IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.J. Jamadar, J.
Suryakand D. Lad and ors. - Petitioners
Versus
M/s. Oil and Natural Gas Corporation Ltd. and ors.– Respondents
Writ Petition No. 2443 of 2022, WP Nos. 2355, 1724, 1826, 1724, 1826 of 2021
Decided On : 23-08-2023
Constitution of India, 1950 - Article 12 - Contract Labour (Abolition and Regulation) Act, 1970 - Payment of Gratuity (Central) Rules, 1972 - Rule 7(1) - Payment of Gratuity Act, 1972 - Section 7(7), 2(f)(i) - Contract Labour Act, 1970 - Section 21(4) - Workmen services - Goodwill Package Scheme - By impugned order Appellate Authority was persuaded to allow appeal holding that issue of liability of ONGC was clearly covered by decision of Court in case of Cummins (I) Ltd. vs. Industrial Cleaning Services and Controlling Authority had exceeded its jurisdiction in deciding question as to whether ONGC was principal employer of petitioners and, therefore, liable to pay gratuity – Petitioners rendered services as contract workmen to ONGC in excess of 15 years, on an average - Para 59.
Finding of the Court: If submission on behalf of ONGC is to be accepted, contractor through whom services of petitioner were being used on date of cessation of employment, would alone be person liable to pay gratuity for entire service tenure and that would bring in element of liability of last contractor to pay gratuity even in respect of past service for which contract employees were not employed by him - Such liability can only be fastened either under a statutory obligation or contractual stipulation - No statutory prescription to cover such liability could be pressed into service by ONGC - Nor Court finds any such contract between last contractor and predecessor contractors, or for that matter, between last contractor and ONGC - In contrast, in case of Cummins (supra), successor contractor had incurred an obligation pursuant to a contract with predecessor contractor, to pay gratuity - Appellate Authority was in error in setting aside order passed by Controlling Authority fastening liability on ONGC to pay gratuity.
Result: Petitions allowed.
JUDGMENT :
1. Rule. Rule made returnable forthwith and, with the consent of the learned Counsel for the parties, heard finally.
2. As a common question of law arises for consideration in these petitions in a, by and large, identical fact-situation, all these petitions are being decided together. Writ Petition No.2443 of 2022 is considered as the lead petition.
3. Background facts can be stated in brief as under:
(b) The petitioners claim as the petitioners and other workmens’ services were being utilized by ONGC for performing work of a permanent and perennial nature, through the Trade Unions dispute was raised to treat the petitioners and other workmen as regular and permanent workers of ONGC, in writ petitions before this Court. An industrial reference was also subjudice before the Central Government, Industrial Tribunal.
(c) On 8th June, 2006 ONGC floated a Goodwill Package Scheme, purportedly to achieve industrial peace and harmony, minimize litigation and jobless contract labour and address the implications of closure, shifting, re-organization and restructuring of establishments of ONGC. Pursuant thereto several Unions of contract workers executed a Memo of Understanding (MoU) with ONGC. One of the principal terms of the Goodwill Package Scheme was that in consideration of payment of lump-sum compensation the contract workers would withdraw from the pending litigation and cease to be engaged on the premises of ONGC. Accordingly, on 13th June, 2006, the petitioners signed an, “affidavit-cum-declaration” to avail the benefits under the said scheme and consequently withdrew from the industrial reference.
(d) The petitioners claim, they were paid the amount in accordance with the terms of Goodwill Package Scheme. However, gratuity payable to them was not paid. Thus, the union dispatched ‘I’ Forms in terms of Rule 7(1) of the Payment of Gratuity (Central) Rules, 1972 framed under the Payment of Gratuity Act, 1972 (“the Gratuity Act”) to respondent Nos.1 and 2. No action in conformity with the obligations of the employers was taken by the respondents. Therefore the union submitted, ‘N’ Forms before the Controlling Authority under the Gratuity Act.
(e) The Controlling Authority issued notices to ONGC and respondent No.2. After evaluating the material and the evidence and considering submissions canvassed, including on the objection as to the maintainability of the claim for gratuity against ONGC – the principal employer, by an order dated 17th July, 2017, the Controlling Authority under the Gratuity Act directed the ONGC to make payment of gratuity to the petitioners. Liberty was granted to ONGC to recover the amount so paid from respondent No.2 contractor and its predecessors. The Controlling Authority, inter alia, held that the contract workers were entitled to claim gratuity from the ONGC, who was, at all material times, their principal employer and the fact that they had accepted the compensation under the Goodwill Package Scheme did not preclude them from claiming the gratuity under the Gratuity Act.
(f) Being aggrieved, ONGC preferred an appeal before the Appellate Authority under Section 7(7) of the Gratuity Act. By the im
Ahmedabad Pvt. Primary Teachers’ Association vs. Administrative Officer and others
Cummins (I) Ltd. vs. Industrial Cleaning Services
The court affirmed that the controlling authority can determine the employer-employee relationship for gratuity claims, establishing that IIT Bombay was liable for gratuity payments to contract emplo....
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