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On 19.7.1989 BHEL filed its reply before the Conciliation Officer inter alia stating that, respondents 1 to 14 herein were engaged by the contractor; that the contractor was engaged by BHEL; and, that there was no employer-employee relationship between BHEL on one hand and the said respondents on the other hand.

Ultimately, the matter was referred to the Labour Court by way of a reference under Section 4-K of the said 1947 Act. Before the Labour Court BHEL contended, that respondents 1 to 14 were malis (gardeners); that they were engaged by the contractor; that these malis were required to clean parks; that in the vast area of land owned by BHEL, they were required to keep the campus neat ant clean; that they had worked for a brief period 1.6.1988 to 24.10.1988; and, that they were casual workmen, who were not entitled to be given work on all the days and, therefore, there was no industrial dispute between BHEL and the said respondents within the meaning of Section 2-A of the said 1947 Act. By the written statement, BHEL further contended, that respondents 1 to 14 were never paid wages by BHEL; that they never worked under their supervision and control, and that the rights, if any, of the said respondents were only against their contractor. BHEL further contended that the period of contract commenced on 1.6.1988 and ended on 24.10.1988.

By the impugned judgment dated 27.9.2004, after stating the above facts, the High Court set aside the order of the ALC dated 1.12.2003 and directed BHEL to reinstate respondents 1 to 14 herein in service directly. Hence, this civil appeal.

Shri Sudhir Chandra, learned senior counsel appearing for BHEL, contended that the doctrine of merger has limited application to the facts of the present case. He submitted that, when the Division Bench of this Court upheld the award vide its judgment dated 21.7.2003, this Court had confirmed the operative part of the award of the Labour Court which directed BHEL to re-employ respondents 1 to 14 in their service or get the said workers employed through an intermediary, namely, the contractor. He submitted that the doctrine of merger applies to the operative part of the award and not to the reasoning or observations in the award. In this connection, learned senior counsel submitted that, an individual dispute was raised by the workers under Section 2-A of the said 1947 Act complaining about termination of services w.e.f. 1.12.1988. Learned senior counsel further pointed out that, before the Labour Court it was the case of the workers themselves that they were engaged by the contractor but the work which they had performed was for BHEL. In this connection, reliance was placed on the observations made by the Labour Court in its award (see page 76 of the SLP paper book). He submitted that, in the above circumstances, the Labour Court had treated BHEL as the principal employer and the contractor as an immediate employer. He submitted that, operative part of the order has become final by reason of the judgment of this Court dated 21.7.2003. He urged, that the award was given on the basis of an individual dispute under Section 2-A of the said 1947 Act; that the terms of the reference indicate that the only question which the Labour Court was required to decide was whether termination of services was justified and lawful and, if not, the benefits/ relief which each of the workers were entitled to. Learned senior counsel submitted that the workers in the present case cannot claim direct employment from BHEL. He urged that the Labour Court while granting reinstatement made an enabling provision by which the said workers (respondents 1 to 14) were directed to be re-employed by BHEL in the service directly or get them employed under their contractor. It is not in dispute that BHEL has got said workers employed through that contractor. The said workers continue to be the employees of the contractor even today. Even today, they are getting the work and salary from the contractor.

Learned senior counsel for the appellant further submitted that, the subject of the dispute before the Labour Court was the validity of the termination and not direct employment from BHEL. He submitted that, if the said workers were to ask for direct employment from BHEL, they were required to raise a regular industrial dispute not under Section 2-A but under Section 2(l) of the said 1947 Act. He submitted that the cause of the said workmen herein was not espoused by any union. If the workmen wanted direct employment from BHEL or regularization, they were required to raise a substantial industrial dispute before the tribunal; they were required to join the regular union of BHEL as party respondent and in such an event the matter was required to be adjudicated upon not by the Labour Court but by the tribunal. He further pointed out, that there is a regular union in the industry; that the company was maintaining a waiting list of workers of BHEL, who were required to be made permanent; that respondents 1 to 14 were never recruited directly by BHEL; that they had never applied for employment against vacancies in BHEL, and if they had sought direct employment with BHEL, then they were required to raise an industrial dispute seeking abolition of contract labour after making the regular union a party respondent. He, therefore, submitted that an individual dispute, though need to be an industrial dispute under Section 2-A, cannot be converted into an industrial dispute under Section 2(l) without a proper reference.

As stated above, the central question which we have to answer concerns the subject of the dispute decided by the Labour Court vide award dated 5.7.1996. The right to employment on setting aside of the earlier order of termination, the right to wages and the right to obtain work from BHEL is different from the right to status as employees of BHEL. Under the said award respondents 1 to 14 were entitled to obtain work from BHEL through its contractor. They were entitled to wages under the said award. However, under the said award of the Labour Court there is no abolition of contract labour. The Labour Court has not conferred the status of a workman qua BHEL. The Labour Court has not granted permanency to them. Per contra, after holding that the work of mali was supervised and controlled by BHEL, the award makes an enabling provision by directing BHEL to re-employ the said workmen in their service or employ them through the contractor. In fact, the operative part of the award further states that it is the contractors who had failed to retain the workmen and terminated their services in breach of Section 6-N of the said 1947 Act. This enabling direction is given on the footing that the work carried out by these workmen was under control and supervision of BHEL. The observations made in the judgment of the High Court as well as in the judgment of this Court in Bharat Heavy Electricals Ltd.2 (supra) have to be read in the context of the operative part of the award. It is true that, observations have been made by this Court in the above judgment in agreement with the views expressed by the High Court that BHEL had resorted to a camouflage to get the work done through contractor. However, since the work was obtained under supervision and control of BHEL, the award directed these workmen to be employed directly or through the contractor. Therefore, the observations of the High Court and this Court have to be read in the light of the operative part of the award.