28 Feb 2023 9:25 AM GMT
The Karnataka High Court has held that Mysore Electrical Industries Limited, a State Government Undertaking, which is not registered under Section 7 of the Contract Labour Abolition Act (CLRA) shifted the services of its workmen to private agencies (contractors) without their consent, declaring their employment as contract labour, only for the purpose of depriving the workers their due...
The Karnataka High Court has held that Mysore Electrical Industries Limited, a State Government Undertaking, which is not registered under Section 7 of the Contract Labour Abolition Act (CLRA) shifted the services of its workmen to private agencies (contractors) without their consent, declaring their employment as contract labour, only for the purpose of depriving the workers their due amounts.
A single judge bench of Justice Suraj Govindaraj upheld the order of the Industrial Tribunal dated 03-12-2011, directing the employer to restore the services of the workmen.
It said “The claim of the employer (of entering into a contract) itself appears to be completely dishonest and such a claim without due compliances appears to be only for the purpose of depriving the workers of their due amounts.”
The bench directed “The workmen belonging to respondent-Union, shall be treated as employees of petitioner. The petitioner shall regularise their services subject to availability of vacancies and in the event of there being no vacancies, as and when vacancies arise. Preference is to be given to members of the respondent-Union, if they are found suitable by relaxing the condition as to maximum age, as also academic qualifications.” The reinstatement of the workman is to be done within a period of four weeks.
The bench also made it clear that job profiles of housekeeping, painter, driver, typist, welder, cook, electrician, packer, loader, unloader, in an Industry, are required on a day to day basis, as also for months on end. These jobs are perennial in nature and therefore would not be temporary.
The employer claimed that services related to house-keeping, gardening, loading and unloading are required only a few hours a day, on that basis had entrusted those works to labour contractors for a lumpsum amount by entering into contract. The contractors are alleged to have engaged their own men to carry out the said work.
In the year 2000 the contractors terminated the contract and thereafter the employer has not engaged any contract workers.
The persons engaged by the contractors filed a petition on 31.03.1999 through the respondent Union before the Deputy Labour Commissioner for a declaration that workers mentioned in the list submitted by the Union were always employees of the employer and therefore they are entitled to get all the benefits as applicable to the permanent workmen from the date of their joining service.
The employer opposed the plea and the matter was referred for Conciliation, which failed, thus the State Government in exercise of powers conferred under Section 10(1)(d) of the Industrial Disputes Act, 1947 referred the points of dispute for adjudication to Industrial Tribunal, Bengaluru on 14.12.1999.
During pendency of adjudication 19 of 66 workmen raised a conciliation proceeding contending that the employer had refused them work from February 2000. The same was referred to the Tribunal by the Labour court.
Thereafter, the Union moved an application on 14.12.2000 under Section 11 of the ID Act seeking for a direction to the employer to restore the services of 19 workmen. Upon hearing the parties the Industrial Tribunal vide order dated 12-04-2001, directed the employer to restore the services of 19 workmen.
This order came to be challenged before the Single Judge bench of the High court, wherein an order of stay was declined. In appeal before the Division bench the court stayed the operation of the order and subsequently disposed of the matter with a direction to the tribunal to dispose of the proceedings before the Tribunal expeditiously.
Subsequently the Tribunal after considering the matter directed the employer to restore the services of the workmen and it is aggrieved by the same that the petitioner employer approached the court.
The primary contention of the employer was that there is no prohibition in terms of Section 10(1) of the Contract Labour Abolition Act, prohibiting the employer from engaging the services of contractors by engaging contract labour. In the absence of such prohibition, the employer is entitled to enter into a contract with a contractor which cannot be found fault with unless a notification is issued under Subsection (1) of Section 10 of the CLRA, the Industrial adjudicator would not get any right to adjudicate any dispute relating to contract labour.
Union Opposed petition.
The Counsel for the Union, contended that the workmen had been engaged with the employer even before the contractor came into the picture, the services of the workmen were shifted by the employer unilaterally to the contractor with a sole purpose of obviating compliance with the applicable labour laws, as also making payment of lesser amounts that required to be made. The arrangement between the employer and the contractor is a sham transaction. Moreover, there is no agreement which has been entered into between the employer and the contractor and no such agreement has been produced before the Tribunal.
Referring to Section 7 and 12 of the CLRA Act the bench said “Only the employer who is registered under Section 7 can engage a contractor registered under Section 12. As a corollary, if an employer who is not registered under Section 7, then he cannot engage services of a contractor though registered under Section 12 of CLRA and vice versa, that is to say a employer registered under Section 7 cannot engage services of a contractor who is not registered under Section 12 of CLRA. It is therefore required that both the employer and the contractor are registered under Section 7 and 12 respectively.”
Further it said “Section 10 would indicate that the State Government can in certain cases prohibit contract labour which would necessarily mean that it is only as regards the areas where State government by exercise of powers under Section 10 can prohibit it.”
Terming the submission of the employer that unless there is prohibition of notification under Section 10, an employer can engage contract labour, as misconceived, the bench held “Merely because there is no notification under Section 10 of CLRA, the same would not permit an employer who is not registered under Section 7 to enter into a contract for contract labour with a contractor who is not registered under Section 12. The requirements of Section 7 and 12 are to be complied with irrespective of whether there is a notification under Section 10 or not.”
It added “Section 10 only prohibits an engagement of a contract labour and would have no bearing and is not a prerequisite for a workman who is engaged by employer under a contract to raise a dispute for redressal of his grievance.”
Noting that the employer has not produced before the tribunal any agreement between the employer and the contractors, shifting the services of workmen to the contractors.
The bench held “It is clear that the claim made by the employer is completely false one and sham. There is no need for this court to ascertain if the agreement is a camouflage, more so when the agreement itself has not been placed on record.”
Accordingly it allowed the petition and directed that “The workmen need to be adequately provided for and absorbed and until such absorption would continue to render service as contract labour directly under the employer with the employer making payment of equal pay for equal work.”
Case Title: The Mysore Electrical Industries Limited And Engineering & General Workers Union. Case NO: WRIT PETITION NO. 3788 OF 2012
Citation: 2023 LiveLaw (Kar) 84
Date of order: 23-02-2023
Appearance: Advocate H M Muralidhar for petitioner
Advocate K B Narayana Swamy for respondent.
Click Here To Read/Download Order