Violations Of The Contract Labour Act By Contractor, Does Not Per See Confer Employment Rights;Guwahati High Court Clarifies

The Guwahati High Court bench comprising of Justice Michael Zothankhuma upheld the Industrial Tribunal's decision that dismissed the claim of six contract labourers seeking reinstatement and regularization with ONGC. It ruled that the labourers failed to prove any employer-employee relationship. Further, any alleged violations of the Contract Labour (Regulation and Abolition) Act, 1970 by the contractor does not automatically entitle contract workers to an employee status. Background Six contract labourers (petitioners) challenged an award passed by the Central Government Industrial Tribunal, Guwahati, which dismissed their claim for reinstatement and regularization as employees of the Oil and Natural Gas Corporation (ONGC). The petitioners were directly employed by ONGC in 1985-1986 and were later shifted to contract work; soon, they were disengaged in 1995/1996. They argued that this shift was a sham designed to obscure their true employer-employee relationship with ONGC. The petitioners relied on an earlier order by the Guwahati High Court, where it directed the Assistant Labour Commissioner (Central), Guwahati, to investigate their employment status. The Commissioner's report indicated that the petitioners had worked for ONGC both under a direct payment system and later under a contractor (Mr. Phukan), primarily performing loading, unloading, and handling tasks. This work formed the basis of their claim for reinstatement. Arguments Firstly, the petitioners contended that they were initially directly employed by ONGC and that the engagement under the contractor from 1987 onward was only a facade to disguise the ongoing direct employment relationship. Secondly, they argued that since the contractor did not have the requisite license under Section 12 of the Contract Labour (Regulation and Abolition) Act, 1970, during the early years of their engagement, the contract system was invalid, and ONGC should be recognized as their true employer. Lastly, they also pointed to a government notification issued in 1994 that prohibited certain categories of work, such as storekeeping, from being outsourced to contract labour. They argued that since they assisted storekeepers, this prohibition applied to their work as well. In support, the petitioners cited several Supreme Court decisions, including Hussainbhai, Calicut v. Alath Factory Thezhilali Union (1978 AIR SC 1410), Steel Authority of India Ltd. v. National Union Waterfront Workers (2001 INSC 407), and Gujarat Electricity Board, Thermal Power Station v. Hind Mazdoor Sabha (1995 AIR SC 1893). They argued that when workers produce goods or services for a business, the presence of contractors is irrelevant if the “real employer” is the principal company. However, ONGC denied any direct employment relationship with the petitioners. They maintained that the workers were always employed by the contractor. Said contractor had been supplying labourers to ONGC since 1985, despite his license being obtained only in 1989. ONGC argued that the absence of a contractor's license did not make ONGC the employer. They cited the case of Dena Nath v. National Fertilizers Ltd. (1992 AIR SC 457), which held that contract labourers do not automatically become permanent employees only because the contractor violated the 1970 Act. Moreover, ONGC argued that the petitioners had not produced any salary slips or appointment letters from the company, and that the issuance of work certificates or gate passes alone did not create an employer-employee relationship. The Tribunal's Ruling The Tribunal dismissed the petitioners' claims, finding that they had not provided sufficient evidence. It stated that “the names of the workers, their wages, and the signatures of the contractor” appeared on the wage payment records, indicating that the contractor was responsible for their employment. It also noted that while the wages were paid by the contractor, all wage payment records were countersigned by ONGC officials. However, it held that such countersigning alone could not make ONGC the employer, as the legal responsibility for payment rested with the contractor. The “mere issuance of a certificate by an officer of the establishment could not make the workers direct casual workers under ONGC.” The Tribunal also relied on the Supreme Court's judgment in Balwant Rai Saluja v. AIR India Ltd. (2015 AIR SC 375), which identified six key factors in determining employer-employee relationships: appointment authority, payment of wages, authority to dismiss, disciplinary control, continuity of service, and extent of control. However, the petitioners failed to demonstrate ONGC's control over any of these factors. Furthermore, the Tribunal also dismissed the argument regarding the 1994 notification, due to absence of any evidence that the petitioners had worked as storekeepers. Their tasks were limited to lifting,...

Violations Of The Contract Labour Act By Contractor, Does Not Per See Confer Employment Rights;Guwahati High Court Clarifies

Pranav Kumar

Tags