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1992 Supreme(Cal) 194
High Court Of Calcutta
Kalyanmoy Ganguli
FCI WORKERS UNION - Appellant
Versus
FOOD CORPORATION OF INDIA - Respondent
Constitutional Writ Jurisdiction . Of .
Decided On : 05/14/1992
K.Banerjee, P.S.SENGUPTA, Tapas
The existence of an intermediary (CWC) between the real employer (FCI) and the workmen does not negate the employer-employee relationship between FCI and the workmen, and the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947, apply to retrenchment of workmen in industrial establishments of certain magnitude, including the godowns in question.
Headnote:
EMPLOYMENT - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 25-G, SECTION 25-N - FOOD CORPORATION OF INDIA ACT - EMPLOYEE-EMPLOYER RELATIONSHIP - CWC AS AN INTERMEDIARY - RETRENCHMENT - VALIDITY - APPLICABILITY OF SECTION 25-G AND 25-N - ABSORPTION OF WORKMEN - PAYMENT OF EMOLUMENTS DURING PENDENCY OF FINAL DECISION.
Fact of the Case:
Petitioners, a trade union and its president, challenged the retrenchment notices issued by the Central Warehousing Corporation (CWC) to workmen employed in CWC godowns exclusively for the Food Corporation of India (FCI). The petitioners contended that the workmen were employees of FCI, not CWC, and that the retrenchment notices violated the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947.
Finding of the Court:
The court held that the workmen were employees of FCI, not CWC, based on the following factors: * FCI requested CWC to hire godowns and employ workmen exclusively for FCI's handling and storing works. * CWC acted as an agent of FCI and received a supervising charge for its services. * FCI bore all the incidences of the work. The court further held that the retrenchment notices were invalid because they violated the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947, which require employers to follow certain procedures before retrenching workmen.
Issues: 1. Whether the workmen were employees of FCI or CWC? 2. Whether the retrenchment notices violated the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947?
Ratio Decidendi: 1. The court applied the "cheeking off theory" propounded in Hussain Bhai v. Alath Factory Tozhilali Union and Ors. to determine the employer-employee relationship. According to this theory, the real employer is the one who has economic control over the workers' subsistence, skill, and continued employment, even if there are intermediate contractors. 2. The court held that Sections 25-G and 25-N of the Industrial Disputes Act, 1947, apply to all industrial establishments of certain magnitude, including the godowns in question, and that FCI was required to comply with these provisions before retrenching the workmen.
Final Decision: The court set aside the retrenchment notices issued by CWC and directed FCI to evolve a scheme to absorb the affected workmen in its other godowns as far as practicable. If retrenchment became inevitable, FCI was directed to strictly comply with the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947. The court also directed FCI to pay the workmen their emoluments from the date of retrenchment until a final decision was reached.
( 1 ) IN the instant application under Article 226 of the Constitution of India, the petitioners, inter-alia, pray for a writ in the nature of mandamus commanding the respondents to rescind, recall, cancel and withdraw the proposed retrenchment notices, a specimen copy of which has been annexed to the petition marked with the letter 'n' and to command the Food Corporation of India not to dehire the Central Warehousing Corporation godowns at Central Warehousing, Calcutta VIII (Presidency Jute Mills) Rishra, Central Warehousing, Calcutta X (Ambica Jute Mills), Central Warehouse, Calcutta II (Hanuman Jute Mills) and Central Warehouse Calcutta I (Shyamnagar South Jute Mills) and restraining the respondents from retrenching the workmen whose names appear in the Annexure marked with letter 'a' and in the alternative commanding the Food Corporation of India to transfer the said workmen to its nearby depots.
( 2 ) THE petitioner No. 1 is a registered trade union seeking to spouse the cause of all sections of workers of the Food Corporation of India and the petitioner No. 12 is the President of the petitioner No. 1.
( 3 ) THE case of the petitioners is that persons whose names appear at Annexure 'a' of the petition are in fact all employees of the Food Corporation of India although the Central Warehousing Corporation and sometimes the State Warehousing Corporations are responsible for the immediate payment of their wages.
( 4 ) THE petitioners state that since the inception of the Food Corporation of India after the enactment of the Food Corporation of India Act, the Food Corporation of India, hereinafter referred to as the FCI, has been employing labour at its various godowns and depots to carry out its functions, the primary and basic function being handling of foodgrains and food stuffs. The petitioners state that such function of handling foodgrains and foodstuffs is perennial in nature. The members of the petitioner no. 1 whose names appear in Annexure 'a' of the petition are working as Sardar/mondal/munsi/handling/ Ancillary labours of the FCI for more or less 20 years.
( 5 ) IT is stated that the FCI carries its functions of handling of food grains and foodstuffs through various types of godowns. The first category includes the godowns which are owned by the FCI, the second category includes go-downs which are hired by the FCI and the third category falls in the hired godowns where the FCI bears the cost of labourers who are paid wages and other fringe benefits by the FCI as for instance the Central Warehousing Corporation (hereinafter referred to as the CWC) and the State Warehousing Corporation (hereinafter referred to as the SWC.)
( 6 ) THE workmen whose names appear at Annexure 'a' of the petition are employed in the godowns belonging to or hired by the CWC but the said workmen work exclusively for the FCI. The CWC is paid some supervising charges by the FCI for looking after the work of such godowns. Before proceeding further it should be noted that the basic facts of this case are more or less admitted although the interpretation of these facts is in question.
( 7 ) IT is asserted in the petition that although the employees concerned are working in the CWC and SWC godowns yet as they work exclusively for the FCI, the real employer is the FCI and in fact, the FCI has always taken the responsibility of the said employees including the payment of wages, other fringe benefits, bonus and uniforms. The FCI has also paid incentive wages to such workmen. It may also be noted here that the rate of bonus paid by the CWC to its own workmen and the rate of bonus paid to the workers working in the CWC godowns working exclusively for the FCI are different and the FCI invariably reimburses the CWC for payment of such bonus. According to the petitioners, the CWC merely manages the working of the godowns for which they are paid a supervising charge. In effect, it is stressed that the workmen concerned are the emp
