Director, Keltron Controls, Aroor and Others), in which we held that the question whether the relationship of master and servant existed, is a question of fact, which cannot be decided in a proceeding under Article 226 of the Constitution. In that case, we also relied on the decision in Gujarat Electricity Board, Thermal Power Station v. Hind Mazdoor Sabha, (1995-II-LLJ-790), in which the Supreme Court held as follows:
"If the contract is sham or not genuine", the workmen of the so called contractor can raise an industrial dispute for declaring that they were always the employees of the principal employer and............. When such dispute is raised, the industrial adjudicator has to decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is sham, then he will have jurisdiction to adjudicate the dispute."
It was the duty of the Tribunal to decide the vital questions; whether there was employer-employee relationship between the management and the Security Guards and whether the contract between the management and the contractor was genuine or a make believe arrangement. If the agreement between the management and the contractor, who supplied the Security Guards to the management from time to time, is sham then only the industrial dispute reference would lie. Without answering these questions, the Tribunal declared the termination of service of the Security Guards as nullity and ordered reinstatement with backwages.
10. The learned Judge also relying on Hussainbhai's case (supra), without giving cogent reasons and without recording a clear finding on the question whether the agreement between the management and the contractor was genuine or sham, held that there was a relationship of employer employee between the management and the Security Guards and that industrial dispute reference was maintainable. In Hussainabhai (supra), the Supreme Court observed that "The presence of intermediate contractors, with whom alone the workers have immediate or direct relationship excontractu is of no consequence when on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect arrangement, that the real employer is the management, not the immediate contractor." The question is whether by the impugned judgment the learned Judge lifted the veil. The veil can be lifted only when a finding is recorded that the agreement between the management and the contractor was sham and that in fact, the workmen were directly employed by the management. There is no such finding in the impugned judgment. In view of the Gujarat Electricity Board, Thermal Power Station (supra), it was imperative on the part of the industrial adjudicator to decide whether the contract between the management and the contractor, who supplied the workmen, was sham or genuine. The adjudicator would have jurisdiction to adjudicate the dispute only if he comes to the conclusion that the contract was sham. The learned Judge himself observed that the word "employed" occurring in Section 2 (s) of the Act "Would postulate a master and servant relationship". The question, therefore, was whether the workmen were employed by the management or by the contractor, who supplied them to the management under a contract. Therefore, the question whether the contract was genuine or sham became significant, which is not decided.
11. For the above reasons, the appeal succeeds and is allowed. The impugned judgment dated November 29, 1994 and Ext. P3 award are set aside and the case is remanded to the Industrial Tribunal directing it to pass an award afresh recording clear findings on the vital questions whether the agreement between the management and the contractor, who supplied Security Guards, was genuine or sham and whether there was a relationship of employer-employee between the management and the Security Guards.