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2013 Supreme(SC) 1035
SUPREME COURT OF INDIA
CHANDRAMAULI KR. PRASAD , V. GOPALA GOWDA, JJ.
BALWANT RAI SALUJA & ANR. ETC. ETC. – APPELLANTS
VERSUS
AIR INDIA LTD. & ORS. – RESPONDENTS
CIVIL APPEAL Nos.10264-10266 OF 2013 (@SPECIAL LEAVE PETITION (C) NOS. 24946-24948 OF 2011)
Decided On : 13-11-2013
IMPORTANT POINT
Statutory obligation to provide Canteen is not decisive to determine the status of workmen employed in the Canteen.
V. Gopala Gowda, J.
IMPORTANT POINT
Contracting with a subsidiary Company for running statutory canteen is a Sham contract. Workers of such canteens are entitled to regularisation as workers of the principal employer.
Headnote:(a) Labour Laws - Regularisation - Principal employer - Employees of canteen run for Air India Ground Services Department, Indira Gandhi International Airport, Delhi (Engineering Unit) by Chef Air Flight Catering a unit of Hotel Corporation of India, a wholly owned subsidiary of Air India Ltd. - Raising Industrial dispute for status of deemed employees of Air India and regularisation - Air India not fulfilling tests of principal employer - It is neither paying wages, nor selects, appoints and supervises them, nor their work - It is also not the disciplinary authority for canteen workers - Is not the principal employer for canteen workers. (Para 23)
(1969) 1 SCC 765; (2001) 7 SCC 1; (2005) 5 SCC 51; (2009) 13 SCC 374; (2011) 1 SCC 635 - Relied upon
(b) Factories Act, 1948 - Section 46 - Statutory canteen - Obligation to provide Canteen - Not decisive to determine the status of workmen employed in the Canteen. (Para 26)
(2004) 3 SCC 547; (2002) 1 SCC 337 - Relied upon
1990 Supp SCC 191; (2001) 7 SCC 1 - Distinguished
Facts of the case:
This case is relates to service conditions of canteen workers of Air India Ltd.
A canteen is run for M/s. Air India Ground Services Department, Indira Gandhi International Airport, Delhi (Engineering Unit) of the Air India Ltd. by Hotel Corporation of India, a wholly owned subsidiary of Air India Ltd. through Chef Air Flight Catering, a unit of the Corporation.
The canteen workers raised an industrial dispute demanding to be treated as deemed employees of Air India Ltd.
The Tribunal awarded the dispute in favour of the workmen.
The award of the Tribunal was set aside by the High Court.
Finding of the Court:
The impugned judgment is not sustainable.
Result : Appeal allowed.
Civil Appeal Nos.10264-10266 of 2013
(Arising out of SLP (C) Nos. 24946-24948 of 2011)
(a) Delhi Factories Rules of 1950 – Rules 65 to 70 – Air India is statutorily required to maintain and provide a canteen for M/s. Air India Ground Services Deptt. IGI, Air Port Delhi (Engineering Unit) – Canteen situated in the Air India premises and run through HCI from its Chefair unit – Both Air India Ground Services and HCI wholly owned subsidiaries of Air India – Air India is the principal employer. (Para 17, 19 and 22)
(1978) 4 SCC 257; (1988) 4 SCC 478; 1995 suppl. (2) SCC 611 – Relied upon
(b) Labour Laws – Regularisation – Principal employer Air India maintaining canteen through Chefair which is in turn a unit of HCI which is a subsidiary of Air India – Post perennial in nature – Workers are required to be regularized. (Para 23)
(c) Labour Laws – Unfair Labour Practices – Workers on perennial nature of work – Continuity of service broken by artificial beaks after 40 days by rotating the workers – Unfair Labour practice in terms of section 2(ra) and item 10 of Schedule V, I.D. Act. (Para 24)
(d) Labour Laws – Employer-employee relationship – Determinative test – Test of economic control rather than the test of control and supervision. (Paras 34 and 35)
(2010)3 SCC 192; (1973)4 SCC2 25; (1978) 4 SCC 257 – Relied upon
(e) Labour Laws – Workman – Under Factories Act, 1948 and I.D. Act, 1947 – The same workers for Factories Act are also workers for I.D. Act – Permanently keeping such workers as temporary is unfair labour practice. (Para 36)
(f) Labour Laws – Employer-employee relationship – Air India contracting with HCI for running its canteen – HCL a subsidiary Company of Air India – Employing contract workers to work in the statutory canteen of Air India – Sham contract. (Para 44)
(1978) 4 SCC 257; (1988) 4 SCC 478; AIR 1964 SC 355; (1988) 4 SCC 59; (1996) 4 SCC 622; (2003) 6 SCC 1; (1999) 3 SCC 601; 1990 (Supp) SCC 191 – Relied upon
1897 AC 22; (1999) 6 SCC 439; (2002) 1 SCC 337 – Distinguished
1995 suppl. (2) SCC 611; (2001) 1 SCC 720; (2001)7 SCC 1; (2009)13 SCC 374; (2004) 3 SCC 514; (2005) 5 SCC 51; (1992) 1 SCC 695 – Referred
(g) Industrial Disputes Act, 1947 – Sections 25F and 33(2)(b) – Termination of workers during pendency of matter before CGIT without obtaining its approval and without complying with section 25F – Void ab intitio. (Para 49)
Facts of the case:
This case is relates to service conditions of canteen workers of Air India Ltd.
A canteen is run for M/s. Air India Ground Services Department, Indira Gandhi International Airport, Delhi (Engineering Unit) of the Air India Ltd. by Hotel Corporation of India, a wholly owned subsidiary of Air India Ltd. through Chef Air Flight Catering, a unit of the Corporation.
The canteen workers raised an industrial dispute demanding to be treated as deemed employees of Air India Ltd.
The Tribunal awarded the dispute in favour of the workmen.
The award of the Tribunal was set aside by the High Court.
Finding of the Court:
Both the learned single Judge and the Division Bench of the High Court have erroneously accepted the case pleaded by Air India and HCI.
Result : Appeal allowed
JUDGMENT
CHANDRAMAULI KR. PRASAD, J.
Leave granted.
Air India Limited was constituted under the Air Corporations Act, 1953. By virtue of Section 3 of the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994, Air India has vested in Indian Airlines Limited. It has Ground Services Department at Indira Gandhi International Airport, Delhi. Respondent No. 2 is Hotel Corporation of India, which is a Government Company incorporated under the Companies Act. The authorized share capital of the Hotel Corporation of India, hereinafter referred to as the Corporation, is Rupees 10 crores, divided into 10 lakhs equity shares of Rs. 100/- each. The Corporation is a wholly owned subsidiary of Air India and its entire share capital is held by Air India and its nominee. Excepting 6 shares, 4,99,994 shares have been subscribed by Air India and rest by its nominees. Air India controls the composition of the Board of Directors and appoints Directors in consultation with the Government of India. The power to remove the Directors from office before the expiry of the term is vested with Air India, in consultation with the Government of India, so also the power to fill up the vacancies caused by death, resignation, retirement or otherwise. General management of the Corporation is vested in the hands of the Managing Director. Notwithstanding that, Air India is conferred with the power to issue such directions or instructions as it may think fit in regard to the finances and the conduct of the business and affairs of the Corporation. Duty has been cast upon the Corporation to comply with and give effect to such directions and instructions. The main objects for which the Corporation is incorporated are large and include carrying the business of hotels, motels, restaurants, cafés, kitchens, refreshment rooms, canteens and depots etc. in general and its incidental and ancillary objects are establishment of catering and opening hotels, which would tend to promote or assist in Air India’s business as an international air carrier. Respondent No. 3, Chef Air Flight Catering, hereinafter referred to as ‘Chef Air’, is one of the units of the Corporation.
Section 46 of the Factories Act, inter alia, confers power on the State Government to make rules requiring a specified factory where more than 250 workers are ordinarily employed, to provide and maintain a canteen for the use of the workers. In exercise of the aforesaid power, Rules 65 to 71 have been incorporated in the Delhi Factory Rules, 1950, hereinafter referred to as ‘the Rules’. Rule 65(1) was to come into force in respect of any class or description of factories on such dates as the Chief Commissioner may by notification in the Official Gazette appoint. Rule 65(2) of the Rules, inter alia, contemplates that the occupier of every factory notified by the Chief Commissioner, where more than 250 workers are ordinarily employed, shall provide in or near the factory an adequate canteen in accordance with the standard prescribed in those Rules. In pursuance of the provisions of sub-rule (1) of Rule 65 of the Rules, the Lieutenant-Governor of the Union Territory of Delhi, by notification in the Official Gazette, dated 21st of January, 1991, directed that Rules 65 to 70 of the Rules shall apply to the factories specified in the said Rules with effect from the date of publication of the notification in the Official Gazette. It included M/s. Air India Ground Services Department, Indira Gandhi International Airport, Delhi (Engineering Unit).
The workmen working in Air India Ground Services Department Canteen, hereinafter referred to as ‘the Canteen’, raised an industrial dispute and the competent Government made a reference to the Central Government Industrial Tribunal as to whether the demand of the workmen employed by Chef Air to provide canteen service to be treated as deemed employees of the management of Air India is justified and, if so, what relief the workmen are entitled to? The workmen laid their
