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ISSUE :

10. The main issue for consideration before this Court in the present reference is “whether workers, engaged on a casual or temporary basis by a contractor (HCI) to operate and run a statutory canteen, under the provisions of the Act, 1948, on the premises of a factory – Air India, can be said to be the workmen of the said factory or corporation”.

SUBMISSIONS :

11. Shri Jayant Bhushan, learned Senior Counsel for the appellants- workmen has two alternative submissions; firstly, that in the event of a statutory requirement to provide for a canteen or any other facility, the employees of the said facility would automatically become employees of the principal employer, irrespective of the existence of any intermediary that may have been employed to run that facility. Secondly, the test of sufficient control by the principal employer over the operation of the canteen and consequently over the appellants-workmen, should prevail. Therefore, the Court should pierce the veil and take note of the fact that the contractor was a mere camouflage, and the principal employer was in real control of the canteen and its workmen. Reference is made to the following cases in support of his submissions- Saraspur Mills Co. Ltd. v. Ramanlal Chimanlal, (1974) 3 SCC 66; Hussainbhai v. Alath Factory Thezhilali Union, (1978) 4 SCC 257; M.M.R. Khan v. Union of India, 1990 Supp SCC 191; and Parimal Chandra Raha v. LIC, 1995 Supp (2) SCC 611.

31. This Court in the Indian Petrochemical case (supra), while explaining the decision in Parimal Chandra Raha’s case (supra), has stated that in Raha’s case, the Supreme Court did not specifically hold that the deemed employment of the workers is for all purposes nor did it specifically hold that it is only for the purposes of the Act, 1948. However, a reading of the judgment in its entirety makes it clear that the deemed employment is only for the purpose of the Act, 1948. Therefore, it has to be held that the workmen of a statutory canteen would be the workmen of the establishment for the purpose of the Act, 1948 only and not for all other purposes. To arrive at this conclusion, the Court has followed the view expressed by this Court in M.M.R Khan’s case (supra) and Reserve Bank of India v. Workmen, (1996) 3 SCC 267.

32. The proposition of law in the Indian Petrochemicals case (supra) has been reiterated in the Hari Shankar Sharma’s case (supra). This Court stated that:

“6. The observations in Parimal Chandra Raha case relied on by the appellants which might have supported the submission of the appellants have been explained by a larger Bench in Indian Petrochemicals Corpn. Ltd. v. Shramik Sena where it was held, after considering the provisions of the Factories Act and the previous decisions on the issue, that the workmen of a statutory canteen would be the workmen of the establishment only for the purpose of the Factories Act and not for all other purposes unless it was otherwise proved that the establishment exercised complete administrative control over the employees serving in the canteen.”

47. We have already referred to the decision of this Court in Parimal Chandra Raha case (supra), and, therefore, we are not referring to the said decision once over again. However, we add that in the Parimal Chandra Raha case (supra), this Court made a general observation that under the provisions of the Act, 1948, it is statutorily obligatory on the employer to provide and maintain a canteen for the use of his employees. As a consequence, the Court stated that, the canteen would become a part of the principal establishment and, therefore, the workers employed in such canteen would be the employees of the said establishment. This Court went on to observe that the canteen was a part of the establishment of the Corporation, that the contractors engaged were only a veil between the Corporation and the canteen workers and therefore, the canteen workers were the employees of the Corporation. This Court, while arriving at the said conclusion laid emphasis on the contract between the corporation and the contractor, whereby it was shown that the terms of the said contract were in the nature of directions to the contractor about the manner in which the canteen should be run and the canteen services should be rendered to the employees. Furthermore, it was found that majority of the workers had been working in the said canteen continuously for a long time, whereas the intermediaries were changed on numerous occasions.