1. Trade union challenged the termination of contract labour, alleging a sham contract and seeking regularisation, while management contended no employer-employee relationship existed to sustain an industrial dispute. (Para 2 , 3 , 4 , 5 , 6 , 7 )
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2026 Supreme(SC) 94
SUPREME COURT OF INDIA
PANKAJ MITHAL, S.V.N. BHATTI, JJ.
M/s Premium Transmission Private Limited – Appellant
Versus
The State of Maharashtra And Others – Respondents
Civil Appeal No. 532 of 2026 [@ S.L.P. (Civil) No. 9970 of 2023]
Decided On : 27-01-2026
Advocates appeared:
For the Petitioner(s): Mr. C. U. Singh, Sr. Adv. Mr. B. R. Kawre, Adv. Mr. Praveen Kumar Pandey, Adv. Mr. Atul Babasaheb Dakh, AOR
For the Respondent(s): Mr. Shrirang B. Varma, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Sandeep Sudhakar Deshmukh, AOR Mr. Nishant Sharma, Adv. Mr. Ankur S. Savadikar, Adv. Mr. Mayur P. Saavarkar, Adv. Mr. B H Marlapalle, Sr. Adv. Mr. Ajit Pravin Wagh, AOR Mr. Avinish Kr Saurabh, Adv.
For the Petitioner(s): Mr. C. U. Singh, Sr. Adv. Mr. B. R. Kawre, Adv. Mr. Praveen Kumar Pandey, Adv. Mr. Atul Babasaheb Dakh, AOR
For the Respondent(s): Mr. Shrirang B. Varma, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Sandeep Sudhakar Deshmukh, AOR Mr. Nishant Sharma, Adv. Mr. Ankur S. Savadikar, Adv. Mr. Mayur P. Saavarkar, Adv. Mr. B H Marlapalle, Sr. Adv. Mr. Ajit Pravin Wagh, AOR Mr. Avinish Kr Saurabh, Adv.
The court clarified that direct prior demands are not mandatory for initiating conciliation and that the contractor-worker relationship can be adjudicated in the context of unfair labor practices and determining employment status under the Industrial Disputes Act.
Headnote:(A) Industrial Disputes Act, 1947 - Sections 10(1), 12, and 33 - Proceedings of Industrial Dispute - The court addressed the legality of the conciliation process initiated without prior demand by the Union, asserting that admission of disputes directly by the Union is permissible if the circumstances warrant it (Para 28). The court further distinguished between genuine and sham contracts, ruling that the nature of the relationship entitles workers to rights under the ID Act, specifically regarding unfair labor practices and employment status (Paras 37 and 40).
(B) Conciliation Proceedings - Requirements - The need for a prior written demand was deemed non-mandatory in context of apprehended disputes; such demands may be circumvented to prevent escalation (Paras 12 and 24).
(C) Employment Status - The court emphasized that the relationship between contract workers and the principal employer needs adjudication to decide rights (Para 38).
(D) Precedents Cited - Reliance was placed on past judgments regarding the recognition of industrial disputes and definitions of workman to assess the legitimacy of the employment status (Paras 9-10). (E)
Result: Civil Appeal dismissed, conciliation proceedings upheld.
Legal Category Hierarchy
- labour and industrial law
- practice and procedure
Table of Contents
2. Management argued that no prior demand notice was served, rendering the reference invalid; union maintained that the alleged sham contract excused prior demand and justified immediate conciliation. (Para 10 , 11 , 14 , 15 )
3. The court observed that determining whether a contract is sham or genuine involves disputed facts requiring adjudication by an industrial court, rather than summary disposal via preliminary objections. (Para 19 , 25 , 26 , 28 , 37 )
4. A formal written demand is not a mandatory prerequisite for an industrial dispute under the Industrial Disputes Act, especially where the dispute involves apprehended industrial unrest or sham contracts. (Para 24 , 33 , 34 , 36 )
5. The High Court's refusal to interfere with the industrial reference was upheld; the industrial court was directed to adjudicate the sham nature of the contract and the status of workmen. (Para 40 , 41 , 42 )
6. Does the failure to serve a prior charter of demands on an employer invalidate a reference of an industrial dispute?
No, a formal written demand is not a sine qua non for existence of an industrial dispute. The appropriate government has the power to refer an existing or apprehended dispute for adjudication, and formal demand requirements cannot be used to stifle the preventive intent of the statute. (Para 24 , 33 , 34 , 35 )
7. Can a writ court decide the issue of whether a labour contract is sham or genuine?
No, determining whether a contract is sham or a camouflage is a disputed question of fact. Such issues must be adjudicated by an Industrial or Labour Court, as writ courts generally do not perform this function under Article 226, nor can such disputes be decided in summary proceedings. (Para 19 , 26 , 28 )
8. Does a notification issued under Section 10 of the Contract Labour (Abolition and Regulation) Act lead to automatic absorption of contract labourers?
No, the notification is merely regulatory and prohibitory. It does not create a positive right of automatic absorption; if a contract is found to be sham, the workmen may be treated as direct employees, but this requires specific adjudication by the Industrial Court. (Para 19 , 35 )
9. Is the status of a workman under the Industrial Disputes Act restricted to those with a direct employer-employee relationship?
The Industrial Disputes Act is broad; while generally assuming privity of contract, the forum is available to those alleging that a contractual intermediation is a sham, provided the issue is raised via a proper industrial reference for determination of employment status. (Para 28 , 29 , 30 )
JUDGMENT
S.V.N. BHATTI, J.
1. Leave granted.
2. On 28.01.2020, the Deputy Labour Commissioner/the appropriate Government, in exercise of powers under sub-section (1) of Section 10 and Sub-section (1) of Section 12 of the Industrial Disputes Act, 1947 (For short, “the ID Act”), referred an industrial dispute for adjudication to the Industrial Court, Aurangabad. The operative portion of the reference order reads as follows:
“(…) And whereas, considering the said report of the Deputy Commissioner of Labour, Aurangabad Division, Aurangabad, it is satisfied that there is a prima-facie case for referring the said dispute to the Industrial Tribunal for adjudication.
Accordingly, in exercise of the powers conferred under Sub Section (5) of Section 12 of the Industrial Disputes Act, 1947, which has now been conferred by the said Notification, the Deputy Commissioner of Labour, Aurangabad Division, Aurangabad sending it to the Hon'ble Member, Industrial Court, Aurangabad established under Hon'ble President, Industrial Court, Maharashtra, Mumbai for adjudicating the said dispute.
SCHEDULE
Demands as mentioned in the Schedule enclosed with the original file.
Signature
(Shailendra B. Pole)
Deputy Labour
Aurangabad Division Commissioner,
Aurangabad”
3. The charter of demands considered by the Conciliation Officer, which resulted in a failure report, is prefaced hereunder:
“I. All the workmen in Annexure - "A" are to be taken on muster roll of Opponent no. 1 with immediate effect,
II. All the workmen in Annexure - "A" are to be deemed to in employment of Opponent no. 1 from their respective dates of joining as set out in Annexure - "A",
III. All the workmen in Annexure - "A" are to be granted the classification of permanent workmen under the Model Standing Orders after their completing 3 months of continuous service from the first date of joining,
IV. All the workmen in Annexure - "A" are to be granted wages equal to the wages paid to the workmen named in Annexure - "B" (the highest paid to any workmen), and arrears in terms of money in respect of the wages and benefits paid to each of the workmen for the entire period actually worked in the Factory.
V. Prevent the Opponents from discharging, dismissing or otherwise teminating the workmen named in Annexure - "A" for their taking part in Industrial Dispute and for joining the Applicant by resorting Unfair Labour Practice falling under Item 1, 4, 5, 11 of Vth Schedule of Industrial Disputes Act.
VI. All the workmen in Annexure - "A" be paid full wages, who were shown to be students / training by Opponent no. 4 from Sept. 2011 to Sept. 2015
VII. The paper arrangements between Opponent no. 1 and other Opponents from time to time are sham and bogus and that Opponent no. 1 alone is the employer of workmen of Annexure- "A" and not Opponent no. 2, Opponent no. 3 and Opponent no.4.”
4. M/S Premium Transmission Private Limited, MIDC, Aurangabad, filed Writ Petition No. 7158 of 2020 against the State of Maharashtra through the Deputy Labour Commissioner, Aurangabad, Conciliation Officer, Aurangabad, and Aurangabad Mazdoor Union, Khokadpura, Aurangabad, challenging the order of reference dated 28.01.2020. The array of parties is referred to as Management, the appropriate Government, and the Union, respectively.
5. A few admitted circumstances are that the Appellant-Management is engaged in the business of manufacturing a wide range of transmission engineering products such as Worm Gearbox, Helical & Bevel Helical Gearbox, Vertical Coal Pulverising Mill Gearbox, Planetary Gearbox, Helical & Worm Geared Motors, Bevel Helical Cooling Tower Gearbox, Fluid Coupling, both Constant and Variable Speed, Extruder Gearbox, Elevator Machines etc.
5.1 According to the Management, the modern technology product line, guided and assisted by computer numerical control machines, is in place and in use in the manufacturing process. In the perennial work of operating computer numerical control machines, the Management states that it has app
