1. Dispute over conferment of permanent status to workmen under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. (Para 3 , 4 , 6 , 8 , 9 , 10 , 11 , 12 , 13 )
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2024 Supreme(SC) 497
SUPREME COURT OF INDIA
SANJAY KAROL, PRASANNA BHALACHANDRA VARALE, JJ.
Tamil Nadu Medical Services Corporation Limited – Appellant
Versus
Tamil Nadu Medical Services Corporation Employees Welfare Union – Respondent
Civil Appeal No. 6511 of 2024, Arising Out of SLP (C) No. 30005 of 2019
WITH
G. Sumathi and Others – Appellants
Versus
Tamil Nadu Medical Services Corporation Ltd. and Another – Respondents
Civil Appeal No. 6512 of 2024, Arising Out of SLP (C) No. 2649 of 2020
Decided On : 17-05-2024
Important Points
The judgment establishes the obligation to comply with the Inspector of Labour's order under the Act and the application of the Act to the Corporation and its employees.
Subject
Labor Law - Industrial Disputes
Act Referred
Headnote
Industrial Establishment - Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 - Section 2(3)(e), Section 3 - The judgment discusses the application of the Act to the Corporation and the eligibility of the Union members for permanent status. It highlights the interpretation of the definition of 'industrial establishment' and the obligation to comply with the Inspector of Labour's order.
Fact of the Case:
The Corporation employed workmen seeking regularization under the Act. The Inspector of Labour accepted the claim of 53 workmen for permanent status, leading to legal proceedings and appeals.
Finding of the Court:
The Court found that the Act applied to the Corporation and the Union members were eligible for permanent status. It held that the High Court should have upheld the Inspector of Labour's order and dismissed the Corporation's appeal while allowing the Union's appeal.
Issues: The Court considered the application of the Act to the Corporation and the eligibility of Union members for permanent status, as well as the High Court's decision to suggest raising an industrial dispute despite the Inspector of Labour's order.
Ratio Decidendi: The Act applied to the Corporation, and the Union members qualified for permanent status. The High Court should have upheld the Inspector of Labour's order, and the Corporation's appeal was dismissed while the Union's appeal was allowed.
Final Decision: The Corporation's appeal was dismissed, and the Union's appeal was allowed, entitling the Union members to permanent employment.
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): Mr. S. Nandakumar, Sr. Adv. Ms. Deepika Nandakumar, Adv. Ms. Preeti Nair, Adv. Mr. Naresh Kumar, AOR Mr. K. K. Mani, AOR Ms. T.archana, Adv. Mr. Rajeev Gupta, Adv.
For the Respondent(s): Mr. K. K. Mani, AOR Ms. T.Archana, Adv. Mr. Rajeev Gupta, Adv. Mr. S. Nandakumar, Sr. Adv. Ms. Deepika Nandakumar, Adv. Ms. Preeti Nair, Adv. Mr. Naresh Kumar, AOR Mr. D. Kumanan, AOR Mr. Deepa. S, Adv. Mr. Sheikh F. Kalia, Adv. Ms. G. Indira, AOR Mr. P Gandepan, Adv. Mr. Ashwini Kumar, Adv. Ms. D Poornima, Adv.
For the Petitioner(s): Mr. S. Nandakumar, Sr. Adv. Ms. Deepika Nandakumar, Adv. Ms. Preeti Nair, Adv. Mr. Naresh Kumar, AOR Mr. K. K. Mani, AOR Ms. T.archana, Adv. Mr. Rajeev Gupta, Adv.
For the Respondent(s): Mr. K. K. Mani, AOR Ms. T.Archana, Adv. Mr. Rajeev Gupta, Adv. Mr. S. Nandakumar, Sr. Adv. Ms. Deepika Nandakumar, Adv. Ms. Preeti Nair, Adv. Mr. Naresh Kumar, AOR Mr. D. Kumanan, AOR Mr. Deepa. S, Adv. Mr. Sheikh F. Kalia, Adv. Ms. G. Indira, AOR Mr. P Gandepan, Adv. Mr. Ashwini Kumar, Adv. Ms. D Poornima, Adv.
Table of Contents
2. Applicability of the Act based on the definition of commercial establishment and construction exemptions — effect of subsequent employment of some workmen. (Para 14 , 15 )
3. Analysis of commercial nature based on profit and turnover — interpretation of construction exemption as applying only to establishments exclusively engaged in such work. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 )
4. Commercial establishments are those operating for monetary gain — construction exemptions do not apply to multi-activity establishments where workers are not engaged in construction. (Para 21 , 24 , 27 )
5. Appeal by the employer dismissed and appeal by the employees allowed, directing compliance with the order granting permanent status. (Para 28 , 29 )
6. When does the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 apply to an establishment?
It applies if the entity is an industrial establishment, which includes commercial establishments under the Tamil Nadu Shops and Establishments Act, 1947. An establishment is considered commercial if its activities are undertaken for monetary gain, as evidenced by turnover and profit. (Para 17 , 18 , 19 , 20 , 21 )
7. Does an establishment's engagement in construction work automatically exempt it from the 1981 Act?
No. The exemption under Section 7 applies to workmen employed in establishments engaged in construction. If construction is only one of many activities and the affected workers are not engaged in construction, the establishment cannot avoid its obligations under the Act. (Para 23 , 24 )
8. Does the fact that some employees found other profitable employment justify dismissing the claims of other similarly situated workmen?
No. The court held that the fact that some individuals involved in an employment dispute have allegedly found other employment does not justify the dismissal of the claims of other workmen. (Para 25 )
9. Can a court direct parties to raise a new industrial dispute if an Inspector of Labour has already passed a valid order under the Act?
No. If an issue is already decided by a competent authority and the decision does not suffer from any vice of authority or jurisdiction, requiring employees to re-establish their claim before an industrial adjudicator is unjustified. (Para 28 )
1. Leave to appeal by special leave granted.
THE APPEALS
2. The cross appeals, one by the Tamil Nadu Medical Services Corporation Limited1 [Hereinafter ‘the Corporation’] and the other by the Tamil Nadu Medical Services Corporation Employees Welfare Union2 [Hereinafter ‘the Union’] question the judgment and order dated 9th August, 2019, passed by the High Court of Judicature at Madras in W.P. Nos. 17133 of 2001 and 15241 of 2009 respectively. The position of the parties is in accordance with SLP (C) No. 30005 of 2019.
3. The impugned judgment came to be passed in Writ Petition No. 17133/2001 which was directed against order dated 31st March, 2001 of the Inspector of Labour, Circle-III, Chennai3 [Hereinafter ‘Inspector of Labour’] by which the claim of 53 workmen to be conferred permanent status in the Corporation was accepted, while the claim of 42 others was rejected.
4. W.P. No. 15241 of 2009 was filed by 22 out of the said 53 workmen seeking a writ of mandamus to be granted employment in the Corporation as per the order of the Inspector of Labour.
QUESTIONS BEFORE THIS COURT
5. The questions that this Court is to consider are:
(i) Whether the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 would apply to the parties?
(ii) Whether by way of the impugned judgment, the suggestion to institute an ‘Industrial Disputes Claim’ questioning non-employment was sustainable, given that the Inspector of Labour had already passed orders in that regard?
FACTS IN BRIEF
6. The Corporation was incorporated under the Indian Companies Act, 1956 on 1st July, 1994. Its management is under the State of Tamil Nadu. It has employed various workmen in different capacities, including the appellants in the appeal arising out of SLP (C) No. 2649 of 2020. Such employees had sought regularization under the provisions of Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981.4 [Hereinafter ‘the Act’] Such representations being unsuccessful, two Writ Petitions bearing Nos. 17263 and 17147 of 1998 were preferred before the learned Single Judge of the High Court.
7. The learned Single Judge5 [Annexure P1, Page 61] vide judgment and order dated 21st July, 2000 passed the following directions:
“19..........
1. The Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (Tamil Nadu Act 46 of 1981) is applicable to the second respondent corporation.
2. The ‘Inspector’ having jurisdiction over the second respondent is directed to inspect and verify the records of the second respondent corporation and pass appropriated orders under Section 3 of the said Act with regard to the claim made by the members of the petitioner Union.
3. The ‘Inspector’ is also directed to consider the claim made by the petitioner Union regarding employment on Saturdays to the members of the petitioner Union.
4. The ‘Inspector’ is further directed to determine the above referred questions within three months from the date of a copy of this order after affording an opportunity of being heard to both parties.
5. Till an order is passed by the ‘Inspector’ as stated above, status quo as on date shall be maintained by both parties. Writ petitions are allowed to the extent mentioned above. No costs. All the miscellaneous petitions are closed.”
8. Pursuant to the above order, the Inspector of Labour passed order dated 31st March, 20016 [Annexure P3, Page 98] wherein the following issues were framed:
“ISSUES
(a) Whether the act pertaining to conferment of permanent status of Workmen could be made applicable to the respondent Establishment.
(b) Whether the authorized office under the aforesaid act being Labour Inspector has got the authority to try this case?
(c) If, the respondent’s Management is covered by the Jurisdiction of the aforesaid Act what is the nature of relief that could be awarded to the petitioners?”
9. The Inspector of Labour concluded that G. Sumathi and 52 other workmen were in the service
