Important Point
Status of workman under Factories Act confines relationship of employer and employee to requirements of Factories Act alone and not for all other purposes and as such workmen of statutory canteen do not ipso facto become employees of establishment for all purposes.

Headnote:(i) Industrial Disputes Act, 1947 -Section 2(s)-Factories Act, 1948 -Sections 2(1) and 46-Workman -Workmen of statutory canteen-Status of workman under Factories Act confines relationship of employer and employees to requirements of Factories Act alone and not for all other purposes-Workmen of statutory canteen do not ipso facto become employees of establishment for all purposes.
       Held : The Factories Act does not govern the rights of employees with reference to recruitment, seniority, promotion, retirement benefits etc. These are governed by other statutes, rules, contracts or policies. Therefore, the workmen’s contention that employees of a statutory canteen ipso facto become the employees of the establishment for all purposes cannot be accepted. The workmen of a statutory canteen would be the workmen of the establishment for the purpose of the Factories Act only and not for all other purposes. (Paras 16 & 19)
       (ii) Industrial Disputes Act, 1947 - Section 2(s)-Workman-Employees of statutory canteen-Claim of employees of canteen that they are workmen of establishment and entitled to be absorbed in employment of management-Canteen managed by engaging contractor-Employees continued in service of canteen uninterruptedly inspite of change of contractor, by virtue of clause in contract as a result of decision of Industrial Tribunal-Decision of Tribunal unchallenged -Contractor engaged only for purpose of record and for all purposes employee are in fact workmen of management - Entitled to be absorbed.
       Held : Though the canteen in the appellant’s establishment is being managed by engaging a contractor, it is also an admitted fact that the canteen has been in existence from inception of the establishment. It is also an admitted fact that all the employees who were initially employed and those inducted from time to time in the canteen have continued to work in the said canteen uninterruptedly. The employer contends that this continuity of employment of the employees, inspite of there being change of contractors, was due to an order made by the Industrial Court, Thane, on 10th of November 1994 wherein the Industrial Court held that these workmen are entitled to continuity of service in the same canteen irrespective of the change in the contractor. Consequently, a direction was issued to the management herein to incorporate appropriate clauses in the contract that may be entered into with any outside contractor to ensure the continuity of employment of these workmen. The management, therefore, contends that the continuous employment of these workmen is not voluntary. A perusal of the said order of the Industrial Court shows that these workmen had contended before the said court that the management was indulging in an unfair labour practice and in fact they were employed by the Company. They specifically contended therein that they are entitled to continue in the employment of the Company irrespective of the change in the contractor. The Industrial Court accepted their contention as against the plea put forth by the management herein. The employer did not think it appropriate to challenge this decision of the Industrial Court which has become final. This clearly suggests that the management accepted as a matter of fact the respondent-workmen are permanent employees of the management’s canteen. This is a very significant fact to show the true nature of respondents’ employment. That apart, a perusal of the affidavits filed in this Court and the contract entered into between the management and the contractor clearly establishes that in the instant case, the respondent-workmen are in fact the workmen of the appellant-management. The contractor in the present case is engaged only for the purpose of record and for all purposes the workmen in this case are in fact the workmen of the management. (Paras 22 & 23)
       Held further, the conditions imposed by the High Court while directing regularisation of workman in tune with recruitment rules of the establishment cannot be said to be unjustified. It should be borne in mind that the initial appointments of these workmen are not in accordance with the rules governing the appointments or the established policy of recruitment of the management. The said recruitments could also be in contravention of the various statutory orders including the reservation policy. Further the respondent is an instrumentality of the State and has an obligation to conform to the requirements of Articles 14 and 16 of the Constitution. Inspite of the same the services of the workmen are being regularised by the Court not as a matter of right of the workmen arising under any statute but with a view to eradicate unfair labour practices and in equity to undo social injustice and as a measure of labour welfare. Therefore, it is necessary that in this process suitable guidelines or conditions be laid down at the time of courts issuing directions to regularise the services of the workmen so concerned depending upon the facts of each case. This Court has consistently followed this practice in the earlier cases of regularisation and we do not find any reason to differ from the same. (Para 25)

Judgment

Santosh Hegde, J.-C.A. No. 1854/ 1998 is an appeal preferred by M/s. Indian Petrochemicals Corporation Limited and another (hereinafter referred to as the management) against an order dated 29.8.1997 made by the High Court of Judicature at Bombay in W.P. No. 2206/97 filed by the Shramik Sena and another (hereinafter referred to as the workmen).

2. C.A. No. 1855/98 is an appeal filed by the workmen against the above-mentioned order of the High Court of Bombay. Both the appeals having been clubbed together, are heard and disposed of by this common judgment.

3. The workmen referred to above, filed the above writ petition before the High Court of Bombay for a declaration that the workmen whose names are shown in Ex. ‘A’ annexed to the said petition, are the regular workmen of the management and are entitled to have the same pay-scales and service conditions as are applicable to regular workmen of the management. It was further prayed that a direction be given to the management to absorb the workmen listed in the said Ex. ‘A’ with effect from the actual date of their entering into the service of the canteen of the management and to pay them all consequential benefits including arrears of wages etc.

4. According to the workmen, the workers listed in Ex. ‘A’ to the petition are working in the canteen of the management in its factory at Nagothane, District Raigad in the State of Maharashtra, and the management was treating them as persons employed on contract basis through a contractor named M/s. Rashmi Caterers, who was impleaded in the writ petition as respondent No. 5. It was contended on behalf of the above workmen that the factory of the management where the workmen are employed, is governed by the provisions of the Indian Factories Act, 1948 (for short ‘the Factories Act’), and the canteen where the said workmen are employed is a statutory canteen established by the management as required under the said provisions of the Act. It is further contended that the said canteen is maintained for the benefit of the workmen employed in the factory and the management had direct control over the said workmen and that respondent No. 5, though shown as a contractor, has no control over the management, administration and functioning of the said canteen. The canteen is a part of the establishment of the management and the workers working in the canteen are the workmen of the said management. The further contention of the workmen was that the work carried on by them in the said canteen is perennial in nature and the canteen is incidental to and is connected with the establishment of the management. Therefore, the said workmen are regular workmen of the said management. The management is denying the said workmen the status of its regular employees and was treating them as contract employees contrary to the statutory provisions and judicial pronouncements of this Court.

5. On behalf of the management, it was contended before the High Court that it is a public sector undertaking and it cannot appoint any person in contravention of the recruitment policy in which requires the management to follow a roster system. Therefore, apart from the fact that the workmen were not in the regular employment of the said management, the absorption or regularisation of the services of the said workmen would contravene Article 16(4) of the Constitution, and would also contravene the reservation policy which is applicable for recruitment in the establishment managed by it.

6. A perusal of the pleadings before the High Court shows that the petitioning workmen based their claim primarily on the ratio of the decision rendered by this Court in the case of Parimal Chandra Raha & Ors. v. Life Insurance Corporation of India & Ors.1, (hereinafter referred to as Raha’s case) without elaborately setting out the facts necessary for the purpose of ascertaining the true nature of employment of the workmen. The management also seems to have proceeded on the basis th

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1999 Supreme(SC) 802

Important PointStatus of workman under Factories Act confines relationship of employer and employee to requirements of Factories Act alone and not for all other purposes and as such workmen of statutory canteen do not ipso facto become employees of establishment for all purposes.

Cases Referred (2)

Important Point
Status of workman under Factories Act confines relationship of employer and employee to requirements of Factories Act alone and not for all other purposes and as such workmen of statutory canteen do not ipso facto become employees of establishment for all purposes.