The necessity for claimants to substantiate allegations of a sham contractor relationship to validate employment claims under the Industrial Disputes Act, emphasizing that mere supervision does not establish employer-employee status.

JUDGMENT :

T.M. NADAF, J

1. The challenge in these appeals are to a common impugned order dated 10.04.2023, passed by the learned Single Judge in Writ Petition No.31261/2016 (L-RES) (C/W. W.P.No.57652/2017 [L-RES] filed by the appellant and respondents herein, whereby the learned Single Judge has dismissed both the petitions filed by the appellant as well as respondents calling in question the order dated 18.02.2016, passed by the Principal Labour Court Bangalore in Reference No.14/2012.

2. Suffice to state the appellant filed writ petition in W.P.No.31261/2016, calling in question the order dated 18.02.2016, passed by Principal Labour Court, Bengaluru in Reference No.14/2012, whereby the Labour Court allowed the reference directing the appellant-management to reinstate all the first party – workmen / respondents herein, to their original post and the said exercise shall be done within one month from the date of publication of the award. However, the claim for backwages by the first party - workmen was declined. The respondents-workmen also filed Writ Petition No.57652/2017, seeking to quash / modify the order of the Labour Court, so far as declining the backwages and sought for grant of full backwages through a writ of mandamus.

3. Shorn of succinctly stated facts of the case are as follows:

The appellant is a partnership firm established in 1974, which is a small-scale industry manufacturing moulded plastic components. There are about 40 permanent workers employed on the rolls of the appellant. Workers of several firms including the appellant are members of a Union called Hind Mazdoor Sabha, recognized by the appellant management since 03.02.1988 entered several settlement with the said Union and the latest settlement was dated 17.04.2019 and was signed by the appellant firm with the said sole recognized Union by the appellant partnership firm.

4. As there was a shortfall of few unskilled workers, the appellant engaged the service of M/s.Madhu Enterprises, a contractor who deployed around 16 workers to carry out the work, which were basically unskilled in nature. Accordingly, an agreement was entered with the appellant and M/s.Madhu Enterprises as per Exhibits-M7 and M8. As there was a demand by M/s.Madhu Enterprises for enhancement of wages to the labourers supplied by it through a letter dated 14.02.2011 to the appellant, the same was found excessive by the appellant-management, in view of the same, the contract between the M/s.Madhu Enterprises and appellant came to be terminated by a letter dated 18.04.2018.

5. The appellant – management, received a notice from the Conciliator under Section-10 of Industrial Dispute Act, 1947, on the dispute raised by the respondent - first party – workmen. The appellant-management appeared before the Conciliation Officer and filed documents, denying that, first party-workmen are its employees; that they were engaged through contractor and there is no relationship of employer-employee as such the dispute raised is not sustainable in law. The specific case before the Conciliation Officer was that first party-workmen are workers of M/s.Madhu Enterprises and if there is any dispute it should be between the M/s.Madhu Enterprises on the one hand, and the first party – workmen on the other hand. On the failure of conciliation, a reference was made by the Government to the Labour Court under Reference No.14/2012 raising the following three points for dispute:

1. “Whether the Management of M/s Leotech, No. 70, 2^nd Main Road, Industrial Town, Rajajinagar,