Heard Shri. B.K. Sampath Kumar, the learned counsel for the petitioners and Shri. S.V. Shastri, the learned counsel for the respondent Management led by learned Senior Counsel Sri. Ramdas.
Facts in brief:-
2. The case of the petitioners is that they have been discharging the duties of the respondent company under various labour contractors and that the date of their entry or rather the date on which their association commenced with the respondent company varies from 1974 to 1997 and all the petitioners are working in Foundry & Forge Division of the respondent company. There is no dispute with regard to the date of commencement of their association with the company. The respondents do not deny the fact that they initially came to be appointed as contract labourers nor does it deny the fact that they continue in the same capacity even as on this day albeit under different labour contractors from time to time. Everyone of them has put in more than a minimum of two decades of service with the respondent under the caption "Contract Labourers".
3. Hence, the present Writ Petitions have been filed before this Hon'ble Court praying this court to exercise its writ jurisdiction under Article 226 and 227 of the Constitution of India, 1950 and grant them the relief as prayed. There are, in all, fifteen petitioners whose cause is jointly canvassed as they involve common facts and question of law.
4. Petitioners are working as contract labourers for several decades under various contractors employed by the Hindustan Aeronautics Limited (hereinafter referred to as the First Respondent). Respondent No.2 is the Human Resource and Administrative Officer, Corporate office HAL. Currently the petitioners are working in Foundry and Forge Division of the First Respondent. The First Respondent admits to the petitioners being in employment through their respective contractors. However, it out-rightly denies any employer-employee relationship with the petitioners.
5. It is the case of First Respondent that they call for tenders from the contractors specifying the nature of work to be executed on contract basis, the period and the estimated cost, and it is for the contractor who qualifies for the tender to appoint/engage any person of his choice.
6. It is contended by the petitioners that, on 02- 02-1988 the First Respondent issued a circular wherein it was stated that person/s who had worked as a casual labour/term contract with the First Respondent and who have completed more than 240 days of attendance would be considered for absorption under various divisions mentioned in the circular issued by HAL. Pursuant to this circular, a meeting was held between the management of First Respondent and the workmen's union of First Respondent, wherein the management stated that the list of employees entitled to absorption, is under consideration and it will take six months time to finalize the confirmation of the 1st batch of employees. The management further informed them about the existing ban on recruitment.
7. It is the case of the petitioners that First Respondent neglected and discriminated against the petitioners in the matter of absorption of their services against regular vacancies, resultantly the petitioners approached this Court by filing W.P. Nos.8294-96/1998 C/w W.P. Nos.34916-26/1997 for directions to First Respondent to regularize their services as permanent employees. This Hon'ble Court by order dated 12.01.2000 was pleased to direct the petitioners to make an appropriate representation to the First Respondent.
8. It is submitted that thereafter the petitioners made a representation to the First Respondent praying for regularizing their service. In this regard two representations were made and the first representation was in the year 2000 and another representation was made on 14.01.2012. It is the further, case of the petitioners that P- 1 to P-9 were given an opportunity to appear for an interview in the late 90's while the remaining petitioners were deprived of that opportunity. However, the fact remains that none of their services were regularized. The First Respondent counters this by stating that the interview was aimed towards appointment on compassionate ground and not for regularization. Though such a contention is canvassed no material is placed to corroborate it. The First Respondent adds that the company will appoint and engage regular employees only in the core activities which are duly elaborated in the standing orders. It is also submitted that over the course of time two conciliation settlements did take place. However, no conclusive results have been arrived at with regard to regularization of the petitioners.
The petitioners have relied on the following rulings:-
1. Balwant Rai Saluja and Another Vs. Air India Limited And Others, (2013) 15 SCC 85.
2. Tamil Nadu Terminated Full Time Temporary LIC Employees Association Vs. Life Insurance Corporation of India and Others, (2015) 9 SCC 62.
3. Chief Conservator of Forests and Another Vs. Jagannath Maruti Kondhare and Others, (1996) 2 SCC 293.
4. Maharashtra State Road Trasnport Corporation and Another Vs. Casteribe Rajya Parivahan Karmchari Sanghatana, (2009) 8 SCC 556.
5. Sudarshan Rajpoot Vs. Uttar Pradesh State Road Transport Corporation, (2015) 2 SCC 317.
6. Oil and Natural Gas Corporation Limited Vs. Petroleum Coal Labour Union and Others, (2015) 6 SCC 494.
7. State of Punjab and Others Vs. Jagjit Singh and Others, (2016) AIR SC 5176.
8. K. Suresh & Others Vs. Hindustan Aeronautics Ltd & Others in W.P. Nos.20405-20424/1997 dated 30.07.2002.
9. Tamil Nadu Terminated Full Time Temporary LIC Employees Association Vs. Life Insurance Corporation of India and Others, (2016) AIR SC 3964.
10. Prem Ram Vs. Uttarakhandy Peyjal & Nirman Nigam, (2015) 11 SCC 255.
11. Anil Joshi and Others Vs. State of Himachal Pradesh and Others, (2015) 12 SCC 669.
12. Secretary of Karnataka & Ors vs. Umadevi & Ors, (2006) AIR SC 1806.
13. The Dharwad District P.W.D. Literate Daily Wages Employees Association & Ors. Vs. State of Karnataka & Ors, (1990) AIR SC 883.
The respondents have relied on the following rulings:-
1. Secretary of Karnataka & Ors vs. Umadevi & Ors, (2006) AIR SC 1806.
2. Accounts Officer (A&I) ASRTC and Others Vs. R.V. Ramanna and Others, (2007) AIR SC 1166.
3. U.P. Power Corporation Limited and Another Vs. Bijli Mazdoor Sangha and Others, (2007) 5 SCC 755.
4. International Airport Authority of India Vs. International Air Cargo Workers Union, (2009) 13 SCC 374.
5. Union of India Vs. Kartick Chandra Mondal and Anr, (2010) AIR SC 3455.
6. Bengal Nagpur Cotton Mills Vs. Bharat Lal, (2011) 1 SCC 635.
7. Union of India Vs. Arulmozhi Iniarasu, (2011) 7 SCC 397.
8. High Court of Calcutta MMTC Vs. The learned Fourth Industrial Tribunal,2015 LLR 292 CAL.
9. Chennai Metropolitan Water Supply & Sewerage Board Vs. T.T. Murali Babu,2014 4 SCC 1141.
10. Steel Authority of India Ltd. Vs. Union of India, (2006) 12 SCC 233.
11. Steel Authority of India and Others Vs. National Union WaterFront Workers and Others, (2001) 7 SCC 1.
12. APSRTC Vs. G. Sreenivasa Reddy, (2006) AIR SC 1465.
13. Balwant Rai Saluja and Another Vs. Air India Limited and Others, (2014) 9 SCC 407.
14. C. Jacob Vs Director of Geology and Mining and Anr, (2009) AIR SC 264.
15. High Court of Delhi Karnik N.A. Vs. Syndicate Bank, (2005) 2 LLJ 884.
16. The State Financial Corporation and Another Vs. M/s. Jagdamba Oil Mills and Another, (2002) AIR SC 834.
17. B.H.E.L. Workers Association, Hardwar and Others Vs. Union of India and Others, (1985) AIR SC 409.
9. In view of the above factual and rival legal contentions urged by the learned counsels on behalf of the parties, the point that this court is required to answer is:
"Whether the petitioners are entitled for the regularization of their services by the First Respondent in accordance with law?"
10. Before this court venture's into reasons for its finding and records its observation as hereinafter below, it is apt to contend with the respondents objection with regard to the maintainability of the present petition on the ground that there is an inordinate delay of 25-30 years in filing of this petition. It is contended that the writ petition is preferred after the lapse of 25-30 years. That they have approached this Hon'ble Court belatedly and no reasons/grounds have been made to justify their lapses. On this ground alone the writ petition requires to be rejected.
However, this court find this submission un-tenable and a misconceived one, as the petitioners continue to be employed to execute the work on the factory premises. That is they continue to discharge the duties as labourers of the contractors awarded with contracts to carry out its work. That apart the petitioners have also pleaded as under:-
" .they were forced to file a writ petition Nos.8294-96/1998 C/w W.P. Nos.34916-26/1997 for a direction to the respondent to regularise their services as permanent employees. At that said point of time, the petitioners had not given any representation to the respondent for the same. Hence, this Hon'ble Court disposed of the said Writ Petition vide order dated 12/01/2000 by reserving liberty to the petitioners to approach the respondent by making appropriate representation to regularise their service
The petitioners submit that they have given representation to the respondent within the time frame fixed by the (sic) this Hon'ble Court in the said writ petition
Finally, the petitioners gave a representation to the various officers of respondent on 14.01.2012 requesting them to consider their case."
11. In light of the aforesaid observation, the submission of the respondent that there is an in-ordinate delay of 25-30 years and therefore the writ petition is not maintainable, does not hold water and the objection is misconceived. Accordingly, this court holds that the present Writ Petitions are maintainable and is not barred by any law nor is it vitiated by any delay and laches.
12. This court would now move on to answer on the point that has been raised by the parties.
13. The learned senior counsel contends that the petitioners were working as contract labourers with the Respondent under various contractors and the said fact is admitted as true and correct. However, he would deny any employer and employee relationship between the petitioners and First Respondent. The said statement requires to be taken with a pinch of salt in the light of the Annexure-'A', a circular, that states, that persons who had worked as casual labour/term contract for more than 240 days will be considered for absorption. The said document in annexure bearing reference No.BC/A/9059-04/25 is dated 4th January 1988. The relevant part of the annexure is reproduced herein below for the sake of convenience:
"2. A plan for absorption of these proposal in span of any 3 to 5 years is to be worked out decided by the Corporated office, therefore, the Divisions are requested to indicate the number of CL/TCL who would be considered for absorption within the ceiling and to what extent additional approval is to be required in case absorption and the existing strength in Direct and Indirect workman of each division in the annexure" (sic)"
Also, a memorandum of meeting, which records the meeting that was held between the respondent and the workman union dated 17.06.89 and produced as Annexure-'B' records the decision taken in the meeting, is as follows:
" the list of employees who were interviewed from the list of employees is pending finalisation from the last one and a half years. Hence, they stated that there is need to finalise the said list. Further the management had stated that the said employees will be absorbed within the next three months i.e. 24.2.89. Now since the management wants six months more time "
14. The counsel for the petitioners contends that the Respondent had in fact regularized the services of some of the workmen of the 1983-84 batches. The petitioners submit that they are of the 1986 batch and their services were promised to be regularized. It is also contended that the petitioners 1 to 9 were interviewed. This assertion is admitted by the respondents. It is also contended that many the workmen of the 1986 batch were regularised and absorbed in the service even though some of them were not interviewed. The learned Senior Counsel to counter this submission of the petitioners would take this court to the relevant annexure wherein those casual labours who belonged to batch of 1983 were regularised. He would further contend that the company's policy regarding engagement of permanent labour is only in the core activities and no regular employee would be engaged in incidental services.
15. The learned counsel for the petitioner would invite the attention of this court to Annexure-C and refers to this document as an internal communication of First Respondent. The learned senior counsel would counter this reliance on the ground that it is an internal communication and that the same vests no right in the etitioners. On the contrary the learned counsel for the petitioner would point out the following observation which he would contend is of some importance i.e. para 3 which reads as follows: "HAL may be bound to absorb such labour when engagement of contract labour is prohibited by the Appropriate Government.(underlining by this court). As such it becomes utmost essential for us that engagement of Casual Labour, Term Contract Labour and Service Contract Labour is carried out in a most cautious manner with a view to effectively containing both financial and legal implication to HAL." He would contend that this is suffice to infer that the respondent was alive to the fact that rights have accrued to the petitioners and, in law they are bound to regularise the services of the petitioner. He would also take this court through para 4 which details the steps that could be considered by the Divisions which are indicated herein below and the relevant ones are;
i) Contract labour should not be employed in areas where regular employees are also working;
ii) As far as possible, all major contracts should be awarded to the reputed contractors who deploy the regular employees by transferring them from the existing establishments and after the contract is over these workers shift back to some other establishments of the contractor.
iv) All sham contracts i.e., contracts which attract the provisions of Section 10 (2) of the Contract Labour (Regulation and Abolition) Act may not be renewed. (Emphasis by this court).
16. This document (Annexure-C) is countered and sought to be explained away by the first respondent as an internal communication issued to the Division of the Respondent to review the engagement of contract labourers through contractors. Admittedly that Internal communication is dated 07.11.1997 has emanated when the request of the petitioners was very much alive.
17. The First Respondent has sought to discredit the document by questioning the method and manner of procurement of the said document by the petitioner by employing un-ethical means. The court at present is only concerned with the content of the document, and the First Respondent has accepted the authenticity of the document. The manner in which it is obtained is not in issue before this court and hence it is unnecessary to adjudicate the said facts and it is also relevant to note that the First Respondent apart from making allegations regarding the manner of procurement has not taken any steps in that regard and hence this court deems it unnecessary to adjudicate the allegation.
18. From the aforesaid submissions of the respective parties, it can be conclusively stated that the petitioners were working as casual labours for the First Respondent for more than 240 days in a calendar years. Further the respondent considered the casual labourers as eligible for regularisation of their services. The same stands corroborated and established as half of the petitioners were called for interview dehors the contention that they consider employment of permanent labour only for the core activities. Hence, the submission regarding company policy stands belied and controverted.
19. The learned Senior Counsel places reliance on the ruling of the Hon'ble Apex Court in the case of Secretary of Karnataka & Ors vs. Umadevi & Ors, (2006) AIR SC 1806:
The aforesaid Judgment is rendered by a Constitutional Bench of the Hon'ble Supreme Court, while dealing with the issue of back door entrants in regular employment and wherein the Court has observed the following with respect to casual labours who have worked for considerable length of time.
"45. While directing that appointments, temporary or casual, be regularized or made permanent, courts are swayed by the fact that the concerned person has worked for some time and in some cases for a considerable length of time. It is not as if the person who accepts an engagement either temporary or casual in nature, is not aware of the nature of his employment. He accepts the employment with eyes open. It may be true that he is not in a position to bargain -- not at arm's length - - since he might have been searching for some employment so as to eke out his livelihood and accepts whatever he gets. But on that ground alone, it would not be appropriate to jettison the constitutional scheme of appointment and to take the view that a person who has temporarily or casually got employed should be directed to be continued permanently. By doing so, it will be creating another mode of public appointment which is not permissible. If the court were to void a contractual employment of this nature on the ground that the parties were not having equal bargaining power, that too would not enable the court to grant any relief to that employee. A total embargo on such casual or temporary employment is not possible, given the exigencies of administration and if imposed, would only mean that some people who at least get employment temporarily, contractually or casually, would not be getting even that employment when securing of such employment brings at least some succor to them. After all, innumerable citizens of our vast country are in search of employment and one is not compelled to accept a casual or temporary employment if one is not inclined to go in for such an employment. It is in that context that one has to proceed on the basis that the employment was accepted fully knowing the nature of it and the consequences flowing from it. In other words, even while accepting the employment, the person concerned knows the nature of his employment. It is not an appointment to a post in the real sense of the term. The claim acquired by him in the post in which he is temporarily employed or the interest in that post cannot be considered to be of such a magnitude as to enable the giving up of the procedure established, for making regular appointments to available posts in the services of the State. The argument that since one has been working for some time in the post, it will not be just to discontinue him, even though he was aware of the nature of the employment when he first took it up, is not one that would enable the jettisoning of the procedure established by law for public employment and would have to fail when tested on the touchstone of constitutionality and equality of opportunity enshrined in Article 14 of the Constitution of India."
20. However this court does not find any force in the point canvassed as the above cited authority is distinguishable in view of the present set of facts involved herein. The court was dealing with back door entrants. In the instant case by the time the above judgment came to be delivered all the petitioners had put in more than ten years service and thereafter also have put in a decade of service. Further, it is not the case of the respondents that petitioners are ineligible to hold the posts. Further reliance is placed on the ruling of the Hon'ble Supreme Court in Maharashtra State Road Transport Corporation and Anr vs Casteribe Rajya Parivahan Karmchari Sanghatana, (2009) 8 SCC 556, has extracted the ratio of Uma Devi (supra) in the following lines:
"34. It is true that the case of Dharwad District PWD Literate Daily Wages Employees' Assn. arising out of industrial adjudication has been considered in Umadevi and that decision has been held to be not laying down the correct law but a careful and complete reading of decision in Umadevi leaves no manner of doubt that what this Court was concerned in Umadevi was the exercise of power by the High Courts under Article 226 and this Court under Article 32 of the Constitution of India in the matters of public employment where the employees have been engaged as contractual, temporary or casual workers not based on proper selection as recognized by the rules or procedure and yet orders of their regularization and conferring them status of permanency have been passed.
35. Umadevi1 is an authoritative pronouncement for the proposition that the Supreme Court (Article 32) and High Courts (Article 226) should not issue directions of absorption, regularization or permanent continuance of temporary, contractual, casual, daily wage or ad-hoc employees unless the recruitment itself was made regularly in terms of constitutional scheme."
21. Thus Uma Devi (supra) deals with a case where illegality has either manifested directly or indirectly qua constitution or any other public law in force with appointments. Also the respondent in their response have not challenged the legality of appointment or that they do not possess the qualification and more importantly their appointments are at least a decade before the Hon'ble Apex Court laid down the law and on these facts alone the ruling is distinguishable. In the instant case unfair labour practice is writ large and the contracts are a mere veil.
22. Since this court has already found that the First Respondent considered the petitioners eligible for regularization by their act of considering them for interview and by regularizing similarly placed casual labours from earlier batches, it would be negation of the principle of equality by the First Respondent, an instrumentality of state, by denying the same opportunity to those who are similarly placed. The observation of the Hon'ble Apex Court can be gainfully referred. It was pleased to observe the following in Oil and Natural Gas Corporation Limited vs Petroleum Coal Labour Union and Others, (2015) 6 SCC 494:
"45. This should have been positively considered by the Corporation and granted the status of regular employees of the Corporation for the reason that it cannot act arbitrarily and unreasonably deny the same especially it being a Corporate Body owned by the Central Government and an instrumentality of the State in terms of Article 12 of the Constitution and therefore, it is governed by Part III of the Constitution. The Corporation should exercise its power fairly and reasonably in accordance with law. This has not been done by the Corporation as per the law laid down by this Court in the case of Olga Tellis & Ors. v. Bombay Municipal Corporation and Ors.22 wherein it was held as under: (SCC pp.577-78, para 40)".
40. "Just as a mala fide act has no existence in the eye of law, even so, unreasonableness vitiates law and procedure alike. It is therefore essential that the procedure prescribed by law for depriving a person of his fundamental right, in this case the right to life, must conform to the norms of justice and fair play. Procedure, which is unjust or unfair in the circumstances of a case, attracts the vice of unreasonableness, thereby vitiating the law which prescribes that procedure and consequently, the action taken under it. Any action taken by a public authority which is invested with statutory powers has, therefore, to be tested by the application of two standards: the action must be within the scope of the authority conferred by law and secondly, it must be reasonable. If any action, within the scope of the authority conferred by law, is found to be unreasonable, it must mean that the procedure established by law under which that action is taken is itself unreasonable. The substance of the law cannot be divorced from the procedure which it prescribes for, how reasonable the law is, depends upon how fair is the procedure prescribed by it ."
23. Therefore this court does not find any merit in the submission on behalf of the First Respondent. Hence the contention that the respondents have not regularized the services of any contract employees engaged by the contractors, and if at all regularized it was only skilled personnel with technical and professional qualification is misleading and requires to be rejected. The court finds that there is no reasonable classification to distinguish between the same classes of casual labours to deny them the regularization as is done by the First Respondent. The action is discriminatory and arbitrary.
24. The learned Senior Counsel has vehemently opposed the contention that petitioners were treated as regular employees at any given time. As such the labourers were under contractual employment with their contractors and at no point of time were they under the employment of the respondent. Since there is no employeremployee relationship between First Respondent and Petitioners there cannot be any regularization of petitioners.
25. There is an obligation on this court to examine and determine the real nature of the contractual relationship between the parties in dispute. The Hon'ble Supreme Court in SAIL Vs. National Union Waterfront Workers, (2001) 7 SCC 1, has held that the crucial test is to determine whether the nature of the contractual relationship between the parties that is juristically introduced, is a genuine one or a sham contract. It must be noted that employers and their organisations and indeed all parties to labour litigation keep close watch on the evolving jurisprudence and tailor legal agreement and paper contracts accordingly to suit the purpose of finding the cheapest and most exploitable labour with honourable exceptions as we have seen in the case of the railway management. This craze for facilitating "flexible labour" which is another phrase for "hire and fire" deserves no constitutional sympathy. On similar lines Justice Krishna Iyer has observed as following, in Hussainbhai Vs Alath Factory Thezhilai Union, (1978) 4 SCC 257:
"5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like, may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of the Constitution. The court must be astute to avoid mischief and achieve the purpose of the law and not be misled by the maya of legal appearances."
6. If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefits and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries or the make-believe trappings of detachment from the Management cannot snap the real-life bond. The story may vary but the inference defies ingenuity. The lia- bility cannot be shaken off."
26. In the line of aforesaid tests, the fact that for years the petitioners are working for the First Respondent and the First Respondent has paid them sums as their principal employers as accepted by the First Respondent in their additional objections at para iv, is sufficient ground for the court to agree with the petitioner that there is an employer-employee relationship between the parties and that the contract between the petitioners and the contractor is nothing but a disguise to hide their relationship with the First Respondent. Therefore, this court is bound by the proposition of law as stated in Chief onservator of Forests and Another Vs Jagannath Maruti Kondhare and Others, (1996) 2 SCC 293, wherein the Hon'ble Supreme Court has stated thus:
"20. there should not be any doubt that they had worked for long despite which they were continued as casuals, which fact is enough to draw the inference that the same was with the object of depriving them of the status and privileges of permanent employees .
22. ...In our opinion, it would be permissible on facts of a particular case to draw the inference mentioned in the second part of the item, if badlis, casuals or temporaries are continued as such for years. We further state that the present was such a case inasmuch as from the materials on record we are satisfied that the 25 workmen .had been kept as casuals for long years with the primary object of depriving them the status of permanent employees inasmuch as giving of this status would have required the employer to pay the workmen at a rate higher than the one fixed under the Minimum Wages Act .. Permanency is thus writ large on the face of both the types of work. If even in such projects, persons are kept in jobs on casual basis for years the object manifests itself; no scrutiny is required. We, therefore, answer the second question also against the appellants."
27. The concept of regularization of the Contractual Labour, draws inspiration from the Directive Principles and as such is a beneficial measure for the welfare of the weaker sections of society and to ensure social and conomic justice. The Hon'ble Supreme Court has explained the concept of Social Justice in the following words in Harjinder Singh v. Punjab State Warehousing Corpn., (2010) 3 SCC 192 : (2010) 1 SCC (L&S) 1146, at page 204 :
"30. Of late, there has been a visible shift in the courts' approach in dealing with the cases involving the interpretation of social welfare legislations. The attractive mantras of globalization and liberalisation are fast becoming the raison d'etre of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganized workers. In large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating bylanes and side-lanes in the jurisprudence developed by this Court in three decades. The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman-employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted such plea unmindful of the accountability of the wrongdoer and indirectly punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood."
In the same case the Court has clarified the obligation of the High Courts in the following words:
"21. Before concluding, we consider it necessary to observe that while exercising jurisdiction under Articles 226 and/or 227 of the Constitution in matters like the present one, the High Courts are duty bound to keep in mind that the Industrial Disputes Act and other similar legislative instruments are social welfare legislations and the same are required to be interpreted keeping in view the goals set out in the Preamble of the Constitution and the provisions contained in Part IV thereof in general and Articles 38, 39(a) to (e), 43 and 43-A in particular, which mandate that the State should secure a social order for the promotion of welfare of the people, ensure equality between men and women and equitable distribution of material resources of the community to sub-serve the common good and also ensure that the workers get their dues. More than 41 years ago, Gajendragadkar, J, opined that:
"10. The concept of social and economic justice is a living concept of revolutionary import; it gives sustenance to the rule of law and meaning and significance to the ideal of welfare State"."
28. Having traversed the legal position and the law laid down by the Hon'ble Apex Court with regard to the aspects governing regularisation of contract labourers this court delves into the factual aspects of the litigation which in the considered opinion of this court are germane for arriving at a conclusion with regard to the point formulated for consideration.
29. There is no dispute with regard to the veracity and authenticity of the material documents placed before this court and as Annexures appended to the writ petition. Prior to rendering a finding on facts, this court deems it necessary to traverse the Standing Orders governing the employer and employee relationship. The Standing Orders are herein after referred to as "SO" for the sake of brevity. SO-3 deals with the classification of workmen who are placed in 5 categories.
30. A temporary workman and a casual workman are defined as those engaged to execute work of a temporary in nature or of casual nature which are nonrecurring or intermittent nature. This court has closely scrutinised the Standing Order and there is no provision which either defines or permits the engagement of labourers on contractual basis.
The other order of relevance is SO-17 which details the essential services and reads as follows:-
(i) Fire Protection;
(ii) Watch and Ward, Vigilance;
(iii) Telex and Telephone operators;
(iv) Welfare Departments such as Canteens, Medical and Health;
(v) Maintenance and Repairs Department;
(vi) Aerodrome Operation;
(vii) Transport for essential services;
(viii) Power and Water Supply;
(x) Conservancy and Sanitation.
31. On a reading of the above, as per the Standing Order conservancy and sanitation, power and water supply, watch and ward and canteen services are construed to be essential services thereby, implying such work are of perennial nature. There is no dispute that the petitioners are executing similar works (underlining by this court). One other interesting aspect is the definition of workman as defined under SO-2(iv). A workman is defined as follows:-
(iv) 'Workman' means any person employed in (emphasis by court) the Company, defined as such in the Industrial Employment (Standing Orders) Act, 1946. The use of the word 'in' is of some significance and the only inference is that all the persons employed in the factory premises irrespective of the nature of employment are workmen towards whom the respondent owes an obligation.
32. Per contra the learned counsel for the respondent has placed a works manual titled as 'HAL Works Manual 2011' to justify the engagement of contract labourers. Chapter-1 deals with the aim or the purpose for formulation of the works manual. 1.0 (a) reads as under:-
"1.0 a) A uniform works and contract procedure was introduced in Hindustan Aeronautics Limited (HAL) on a corporate basis in 1969 and updated in 1985, applicable to all the Divisions of the Company. The need to update the works and contract procedure again has been increasingly felt ..".
33. On perusal of the above clause, it is apparent that a works manual has been published in 1969 and updated in 1985, but neither of them are furnished to the court to demonstrate the fact that engagement of workmen on contractual basis were prescribed or permitted. Chapter-3:- More particularly Clause 3.3 deals with maintenance services and maintenance services is described as comprising of 2 parts i.e. Soft Services and engineering services. Clause 3.3.1. describes Soft Services. 3.3.1 Soft Services includes the following:-
a) Housekeeping & Sanitary Services
b) Security, watch & ward and Fire Services
c) Landscaping & Horticulture and Gardening,
d) Event Management
e) Pest Control Management
In the sense the maintenance services or Soft Services includes services which are detailed as essential services under Standing Order-17 of the respondent's Standing Order. It is also relevant to note that these maintenance services are not enumerated as services of casual nature or being of intermittent nature.
Chapter-6 deals with classification of contracts and Clause 6.0(v)&(vi) deal with service contracts and term contracts. Clause 6.5 deals with service contracts. Clause 6.5(2)(c) refers to a man power matrix to be part of the tender, i.e. it is a pro-forma model which is provided at Annexure-G3 and the man power matrix, Annexure-G3, provides for shift timings, requisite type of man power numbers required and numbers deployed. This matrix assumes some significance which this court would set-out in the later part of the judgment.
34. One fact which stands crystallised after a careful scrutiny of both the works manual and the Standing Orders is that the services described as essential services in Standing Order-17 and those detailed as maintenance services/soft services under chapter 3.3. of the workmen manual of 2011 are services of perennial nature. Hence, the moot question would be whether the respondent who is a public sector behemoth with a work force of over 30,000 and a turnover of about 18,000 crores and engaged in developing technology to serve the defence of the country and also categorised as a navaratna company, could have resorted to employing labourers on contractual basis to execute services of a perennial nature? In the considered opinion of this court the only answer can be is a emphatic "NO", more so, keeping in view the enormous work and thousands of thousands of employees and thousands of crores of profits. More so in the light of the fact that the petitioners started working between the year 1974-1997 is not disputed. If that be so, even the latest entrant has put in two decades of services as on today and almost a decade of service even by the time the judgment in Umadevi's case came to be rendered.
35. It is also not in dispute that the petitioners have been continuously employed not merely for 240 days in a year but have been rendering services 365 days a year from the date they commenced rendering services. It is also not in dispute that some of their batch mates have been absorbed in the services of the company and their services are regularised. It is also not in dispute that some of the petitioners were also invited for interviews. It is also not in dispute that the petitioners were represented by the workmen's union, recognised by the respondent, in the matter of regularisation by way of absorption of their services which is evidenced by Annexure-B. It is also not in dispute that the respondent's company had envisaged a policy to absorb such of those employed as casual labourers and term contract labourers who have completed more than 240 days of attendance which is evidenced by Annexure-A. It is also not in dispute that the respondent company was alive to the fact that it had an obligation towards the contract labourers and was aware of the law in the light of the judgment rendered by the Hon'ble Apex Court in Gujrat Electricity Board case that with the abolition of contract labour system the workmen so employed would automatically become employees of the principal employer. This fact of the respondent's awareness and obligation towards the contract labourers is evidenced by Annexure-C. This inference drawn by this court is further corroborated by a confidential note produced vide Annexure-D. On a conjoint reading of Annexure-C & D what one can clearly discern is that the respondent company was aware of its obligation to absorb the workmen employed as contract labourers. It also throwsup another interesting aspect, where the office note/confidential note, would advise the concerned officers not to mention the number of workmen to be employed as contract labourers. To state the least the same is unethical and an unfair practice. This advice can only be inferred as a defence or as a plausible defence devised in the event of any legal proceedings being instituted as in the instant case.
36. Another interesting decision that was conveyed by the confidential note is that contract should be awarded to such firms who have employed labourers on permanent basis on regular terms and conditions, thereby implying that there ought to be a pre-existing employer and employee relationship between the contractor and his labourers before he is awarded the contract. In this regard this court has perused the volumes and volumes of contracts for the period between 2008-09 till 2015-16, that is service contracts executed between 2008 to 2016 and what is apparent is that not a single contractor has enclosed the list of his employees nor any material placed by the respondent to demonstrate any employer-employee relationship between the contractor and the petitioners.
37. Though dozens of contractors have been engaged by the respondent company. Somehow the different contractors have contrived to employ the same set of persons. Thereby, giving a picture that the labourers of the contractor are actually identified by the respondent only. This opinion is further strengthened by the note put up in a letter of the Respondent dated 23.02.2012 bearing reference No.F/DGM(ES)/19-2/618/2012 of the Foundry and Forge Division HAL (BC) and the note reads as under:-
"Sir, All police verification already available with MP Enterprises contract".
Thereby, giving scope for this Court to presume that the workers who are described as contractual labourers and who are supposed to have been deployed by the contractor, one M/s. Updater Services Pvt. Ltd. under Contract No.CONT.NO.HAL-R/168/11-12 are workers who were earlier deployed by the said M.P. Enterprises and the police verification is by the respondent. In fact in this regard a query was put to the learned senior counsel appearing on behalf of the respondent. This court pointedly asked as to how the dozens of contractors have managed to employ the same set of labourers to which the respondent is yet to provide an answer. It was also asked as to whether it is possible to place on record the terms of employment agreed upon and executed between the contractor and the petitioners and the respondents expressed helplessness in this regard forcing the Court to observe during the proceedings that the contracts appear to be a sham and in fact the court observed that it would be constrained to observe that the so called alleged labour contracts or service contracts are a sham and a scam.
38. Despite the strong observations made during the course of hearing, no material is placed to dispel the notion that the service contracts is neither a sham nor a scam. Amounts running into crores of rupees are paid under the guise of service contracts. Thereby, enabling third parties to profit at the expenses of the poor labourers. The very fact that the same set of workers have been appointed and continued as contract labourers year after year under different contracts would only go to prove that the service contracts are a sham and no sanctity can be attached to them to accept the contention of the respondent and hold them as labourers under the contractor or in short contract labourers.
39. It is not the case of the respondents that the petitioners are not qualified to be appointed or absorbed. It is also not the case of the respondents that the contract labourers are back door entrants. The fact remains that their services have been engaged, even according to the respondents and as per their workers manual, to execute services of a perennial nature.
40. All the above factors point towards only one single and inevitable conclusion that the petitioners are in reality employees under the respondent. In fact the Annexure-G series evidences the absorption and appointment of persons who were similarly engaged as the petitioners. There is no explanation as to why the petitioners have been discriminated against and the discrimination smacks of arbitrariness.
41. In fact an attempt was made by the learned senior counsel for the respondent, to demonstrate that the services rendered by the petitioners are only incidental in nature and do not constitute the core activity of the company and in this direction reliance was placed on the contents of the documents annexed as F series. It is contended that the company has evolved a policy to employ the workmen on a permanent basis in core areas only. The contention of the learned senior counsel requires to be rejected as the services rendered by the petitioners is classified as essential services under the companies Standing Order No.17. Hence, the description of the services rendered by the petitioners as incidental services is contrary to the respondents own Standing Orders. This court is constrained to arrive at the conclusion that the contracts are a sham after perusing the response of the respondents placed before the court on 16.06.2017 and styled as an 'Additional Objections'.
42. It is contended that this court ought not to delve into or examine disputed questions of fact. The only fact that is allegedly disputed is that they are the employees of the respondent. Otherwise, all other material placed on record by way of annexures to the writ petition are not disputed but are sought to be explained away and the explanation put-forth are neither tenable nor convincing enough for this court to conclude that the service/labour contracts are genuine. Though certain documents are produced as Annexure-R2 along with Additional Objections that is the I.D. Cards said to have been issued by the contractor. If the respondent is able to produce the I.D. Cards then what prevented the Respondent to produce "Appointment Orders" issued by the so called contractors. These appointment orders along with the payments details would have gone a long way to atleast create a doubt in the mind of the court with regard to the sanctity of the Petitioners claims. In fact a scrutiny of the tender conditions would reveal that the contractor is required to furnish such details before claiming payments. The said I.D. Cards pertain to only one contractor.
43. Annexure-R1 is a settlement said to have been signed on 06.02.2015 and this document is pressed into service to state that in view of the settlement arrived between the respondent and the union and as per the covenant 2.08, the union cannot raise any dispute for regularisation of labourers. The said document is of no avail in view of the fact that the petitioners' services have been engaged, starting from the year 1974. Furthermore, the list of labourers annexed are described as casual labourers and the other documents attached to the said settlement also refers to casual labourers. This very document by itself cuts at the very root of the respondent's case that the petitioners are contract labourers. Mere issuance of I.D. Cards does not in any way detract from the finding of this court that the contracts are sham contracts. As noted supra despite the insistence by this court to place on record the terms and conditions of employment, between the contractor and the petitioners or persons similarly placed as the petitioners no efforts was made to comply with the same.
44. The additional objections is nothing but an attempt to explain away certain documents that have been placed before this court under the memos dated 27.03.2017 and 20.04.2017. Under memo dated 27.03.2017 filed into court on 11.04.2017 is enclosed a list of the so called contract labourers and their working location and the nature of work assigned to them. The pass number issued to them and the P.F. number assigned to each of the employees. The very fact that the pass has been issued individually to the said employees is of considerable significance and goes to demonstrate that their deployment to various departments and supervision was under the respondent. This conclusion drawn by this court is fortified by the terms of the labour contract which stipulates that the contractor should report daily in person with the deployment (his workforce) by 7 a.m to the officer in charge and take day to day instructions and the contractor is required to submit a daily report to the labour department by 7 a.m. the next day. There is no material produced nor a single scrap of paper placed to show compliance of this condition. One other condition of interest is the one that speaks of reimbursement of payment made to the workers on production of proof of payment to the labourers. There is nothing on record to demonstrate that payment made to contractors is on proof of payment. In fact the contract documents, speaks otherwise, as amounts have been paid in lump sum without either detailing quantum of working hours or the number of personnel required to be deployed. The contracts appear to be farcical and arrangements of convenience. (underlining by This Court).
45. It is the specific case of the petitioners that the statutory contributions are paid by the respondent only. The other documents enclosed along with memo is a communication by the Deputy General Manager (Maintenance) addressed to the Foundry and Forge Division wherein the Division is directed that weekly offs have to be given to the enclosed list of workmen on a particular date only and it is specifically mentioned that the dates fixed are due to administrative reasons. Thereby, implying that the workmen were under the supervision of the officer in charge of the foundry and forge division. It is not disputed that the names of the petitioners is also found in the said list of workmen. The next document makes an even more interesting reading. It is a communication again emanating from the office of the Deputy General Manger dated 13.04.2016 and the communication dated 22.02.2016 speaks of the competent authority having accorded approval to do the following i.e. A) to make enhanced allowance payment of 72 rupees per day with effect from 24.10.2014 to 31.12.2015 departmentally, by cheque/RTGS. B) Continue to make enhancement of allowances C) To make payment to 141 personnel directly through HAL by cheque who are on present rolls, at a financial implication of rupees 24,61,296/- excluding service tax D) To make payment to 16 personnel directly through HAL by Cheque who are not on present rolls at a financial implication of Rs.1,58,400/- excluding service tax and that accordingly, cheques have been made directly. The contents of paragraph 6 of the letter makes even more interesting reading "Six establishments of new sanitation and horticultural contract is also under contract at FMD. However, system being maintained under departmental payment with effect from 01.04.2014 to 31.05.2016" (underlining by This Court).
46. A bare reading of the above would conclusively prove that during the period 01.04.2014 to 31.05.2016 the alleged contract labourers were under the direct employment of the respondent. This is further corroborated by the contents of the next following paragraph at No.7 "in view of the above cited circumstances, it will be the responsibility of the principal employer to make the difference of payment from 01.01.2016 to 31.03.2016 which is not paid by the previous contractor. Further, the cheques issued infavour of the petitioner No.7, 3 and 2 are enclosed. Further, the prescription issued by the HAL hospital to the petitioner No.3 is also enclosed along with memo dated 20.04.2017. The redeployment order issued by the DGM (Engineering Services) of the Foundry & Forge Division is enclosed. The same is dated 12.04.2017 in paragraph 2 of the order it is stated as under:- "2) due to exigency of the work the following persons/workers in Day N Day Services, Bangalore may be permitted for and for carrying out work from 12.04.2017 till further notice at TTI. The persons named therein are petitioner No.9 and petitioner No.7 and their pass number is also detailed and the same is addressed to the security duty officer. This only goes to buttress the case of the petitioners that the allocation of work and supervision was vested with the respondent's officers only.
47. The Statement of Account of the first petitioner maintained with the Vijaya Bank is also produced to demonstrate the fact that the salaries of June, July, August, September, October and November 2016 were directly paid by the respondent by way of NEFT bank transfer. Further the copy of the cheque issued by the respondent to the 13th petitioner is also enclosed. The petitioners have also enclosed the schedule G statement issued by the P.F. authority in favour of the first petitioner and the contribution is by the respondent's only. It is dated 25.08.2008. Similarly, schedule G statement pertaining to the year 2002-03 and 2007 are also enclosed. The respondent's in an attempt to explain the documents annexed with memo dated 20.04.2017 have in paragraph 4 have admitted that it is an internal arrangement made by the respondent as the principal employer and it is sought to be explained that the PF account number of the respondent has been used by the PF authorities as the contractors engaged by the company did not have their own registered numbers. This explanation must fail in the absence of any corroboration. Further, the said contention is contrary to the terms of the contract and the instructions issued under Annexure-'C' and is also violative of the TCL [R&A] Act, 1970.
48. In paragraph No.2 the issuance of pass and the order of redeployment is also not disputed. In paragraph No.3 it is categorically admitted that the NEFT transfers evidenced in the bank passbook is categorically admitted and it is sought to be explained as the respondent discharging it's duty as a principal employer, on account of the contractor not paying the wages for the intermittent period. This admission itself will suffice to hold the contracts are sham contracts and a facade to hide the devious method employed to exploit the hapless workmen. This is a classic example of systemic exploitation.
49. In the next paragraph at No.4 it is stated that the enhanced payment have been made because the contractor turned a deaf ear to the request of the respondent to make the payments. To state the least, the admissions made by the DGM (HR) F & F Division are damning to state the least. It is unthinkable that there was any obligation on the respondent to pay the salary because the so called contractor failed to make the payment. There is no explanation as to why the respondent paid the salaries despite the fact that the agreed amount under the contract has been paid in full. It is also not explained why no action is initiated against the contractor as the action complained of is perse violative of the provisions of the TCL [R&A] Act, 1970. The fact that the Respondent has silently suffered the flagrant violation of the Act and the other Labour Laws speaks volumes about the sanctity of the contracts and why this court concluded them as a SHAM. All these incongruities and inconsistencies render the defence of the respondent as self contradictory. The petitioner along with his rejoinder filed into court on 14.08.2015 has placed on record 5 appointment orders issued to similarly placed employees. In fact, one such employee has also been accorded promotions.
50. The petitioners were under the direct employment of the Respondent between 2014 and 2016. This fact is established by the respondents own document, rather the respondents communication. The respondents have by not denying the fact have candidly admitted the same.
51. This Court draws succour and support from the observation of the Hon'ble Apex Court in the following rulings for the conclusion that follows:-
1) State of Punjab Vs Jagjit singh and others, (2016) AIR SC 5176
"8. D.S. Nakara v. Union of India], decided by a five-Judge Constitution Bench: It is not necessary for us to narrate the factual controversy adjudicated upon in this case. In fact, the main issue which arose for consideration pertained to pension, and not to wages. Be that as it may, it is of utmost importance to highlight the following observations recorded in the above judgment:-
"32. Having succinctly focused our attention on the conspectus of elements and incidents of pension the main question may now be tackled. But, the approach of court while considering such measure is of paramount importance. Since the advent of the Constitution, the State action m
Please Login To View The Full Judgment!
ust be directed towards attaining the goals set out in Part IV of the Constitution which, when achieved, would permit us to claim that we have set up a welfare State. Article 38 (1) enjoins the State to strive to promote welfare of the people by securing and protecting as effective as it may a social order in which justice - social, economic and political shall inform all institutions of the national life. In particular the State shall strive to minimise the inequalities in income and endeavour to eliminate inequalities in status, facilities and opportunities. Art. 39 (d) enjoins a duty to see that there is equal pay for equal work for both men and women and this directive should be understood and interpreted in the light of the judgment of this Court in Randhir Singh v. Union of India & Ors., (1982) 1 SCC 618 (AIR 1982 SC 879). Revealing the scope and content of this facet of equality, Chinnappa Reddy, J. speaking for the Court observed as under: (SCC p.619, para 1) (at P.879 of AIR)." "Now, thanks to the rising social and political consciousness and the expectations aroused as a consequence and the forward looking posture of this Court, the underprivileged also are clamouring for the rights and are seeking the intervention of the court with touching faith and confidence in the court. The Judges of the court have a duty to redeem their Constitutional oath and do justice no less to the pavement dweller than to the guest of the fivestar hotel." "Proceeding further, this Court observed that where all relevant considerations are the same, persons holding identical posts may not be treated differently in the matter of their pay merely because they belong to different departments. If that can't be done when they are in service, can that be done during their retirement? Expanding this principle, one can confidently say that if pensioners form a class, their computation cannot be by different formula affording unequal treatment solely on the ground that some retired earlier and some retired later. Art. 39 (e) requires the State to secure that the health and strength of workers, men and women, and children of tender age are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength. Art.41 obligates the State within the limits of its economic capacity and development, to make effective provision for securing the right to work, to education and to provide assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want. Art. 43 (3) requires the State to endeavour to secure amongst other things full enjoyment of leisure and social and cultural opportunities." It is however impossible to overlook, that the Constitution Bench noticed the Randhir Singh case, and while affirming the principle of 'equal pay for equal work', extended it to pensionary entitlements also." 2) The Hon'ble Apex Court, in the case of The Secretary, State of Karnataka Vs. Umadevi, (2006) AIR SC 1806 in paragraph 44 observed as follows: "44. One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa (supra) R.N. Nanjundappa (supra), and B. N. Nagarajan (supra) and referred to in para 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularisation of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases abovereferred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularisation, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further by-passing of the constitutional requirement and regularising or making permanent, those not duly appointed as per the constitutional scheme." The Division Bench of this Court in the case of State of Karnataka and Others vs. T.B. Manjunath & Others, (2003) ILR(Kar) 2827, held as hereunder:- "Following a host of decisions of the Division Bench of this Court and the decision rendered in Premakala Shetty's case, it is held that any person employed either temporarily or on daily wage basis serves continuously for a period of more than 10 years, he should normally be considered for regularization. The stress should be on the 10 years minimum service and not on any cut off date and it does not mean that no one appointed after 1-7-1984 cannot be regularized, even if they rendered continuous service for 10 years and therefore that persons appointed after 1-7-1984 cannot be regularized has no merit, provided the employees possesses the prescribed qualification for the post of which he is considered for regularization." Thus in the light of the above findings by this court on the basis of the documents placed before this court, the point formulated is answered in favour of the petitioners and the writ petitions stand allowed. For the reasons stated above the following order:- a) Writ Petitions are allowed in part; b) The First Respondent shall absorb the petitioners who fulfill the following conditions: i) At the time of their initial appointment the petitioners were not disqualified to be appointed; ii) The petitioners shall be entitled for all service benefits. c) The First Respondent shall comply the above directions within a period of three months from today. d) No order as to costs. The order shall be complied by the First Respondent and the same shall be done without any unnecessary delay. In view of disposal of writ petitions, pending I.As if any shall stand disposed off.