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SUPREME COURT OF INDIA
W.P. (Civil) No. 617 of 1986
Decided On: 12.05.1994
R.K. Panda and Ors. Appellants
Vs.
Steel Authority of India and Ors. Respondent
Counsel for the Parties
For Appearing parties: Altaf Ahmed, Additional Solicitor General, Shanti Bhushan and A.K. Ganguli, Senior Advs., Prashant Bhushan, Madan Lokur, Gaurav Banerjee, P.K. Sinha, M.P. Sharma, K.J. John, A.K. Panda, Kitty Kumaramangalam, S.N. Terdal, Sushma Suri, Indu Malhotra, Aysha Khatri, Dania Pradhan, Jaishree Suryanarayan, Parijat Sinha, Madhu Moolchandani and N.R. Choudhary, Advs.
Contract Labour (Regulation and Abolition) Act, 1970 – Sections 2(1)(b),2(1)(c),10,(2),12,16,17,18,19,20,21(4) – Constitution of India,1950 –Article 136 - frustrate claims - construction and maintenance of roads and buildings within the plant premises, public health, horticulture, water supply (town) - Contract labour has been defined in Section 2(1)(b) to mean a workman who has been employed as contract labour in or in connection with work of an establishment when he is hired in or in connection with such work by or through a contractor with or without knowledge of principal employer - Section 2(1)(c) defines contractor to mean a person who undertakes to produce a given result for establishment other than a mere supply of goods or articles of manufacture to such establishment through contract labour or who supplies contract labour for any work of establishment and includes a sub-contractor - Principal employer has been defined to mean in relation to any office or department of Government or a local authority head of that office or department or such other officer as Government or local authority as case may be may specify in this behalf and in a factory owner or occupier of factory - In view of Section 10 appropriate Government may after consultation with Central Board or as case may be a State Board prohibit by notification in Official Gazette employment of contract labour in any process operation or other work in any establishment - Sub-section (2) of Section 10 requires that before issuing any such notification in relation to an establishment appropriate Government shall have regard to conditions of work and benefits provided for contract labour in that establishment and other relevant factors - One of relevant factors which is to be taken into consideration is whether work performed by contract labourers is of perennial nature - Section 12 enjoins that no contractor to whom this Act is applicable shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by licensing authority - Licence so issued may contain conditions in respect of hours of work fixation of wages and other essential amenities in respect of contract labour as appropriate Government may deem fit to impose in accordance with rules - Section 20 provides that if any amenity required to be provided under section 16, Section 17, Section 18 or Section 19 for benefit of contract labour employed in an establishment is not provided by contractor within time prescribed therefor such amenity shall be provided by principal employer within such time as may be prescribed and all expenses incurred by principal employer in providing amenity may be recovered by principal employer from contractor either by deduction from any amount payable to contractor under any contract or as a debt payable to contractor - Section 21 says that a contractor shall be responsible for payment of wages to each worker employed by him as contract labour but at same time in order to protect interest of such contract labour it requires every principal employer to nominate a representative duly authorised by him to be present at time of disbursement of wages by contractor - It shall be duty of such representative to certify amounts paid as wages in such manner as may be prescribed - Same section also enjoins a duty on contractor to ensure disbursement of wages in presence of authorised representative of principal employer - Because of Sub-section (4) of Section 21 if contractor fails to make payment of wages within prescribed period then principal employer shall be liable to make payment of wages in full to contract labour employed by contractor and recover amount so paid from contractor - Any contravention of provisions aforesaid has been made penal for which punishment can be imposed - Is whether work performed by contract labourers is of perennial nature whether employment of contract labour in any process operation or other work in any establishment should be abolished or not - Whether contract labourers have become employees of principal employer in course of time whether engagement and employment of labourers through a contractor is a mere camouflage and a smoke screen as has been urged in this case is a question of fact and has to be established by contract labourers on basis of requisite material - Whether contract labour in Steel Industry in State of Orissa should be abolished - Held, Court would have also directed petitioners herein to pursue same remedy - But Court are faced with different orders passed by this Court since when this writ application was entertained by this Court - On this court was informed that services of a number of labourers were to be terminated because contract of contractor concerned was to expire - This Court however directed that notwithstanding it labourers should be continued - Again a direction was given to new contractor to continue employment of labourers who had been already working taking into consideration fact that they had picked up expertise and therefore would be more suited to job - Yet another order was passed by this Court directing respondent to see that new contractors employ those who have been retrenched with effect from - In that very order it was said that in event contractors jobs are taken over by respondent respondent will not employ any other workers directly without giving preference to persons who were working for more than three years - This Court was informed that State Government of Orissa which is appropriate Government under Contract Labour Act, had appointed a Committee to enquire into question whether contract labour in Steel Industry in State of Orissa should be abolished - It appears to be an admitted position that because of different interim orders passed by this Court many contract labourers whose employment in normal course would have ceased have continued with respondent and directions have been given to respondent to make payments to them from time to time - Such contract labour had been employed in jobs in Steel Plant - Out of them jobs have been identified in which contract labour has been abolished - But in jobs contract labour is being continued and contract labourers who might have ceased to be working with respondent are continuing by different interim orders passed by this Court - Following order was passed by this Court - Writ Application Disposed Of
JUDGMENT
N.P. Singh, J.
1. This writ petition has been filed on behalf of the petitioners, alleging that, they had been employed by the respondent - Steel Authority of India (hereinafter referred to as the Respondent) through various contractors at its Rourkela plant, but they are doing jobs which are perennial in nature and identical to the jobs which are being done by the regular employees of the said respondent. As such they are entitled to same pay which is being paid to the regular employees of the respondent and are entitled to be treated as the regular employees of the respondent. It is alleged that the respondent in order to frustrate the claims of the petitioners and other labourers similarly situated, to be treated as regular employees of the respondent, designated them as contract labourers. It has been asserted that the petitioners had been working for the respondent for the last 10 to 20 years under different contractors. The contractors used to be changed, but while awarding the contract, one of the terms incorporated in the agreement used to be, "the incoming contractors shall employ the workers of the respective outgoing contractors subject to the requirement of the job". Reading the agreement aforesaid, it appears that the workers concerned had been employed through the contractros concerned for different purposes like construction and maintenance of roads and buildings within the plant premises, public health, horticulture, water supply (town) etc. In the said agreement, it has been stated that parties shall be governed by the provisions of Contract Labour (Regulation and Abolition) Act, 1970 as well as Payment of Bonus Act. But one of the terms of the agreement is that incoming contractor shall employ the workers of outgoing contractor.
2. With the industrial growth, the relation between the employer and the employees also has taken a new turn. At one time the establishment being the employer all persons working therein were the employees of such employer. But slowly the employers including Central and State Governments started entrusting many of the jobs to contractors. Contractors in their turn employed workers, who had no direct relationship with the establishment in which they were employed. Many contractors exploited the labourers engaged by them in various manners including the payment of low wages. Hence, the Contract Labour (Regulation and Abolition) Act 1970 was enacted to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
3. The "contract labour" has been defined in Section 2(1)(b) to mean a workman, who has been employed as contract labour in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. Section 2(1)(c) defines "contractor" to mean a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor. "Principal employer" has been defined to mean (i) in relation to any office or department of the Government or a local authority, the head of that office or department or such other officer as the Government or the local authority, as the case may be, may specify in this behalf and (ii) in a factory, the owner or occupier of the factory. In view of Section 10, the appropriate Government may after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour "in any process, operation or other work in any establishment." Sub-section (2) of Section 10 requires that before issuing any such notification, in relation to an establishment, the appropriate Government
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