WP/2384/1996 of PETROLEUM EMPLOYEES UNION Vs HINDUSTAN PETROLEUM CORPNand ORS. on 18 December 1996

(1) (a) Before, January 28, 1986, the

determination of the question whether

Central Government or the State

Government, is the appropriate

Government in relation to an

establishment, will depend, in view

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of the definition of the expression

"appropriate Government" as stood in

the CLRA Act, on the answer to a

further question, is the industry

under consideration carried on by or

under the authority of the Central

Government or does it pertain to any

specified controlled industry: or

the establishment of any railway,

cantonment board, major port, mine or

oilfield or the establishment of

banking or insurance company? If the

answer is in the affirmative, the

Central Government will be the

appropriate Government : otherwise

in relation to any other

establishment the Government of the

State in which the establishment was

situated, would be the appropriate

Government.

(b) After the said date in view of

the new definition of that

expression, the answer, to the

question referred to above, has to be

found in Cl. (a) of s.2 of the

Industrial Disputes Act; if (i) the

concerned Central Government

company/undertaking or any

undertaking is included therein eo

nomine, or (ii) any industry is

carried on (a) by or under the

authority of the Central Government,

or (b) by railway company; or (c) by

specified controlled industry, then

the Central Government will be the

appropriate Government otherwise in

relation to any other establishment,

the Government of the State in which

that other establishment is situated;

will be the appropriate Government.;

(2) (a) A Notification under S.10(1)

of the CLRA Act prohibiting

employment of contract labour in any

process, operation or other work in

any establishment has to be issued by

the appropriate Government :

(1) After consulting with the

Central Advisory Board or the State

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Advisory Board, as the case may be,

and;

(2) having regard to

(i) conditions of work and benefits

provided for the contract labour in

the establishment in question; and

(ii) other relevant factors including

those mentioned in sub-section (2) of

S.10 ;

(b) inasmuch as the impugned

notification issued by the Central

Government on December 9, 1976 does

not satisfy the aforesaid

requirements of S.10, it is quashed

but we do so prospectively i.e. from

the date of this judgment and subject

to the clarification that on the

basis of this judgment no order

passed or no action taken giving

effect to the said Notification on or

before the date of this judgment,

shall be called in question in any

Tribunal or Court including a High

Court if it has otherwise attained

finality and/or it has been

implemented.

(3) Neither S.10 of the CLRA nor any

other provision in the Act, whether

expressly or by necessary

implication, provides for automatic

absorption of contract labour on

issuing a notification by appropriate

Government under sub-section (1) of

S.10, prohibiting employment of

contract labour, in any process,

operation or other work in any

establishment. Consequently, the

principal employer cannot be required

to order absorption of the contract

labour working in the concerned

establishment.

(4) We overrule the judgment of this

Court in Air India’s case (1997 AIR

SCW 430 : AIR 1997 SC 645 : 1997

Lab IC 365) (supra) prospectively and

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declare that any direction issued by

any industrial adjudicator/any Court

including High Court, for absorption

of contract labour following the

judgment in Air India’s case (supra),

shall hold good and that the same

shall not be set aside, altered or

modified on the basis of this

judgment in cases where such a

direction has been given effect to

and it has become final.

(5) On issuance of prohibition

notification under S.10(1) of the

CLRA Act prohibiting employment of

contractor labour or otherwise, in an

industrial dispute brought before it

by any contract labour in regard to

conditions of service, the industrial

adjudicator will have to, consider

the question whether the contractor

has been interposed either on the

ground of having undertaken to

produce any given result for the

establishment or for supply of

contract labour for work of the

establishment under a genuine

contract or is a mere ruse/camouflage

to evade compliance of various;

beneficial legislations so as to

deprive the workers of the benefit

thereunder. If the contract is found

to be not genuine but a mere

camouflage, the so-called contract

labour will have to be treated as

employees of the principal employer

who shall be directed to regularise

the services of the contract labour

in the concerned establishment

subject to the conditions as may be

specified by it for that purpose in

the light of para 6 hereunder.

(6) If the contract is found to be

genuine and prohibition notification

under S.10(1) of the CLRA Act in

respect of the concerned

establishment has been issued by the

appropriate Government, prohibiting

employment of contract labour in any

process, operation or other work of

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any establishment and where in such

process, operation or other work of

the establishment the principal

employer intends to employ regular

workmen he shall give preference to

the erstwhile contract labour, if

otherwise found suitable and, if

necessary, by relaxing the condition

as to maximum age appropriately

taking into consideration the age of

the workers as the time of their

initial employment by the contractor

and also relaxing the condition as to

academic qualifications other than

technical qualifications."

3. In the light of the above decision in the case of Steel Authority of India Ltd., the Petitioner has already approached the authorities under the Industrial Disputes Act for making a reference under section 10 of the said Act and the reference has been made under section 10 to the Industrial Tribunal.

4. The Petitioner shall apply to the Industrial

Tribunal for interim relief within a period of four weeks from the date of the receipt of the notice from the Industrial Tribunal.

5. The Tribunal is directed to decide the application for interim relief as expeditiously as possible and, in any event, within a period of eight weeks from receipt thereof.

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6. Till the application for interim relief is decided by the Industrial Tribunal and for a period of four weeks thereafter, the Respondents are directed to abide by the interim relief granted by this Court.

7. It is needless to say that the application for interim reliefs shall be disposed of on its own merits, without being influenced by any orders being passed by this Court.

8. In the meantime, it would be open to the Respondents to change the contractor where the contract labour is not abolished but the new contractor shall engage the same workers, subject to the orders of the Industrial Tribunal that may be passed as per paragraph 5.

9. All contentions of the parties on merits are left open, to be agitated before the Industrial Tribunal.

10. The Industrial Tribunal is expected to hear and decide the reference expeditiously.

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11. Rule is accordingly disposed of.

Certified copy expedited.