Bombay High Court
Oil And Natural Gas Corporation Limited vs Petroleum Employees Union And Ors. on 13 December, 2002
Equivalent citations: 2003(4)BOMCR665, [2003(96)FLR847], (2003)ILLJ597BOM, 2003(2)MHLJ70
Bench: R.J. Kochar, S.A. Bobde
JUDGMENT
1. The Appeal No. 1285 of 1996 arises out of Writ Petition No. 401 of 1996 which is in respect of 185 workers referred to in Exhibit "A" to the writ petition. The Appeal No. 1286 of 1996 arises out of Writ Petition No. 1240 of 1996 in respect of 245 workmen referred to in Exhibit "A" to the writ petition. Since the writ petitions were decided by a common judgment and order and since the issue involved in both the writ petitions is the same the appeals are disposed of by this common judgment and order.
2. These appeals are preferred by Oil and Natural Gas Corporation Limited against the Judgment and Order dated 31st. August, 1996 of the learned single Judge of this Court holding that the appellant, Oil and Natural Gas Corporation Limited is prohibited by a Notification dated 8th September, 1994 from employing contract labour and directing that the concerned contract workers be absorbed as regular workmen of the Oil and Natural Gas Corporation Limited with consequential benefits.
3. The appellant is a Government of India undertaking. Its main activity is to explore oil and natural gas in various parts of the country and to draw the same from the earth. In the State of Maharashtra, its main activity is offshore drilling for oil at Bombay High. It employs more than 2000 workers at Bombay High as well as in their other establishments including its administrative offices in the State of Maharashtra. It regularly employs a large number of contract workers in various departments.
4. In the light of the recommendation made by the Sub-Committee constituted by the Central Government for studying the working of labour contract system in the jobs of maintenance and utility installations, fire-fighting, electrician, plumber, floor decoration, sewerage plant, electronic and telecom operators, loading and unloading crane labour, etc., the Union of India issued a Notification dated 8th September, 1994 prohibiting the employment of contract labour for various work into the following categories.
1. Fire-Fighting (Fire Supervisor, Fireman, Fire Technician).
2. Typists.
3. Clerks (including Accounts Clerk).
4. Steno Typists/Stenographers.
5. Data Operators.
6. Computer Operators.
7. Store Keepers.
8. Boiler Operators.
9. Attendants/Helper s/Peons.
10. Radio Operators.
11. Drivers (whereof driving work is not done by hiring vehicles on contract but by vehicles owned by Oil and Natural Gas Commission).
5. The respondents in the Appeal i.e. the Petroleum Employees Union and the General Employees Association, both registered trade unions, filed writ petitions in this Court praying for a declaration that the workers referred to in the list be declared as direct and regular employees of the appellant with effect from their initial appointment in the establishment of the appellant. They also prayed for absorption of the workers with effect from the actual date of their entering into the service of the appellant as contract workers and all consequential benefits and the direction to the appellant to continue to engage the services of the workers. In view of the law laid down by this Court in several decisions referred to by the learned single Judge allowed the writ petitions with directions that the contract workers are entitled to be absorbed in the services of the appellant in view of the prohibition on engaging contract labours in respect of the categories enumerated above under a Notification, dated 8th September, 1994 referred to above. There is no doubt that the judgment of the learned single Judge was in accordance with the law as it then stood, as laid down by this Court as also in accordance with the decision of the Supreme Court in Air India Statutory Corporation v. United Labour Union .
6. These Appeals were admitted by this Court on 19th June, 1997. This Court, thereafter passed an interim order in terms of the decision of the Supreme Court in Hindustan Petroleum Corporation v. General Employees Association and Ors. This Court also directed the appellant not to terminate the services of any employee except on a ground permissible under the Industrial Disputes Act for misconduct. This court recorded the statement of the appellant that the appellant would workout a pay scale of the workers in respect of whom the directions have been given by the learned single Judge. Under the interim orders of this Court, the appellant have been directed to treat the workmen as their direct employee with effect from the date of the judgment of the learned single Judge and with the further direction not to terminate them as above.
7. Mr. Cama, learned Counsel for the appellant substantially made only one submission, before us. According to the learned Counsel, even if the decision of the learned single Judge was in accordance with the law when it was rendered, the said decision must be set aside in view of the judgment of the Supreme Court in the case of Steel Authority of India Limited v. National Union Water Front Workers and Ors., AIR 2001 SC 5527, hereinafter referred to as the SAIL case. We find substance in the submission of the learned Counsel for the appellants in view of the decision of the Supreme Court in the case of Steel Authority of India Limited (supra). In that case, the Supreme Court inter alia framed the following question for decision :--
"6.(iii) Whether automatic absorption of contract labour, working in the establishment of the principal employer as regular employees, follows on issuance of a valid notification under Section 10(1) of the CLRA Act prohibiting the contract labour in the concerned establishments ?
Apart from declaring a Notification dated 9th December, 1976 as not being in accordance with the Section 10 of the Contract Labour (Regulation and Abolition) Act, hereinafter referred to as "the CLRA Act", the Supreme Court has inter alia held vide paragraph 116 as follows:--
"(3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether the expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under Sub-section (1) of Section 10, prohibiting employment or contract labour, in any process, operation or other work in any establishment, consequently the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment.
(4) We over-rule the judgment of this Court in Air India's case (supra) prospectively and declare that any direction issued by any industrial adjudicator / any court including High Court for absorption of contract labour following the judgment of in Air India's case (supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final."
It is clear that in view of the fact that contract labour was abolished in respect of the categories referred to above, the workmen in the present case admittedly being contract workman, are not entitled for automatic absorption thereupon.
8. Mr. Pakale, learned Counsel for the respondents, mainly opposed the application of the Judgment of the Supreme Court in the SAIL case on two grounds. Firstly, according to the learned Counsel by the Judgment in the case of SAIL, the Supreme Court overruled its earlier Judgment in Air India's case (supra) prospectively. Therefore, the workmen represented by the respondents, who have been already absorbed and in fact given all consequential benefits on that basis cannot be disturbed. According to the learned Counsel the contract labour has been absorbed in pursuance of the judgment of the learned single Judge and the interim orders passed by this Court in the present appeal and therefore the cases of the contract labour represented by the respondent Union are protected by the direction of the Supreme Court in the SAIL case. The learned Counsel relies on that part of the direction, reproduced above, where the Supreme Court has over-ruled its judgment in the case of Air India's case prospectively and has further stated that any direction issued by, inter alia, a High Court for absorption of contract labour shall hold good and that it shall not be set aside, altered or modified on the basis of the judgment in the SAIL's case where such direction has been given effect to and it has become final.
9. Having considered this question at length, it is not possible for us to accept the submission of the learned Counsel for the respondents. The language used by the Supreme Court in giving the aforesaid direction is unambiguous. Their Lordships have clearly stated that the absorption shall not be set aside in cases where the absorption has been implemented and has become final. In other words, it has been held that if contract labour has been absorbed in pursuance of a direction which has been given effect to and has also become final, such absorption shall not be set aside. In the present case it is clear that though such a direction has been implemented pending the appeal, it has not become final. These appeals have been admitted against the judgment of the learned single Judge and obviously therefore the direction for absorption cannot be said to have become final. The interim orders of this Court initially directing the appellant to treat the respondents, the contract labours as their direct employee with effect from the date of the judgment and any other interim orders cannot be construed as a direction which has become final and therefore it is not possible to hold that the absorption, if any, is not liable to be set aside.
10. In fact if we accept the submission of the learned Counsel for the respondents we would be deciding these appeals contrary to the law laid down by the Supreme Court in SAIL case.
11. Mr. Pakale, learned Counsel for the respondents further submitted that the appellants have after the notification dated 8th September, 1994 by which contract labour was abolished in the specified category therein, has continued to employ the workmen represented by the respondents. This fact has been strongly denied by Mr. Cama, learned Counsel for the appellant who has stated that the workmen had not been employed by the appellant at any stage. If at all, they were employed, they may have been employed by the contractors who were engaged by the appellant. Mr. Cama, learned Counsel for the appellant further submitted that even after this statement on behalf of the respondent be correct, it cannot result protecting such absorption which has been held to be illegal by the Supreme Court. According to the learned counsel the appellant can only be proceeded against under the provisions of CLRA Act. He drew our attention to the following observations of the Supreme Court in the case of Steel Authority of India Limited (supra):--
"89. In Dena Naths case (supra) a two-Judge bench of this Court considered the question, whether as a consequence of non-compliance of Sections 7 and 12 of the CLRA Act by the principal employer and the licensee respectively, the contract labour employed by the principal employer would become the employees of the principal employer. Having noticed the observation of the three-Judge Bench of the Court in The Standard-Vaccume's case (supra) and having pointed out that the guidelines enumerated in Sub-section (2) of Section 10 of the Act are practically based on the guidelines given by the Tribunal in the said case, it was held that the only consequence was the penal provisions under Sections 23 to 25 as envisaged under the CLRA Act and that merely because the contractor or the employer had violated any provision of the Act or the Rules the High Court in proceedings under Article 226 of the Constitution could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer. The Court thus resolved the conflict of opinions on the said question among various High Courts. It was further held that neither the Act nor the Rules framed by the Central Government or by any appropriate Government provided that upon abolition of the contract labour, the labourers would be directly absorbed by the principal employer."
The Supreme Court further observed as follows :--
"98. The principle that a beneficial legislation needs to be construed liberally in favour of the class for whose benefit it is intended, does not extend to reading in the provisions of the Act what the legislature has not provided whether expressly or by necessary implication, or substituting remedy or benefits for that provided by the legislature. We have already noticed above the intendment of the CLRA Act that it regulates the conditions of service of the contract labour and authorises in Section 10(1) prohibition of contract labour system by the appropriate Government on consideration of factors enumerated in Sub-section (2) of Section 10 of the Act among other relevant factors. But, in the presence of some or all those factors, in our view, provide no ground for absorption of contract labour on issuing notification under Subsection (1) of Section 10. Admittedly when the concept of automatic absorption of contract labour as a consequence of issuing notification under Section 10(1) by the appropriate Government, is not alluded to either in Section 10 or at any other place in the Act and the consequence of violation of Sections 7 and 12 of the CLRA Act is explicitly provided in Sections 23 and 25 of the CLRA Act, it is not for the High Courts or this Court to read in some unspecified remedy in Section 10 or substitute for penal consequences specified in Sections 23 and 25 a different sequel be it absorption of contract labour in the establishment of principal employer or a lesser or a harsher punishment. Such an interpretation of the provisions of the statute will be far beyond the principle of ironing out the creases and the scope of interpretative legislation and as such clearly impermissible. We have already held above, on consideration of various aspects, that it is difficult to accept that the Parliament intended absorption of contract labour on issue of abolition notification under Section 10(1) of CLRA Act."
It is, therefore of no avail for the respondents to urge that they have been employed by the appellants.
12. The last submission made by the learned Counsel for the respondents is that the employment of the workmen represented by the respondents was in fact a direct employment by the appellants and that the employment through a contractor was sham and meant to be a mere ruse or camouflage to evade compliance of the CLRA Act. The learned Counsel for the appellants objects to the consideration of this question on the ground that it has not been raised in the writ petition. The learned Counsel submits that on the other hand the writ petition proceeds on the assumption that the workmen represented by the respondents were contract labour. Whatever be the merits of this matter, we are of view that the respondents are not entitled to invite this Court to decide this question. If they wish to raise this question they must do so in accordance with the observation of the Supreme Court in SAIL's case (supra), which reads as follows:--
"116. (5) On issuance of prohibition notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question 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 contractor is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder."
The Supreme Court has in a subsequent paragraph of the Judgment observed that the High Court cannot conveniently be the industrial adjudicator. Their Lordships have observed as under:--
"117. We have used the expression "industrial adjudicator" by design as determination of the questions aforementioned requires inquiry into disputed question of facts which cannot conveniently be made by High Courts in exercise of jurisdiction under Article 226 of the Constitution. Therefore, in such cases, the appropriate authority to go into those issues will be industrial tribunal/court whose determination will be amenable to judicial review."
13. The reliance on the decision of the Supreme Court in the Secretary, Haryana State Electricity Board v. Suresh and Ors., 1999 (I) CLR 959, by Mr. Pakale is of no avail since in that case it was found by the Labour Court that the contractor was a mere name lender.
14. In the result, we find that the appeals deserve to be allowed and the judgment of the learned single Judge is liable to be set aside not because there is any error of law committed by the learned single Judge but because of the supervening circumstance that has arisen thereafter. The learned single Judge was absolutely right in his judgment as he followed the judgment of the Supreme Court in the case of the Air India (supra) which was the good law holding the field then. After the decision rendered by the learned single Judge, 5-Judges Bench of the Supreme Court has overruled the judgment of the Air India case in the case of the SAIL (supra) and the latter is the law on the date of hearing and final decision of these Appeals. The pronouncement and declaration of the law by the 3-Judges Bench of the Supreme Court has been held to be erroneous and has been set aside by the 5-Judges of the Supreme Court and we are obviously bound by the latter that holds the field at present. Better wisdom of 3 Judges must yield to the higher wisdom of 5 Judges, says the law of precedents. The journey of the contract labour appears to be through the three milestones :
(1) Under the prohibitory Notification contractor stood abolished. (2) Under the Air India judgment the labour stood absorbed. (3) Under the SAIL the contract labour stands abolished.
Shri Pakale for the Unions has made fervent appeal to consider the plight and agonies of the contract labour workers and their families, who would be thrown in the street as they would be thrown out of employment after putting in long service and that at such age and stage of their life when they have more liabilities of their children who have become of marriageable age. Howsoever sympathetic we might become, our sympathies would dry up and end in the judgment of the SAIL. In the judgment of the Air India, the Supreme Court indeed had kindled the light of hopes in the hearts of the contract labourers that they would be absorbed in employment as a consequence of the prohibitory order issued by the Central Government. The SAIL has however extinguished that light and resultantly they are thrown on the heap of millions unemployed. We cannot do any better for them as we cannot interpret to legislate that the contract labour when prohibited should automatically stand absorbed. Obviously that cannot be done on account of the provisions of the enactments, viz., the Industrial Disputes Act, 1947 and the Contract Labour (Regulations and Abolition) Act, 1970. It is significant to note that there is hardly any problem of the contract labour in the industries governed by the Bombay Industrial Relations Act, 1946 as that law includes the contract labour in the definitions of "employee" and the "employer". It is no use merely to issue prohibitory notifications prohibiting employment of contract labour. The law also must provide for consequence of their absorption in the employment and not their automatic abolition from employment forever. Unless the legislature intervenes this problem would haunt the litigations perennially. Though we agree with the sentiments of the learned Counsel for the Unions, we are helpless. The best we can do is to grant liberty to the respondents to raise an industrial dispute as to the genuineness or otherwise of their mode of employment as contract labour for which the learned Counsel for the appellant has no objection. They may raise such dispute as may be advised in this regard. Since a large number of contract labour are concerned herein, we would direct the Appropriate Government to refer their industrial dispute, if raised, as expeditiously as possible in exercise of its powers under Section 10 of the Industrial Disputes Act, 1947, to an Industrial Tribunal for adjudication and the Tribunal shall also decide all the issues in the dispute finally on merits, as expeditiously as possible. With the aforesaid directions the above appeals are allowed. Rule in the writ petitions are discharged.
15. On the application of Mr. Pakale, learned Counsel for the respondents, this order is stayed for a period of six weeks to enable the respondents Union to approach the Supreme Court.
In the circumstances of the case, however, there shall be no order as to costs.
P. A. to give ordinary copy of this order to the parties concerned.