IMPORTANT POINT
Where person was engaged on contract basis on various spells as a trainer to train weavers, non renewal of contract would not amount to retrenchment u/s 2(oo)(bb) of Industrial Disputes Act.

Headnote:Industrial Disputes Act, 1947—Sections 2(oo) (bb) and 25F—Respondent was engaged for various spells of fixed periods on a fixed honorarium as an expert weaver to train weavers—After expiry of contract of appointment on 31.8.1994 he was not appointed again—Industrial dispute was raised—Labour Court allowed the reference and directed reinstatement without back wages—High Court upheld the award—Appeal—Training programme was not perennial in nature—Terms and conditions of appointment showed that respondent was not a worker but employed on contract basis on a time bound specific scheme assigned as weaving trainer—Section 2(oo) of the Act was not attracted—Impugned award and judgment were illegal, liable to be set aside.
       Held : This training programme is not perennial in nature of work of the respondent. As and when such schemes are sanctioned for the limited period (sanctioned period), expert weavers on stipend/honorarium of Rs.1000/- for a specific period of 9 months are appointed. In this case 9 months period will commence from the date of his appointment i.e. 30.11.1993 under No. KHDC/IHDP/BNT/ADM/93-94:1301. It is thus clear from the above that the respondent claimant is aware that his appointment was purely contractual and for a specified period. He is also aware that he is not eligible to any other benefits as a regular employee of the Corporation and could be liable for termination without any notice and without payment of compensation. The claimant is also aware that his appointment stood automatically terminated on the completion of the stipulated period. The case of the claimant, therefore, in our view, does not become an industrial dispute. (Paras 13 and 14)
       A careful perusal of the terms and conditions of appointment would go to show that the respondent is not a worker but employed on contract basis on a time bound specific scheme assigned as weaving trainer. However, the learned Judges of the Division Bench committed a factual error in holding that the above letter of appointment does not show that employment was not a contract which stipulated that it comes to an end with the expiry of project or scheme nor is it the case of the Corporation that the respondent was made aware of any such stipulation even at the commencement of the employment. The High Court has failed to notice that the respondent was engaged on contract basis and had been assigned to train weavers who were lagging in weaving skills in the weaving potential development area working on time specific short term scheme sponsored by the Corporation. We are, therefore, of the opinion that the respondent is not a worker for the purposes of Section 25F of the I.D. Act but employed on contract basis only. The High Court also has not properly appreciated the judgment relied on – S.M. Nilajkar & Ors. vs. Telecom District Manager, Karnataka, (2003) 4 SCC 27. As the respondent was engaged as trainer for a specific period under the scheme and was paid a stipend of Rs.1,000/- p.m. from the date of his appointment and, therefore, Section 2(oo) of the Act is not attracted soon after the expiry of the specific period the respondent’s service was discontinued and so it is not a retrenchment as defined under Section 2(oo) of the I.D. Act.(Para 16)
       As pointed out earlier, the respondent was engaged only on contract basis. It is only a seasonal work and, therefore, the respondent cannot be said to have been retrenched in view of what is stated in clause (bb) of Section 2(oo) of the Act. Under these circumstances, we are of the opinion that the view taken by the Labour Court and the High Court is not correct and is illegal.(Para 24)

JUDGMENT

Dr. AR. Lakshmanan, J.—Karnataka Handloom Development Corporation Limited is the appellant in this appeal. The appellant-Corporation is a Public Sector Enterprise established by the Karnataka State Government to promote and assist the growth and development of the Handloom Industry outside the Cooperative sector in the State.

2. The respondent was appointed for various spells of fixed periods on a fixed honorarium as an expert weaver to train the weavers in the unorganized sector. The respondent was appointed on contract basis for a period of 200 days only, on a fixed pay of Rs.400 per month with a stipulation that the contract of appointment automatically expires on the 201st day.

3. The State Government introduced “VISHWA” programme to train and TO rehabilitate the weavers. The respondent was appointed specifically under the scheme on contract basis in February, 1993 for a period of 3 months on different terms of pay of Rs. 1,000/- per month. He was again appointed on contract basis for a period of 9 months as per the terms set out in the letter of appointment. After the expiry of the contract of appointment, on 31.08.1994, he was not appointed again. Being aggrieved, the respondent raised an Industrial Dispute. The Labour Department referred the dispute under Section 10(1)(c) of the Industrial Disputes Act, 1947 (hereinafter called “the I.D.Act”) for adjudication, inter alia, on the question (a) whether the Project Administrator Handloom, Banhatti is justified in refusing employment to the workman.

4. The appellant-Corporation, inter alia, contended that: 1) the I.D. Act does not apply to the respondent and 2) the respondent, his father and his wife have been doing business with the appellant at the relevant time and that the respondent was independently doing the weaving business and 3) the respondent was engaged on contract basis for fixed periods only and later under a specific scheme/Vishwa programme introduced by the State and that the scheme has already been closed and as such there are no funds for continuing with the said scheme.

5. The Labour Court allowed the reference, in part, directing reinstatement without back wages. Aggrieved by the award, the Corporation preferred a writ petition, which was dismissed by a Single Judge. The writ appeal filed by the appellant-Corporation was also dismissed by the Division Bench of the High Court. Aggrieved by the dismissal of their writ appeal, the Corporation preferred the above appeal in this Court.

6. We have heard Mr. P. Vishwanatha Shetty, learned senior counsel for the appellant-Corporation and Mrs. Rajani K. Prasad, learned counsel for the respondent.

7. Mr. P. Vishwanatha Shetty, learned senior counsel submitted that the High Court has failed to appreciate that the respondent was not a workman in the employment of the appellant-Corporation and that the respondent was a weaver in the area as any other independent weaver in the area and was getting certain concession from the Corporation which was in the interest of development of Handloom Industry. It was further submitted that there is no finding of the Labour Court that the workman was working for 240 days continuously in a calender year under the employer with wages and, therefore, the findings of the Labour Court and the confirmation by the High Court are erroneous. It was further contended that the respondent has worked as master weaver for certain periods with aims and objectives of the scheme of the Corporation which is purely temporary in nature and the respondent had been an independent weaver before and after the temporary period of training. It was further argued that the appellant has no control over the respondent or over his work and that they are given only assistance in the form of raw materials, yarn etc. to convert the yarn into fabric and to again sell the finished products to the Corporation. There is no relationship of employee and employer between the Corporation and the we

Click Here to Read the rest of this document

Judicial Analysis

SupremeToday

2006 Supreme(SC) 1126

IMPORTANT POINTWhere person was engaged on contract basis on various spells as a trainer to train weavers, non renewal of contract would not amount to retrenchment u/s 2(oo)(bb) of Industrial Disputes Act.

Cases Referred (7)

Judicial Analysis

IMPORTANT POINT
Where person was engaged on contract basis on various spells as a trainer to train weavers, non renewal of contract would not amount to retrenchment u/s 2(oo)(bb) of Industrial Disputes Act.