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The respondent company filed an affidavit in reply dated 12-5-1995 of its Manager Personnel which was treated to be its written statement and resisted the complaint filed by the petitioner Union denying all the allegations of unfair labour practice levelled by the petitioner Union. It specifically denied the plea of the petitioner Union that Chapter V-B of the Industrial Disputes Act was applicable to the respondent company Mumbai Unit and that section 25-O under the said Chapter was therefore not applicable to them and therefore there was no question of getting permission from the State Government before closing down the Unit. It was the specific case of the company that it had employed far less than 100 workmen at Mumbai and it had never employed 100 or more than 100 workmen in the last preceding 12 months to attract the mandatory provisions of section 25-O of the Act. The respondent company however admitted the fact that it owned two other Units at Jodhpur (Rajasthan) and Ahmedabad (Gujarat) employing at both the places certain number of workmen. It also admitted that at its Head Office at Mumbai about 16 persons in the category of workmen were employed. In its affidavit in reply the respondent company had set out its case in detail before the Industrial Court. It was specifically averred that the total number of employees working in the factory at Mumbai was less than 50 and therefore it was not necessary for the company to have issued notice under section 25 FFA of the Industrial Disputes Act. The respondent company has given figure of 35 workmen in the factory and about 10 employees in the Staff category. It was admitted by the company that it had engaged a contractor to do certain work through the contract labour engaged by the said contractor. It was denied that the work done by the contract labour was permanent, perennial and regular nature. It was admitted that there were certain Mathadi workers who were covered under the provisions of Maharashtra Mathadi Hamal and other Mannual Workers Regulations of Employment and Welfare Act, 1969. All such Mathadi workers were provided by the Mathadi Board which fully controlled the Mathadi workers. It was therefore specifically denied by the respondent company that the contract labour and the Mathadi workers could be added to the total of its own employees to sum up the figure of 100 workmen to attract the provision of Chapter V-B of the Act. It was further specifically averred by the respondent company in its affidavit that there were 30 employees working in the head office. It was further asserted that not all the 30 employees fell in the category of workmen under the Act. Out of 30 employees seven employees were said to be not falling in the category of workmen but were said to be holding the Managerial or Administrative Posts. Further it was pointed out that the head office staff was required to perform the activities relating to other than manufacturing activities of the three Units owned by the company at Mumbai, Jodhpur and Ahmedabad. It also pointed out that the employees of the head office were not transferable to the factories and that their service conditions were distinct and separate from that of the employees working in the factories. It was also specifically averred by the affiant for the respondent company that all the three units were independently functioning having their own separate and distinct establishments and activities and there was no interdependence amongst them. All the three units were independently, separately and distinctly functioning and none of them was dependent on the other. It was positively stressed that there was no functional integrality between the three Units of the respondent company. It was therefore, clearly asserted that the employees/ workmen working in the two other units cannot be included to count the total number of employees/workmen employed by the respondent company so that Chapter V-B of the Industrial Disputes Act could be made applicable to the respondent company. After giving all the details and particulars and denying the various factual and erroneous statements made by the petitioner Union the respondent company prayed for dismissal of the complaint.

1. Mumbai factory workmen Contract Labour Mathadi Workers Head Office

2. Ahmedabad Factory workmen

3. Jodhpur Factory workmen A sum total of the aforesaid figures comes to 188. The petitioner Union has given a figure of 196 as the total employment of the respondent company. Even ignoring the difference in the figure of employment and even accepting the figures given by the petitioner Union I am not satisfied that the total number of workmen employed by the respondent company at its Mumbai factory would exceed 100 as required under the Chapter V-B of the Act to attract section 25-O. Even assuming the figure of 44 employees in the factory at Mumbai obviously the figure cannot be stretched to 100, as I am not inclined to include the contract labour and the Mathadi workers. I am further not inclined to include the head office staff. As far as the contract labour is concerned the respondent company is not the direct employer of such contract labour which is employed by an independent entity that is the contractor. The arrangement between the principal employer and the contractor obviously is that the principal employer engaged the contractor to get certain work to be done by such contractor within four corners of the law. The contractor in turn employs his own labourers and gets the work done for remuneration which is paid to them by the contractor, who in turn receives the agreed amount for the completion of the work. Broadly and distinctly the contractor is a separate legal entity and he employs his own labourers and they are not directly or indirectly employed by the principal employer and therefore, they do not become the employees of the principal employer. There is no privity of contract between the principal employer and the contract labourers employed by their contractor, there is no master and servant or employer and employee relationship between them. In these circumstances it cannot be said that the contract labourers are the workmen employed by the respondent company. Where such contract labour is legal, valid and where such contract labour is to be treated as the permanent and regular employees of the principal employer are the distinct and separate issues which will require separate adjudication and they cannot be decided as incidental question in such proceedings. As held by the Supreme Court in the case of The Workmen of the Food Corporation of India v. M/s. food Corporation of India, reported in 1985(II) L.L.J. (S.C.)4 the contract labourers cannot be held to be the workmen employed by the principal employer. It would be useful to quote paragraph 12 from the said judgment.

5. The next group of persons claimed to be included in the total number of workmen employed by the respondent company is that of Mathadi workers. They are 20 in number and they are allotted by the Mathadi Board to the respondent company under the provisions of the Maharashtra Mathadi Hamal and other Mannual Workers Regulations of Employment and Welfare Act, 1969 (for short the Mathadi Act). To protect such unorganised class of Mathadi workers the State of Maharashtra has enacted the aforesaid Act in order to ensure that such scattered class of workers are not exploited and are sufficiently protected in the larger interest of the society. The Act has established a Board which is empowered to enroll such persons called Mathadi/Hamal who do the work of loading and unloading etc. Any employer or any establishment needing the work of loading, unloading has to request the Board to supply such labour as required by them on the terms and conditions which are statutorily prescribed. The Board would send its own Bill for the work done by such Mathadi workers and the employer requiring such Mathadi workers would pay the stipulated amount to the Board for the services rendered by such Mathadi workers. Considering all the provisions of the Mathadi Act and the Rules made thereunder it is crystal clear that the Mathadi workers are enrolled as candidates available for Mathadi work and they are supplied by the Board in accordance with the provisions of the Act. It is the Board which supplies the Mathadi labour on its own terms and conditions statutorily determined. It is the Board which pays remuneration to the Mathadi workers for the work done by them with a particular employer or establishment. It is the Board which provides for the welfare scheme such as ESI, PF, Leave, Gratuity etc. It is the Board which alone is empowered to initiate disciplinary proceedings against such Mathadi workers, who misconduct themselves. The employer's duty is only to pay the required sum claimed by the Board. To be precise there is no privity of contract between the Mathadi workers and the principal employer or the establishment. The employer does not issue any appointment order and does not pay any remuneration directly to such workers. In a way he is not directly concerned with them except that they do the work which is required to be done by them for him. In the aforesaid broad circumstances and provisions of the Mathadi Act according to me, the test laid down by the Supreme Court in the case of Food Corporation of India (supra) would also be aptly applicable to the case of the Mathadi workers also. In the case of Contract Labour the Contractor is an agent while in the case of Mathadi workers it is the Board which acts as an Agent. There is no relationship of employer and employee or master and servant between them. I therefore hold that neither the contract labourers nor the Mathadi workers can be included in the list of the workmen employed by the respondent company for the purpose of Chapter V-B of the Industrial Disputes Act. I am further fortified in my view by a judgment of the learned Single Judge of this Court (B.U. Wahane, J.) in the case of M/s. Jayram Karsan Tank v. Deputy Regional Director, reported in 1992 Lab.I.C. 2404. The question before the learned Single Judge was whether the Mathadi workers were entitled to get the cover of the E.S.I. Act and whether employer was liable to pay E.S.I. contribution in respect of such Mathadi workers ? The learned Judge has observed as under :

"Where the employee was deputed by the Mathadi Board to work with the employer and he was neither on the muster roll of the said employer nor any fixed hours were prescribed for his work and during the working period he was doing work in other factories also, the employer was not liable to pay E.S.I. contribution in respect of such employee. Such employees who are engaged in building of raw timber are not permanently attached to any factory or establishment and their working hours are not fixed like the factory workers because they are called upon to perform their duty as and when there is a work, otherwise they do not go to factory or establishment days together. Their wages are also not paid by any one employer like factory workers, because they go round the factories and establishments, and collect wages to the extent they had done the work on piece rated basis. Their employers change every week. Thus, the nature of their work is such that they are neither employed nor work incidentally in the manufacturers process of the factory. Besides, the intermittent and irregular payment of wages involved in respect of these workers, makes the deduction of contribution, if any, practically impossible. Also, the E.S.I. scheme can be made applicable to those workers who are regular and borne on the muster roll of the establishment."