The definition of “employer” in S. 2(i)(iv) of the U.P. Industrial Disputes Act, 1947 includes the owner of an industry who contracts with a person for the execution of work which is ordinarily a part of the industry.

Headnote:
INDUSTRIAL DISPUTES ACT, 1947 - S. 2(i)(iv), 2(z) - U.P. INDUSTRIAL DISPUTES ACT, 1947 - S. 2(i)(iv), 2(z) - STANDING ORDERS - DEFINITION OF “WORKMEN” - CONTRACT LABOUR - WHETHER WORKMEN EMPLOYED BY CONTRACTOR ARE WORKMEN OF THE PRINCIPAL EMPLOYER - WHETHER ENTITLED TO MINIMUM WAGES AND OTHER BENEFITS UNDER THE STANDING ORDERS.
Fact of the Case:

21 workmen were engaged by a contractor to remove press-mud in a sugar factory. The contractor terminated their services after 3 months. The workmen claimed that they were directly employed by the sugar factory and were entitled to the minimum wage and other benefits under the Standing Orders.
Finding of the Court:

The Labour Court held that the workmen were employed by the contractor and not by the sugar factory. However, it held that the sugar factory was their employer in law under the definition of “employer” in S. 2(i)(iv) of the U.P. Industrial Disputes Act, 1947. The Labour Court ordered the sugar factory to pay the workmen the minimum wage and other benefits.
Issues: 1. Whether the workmen were employed by the sugar factory or by the contractor? 2. Whether the workmen were entitled to the minimum wage and other benefits under the Standing Orders?
Ratio Decidendi: 1. The definition of “employer” in S. 2(i)(iv) of the U.P. Industrial Disputes Act, 1947 includes the owner of an industry who contracts with a person for the execution of work which is ordinarily a part of the industry. 2. The definition of “workmen” in S. 2(z) of the U.P. Industrial Disputes Act, 1947 includes any person employed in an industry to do any skilled or unskilled, manual, supervisory, technical or clerical work for hire or reward. 3. The definition of “workmen” in the Standing Orders of the sugar factory includes any person employed by a factory to do any skilled or unskilled, manual, supervisory, technical or clerical work for hire or reward. 4. The words “employed by a factory” in the definition of “workmen” in the Standing Orders include workmen employed by the contractors of the factory.
Final Decision: The Supreme Court dismissed the appeal filed by the sugar factory. It held that the workmen were employed by the sugar factory in law and were entitled to the minimum wage and other benefits under the Standing Orders.

Judgment

DAS GUPTA, J. : The twenty-one persons who are the respondents in this appeal were engaged from November 21, 1958 to February 5, 1959 in the work of removal of press-mud in the sugar factory belonging to the appellant. On February 6, 1959, their services were terminated. It also appears that for the period of work of November 21, 1958 to February 5, 1959 they were paid wages at rates lower than Rs. 55/- per month which was the minimum prescribed wage for workmen of vacum pan sugar factories of Uttar Pradesh under the Standing Orders dated October 3, 1958, issued by the Government of Uttar Pradesh. On July 31, 1962, the Government of Uttar Pradesh referred to the Labour Court, Lucknow, a dispute between these respondents and the Basti Sugar Mills Ltd. In this the Basti Sugar Mills Ltd., was described as the employers and the respondents as their workmen. The matters in dispute were thus mentioned in the order of reference :-

"(1) Whether the employers have terminated the services of their workmen, named in the Annexure, with effect from February 6, 1959 legally and/or justifiably ? If not, to what relief are the workmen concerned entitled ?

(2) Whether the action of the employers in paying to the workmen, named in the Annexure to issue No. 1, at rates lower than the minimum prescribed wage of Rs. 55 per month, for the period from November 21, 1958 to February 5, 1959 is legal and/or justified. If not, to what relief are the workmen concerned entitled and with what details."

2. The appellant contended that these 21 workmen were not employed by the management of the sugar mills. The appellant s case was that the work of removal of press-mud had been given by the Company to a contractor, Banarsi Das, and that these 21 men were employed by that contractor to do the work. The management of the Company, it was said, had nothing to do with these men. Banarsi Das left the work on February 6, 1959 and the termination of the services of these workmen was made by him. The respondents through their Union contended, on the contrary, that they had been employed directly by the management of the Company.

3. On a consideration of the evidence the Labour Court accepted the appellant s case that the work of removal of press-mud was being done through the contractor Banarsi Das and it was Banarsi Das under whom these 21 persons were employed. It further held that in view of the definition of "employer" in sub-cl. (iv) of S. 2 (i) of the Uttar Pradesh Industrial Disputes Act, 1947, the appellant was in law the employer of these 21 persons. It held accordingly that they were entitled to the benefit of the Standing Orders regarding minimum wages and were also entitled to reinstatement . In that view the Labour Court ordered, (a) payment to the workmen at the rate of Rs. 55/- per month from February 6, 1959 upto the end of the crushing season of 1958-59; (b) reinstatement of the workmen if not already employed by the Company in the crushing season of 1962-63; and (c) payment of difference of wages computed at the rate of Rs. 55/- per month and Rs. 1/- per day in the case of Ram Ujagar and 14 annas per day in the case of other workmen for the period November 21, 1958 to February 5, 1959.

4. Against this order of the Labour Court the present appeal has been filed by the Company with the special leave of this Court.

5. Three points are raised by Mr. Pathak in support of the appeal. The first is that the definition of "employer" in sub-cl. (iv) of S. 2(i) of the Act does not make the appellant, the employer of these workmen. The second point, urged rather faintly, is that if the above definition be so construed as to make the contractor s labourers, workmen of the company the definition should be held to violate the provisions of Article 19 (1) (g) of the Constitution. The third point urged is that, in any case, the respondents are not entitled to the benefit of the Standing Orders which fixed the minimum wage for the workmen of the vacuum pan sugar fa

Click Here to Read the rest of this document