Delhi District Court
Prithvi Raj Ors vs Ms Agricultural Produce Market ... on 13 September, 2023
IN THE COURT OF SH. AJAY GOEL:
PRESIDING OFFICER INDUSTRIAL TRIBUNAL-I,
ROUSE AVENUE DISTRICT COURTS , NEW DELHI.
Ref: F.24(347)/2006/Lab-2519-2523,
Dated 04.09.2006
POIT NEW NO.: 131/2016
OLD ID NO. 1007/2006
Workman
Shri Prithvi Raj and 11 Ors.,
through the Secretary
Delhi Labour Union,
Agarwal Bhawan, G.T. Road,
Tis Hazari, Delhi-110 054.
Vs.
The Management of
(i) Agricultural Produce Market Committee,
through it's Secretary,
D-4, Panchvati, Azadpur Mandi,
Delhi.
(ii) Shri Gurdeep Singh (Contractor),
Agricultural Produce Market Committee Workshop,
Azadpur Mandi,
Delhi
Also at
BW 34-D, Shalimar Bagh, Delhi.
Date of Institution : 07.09.2006
Date of presentation : 28.04.2023
before this court
Date of Arguments : 13.09.2023
Date of Award : 13.09.2023
AWAR D
1. The Labour Department, Govt. of the National Capital
Territory of Delhi has referred this dispute arising between the
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parties named above for adjudication to this Tribunal with following
terms of the reference:-
"WhetherS/Sh. Prithvi Raj, Shiv Kumar,
Rijwan Hussain, Ganesh Mandal, Bhola
Singh and Sh. Dilip are not reporting for
duty or their services have been terminated
by the management illegally and/or
unjustifiably and if so, to what sum of
money as monetary relief along with other
consequential benefits in terms of existing
Laws/Govt. notification and to what other
relief are they entitled and what directions
are necessary in this respect?'
"Whether there exist employer-employees
relationship with management in respect of
S/Sh. Om Prakash, Rahul, Haroon, Sonu
And Mohd. Amir Hussain (Raju) And If So.
Whether Their services have been
terminated illegally and/or unjustifiably by
the management and if so, to what sum of
money as monetary relief along with other
consequential benefits terms of existing
Laws/ Govt. notification and to what other
relief are they entitled and what directions
are necessary in this respect?"
2. Thereafter again vide Corrigendum dated 21.08.2009, bearing
No.F.24(347)/06/N.W.D/ID-157/2005(01)Lab/739 dated 21.08.2009
an additional terms of reference is added as term no. III in the
schedule of the said order under the heading "terms of reference":-
"Whether the demand of above workmen
referred to in terms of reference no. 1 and II for
regularization of their services from their
respective initial date of joining with the
management no. 1 in proper pay scale and
allowances alongwith consequential benefits
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including difference of salary, along with arreas
is justified; and if yes, from which date and what
directions are necessary in this respect?"
3. Statement of claim has been filed on behalf of the
workmen wherein workmen have stated that the workmen had been
taken into the employment of the management no.1 through
contractor/management no.2 against regular and permanent nature
of jobs on their respective posts and from the dates as detailed in the
table mentioned here below. That the workmen were treated as
temporary / contract employees and denied proper salary and
privileges as available to regular employees of their category. That
the alleged Contractor i.e. management no. 2 is working under
different-different name & Style. Some time he was getting the
signatures of workmen concerned on the vouchers of Doaba Motor
Works, some times on Deep Brothers Auto Works, some times on
Balbir Singh & Co. but in fact he himself was doing all the business
under different- different names just to circumvent the law. That all
the workmen were working continuously without any break and
they had an unblemished and uninterrupted record of services to
their credit to the satisfaction of their superiors. Though they were
taken into the job through the contractor, all of them were working
under the direct control and supervision of the management of
A.P.M.C. That the principal employer is the management of APMC
and the workmen concerned were shown as working under a
contractor namely Shri Gurdeep Singh i.e. management no. 2. That
the contract/arrangement between the management no 1 and 2 is
sham and bogus and it was merely an arrangement between them
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just with a view to deprive the workmen concerned of their legal
rights and with a view to avoid their respective liabilities.
4. It is further contended that the duties which were being
discharged by the workmen concerned are of such a nature, which
would ordinarily be done through regular workmen of A.P.M.C.
That the workmen are entitled to a higher amount of salary but they
were paid a lower amount of salary and even in that lower amount, a
particular amount was being deducted every month from their salary
on the assurance that the same would be paid to them subsequently
in lump sum. When on 17.03.2005 the workmen concerned
demanded their entire deducted amount, they were asked by the
contractor to sign some blank papers and as the workmen concerned
refused to do the same, they were not taken in job from 18.03.2005.
That aforesaid action on the part of the management in terminating
the services of the workmen by way of refusing them duties w.e.f.
18.03.2005 and non- regularization of their services in proper pay-
scale and allowances on their respective posts and denial of proper
salary at par with their regular counterparts on the principle of
"Equal Pay for Equal Work" with all arrears thereof is wholly
illegal, bad, unjust and malafide for the following amongst other
reasons:
5. That the workmen aforesaid have been meted out with hostile
discrimination as juniors to them have been retained in service and
they have been thrown out of job. That in case of retrenchment, no
seniority list was displayed, no notice was given, no notice pay was
either offered or paid to them. Furthermore no service compensation
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was given to them at the time of termination of their services by
way of refusal to duties. That the principle of natural justice were
completely violated. That the impugned termination is also violative
of Section 25 F, G & H of the Industrial Disputes Act, 1947 read
with Rules 76, 77 and 78 of "the Industrial Dispute (Central) Rules,
1957." That it is also violative of Article 14, 16 and 39-(d) of the
Constitution of India. That the workmen aforesaid have been
working under the direct control and supervision of the
management. That the workmen aforesaid are totally unemployed
since the date of their termination i.e. from 18.03.2005. That a
demand notice was served upon the management which was duly
received in their office, but no reply was received and thus, it is
presumed that the demand has been rejected. Thereafter,
Conciliation proceedings were also initiated but the same resulted in
failure due to non cooperative and adamant attitude of the
management. That the workman prayed that an Award be made in
their favour holding that they are entitled to be regularized in the
service with retrospective effect from his initial date of joining and
to pay him entire difference of salary on the principle of "Equal Pay
for Equal Work" from his initial joining onwards and all
consequential benefits thereof along with litigation cost. The service
details of workmen are as follows:-
S.N Name & Fathers Designation Date of Date of
Name joining termination
1 Sh. Prithvi Raj S/o Hydraulic 08.04.1998 18.03.2005
Sh. Dhyan Chand Mistri
2 Shiv Kumar S/o Sh. Welder-Fitter 07.04.2001 18.03.2005
Edhai Ram
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3 Rizwan Hussain S/o Head 10.01.2001 18.03.2005
Faiaz Hussain Mistry/Engine
mistri
4 Bholey S/o Puran Welder 04.08.2007 18.03.2005
Singh
5 Om Prakash S/o Sh. Loader Mistri 01.04.1998 18.03.2005
Puran Chand
6 Rahul, S/o Sh. M.D. Helper March 18.03.2005
Kasim 2002
7 Ganesh S/o Sh. Helper May 2004 18.03.2005
Sunder Mandal
8 Dilip S/o Sh. Engine Mistri April 2004 18.03.2005
Dhandeshwar
Mandal
9 Harun S/o Almuddin Helper + July 1998 18.03.2005
Welder
10 Sonu S/o Sh. Nathi Auto Mistri/ Sept. 1999 18.03.2005
Lal Garmo Mistri
11 Md. Amir Hussain Tyre Mistri 07.05.2001 18.03.2005
(Raju) S/o Md.
Chulhai
12 Satpal S/o Sh. Mistri August 18.03.2005
Dharam Singh 2000
6. The management no. 1 filed Written Statement, wherein it
has taken objections that there is no relationship between the parties
i.e. workman and management; That the claimants are not engaged
by management no. 1 for any work. The respondent no. 1 has an
annual maintenance contract dated 01.06.2004 for repair and
maintenance of 34 sanitary vehicles and 4 attachment with
respondent no. 2 for which monthly payment is made to respondent
no. 2 by respondent no. 1. That there was no cause of action, hence
claim of the workmen is liable to be dismissed. That the annual
preventive maintenance contract of sanitation vehicles was awarded
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to the contractor i.e. respondent no. 2 for a period of one year which
included replacement of spare parts, other repair etc. through his
employees. It is further contended that it was the responsibility of
the contractor to arrange for all necessary items of the
repair/maintenance of vehicles under him. Any work force engaged
by contractor for the repair jobs as per the contract is neither
appointed by the APMC Azadpur, nor it is under the supervision and
control of the APMC and responsibility of the contractor respondent
no. 2. Hence, any dispute arising between the contractor and his
work force should be settled by them only. That the claimants have
not come before this Court with clean hands and have concealed the
material and true facts, hence the present dispute is liable to be
dismissed. Rest of the contentions of the statement of claim were
denied by the management no. 1.
7. Management no. 2 also filed written statement wherein they
contended that there exists no firm or establishment or entity or
legal person with the name and style of Sh. Gurdeep Singh
(Contractor) i.e. management no.2. That no cause of action has
arisen against Sh. Gurdeep Singh or Gurdeep Singh (Contractor).
That the names of 6 of the concerned workmen S/Sh. Prithvi Raj,
Shiv Kumar, Rijwan Hussain, Ganesh Mandal, Bhola Singh and Sh.
Dilip are still on the rolls of M/s. Deep Brothers Auto Works. The
concerned workmen have failed to report for duty in spite of
repeated requests and reminders by the said firm including letters dt.
21.03.05, 23.04.05, 28.04.05, 14.05.05, 30.09.05 and various notices
displayed at the premises of the above said firm. The said firm still
welcomes them to join duty. That there existed no relationship of
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employer and workman between Sh. Om Prakash, Rahul, Sonu,
Haroon, Mohd. Amir Hussain (Raju) & Sh. Gurdeep Singh
(Contractor) or M/s. Deep Brother Auto Works. That the entire
Statement of claim is based on wrong submissions particularly
regarding relationship, the rate of wages payable and the date of
entry in employment & alleged termination of services. That the
statement of claim of workmen is extremely vague and nonspecific.
It has not been specified as to which employer has allegedly taken
the action of terminating the services of any or all the concerned
workmen. It has also not been specified as to what is the duration of
employment with the employer no: 2. In fact there is no such entity
and the reply is being filed on behalf of M/s Deep Brothers Auto
Works where some of the concerned persons were employed on the
date of alleged termination of their services. That no demands were
ever raised by any party in this regard on the other party. Hence for
this reason also it is not an Industrial Dispute. That the Union M/s
Delhi Labour Union, Aggarwal Bhawan, G. T. Road, Tis Hazari,
Delhi-54 does not represent the workmen of the establishment nor it
has been authorized by the workmen of the establishment or the
workmen for this purpose. It is a general Union and it has no unity
of interest with the employees of the respondent employers.
8. Rejoinder has been filed by the workmen, wherein all
objections raised in the preliminary objections have been denied and
the contentions made in the statement of claim are reiterated and
affirmed.
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9. After completion of pleadings, the following issues were
framed by the Ld. Predecessor on 12.04.2007.
"i. Whether there was a relationship of employer &
employee between the workman and the management
no. 1:
ii. Whether there was relationship of employer and
employee between workman Om Prakash, Rahul,
Sonu, Harun, Mohd. Amir Hussain and M-2?
iii. Whether the remaining workmen in the reference
have abandoned the services with M-2 by not
reporting for duty?
iv. As per terms of reference.
10. To prove their case, the workmen examined themselves as
WW-1 to WW-11 and also to Sh. Surender Bhardwaj, General
Secretary of the Union as WW-12 and filed their Affidavits in lieu of
their examination in chief. They placed their reliance upon
documents as per the list of documents filed before the Tribunal i.e
Ex. WW1/1 to Ex.WW1/25. The workmen, after duly tendering of
their evidence, were cross-examined by the ld. AR for the
Management.
11. Per contra, the management no. 1 examined one Sh. R.K.
Aggarwal, who happens to be Executive Engineer of the
management no. 1 and filed his affidavit in lieu of examination-in-
chief as Ex. MW-1/A. He tendered his evidence and relied upon
document Ex. MW1/1 to Ex. MW1/2 and WW1/25. Thereafter he
was duly cross-examined by the ld. AR for the workmen.
Management no. 2 also examined one Sh. Gurdeep Singh,
Contractor as MW-2. He tendered his evidence by way of affidavit
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Ex. MW2/A and relied upon document Ex. MW2/1 to Ex. MW2/6.
Thereafter he was also duly cross-examined by the ld. AR for the
workmen.
12. Final arguments have been heard at length as advanced
by counsels for both the parties.
13. I have gone through the entire records of the case
including pleadings of the parties, evidence led and documents
proved during evidence.
14. My issue wise findings are:-
Issue No. 1:
"i. Whether there was a relationship of employer &
employee between the workman and the management
no. 1:
ii. Whether there was relationship of employer and
employee between workman Om Prakash, Rahul,
Sonu, Harun, Mohd. Amir Hussain and M-2?
iii. Whether the remaining workmen in the reference
have abandoned the services with M-2 by not
reporting for duty?
15. It is the claim of the workmen that the contracts entered into
between the Management No. 1 and the contractor i.e. Management
No. 2 is sham, bogus, and merely a smoke-screen to deny the
employment benefits to the workmen concerned. The Union has
contended that the workmen have been employed against the
regular, perennial and permanent nature of jobs. The workmen are in
continuous employment from their initial appointments. The job of
the workmen is an integral part of the establishment of the
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Management No. 1. In day to day working the workmen are
working under direct supervision and control of the Management
No. 1 and its officers. The workmen are directly supervised by the
officers of the Management No. 1. The attendance registers of the
workmen are maintained by Management No. 1. Some of the
workmen were earlier working as direct employees of the
Management No. 1 and subsequently they were transferred on the
rolls of the contractors without any consent. Based upon this, it is
claimed that the contracts between the Management No. 1 and
various contractors are sham and bogus and the workmen are direct
employees of the Management No. 1. The Management No. 2 is a
mere mediary engaged by the Management No. 1 merely to escape
from the rights and liabilities arising from the employer-employee
relationship.
16. A constitution bench of the Hon'ble Supreme Court in Steel
Authority of India Ltd. & Ors. vs National Union Water Front
WOrkers & Ors AIR 2001 SC 3527 has held that,
105. An analysis of the cases, discussed above, shows
that they fall in three classes;(i) where contract labour
is engaged in or in connection with the work of an
establishment and employment of contract labour is
prohibited either because the Industrial
adjudicator/Court ordered abolition of contract labour
or because the appropriate Government issued
notification under Section 10(1) of the CLRA Act, no
automatic absorption of the contract labour working in
the establishment was ordered; (ii) where the contract
was found to be sham and nominal rather a
camouflage in which case the contract labour working
in the establishment of the principal employer was
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held, in fact and in reality, the employees of the
principal employer himself. Indeed, such cases do not
relate to abolition of contract labour but present
instances wherein the Court pierced the veil and
declared the correct position as a fact at the stage after
employment of contract labour stood prohibited; (iii)
where in discharge of a statutory obligation of
maintaining canteen in an establishment the principal
employer availed the services of a contractor and the
Courts have held that the contract labour would indeed
be the employees of the principal employer.
17. The issue involved in SAIL (Supra) was regarding automatic
absorption of contract labour in the event the appropriate
government issued notification under Section 10(1) of the CLRA
Act. Hon'ble Supreme Court illustrated an instance wherein the
contract was found to be sham and camouflage. In Gujarat
Electricity Board, Thermal Power Station, Ukai vs Hind Mazdoor
Sabha & Ors AIR 1995 SC 1893, Hon'ble Supreme Court upheld
an award wherein the contract between the principal employer and
the contractor was found to be sham and nominal. However, it was
partially overruled. The correct position has been explained by
Hon'ble Supreme Court in International Airport Authority of
India vs International Air Cargo Workers' Union & Ors AIR 2009
SC 3063, which reads as under,
"17. In Gujarat Electricity Board, this Court held:
...the exclusive authority to decide whether the
contract labour should be abolished or not is
that of the appropriate Government under the
said provision. It is further not disputed before
us that the decision of the Government is final
subject, of course, to the judicial review on the
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usual grounds. However, as stated earlier, the
exclusive jurisdiction of the appropriate
Government under Section 10 of the Act arises
only where the labour contract is genuine and
the question whether the contract is genuine, or
not can be examined and adjudicated upon by
the court or the industrial adjudicator, as the
case may be. Hence in such cases, the workmen
can make a grievance that there is no genuine
contract and that they are in fact the employees
of the principal employer. 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 for claiming the
appropriate service conditions. When such
dispute is raised, it is not a dispute for abolition
of the labour contract and hence the provisions
of Section 10 of the Act will not bar either the
raising or the adjudication of the dispute. 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, that he will
have jurisdiction to adjudicate the dispute. If,
however, he comes to the conclusion that the
contract is genuine, he may refer the workmen to
the appropriate Government for abolition of the
contract labour under Section 10 of the Act and
keep the dispute pending. However, he can do so
if the dispute is espoused by the direct workmen
of the principal employer. If the workmen of the
principal employer have not espoused the
dispute, the adjudicator, after coming to the
conclusion that the contract is genuine, has to
reject the reference, the dispute being not an
industrial dispute within the meaning of Section
2(k) of the ID Act. He will not be competent to
give any relief to the workmen of the erstwhile
contractor even if the labour contract is
POIT NEW NO.: 131/2016 Page 13 of 51
abolished by the appropriate Government under
Section 10 of the Act.
In view of the provisions of Section 10 of the Act, it is
only the appropriate government which has the
authority to abolish genuine labour contract in
accordance with the provisions of the said section. No
court including industrial adjudicator has jurisdiction
to do so.
1 8 . Gujarat Electricity Board was partly overruled in
Air India in regard to the question whether on
abolition of contract labour system, the contract
labour have to be automatically absorbed by the
principal employer, this Court held as follows in Air
India: The moment the contract labour system stands
prohibited under Section 10(1), the embargo to
continue as a contract labour is put an end direct
relationship has been provided between the workmen
and the principal employer. Thereby, the principal
employer directly becomes responsible for taking the
services of the workmen hitherto regulated through the
contractor. The linkage between the contractor and the
employee stood snapped and direct relationship stood
restored between the principal employer and the
contract labour as its employees. Considered from this
perspective, all the workmen in the respective services
working on contract labour are required to be
absorbed in the establishment of the employer.
19 . A course correction, if we may use that expression,
was applied by the Constitution Bench, in SAIL. This
Court made it clear that neither Section 10 nor any
other provision in CLRA Act provides for automatic
absorption of contract labour on issuing a notification
by the appropriate government under Section 10(1) of
the CLRA Act and consequently the principal employer
cannot be required to absorb the contract labour
working in the establishment. This Court further held
that on a prohibition notification being issued under
Section 10(1) of the CLRA Act, prohibiting employment
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of contract labour in any process, operation or other
work, if an industrial dispute is raised by any contract
labour in regard to conditions of service, the industrial
adjudicator will have to consider whether the
contractor has been interposed either on the ground of
having undertaken to produce any given result for the
establishment or for supply of contract labour for work
of the establishment under a genuine contract, or as a
mere ruse/camouflage to evade compliance with
various beneficial legislations so as to deprive the
workers of statutory benefits. If the contract is found to
be sham or nominal and merely a camouflage, then the
so called contract labour will have to be treated as
direct employees of the principal employer and the
industrial adjudicator should direct the principle
employer to regularize their services in the
establishment subject to such conditions as it may
specify for that purpose. On the other hand if the
contract is found to be genuine and at the same time
there is a prohibition notification under Section 10(1)
of CLRA Act, in respect of the establishment, the
principal employer intending to employ regular
workmen for the process, operation or other work of
the establishment in regard to which the prohibition
notification has been issued, it shall give preference to
the erstwhile contract labour if otherwise found
suitable, if necessary by giving relaxation of age.
As noticed above, SAIL did not specifically deal with
the legal position as to when a dispute is brought
before the Industrial Adjudicator as to whether the
contract labour agreement is sham, nominal and
merely a camouflage, when there is no prohibition
notification under Section 10(1) of CLRA Act.
20. But where there is no abolition of contract labour
under Section 10 of CLRA Act, but the contract labour
contend that the contract between principal employer
and contractor is sham and nominal, the remedy is
purely under the ID Act. The principles in Gujarat
Electricity Board continue to govern the issue. The
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remedy of the workmen is to approach the industrial
adjudicator for an adjudication of their dispute that
they are the direct employees of the principal employer
and the agreement is sham, nominal and merely a
camouflage, even when there is no order under Section
10(1) of CLRA Act. The industrial adjudicator can
grant the relief sought if it finds that contract between
principal employer and the contractor is sham,
nominal and merely a camouflage to deny employment
benefits to the employer and that there is in fact a
direct employment, by applying tests like: who pays the
salary; who has the power to remove/dismiss from
service or initiate disciplinary action; who can tell the
employee the way in which the work should be done, in
short who has direction and control over the employee.
But where there is no notification under Section 10 of
the CLRA Act and where it is not proved in the
industrial adjudication that the contract was
sham/nominal and camouflage, then the question of
directing the principal employer to absorb or
regularize the services of the contract labour does not
arise. The tests that are applied to find out whether a
person is an employee or an independent contractor
may not automatically apply in finding out whether the
contract labour agreement is a sham, nominal and is a
mere camouflage. For example, if the contract is for
supply of labour, necessarily, the labour supplied by
the contractor will work under the directions,
supervision and control of the principal employer but
that would not make the worker a direct employee of
the principal employer, if the salary is paid by
contractor, if the right to regulate employment is with
the contractor, and the ultimate supervision and
control lies with the contractor. The principal employer
only controls and directs the work to be done by a
contract labour, when such labour is
assigned/allotted/sent to him. But it is the contractor as
employer, who chooses whether the worker is to be
assigned/allotted to the principal employer or used
otherwise. In short worker being the employee of the
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contractor, the ultimate supervision and control lies
with the contractor as he decides where the employee
will work and how long he will work and subject to
what conditions. Only when the contractor
assigns/sends the worker to work under the principal
employer, the worker works under the supervision and
control of the principal employer but that is secondary
control. The primary control is with the contractor."
18. From the above precedents, the legal position emerges that
even in cases where there is no abolition of contract labour under
Section 10 of the CLRA Act, the industrial court can look into the
arrangement as to whether the contract between the principal
employer and contractor is sham and bogus. The industrial court can
grant relief if it arrives at a conclusion that the contract was sham
and camouflage to deny the employment benefits. The same
principles were reiterated by Hon'ble Supreme Court in Kirloskar
Brothers Limited Vs Ramcharan & Ors., Civil Appeal Nos. 8446-
8447 of 2022 and Hon'ble High Court of Delhi in The
Management of Ashok Hotel vs. Their Workmen (W.P. (C)
14828/2006, decision dated 19.02.2013).
19. To arrive at a finding of sham and bogus contract, the
industrial tribunal can apply tests like: who pays the salary, who has
the power to remove/dismiss from service or initiate disciplinary
action, who can tell the employees the way in which the work is to
be done. It is vital to be noted that the tests which are applied to find
out whether a person is an employee or an independent contractor
may not automatically apply in finding out whether contract labour
agreement is sham and bogus.
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20. In Balwant Rai Saluja vs Air India Ltd 2014(9) SCC 407
Hon'ble Supreme Court has held that,
"52. To ascertain whether the workers of the
Contractor can be treated as the employees of the
factory or company on whose premises they run the
said statutory canteen, this Court must apply the test of
complete administrative control. Furthermore, it would
be necessary to show that there exists an employer-
employee relationship between the factory and the
workmen working in the canteen. In this regard, the
following cases would be relevant to be noticed.
***
6 2 . A recent decision concerned with the employer employee relationship was that of the NALCO case (supra). In this case, the appellant had established two schools for the benefit of the wards of its employees. The Writ Petitions were filed by the employees of each school for a declaration that they be treated as the employees of the appellant-company on grounds of, inter alia, real control and supervision by the latter. This Court, while answering the issue canvassed was of the opinion that the proper approach would be to ascertain whether there was complete control and supervision by the appellant therein. In this regard, reference was made to the case of Dhrangadhra Chemical Works case (supra) wherein this Court had observed that:
"14. The principle which emerges from these authorities is that the prima facie test for the determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work, or to borrow the words of Lord Uthwatt at p.23 in Mersey Docks and Harbour Board v. Coggins & POIT NEW NO.: 131/2016 Page 18 of 51 Griffith (Liverpool) Ltd., (1952) SCR 696 "The proper test is whether or not the hirer had authority to control the manner of execution of the act in question"."
***
65. Thus, it can be concluded that the relevant factors to be taken into consideration to establish an employer-employee relationship would include, inter alia,
(i) who appoints the workers;
(ii) who pays the salary/remuneration;
(iii) who has the authority to dismiss;
(iv) who can take disciplinary action;
(v) whether there is continuity of service; and
(vi) extent of control and supervision, i.e. whether there exists complete control and supervision."
21. In Chief Engineer, Thermal Power Station, GEB vs Workmen & Ors, Special Civil Appeal No. 16912 of 2005 decided on 31.08.2017, Hon'ble High Court of Gujarat upheld the test applied by the industrial tribunal to arrive at a finding of whether the contract is sham and bogus. The relevant paragraph reads as under:-
On reading the award, it comes out that so as to decide the issue whether the contract is genuine or camouflage or sham and bogus and whether the contract is merely name lender and so as to reach to the final conclusion with regard to the dispute referred by appropriate Government, learned Tribunal examined, analyzed, evaluated and appreciated the documentary and oral evidence available on record in 8 segments i.e. under 8 broad heads namely viz.
"(1) Activities/business of the principal employer POIT NEW NO.: 131/2016 Page 19 of 51 (2) genuine need or requirement of engaging contract labour (3) length of continuous and uninterrupted service of workman (4) nature of work done by the workmen i.e. whether the work is perennial in nature or intermittent (5) who has in fact, supplied the labour force to the principal employer, meaning thereby, whether service of the workmen were made available to the principal employer by the labour contractor after making recruitment (6) extent of supervision and control of the workmen by the principal employer (7) whether the workers do the labour work to produce goods or service for business of the principal employer and (8) whether the provisions of the Act (The Contract Labour (R&A) Act, 1970) relating to registration and licence etc. are complied with."
22. The workmen have stated that they joined into the employment of the management no. 1 w.e.f the dates as mentioned in the table above. Even though the said factum pertaining to their dates of joining was disputed by both the management, however, neither the management no. 1 nor the management no. 2 have filed the appointment letters issued to the workmen concerned on record. Assuming for the sake of the argument that the management no. 1 is merely the principal employer, then also the management no. 1 is supposed to maintain the list of workers provided by the service provider i.e. management no. 2 so as to ensure that the management no. 2 is complying with labour laws with resepect to the workmen POIT NEW NO.: 131/2016 Page 20 of 51 cocnenred. No such plea has been taken by the management to say that they have not complied with the CLRA Act, or that they do not have records pertaining to their service details. Despite the same, the said details were neither brought by the management no. 1 nor by the management no. 2 on the court records.
23. On the contrary, the workmen concerned during their cross- examination have maintained the stance that they joined into the employment of the management no. 1 w.e.f. the dates as mentioned in the table above and have been working for the management No, 1 since then. Sh. Prithvi Raj in his cross-examination dated 19.02.2008 by the management no. 2 stated that "it is correct that I was employed w.e.f. 08.04.1998 as Hydraulic Mistri. Vol. With APMC. I was not given any appointment order and was neither covered under ESI, PF. Vol. I was kept on daily wages. I was working since the date of my appointment as a daily wager with A.P.M.C.......... All my leaves, job profile, and performance were being maintained by A.P.M.C officers, namely Dinesh Sharma, Anwar Hussain.....The other workmen concerned were also being paid salary through Gurdeep Singh Vouchers and the other workmen daily assignment were assigned to me and other concerned workmen by Sh. Dinesh Sharma, who is an employee of A.P.M.C....It is not necessary that only Guudeep Singh used to assign job. It was also Sh. Dinesh Sharma, who also used to assign work to us....I used to work in the premises of A.P.M.C."
24. When cross-examined by the management no. 1, the workman stated "I joined the services of the Respondent No. 1 in POIT NEW NO.: 131/2016 Page 21 of 51 April 1998. I was being paid Rs. 5800/- per month from the date of my joining.....During the employment with respondent no. 1, I have been paid Rs. 3500/- per month since my date of joining. Again said, the management was given Rs. 2500/- as salary though papers my salary was Rs. 5800/-."
25. Similarly, in respect of Sh. Shiv Kumar, he stated the following in his cross-examination by the management no. 1 stated that "I was employed by APMC and not by contractor. There was a gentleman by the name of Mr. Sharma who had taken me with the employment of APMC. No application was invited from me. At the spot, I was made to write an application and asked to join from the next date. There was a person by the name of Prithvi Raj through whom I had received the message that I would be given employment by APMC......It is incorrect to say that I was working under Gurdeep Singh directly in his workshop. In fact, I was assigned by APMC to work in the workshop of Gurdeep Singh." He further maintained his stance while cross-examined by the AR for management no. 2 and stated that "I was working with APMC as welder fitter. I was not provided appointment letter by APMC. Although attendance, leave book, salary were all maintained by APMC.....I was being paid Rs. 4200/- per month lastly. Vol. But it used to be shown as Rs. 8000/- . This payment is used to be made by Mr. Anwar and Mr. Tyagi. I used to be assigned work by Mr. Tyagi, Mr. Anwar and various drivers." Similarly, the rest of the workmen maintained the stance they were working for the management no. 1 under their direct supervision and control.
POIT NEW NO.: 131/2016 Page 22 of 5126. The management witness no. 1 in his cross-examination dated 18.07.2023 stated that the following:
"It is correct that the management/APMC/R-1 was owing lots of vehicle/trucks for their business. Vol. there was about 34 vehicles including trucks. I do not know the place where these vehicles were regularly serviced or repaired. It is correct that the workshop where these vehicles were serviced or repaired was owned by APMC/R-1. Vol. The vehicles were not serviced or repaired everyday. The machines on which the vehicles were serviced or repaired were not owned by APMC/R-1. Q: Do you have any evidence or material to show that the machinery in the workshop was not owned by APMC/R-1? A: It is a matter of record.
The workshop was located at New Sabzi Mandi, Azadpur, Delhi.
Q: Have you brought the complete records of machinery of manpower working over there and all other records of the workshop located at New Sabzi Mandi, Azad Pur, Delhi? A: I have not brought the same. It is a matter of record. ............
I have no knowledge if the work and conduct of the concerned workmen was satisfactory with the management. I do not have knowledge if the averments made in para-1 of the statement of claim are correct. I do not know if the concerned workmen were paid less salary and status than which was paid to the regular staff of the management/APMC/R-1. .............
I do know have any document to show that the management/APMC/R-1 registered themselves under Contract Labour (Regulations & Abolition) Act, 1970. Vol. I have no knowledge.
27. On the other hand, the management witness no. 2 has stated the following in his cross-examination dated 18.07.2023 and 04.09.2023:POIT NEW NO.: 131/2016 Page 23 of 51
"Q: have you obtained licence under Contract Labour (Regulation & Abolition) Act?
A:I only have my driving licence and got renewed twice. Q: Is it correct that the workshop at New Sabzi Mandi, Azadpur, Delhi was the property of APMC/R-1? A:Yes.
Q: Is it correct that all the machinery in the workshop was also owned by APMC/R-1?
A: I had only tipper and loader.
Q: Have you brought any record to show that who was controlling and supervising the work of concerned workmen? A: No. ...............
I do not have any originals of Ex. MW2/1 to Ex. MW2/5."
...........
I have no record to show that the concerned workmen were my employees. I was taking work from the concerned workmen for repairing the trucks and other vehicles of the management as per my contract with APMC. It is correct that APMC was paying me as per contract the salary of the concerned workmen and in turn I was paying the same to the concerned workmen. It is correct that I had no complaint against the concerned workmen and they were going their work diligently. I cannot say if the regular employees of APMC were also working there. Vol. I have no idea. I cannot admit or deny if the workmen are entitled to be regularised in service of APMC in the regular payscale or that they should be paid salary in the regular payscale as paid to the regular staff of their category. It is incorrect to suggest that I am deposing falsely at the instance of APMC."
28. From the bare perusal of the aforementioned testimonies, it is evident that Management No. 1 owned the vehicles/trucks which were to be maintained by the concerned workmen. The testimony reveals that the workshop, where these vehicles were repaired or serviced, was also owned by Management No. 1. When questioned about whether the machines on which the vehicles were serviced or repaired were owned by Management No. 1, the witness denied that POIT NEW NO.: 131/2016 Page 24 of 51 they were owned by Management No. 1. When asked if Management No. 1 had any documentary evidence to show that the machinery in the workshop was not owned by them, the response was merely that it was a "matter of record". Furthermore, when asked, "Have you brought the complete record of machinery, manpower working there, and all other records of the workshop located at New Sabzi Mandi, Azad Pur, Delhi?" he responded that he had not brought the same and that it was a matter of record. The management despite maintaining all the records and stating that it a matter of record have not filed a single piece of document/evidence on the court record. The management no. 1 is that the custodian of the document, and it has withheld all the crucial documents which are necessary for the adjudication for the present dispute. Therefore, adverse inference be drawn against the management no. 1 for not bringing the complete records as it would have shown the case of the workmen that they were working under the direct control and supervision of the workmen. On the other hand, when Management No. 2 was asked about the ownership of the machinery, the response indicated that the contractor, i.e., Management No. 2, only had a tipper and loader. This implies that it was Management No. 1 who provided the tools and materials in the form of machinery for the concerned workmen to perform their services. This provision is in contravention of the terms stated in the letters dated 31.07.2006, 18.01.2008, and 28.03.2010 given to Management No. 2. In these letters, Management No. 1 specified that "you shall have to bring at your own cost all equipment, tools, and machines required for the timely completion of the work". The management no. 2 has admitted POIT NEW NO.: 131/2016 Page 25 of 51 that they do not have any record to show that the workmen concerned are the employees of the management no. 2 or they were controlled and supervised by the management no. 2. In fact, the said witness admitted to the fact that it is the management no. 1 who is making the payment to the contractor i.e. management no. 2, who are getting said payment disburse the same to the workmen concerned.
29. Management No. 1 contends that the concerned workmen are merely outsourced workers, and there exists no employer-employee relationship between them. According to them, Management No. 1 is simply a principal employer. However, this argument is not supported by any documentary evidence. As admitted in the testimony of the management's witness, neither does Management No. 1 possess the Registration Certificate, nor does the so-called contractor, i.e., Management No. 2, have any license as mandated under the Contract Labour (Regulation & Abolition) Act, 1970. A division bench of Hon'ble High Court of Gujarat in Gujarat Mazdoor Panchayat vs State of Gujarat (1992) II LLJ 1486 Guj has held that In this connection, it will be necessary to note that even if contract labour is in vogue in a concern, employees employed by the contractor can validly raise the following contentions which may buttress their grievance that even though they are the direct employees of the principal employer, they have wrongly been treated as employees of the contractor who is not a real intermediary. Such types of disputes which would be covered by the principal dispute under the I.D. Act can legitimately be raised in the following POIT NEW NO.: 131/2016 Page 26 of 51 cases which are mentioned by way of illustrations only without suggesting that they are exhaustive :
(1) When it is alleged that employees were directly employed by the principal employer and subsequently contract system was introduced for the same activities resulting in snapping of relationship of employee-
employer between the workmen on the one hand and the main employer on the other, thus violating Section 9A of the I.D. Act.
(2) When there is absence of proper registration of the concerned principal employer under the Contract Labour Act.
(3) When there is absence of proper licensing of the concerned contractor who employs contract labour at a given point of time.
(4) Even though the principal employer may be registered employer under the Act and the concerned contractor may be licensed contractor under the Act, his licence may not cover the activity which is carried on by the contract labour.
(5) Even though principal employer may be registered employer under the Contract Labour Act and the contractor may be having a valid licence to employ contract labour, under the Contract Labour Act, for a given activity, still licence issued to him may not cover exact number of permissible employees employed by him meaning thereby, number of permissible employees under the license may be less than number of employees actually employed and qua such excess number of employees, protective umbrella of licence would not be available to the contractor so far as the activity covered by the licence is concerned.
(6) Even though principal employer may be registered employer and the contractor may be licensed contractor, and the workmen employed by him might be covered by the permissible number of employees as POIT NEW NO.: 131/2016 Page 27 of 51 recognised by the licence and even though such activities may be covered by a licence, in fact and in substance, control including disciplinary control and supervision of the entire activity may be with the principal employer and the wages of the employees may in fact be coming out of coffers of the principal employer, and may be getting paid through the contractor who may operate as a mere conduit pipe. Such type of control, supervision and payment being outside the scope of Section 10(2) read with Section 20 & 21 of the Contract Labour Act would give rise to a legitimate contention that the principal employer is in fact and substance the real employer and the so-called contractor is an eye wash. (emphasis supplied)
30. Further, the managements have not presented the initial contract agreement signed between Management No. 1 and Management No. 2, along with the detailed terms and conditions. Ex. MW-2/1 (Colly), which includes a letter dated 26.03.2000, is merely a letter issued to Management No. 2 by Management No. 1. According to this letter, Management No. 2 was awarded the tender for an annual maintenance contract. However, no contract agreement detailing the terms and conditions of the contract has been filed on record.
31. The concerned workmen, in support of their case, have placed on record Ex. WW1/13, which is the attendance record of the workmen for the period starting from September 2003 to December 2003, as marked in the attendance sheets. Similarly, Ex. WW1/4 consists of vouchers in the name of the concerned workmen, along with ledger account notations for the workmen that date back to the years 2000, 2001, and 2002. This evidence supports the workmen's claim that they have been working for Management No. 1 since the POIT NEW NO.: 131/2016 Page 28 of 51 dates mentioned in the table above. Meaning thereby, the workmen concerned are working for substantial periods of time, some of them for about 7 long years, even before the so-called contractor came into picture.
32. Therefore, in view of the settled position of law, as well as the documentary and oral evidence placed upon record, this Tribunal is of the view that the Managements have not complied with the provisions of the CLRA Act, which they claim to be governed with as no registration certificate and license under CLRA Act has been placed upon record. Further, in the present matter as there is overwhelming evidence to arrive at a finding that the workmen are in fact employees of the Management No. 1. Hence, this Tribunal holds that the contract arrangement between the Management No. 1 and the Management No. 2 is mere sham, nominal and camouflage to deny the employment benefits to the workmen. The workmen whose details are given in the table above at Para No. 4 are in fact employees of Management No. 1. Therefore, this issue i.e. issue no. 1 is decided in favour of the workmen and against the managements.
ii. Whether there was relationship of employer and employee between workman Om Prakash, Rahul, Sonu, Harun, Mohd. Amir Hussain and M-2?
33. In view of my findings above in issue no. 1, this issue i.e. issue no. 2 is already covered. Hence, this tribunal reiterates that after piercing the veil of sham and bogus contract, it has emerged that the workmen concerned are the real employees of Management No. 1. The management No. 2 is a mere smokescreen. The POIT NEW NO.: 131/2016 Page 29 of 51 workmen, namely Sh. Om Prakash, Sh. Rahul, Sh. Sonu, Sh. Harun, Sh. Mohd. Amir Hussain are the employees of the Management No.
1. Therefore, there is no relationship of employer-employee between the workmen namely, Sh. Om Prakash, Sh. Rahul, Sh. Sonu, Sh. Harun, Sh. Mohd. Amir Hussain with the management no. 2. Hence this issue is decided in favour of the workman and against the managements.
iii. Whether the remaining workmen in the reference have abandoned the services with M-2 by not reporting for duty?
34. The management no. 2 has contended in its written statement as well as in the oral arguments that the workmen concerned remained unauthorisedly absent on their own, their services were never terminated and they themselves have abandoned their services.
35. The Hon'ble Supreme Court in the case of G. T. Lad and Ors. vs. Chemical and Fibers of India Ltd., has discussed in detail the factors for ascertaining abandonment of service. The relevant portion is reproduced below:
"7. From the connotations reproduced above it clearly follows that to constitute abandonment there must be total or complete giving up of duties so as to indicate an intention not to resum the same. In Buckingham Co. v. Venkatiah and Ors. MANU/SC/0163/1963 : (1963)IILLJ638S it was observed by this Court that under common law an inference that an employee has abandoned or relinquished service is not easily drawn unless from the length of absence and from other surrounding circumstances an inference to that effect can be legitimately drawn and it can be assumed that the employee intended to abandon service. Abandonment or relinquishment of service is always a question of POIT NEW NO.: 131/2016 Page 30 of 51 intention, and normally, such an intention cannot be attributed to an employee without adequate evidence in that behalf. Thus, whether there has been a voluntary abandonment of service or not is a question of fact which has to be determined in the light of the surrounding circumstances of each case."
36. In the present case, the workmen Sh. Prithvi Raj in his cross- examination by the management no. 2 stated that his services were terminated by Sh. Gurdeep Singh for not signing on the resignation papers. He last reported for duties on 17.03.2005, thereafter, he was not allowed to enter the premises of the management no. 1. Similarly, the workman Sh. Shiv Kumar stated in his cross- examination dated 24.07.2008 that he went two times to his place of work as per the instructions of the conciliation officer who directed him to resume the work in the year 2005. He asked Mr. Anwar, Mr. Tyagi and Mr. Sharma i.e. the concerned officers of the management no. 1 whether they would keep him on work, to which the management no. 1 refused. Similarly, the remaining workmen substantiated the fact of their being not allowed to perform their services in the premises of Management No. 1.
37. Ex. MW2/2 have been placed upon record by the management i.e. letters issued to the workmen for resumption of their duties are mere facade in order to further victimize the workman by keeping them on standstill. When the matter reached for the conciliation proceedings, the workmen approached the management for resumption for their duties but till date the workmen concerned were not taken back on rolls of the management no. 1. Even otherwise, in case of an alleged unauthorized absence, no departmental/domestic inquiry was POIT NEW NO.: 131/2016 Page 31 of 51 conducted by the managements. The Hon'be Delhi High Court in South Delhi Municipal Corporation vs. Ramesh Singh, W.P.(C) No. 11226/2020 decided on 05.01.2021, has held that the principles of natural justice would apply even to a daily wager and the workman can not be terminated without offering them the opportunity of being heard. The relevant portion of the judgement is reproduced below:
"8. Mr. Birbal says that respondent/workman during the course of the inquiry by the vigilance department had made a statement that he had indulged in the aforementioned activity as complained of by Smt. Saroj.
8.1 Mr. Birbal, however, does accept that in the reply to the show cause notice, the stand taken by the respondent/workman was that the said statement was made under coercion.
9. Mr. Birbal also accepts the fact that the respondent/workman was given no opportunity to either cross-examine the complainant i.e. Smt. Saroj or to lead in his defence any evidence before the enquiry officer.
9.1 Mr. Birbal, however, says that since the respondent/workman was a daily-wager this procedure was not adopted.
10. Be that as it may, in my view, if nothing less, the principles of natural justice would definitely apply even to a daily-wager.
11. The respondent/workman, in the very least, should have been confronted by the complainant i.e. Smt. Saroj so that he could have cross-examined her."
38. Therefore, as per the position laid down by the Hon'ble Delhi High Court in the aforementioned case, the workmen concerned despite being temporary employees are entitled to the domestic/departmental inquiry.
39. In view of above, this tribunal holds that none of the workmen concerned abandon their services as claimed by the management no. 2. The workmen concerned were forced to sign on blank papers by the managements, opposing the same resulted into their termination w.e.f POIT NEW NO.: 131/2016 Page 32 of 51 18.03.2005. Hence, this issue i.e. issue no.3 is decided in favour of the workmen and against the management.
Issue No. IV: As per terms of reference
(i) "WhetherS/Sh. Prithvi Raj, Shiv Kumar, Rijwan Hussain, Ganesh Mandal, Bhola Singh and Sh. Dilip are not reporting for duty or their services have been terminated by the management illegally and/or unjustifiably and if so, to what sum of money as monetary relief along with other consequential benefits in terms of existing Laws/Govt. notification and to what other relief are they entitled and what directions are necessary in this respect?'
(ii) "Whether there exist employer-employees relationship with management in respect of S/Sh. Om Prakash, Rahul, Haroon, Sonu And Mohd. Amir Hussain (Raju) And If So. Whether Their services have been terminated illegally and/or unjustifiably by the management and if so, to what sum of money as monetary relief along with other consequential benefits terms of existing Laws/ Govt. notification and to what other relief are they entitled and what directions are necessary in this respect?"
40. Thereafter again vide Corrigendum dated 21.08.2009, bearing No.F.24(347)/06/N.W.D/ID-157/2005(01)Lab/739 dated 21.08.2009 an additional terms of refence is added as term no. III in the schedule of the said order under the heading "terms of reference":-
"Whether the demand of above workmen referred to in term of reference no. 1 and II for regularization of their services from their respective initial date of joining with the management no. 1 in proper pay scale and POIT NEW NO.: 131/2016 Page 33 of 51 allowances alongwith consequential benefits including difference of salary, along with arrears is justified; and if yes, from which date and what directions are necessary in this respect?"
41. Though the management has taken objection that the present statement of claim is not maintainable as the workmen are neither the workmen nor the respondent no.1 is an industry as per the provisions of the Industrial Disputes Act.
42. The management has made a bald averment in the written statement that the management does not fall into the definition of Industry u/s 2 (j) of the Industrial Disputes Act. In the cross- examination of MW-1 conducted by ld. AR for the workman, he has stated that the job of the management/ APMC/R-1 is to provide infrastructure to the traders and buyers and maintain the place including cleaning etc. and charge market fee from the traders/buyers and that because of the cooperation between the management/APMC/R-1 and the traders the wants of the society is satisfied.
43. The Hon'ble Supreme Court in Bangalore Water-Supply & Severage Board v. R. Rajappa & Others, 1978 AIR 548, had held that:
1. 'Industry', as defined in Sec, 2 (j) and explained in Banerji, has a wide import.
(a) Where (i) systematic activity, (ii) organized by co- operation between employer and employee, (the direct and substantial element is chimerical)
(iii) for the production and/or distribution of goods and services calculated to satisfy human POIT NEW NO.: 131/2016 Page 34 of 51 wants and wishes (not spiritual or religious but inclusive of material things or services geared to, celestial bliss e.g. making, on a large scale, prasad or food), prima facie, there is an 'industry' in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
(d) If the Organisation is a trade or business, it does not cease to, be one because of philanthropy animating the undertaking.
11. Although sec. 2(j) uses, words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.
(a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment, so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' (provided the nature of the activity, viz. the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the- fold of 'industry' undertakings, callings and services adventure 'analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organizing the co-operation between employer and employee may be dissimilar. It does not matter, if off the employment terms there is analogy.
III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or other sense of motivation for or resultant of the POIT NEW NO.: 131/2016 Page 35 of 51 economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing mom.
(a) The consequences are (i) professions, (ii) Clubs (iii) educational institutions (iiia) co- operatives, (iv) research institutes (v) charitable projects and (vi) other kindred adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of sec. 2 (j).
(b) A restricted category of professions, clubs, co- operatives and even Gurukulas and little research labs, may qualify for exemption if in simple ventures substantially and going by the dominant nature criterion substantatively, in single simple ventures, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non- employee character of the unit.
(c) If in a pious or altruistic mission many employ them- selves, free or for small honoraria, or likely return mainly by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant, relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt-not other generosity, compassion, developmental passion or project.
POIT NEW NO.: 131/2016 Page 36 of 5144. From the triple test laid down in Bangalore Water (supra), it is clear that an organization indulging in activities analogous to trade or commerce is an Industry u/s 2 (j) of the Act. In view of the same, the management no. 1 i.e. APMC falls within the definition industry as provided u/s 2 (j) of the I.D. Act.
45. Now, moving on to the issue of illegal termination, this court has to see whether the management no. 1 has complied with the provisions of Section 25 F, G & H of the Industrial Disputes Act while terminating the services of the workmen concerned.
46. Even otherwise, in the present case the management did not comply with the provisions of Section 25F, G and H of the I.D Act. The management witness i.e. MW-1 has admitted in his cross-examination dated 18.07.2023 that "The management/ APMC/ R-1 does not have any record to show that the concerned workmen were given any notice or notice pay in lieu of notice, service compensation, while terminating their services. Vol. They were not our employees. No seniority list was exhibited/displayed by the management/ APMC/R-1 and no memo or chargesheet was given, nor any inquiry was conducted by the management/ APMC/R-1, while terminating their services. The management himself admitted that the conditions precedent to Section 25F are not followed, not only this, the services of the workman were terminated in violation of the principles of the last come first go as no seniority list was either displayed or exhibited before their termination. It is a well settled position of law that the provisions contained in Section 25F(a) and (b) are mandatory and termination POIT NEW NO.: 131/2016 Page 37 of 51 of service of workman, without giving one month's notice or pay in lieu thereof and retrenchment compensation is null and void/illegal/inoperative as held by the Hon'ble Supreme Court in Devinder Singh vs. Municipal Council, Sanaur, AIR 2011 SC 2532.
"19. Section 25 couched in negative form. It imposes a restriction on the employer's right to retrench a workman and lays down that no workman employed in any industry who has been in continuous service for not less then one year under an employer shall be retrenched until he has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired or he has been paid wages for the period of notice and he has also been paid, at the time of retrenchment, compensation equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months and notice in the prescribed manner has been served upon the appropriate Government or the authority as may be specified by the appropriate Government by notification in the Official Gazette.
20. This Court has repeatedly held that the provisions contained in Section 25F(a) and (b) are mandatory and termination of the service of a workman, which amounts to retrenchment within the meaning of Section 2(oo) without giving one month's notice or pay in lieu thereof and retrenchment compensation is null and void/illegal/inoperative."
47. Moreover, onto the factual aspect of the case for the purpose of Section 25G and H of the I.D. Act, the management witness admitted that "No seniority list was exhibited/displayed by the management/ APMC/R-1 and no memo or chargesheet was given, POIT NEW NO.: 131/2016 Page 38 of 51 nor any inquiry was conducted by the management/ APMC/R-1, while terminating their services."
48. The division of Patna High Court in Gaffar and Ors. vs. Union of India (UOI) and Ors., 1983(31)BLJR282 have highlighted the importance of Rule 77 of I.D Rules and failing to implement the same renders the termination/retrenchment illegal. The relevant portion of the judgement is reproduced below:
"4. The Rule 77 of the Industrial Disputes (Central) Rules, 1957 which is mentioned below requires preparation and publication of a list of all workmen in the concerned category at least 7 days in advance:
Maintenance of seniority list of workmen--The employer shall prepare a list of all workmen in the particular category from which retrenchment is contemplated arranged according to the seniority of their service in that category and cause a copy thereof to be pasted on a Notice Board in a conspicuous place in the premises of the Industrial Establishment at least seven days before the actual date of retrenchment. This provision has been included in the Rules so that the object of Section 25G of the Industrial Disputes Act may be effectively achieved. The Industrial rule relating to retrenchment of 'last come, first go' where other things are equal has been recognised for long and affords a healthy safeguard against discrimination. The principle was given statutory recognition by amendment of the Act in 1953. The Rule 77 was framed with a view to facilitate a retrenched workman to verify that he is not being discriminated against otherwise it may be impracticable for him to collect relevant information and' enforce his right. The minimum time of seven days allowed POIT NEW NO.: 131/2016 Page 39 of 51 for this purpose is not unnecessarily long, for the workman should get an adequate opportunity to scrutinize the correctness of the seniority list before he is thrown out Viewed from this angle, it should be held that the requirement mentioned in Rule 77 is mandatory and its violation renders an order of retrenchment illegal."
49. The similar view was also taken by the Hon'ble Supreme Court of India in Harjinder Singh vs. Punjab State Warehousing Corporation, AIR 2010 SC 1116. Now, as per the stance of the workmen their services were terminated by the management on 18.03.2005 after when the workmen concerned demanded their rightful dues i.e. entire deducted amount from their salary as the management was used to deduct a portion of their salary. Consequently, the services of the workmen were terminated on the same date i.e. 18.03.2005 and all of them were not allowed to perform their services at the premises of Management no. 1 anymore. The management no. 2 has averred that the workmen were never thrown out of their jobs by the managements but it were the workmen who themselves have abandoned their duties. However, in view of my findings on issue no. 2, this mere facade of employment would not rescue the managements. The services of the workmen were indeed terminated on 18.03.2005 by the management no. 1.
50. In view of the above and the mandate of the law, this tribunal holds that the management has clearly committed unfair labour practice as mentioned in Fifth Schedule at Item No. 5(a), (b) and (f) of the I.D. Act by terminating the services of the workman concerned by way of victimization and in colourable exercise of POIT NEW NO.: 131/2016 Page 40 of 51 employer's rights as no proper grounds/reasons were afforded to the workmen while terminating their services and in case of termination simpliciter, the management contravened Section 25 F, G and H of the I.D. Act.
51. The AR for the workman have argued that once the termination is held to be illegal the normal relief is to award reinstatement with continuity in service and full backwages. He placed reliance upon the judgement of Hon'ble High Court in Delhi Transport Corporation vs Ram Kumar And Another, 1982 (44) FLR 356 wherein it was held that once the termination is held to be illegal and unjustified, the normal rule is to award reinstatement with full backwages and continuity in service except when the workman is gainfully employed coupled with receiving wages equivalent to his last drawn salary at the time of his illegal termination. The Para 14 of the aforementioned judgement is as follows:
"......The principle is that when an employee after protracted litigation with the employer succeeds in showing that the termination of his service was unjustified he would normally be entitled to reinstatement with full back wages expecting of course if it could be shown that he had been gainfully employed in the meanwhile. Thus full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure, See Gujarat Steel Tubes Ltd. v. Its Mazdoor Sabha MANU/SC/0369/1979 : (1980)ILLJ137SC . Thus if the employer wishes to show that workman gainfully employed he must establish and prove that fact; no presumption of being gainfully employed can be raised. It is not dispute that no evidence has been POIT NEW NO.: 131/2016 Page 41 of 51 led or even shown on the record by the appellant which shows that workman was at any time in between employed elsewhere. In that view there would be no justification for denying him full back wages. The mere fact of long time having elapsed is certainly not a reason to deny him his normal relief of reinstatement because as said in Panitole Tea Estate case. "If his dismissal was wrongful then merely because proceedings for adjudication of the industrial disputes have taken a long time is by itself no reason for not directing his reinstatement if it is otherwise justified being in accordance with normal rule."
52. Further, reliance upon case of Deepali Gundu Surwase vs Kranti Junior Adhyapak & Ors., Civil Appeal No. 6767/2013 decided on 12.08.2013 wherein the Hon'ble Supreme Court has held that onus to prove that the gainful employment shifts to the management once the workman has pleaded that he/she is not gainfully employed elsewhere. The Para 33 of the aforementioned judgement is as follows:
"33 (iii) Ordinarily, an employee or workman whose services are terminated and who is desirous of getting back wages is required to either plead or at least make a statement before the adjudicating authority or the Court of first instance that he/she was not gainfully employed or was employed on lesser wages. If the employer wants to avoid payment of full back wages, then it has to plead and also lead cogent evidence to prove that the employee/workman was gainfully employed and was getting wages equal to the wages he/she was drawing prior to the termination of service. This is so because it is settled law that the burden of proof of the existence of a particular fact lies on the person who makes a positive averments about its existence. It is always easier to prove a positive fact than to prove a negative fact. Therefore, once the POIT NEW NO.: 131/2016 Page 42 of 51 employee shows that he was not employed, the onus lies on the employer to specifically plead and prove that the employee was gainfully employed and was getting the same or substantially similar emoluments.
53. The Hon'ble Delhi High Court in the case of Municipal Corporation of Delhi vs. POIT & Anr., W. P. (C) 6024/1999 awarded reinstatement once the services of the workman were found to be terminated in contravention to Section 25G of the I.D. Act. The relevant para is reproduced below:
"In the present case, the MCD has not been able to produce evidence to show that while terminating services of the Respondent workman it complied with the requirements of Section 25G ID Act. Mr. Rajiv Aggarwal, learned counsel for the workman submitted that the workman is in dire need of employment and in such circumstances the award of compensation would not be an adequate remedy. Given the difficulty in obtaining employment, the submission on behalf of the workman appears to be justified. In a case like this, lumpsum compensation in lieu of reinstatement cannot be an adequate or satisfactory remedy for Respondent No. 2 workman.
54. The workman has stated in his statement of claim and Affidavit that he remained unemployed since the date their services were illegally terminated by the management. The management witness no. 1 in his cross-examination dated 18.07.2023 at Page 3 has stated that "The management APMC/R-1 does not have any record to show that the concerned workmen are gainfully employed elsewhere." In the absence of any evidence that the workmen are gainfully employed elsewhere, this tribunal can not assume the same. Moreover, no exceptional circumstances or situations were POIT NEW NO.: 131/2016 Page 43 of 51 advanced by the AR for the management no. 1 as to why this tribunal should deviate from the normal rule of reinstatement and continuity in service along with full back wages once the termination is held to be illegal. In view of the aforementioned reasons, this tribunal holds that the workmen concerned are entitled for reinstatement along with continuity in service and full backwages.
(iii)"Whether the demand of above workmen referrred to in term of reference no. 1 and II for regularisation of their srvices from their respective initial date of joining with the management no. 1 in proper pay scale and allowances alongwith consequential benefits including difference of salary, along with arreas is justified; and if yes, from which date and what directions are necessary in this respect?"
55. The workman representative has argued that the management has committed unfair labour practice as enumerated in Section 2 (ra) read with item 10 of Fifth Schedule of the Industrial Disputes Act and further submitted that employing the workman for performing the regular and permanent nature of job as enumerated in the table above in para 4 and treating them as mere outsourced workmen and to continue them for several years with the object of depriving the status of permanent workmen amounts to unfair labour practice as regularizing their services would mandate the management to pay the salary in regular payscale to the workmen. He placed his reliance upon the judgment of Hon'ble Supreme Court titled as Chief Conservator of Forest and Anr., (1996) 2 SCC 293 and the judgment of Hon'ble Delhi High Court titled as Project Dir. Dep.
POIT NEW NO.: 131/2016 Page 44 of 51Of Rural Development v. Its Workmen, 2019 SCC OnLine Del 7796.
56. This tribunal has considered all the material on record as well as legal submissions of the parties and is of the opinion that this tribunal has power to regularize the services of the workman in the light of the judgment of Hon'ble Supreme Court titled as Chief Conservator of Forest and Anr. (supra), the judgment of Hon'ble Delhi High Court titled as Project Dir. Dep. Of Rural Development v. Its Workmen, (supra). The relevant portion of the aforesaid judgement is reproduced below:
"28. The decisions relied upon by the learned counsel for the respondents in Ajaypal Singh (supra), ONGC (supra) and Umrala Gram Panchayat (supra), also leave no manner of doubt that the Supreme Court has specifically observed that the prohibition laid down for regularization in Uma Devi (supra) does not apply to industrial adjudication and that the Industrial Tribunal has the power to direct regularization of services in cases where pursuant to unfair labour practices, employees have been made to render services for long periods of time on causal basis for work that should ordinarily be done by regular employees."
........
"61. We would now examine the process by which an Industrial Tribunal comes to its decisions and I have no hesitation in holding that the process employed is not judicial process at all. In settling the disputes between the employers and the workmen, the function of the Tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely POIT NEW NO.: 131/2016 Page 45 of 51 to interpret or give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace.."
57.. The Constitution Bench of the Hon'ble Supreme Court in the case of Bidi, Bidi Leaves' and Tobacco Merchants Association vs. The State of Bombay, Civil Appeals Nos. 415 to 418 of 1960 decided on 15.11.1961 has held that the tribunal has the power to create new rights and liabilities upon the employer. The relevant portion of the judgment is reproduced below:
"15. It is well settled that industrial adjudication under the provisions of the Industrial Disputes Act 14 of 1947 is given wide powers and jurisdiction to make appropriate awards in determining industrial disputes brought before it. An award made in an industrial adjudication may impose new obligations on the employer in the interest of social justice and with a view to secure peace and harmony between the employer and his workmen and full co-operation between them. Such an award may even alter the terms of employment if it is thought fit and necessary to do so. In deciding industrial disputes the jurisdiction of the tribunal is not confined to the administration of justice in accordance with the law of contract. As Mukherjea, J., as he then was, has observed in Bharat Bank Ltd., Delhi v. Employees of the Bharat Bank Ltd., Delhi the tribunal "can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations between them which it considers essential for keeping industrial peace". Since the decision of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay it has been repeatedly held that the jurisdiction of Industrial Tribunals is much wider and POIT NEW NO.: 131/2016 Page 46 of 51 can be reasonably exercised in deciding industrial disputes with the object of keeping industrial peace and progress (Vide: Rohtas Industries, Ltd. v. Brijnandan Pandey, Patna Electric Supply Co. Ltd.,Patna v. Patna Electric Supply Workers' Union ).
58. In Bhilwara Dugdh Utpadak Sahakari S. Ltd. vs Vinod Kumar Sharma Dead by L.R.s and Ors AIR 2011 SC 3546 Hon'ble Supreme Court held that, "3. This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country.
4. 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.
5. 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 concerned workmen 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.
6. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers."
POIT NEW NO.: 131/2016 Page 47 of 5159. In Oil and Natural Gas Corporation vs Krishan Gopal & Ors (2020) 3 SCR 661, Hon'ble Supreme Court summarised the legal position related to power of the industrial tribunal to grant regularization. The relevant paragraph reads as under:-
"The following propositions would emerge upon analyzing the above decisions:
(i) Wide as they are, the powers of the Labour Court and the Industrial Court cannot extend to a direction to order regularisation, where such a direction would in the context of public employment offend the provisions contained in Article 14 of the Constitution;
(ii) The statutory power of the Labour Court or Industrial Court to grant relief to workmen including the status of permanency continues to exist in circumstances where the employer has indulged in an unfair labour practice by not filling up permanent posts even though such posts are available and by continuing to employ workmen as temporary or daily wage employees despite their performing the same work as regular workmen on lower wages;
(iii) The power to create permanent or sanctioned posts lies outside the judicial domain and where no posts are available, a direction to grant regularisation would be impermissible merely on the basis of the number of years of service;
(iv) Where an employer has regularised similarly situated workmen either in a scheme or otherwise, it would be open to workmen who have been deprived of the same benefit at par with the workmen who have been regularised to make a complaint before the Labour or Industrial Court, since the deprivation of the benefit would amount to a violation of Article 14; and
(v) In order to constitute an unfair labour practice Under Section 2(ra) read with Item 10 of the Vth POIT NEW NO.: 131/2016 Page 48 of 51 Schedule of the ID Act, the employer should be engaging workmen as badlis, temporaries or casuals, and continuing them for years, with the object of depriving them of the benefits payable to permanent workmen."
60. Therefore, the industrial tribunal has power to grant status of permanency where the employer has indulged in unfair labour practices.
61. Now moving on to the factual matrix of this case, it has emerged that the workmen concerned joined into the employment of the management as enumerated in the table above in para 4, some of whom have joined way back in 1998 and since then they have worked continuously and uninterruptedly till 18.03.2005 i.e. the date of their illegal termination. The nature of the job performed by the workmen is permanent and perennial in nature as the same has been continuing for years at end and is very incidental to the functioning of the management. Neither the management no. 1 nor the management no. 2 has brought anything on record to show that the work and conduct of the workmen was not satisfactory.
62. In view of the above position and the material on record, this tribunal holds that the management has clearly committed unfair labour practice by employing the workmen as outsourced worker for performing the permanent and perennial nature of work and continued them for substantial number of years with the object of depriving them the status and privileges of a regular and permanent employee. This also finds strength from the judgment of Hon'ble Supreme Court in Chief Conservator of Forest (supra) wherein POIT NEW NO.: 131/2016 Page 49 of 51 the Hon'ble Supreme Court of India had held that employing workers on temporary basis for long periods and denying them the status and salary of a regular employee amounts to unfair labor practice as giving them the status and privileges of permanent employee would require the management to pay the workman higher than the one fixed under the Minimum Wages Act. Therefore, since the Management No. 1 has committed unfair labour practice against the workmen and the Management No.1 is the actual employer of the workmen, their services are entitled to be regularized/absorbed with the Management No. 1.
63. In these circumstances, this tribunal holds that the workmen whose particulars are mentioned above in para 4 are entitled for regularization in service on the rolls of management no. 1 on their respective posts with all consequential benefits either monetary or otherwise. Therefore, this terms of reference is decided in favour of the workmen and against the managements. Apart from it, it is observed that WW12 has proved the espousal in the present case.
Issue No. 3: Relief
64. To sum up the findings arrived above, this tribunal holds that the workmen concerned are indeed the employees of the management no. 1 and the contract entered into between the management no. 1 and management no. 2 is nothing but mere sham, bogus and camouflage in order to avoid the liabilities arising from the employer employee relationship. This tribunal further holds that the management has clearly committed unfair labour practice as mentioned in Fifth Schedule at Item No. 5(a), (b) and (f) of the I.D. POIT NEW NO.: 131/2016 Page 50 of 51 Act by terminating the services of the workmen concerned by way of victimization and in colourable exercise of employer's rights and even otherwise, the compliances under Section 25 F, G & H of the I.D. Act were not made. This tribunal further holds that the management did not follow the principles of natural justice as no domestic/departmental inquiry was conducted, nor the charges were proved before this tribunal which they could have done, and their services were terminated on 18.03.2005 with undue haste without offering any opportunity of being heard. In view of the same workmen concerned whose particulars are mentioned above in para no. 4 are entitled for reinstatement alongwith continuity in service and full back wages.
65. It is also held that the workmen concerned whose particulars are mentioned above in para 4 are entitled for regularization in service on the rolls of management no. 1 on their respective posts with all consequential benefits either monetary or otherwise. The management is directed to implement the award within 30 days of its publication with an interest @ 8 % per annum from the date of accrual i.e. from their respective initial dates of joining to till the final payment is made. The award is passed accordingly.
66. Copy of the award be sent to the appropriate Government for publication. File be consigned to the Record Room.
Announced in the open Tribunal on this 13.09.2023.
(Ajay Goel) POIT-I/RADC, New Delhi.
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