1. Dispute regarding employment status and regularization of contract workers in a government undertaking. (Para 5 , 3 , 4 )
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2018 Supreme(SC) 828
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, SANJAY KISHAN KAUL, JJ.
Food Corporation of India - Appellant
Versus
Gen. Secy, FCI India Employees Union & Ors. - Respondents
Civil Appeal No. 10499 of 2011
With
Food Corporation of India - Appellant
Versus
The Workmen Through the Convener & Anr. - Respondents
Civil Appeal No. 10511 of 2011
Decided On : 20-08-2018
Important Points
IMPORTANT POINT
When workers continued in employment even after expiry of contract labour agreement, wages were paid directly by the employer, workers performing perennial nature of work as permanent workers and the employer not adducing any evidence in rebutting workers’ claim, held, workers are entitled to regularization in the services of the employer.
When workers continued in employment even after expiry of contract labour agreement, wages were paid directly by the employer, workers performing perennial nature of work as permanent workers and the employer not adducing any evidence in rebutting workers’ claim, held, workers are entitled to regularization in the services of the employer.
Subject
Employment - Regularization of Services
Act Referred
Headnote
Labour law – Employer-employee relationship – 995 casual labourers of FCI – Contract labour agreement coming to an end in 1991 and not renewed – Workers continued in employment – Wages paid directly by FCI – Workers performing perennial nature of work – Performing their duties as permanent workers – FCI not adducing any evidence in rebutting workers’ claim – Held, the forums below rightly deciding the issue in favour of workers. (Para 16)
Facts of the case:
In the year 1992, a dispute arose between the appellant (FCI) and around 955 employees working in the Branch office at Chennai as to whether these 955 employees are the employees of the FCI or they are employed by the contract labourers’ Society to work in the FCI to carry out their business operations and secondly, whether these 955 employees are entitled to claim regularization of their services as FCI employees.
The Industrial Tribunal answered the reference in favour of the workers’ Union and against the appellant. It was held that these 955 employees are entitled to be regularized in the services of the FCI.
The Division Bench of the High Court dismissed the writ appeals and affirmed the order of the Single Judge and the awards of the Industrial Tribunal.
Finding of the Court:
Forums below have rightly decided the dispute in favour of the workers.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Workers claim direct employment and right to regularization; management contends they are employees of third-party contract societies. (Para 6 , 7 , 4 )
3. Regularization is justified where contracts expire, wages are paid directly, work is perennial, and management fails to rebut evidence. (Para 16 , 19 , 8 )
4. Concurrent findings of fact by Industrial Tribunals and High Courts are binding unless they suffer from perversity or illegality. (Para 17 , 20 , 21 )
5. Appeals dismissed; regularization upheld where evidence of employment existed and rejected where no employer-employee relationship was proven. (Para 25 , 12 , 9 )
6. Under what conditions can contract workers be regularized in a government undertaking?
Regularization is appropriate when the contract with the labor provider has ended, wages are paid directly by the undertaking, the work is of a perennial nature, and workers perform duties as permanent employees. (Para 16 )
7. What is the legal consequence when a party fails to adduce evidence in an industrial dispute?
If a party fails to adduce evidence to prove its case despite being afforded the opportunity, the tribunal is justified in drawing an adverse inference against that party. (Para 19 )
8. How are concurrent findings of fact treated in appeals under Article 136 of the Constitution?
Concurrent findings of fact recorded by the Industrial Tribunal and the High Court are binding on the Supreme Court, provided they do not suffer from any perversity or illegality. (Para 17 , 20 , 21 )
9. Can regularization be granted in the absence of a proven employer-employee relationship?
No. Relief of absorption or regularization cannot be granted if the claimants fail to prove an employer-employee relationship and evidence shows they were appointed by a third-party society. (Para 8 )
JUDGMENT :
Abhay Manohar Sapre, J.
1. These appeals are directed against the final judgment and order dated 13.12.2006 passed by the High Court of Madras at Chennai in Writ Appeal No.3383 & 3382 of 2003 whereby the High Court dismissed the appeals filed by appellant herein.
2. In order to appreciate the short controversy involved in these appeals, few relevant facts need to be mentioned infra.
3. The appellant is a Government of India Undertaking known as “Food Corporation of India” (hereinafter referred to as “the FCI”). The appellant is engaged in the business of sale, procurement, storage and distribution of food grains.
4. In order to carry out their business activities, which are spread all over the country, the appellant has established its Branch offices in every State. One such Branch office is at Chennai (TN). The appellant has employed a large number of employees to carry out its business operations through their Chennai Branch office with which we are concerned in these appeals.
5. In the year 1992, a dispute arose between the appellant (FCI) and around 955 employees working in the Branch office at Chennai as to whether these 955 employees are the employees of the FCI or they are employed by the contract labourers’ Society to work in the FCI to carry out their business operations and secondly, whether these 955 employees are entitled to claim regularization of their services as FCI employees.
6. The case of the appellant (FCI), in substance, was that these (955) employees were/are never the employees of the FCI but were/are the employees of a contract labourers’ Society though working in the establishment of the FCI for doing their work. It was stated that due to this reason, they are not entitled to claim the status of the employees of the FCI and nor are they entitled to claim any regularization of their services in the set up of the FCI as the employees of the FCI. It was stated that their remedy, if any, would be against the contract labourers’ Society engaged by the FCI but not against the FCI.
7. On the other hand, the case of the workers’ Union was that these 955 employees are, in fact, the employees of the FCI and being in their regular employment since inception have been discharging their duties regularly for doing the work of the FCI. It was contended that they are therefore entitled to claim the regularization of their services in the set up of the FCI.
8. Since the aforementioned dispute could not be resolved amicably between the appellant and the workers’ Union, the Government of India by order dated 06.04.1992 referred the said dispute to the Industrial Tribunal, Madras for its adjudication under Section 10 of the Industrial Disputes Act, 1947.
9. The following reference was made for adjudication:
“Whether the action of the management of Food Corporation of India is denying to regularize 955 contract labourers engaged in management of Food Corporation of India, Godown, Avadi through TVK Cooperative Society in respect of names as given in Annexure is justified ? If not, to what relief they are entitled to?”
10. Both the parties submitted their statements in ID No. 39/1992 & I.D. 55/1993 in support of their respective stand before the Industrial Tribunal. So far as the workers’ Union (respondents herein) is concerned, they adduced the evidence to prove their case whereas the appellant (FCI) did not adduce any evidence to prove their case despite affording them an opportunity to adduce.
11. By awards dated 19.02.1997 & 29.07.1998, the Industrial Tribunal answered the reference in favour of the workers’ Union and against the appellant. It was held that these 955 employees are entitled to be regularized in the services of the FCI.
12. The appellant (FCI) felt aggrieved and filed writ petitions before the High Court of Madras at Chennai. By order dated 07.08.2000, the Single Judge dismissed the writ petitions and upheld the award passed by the Industrial Tribunal. The appellant felt aggrieved and filed intra court appeal
