The status of contract labour is determined by the nature of the contract between the principal employer and the contractor, and not by factors such as payment of bonus or non-production of license under CLRA Act.

1. An industrial dispute between M/s. Indian Iron & Steel Company Limited, Burnpur Works (hereafter the company) and their workmen represented by ABK Metal & Engineering Workers Union, Purnahat (hereafter the respondent no.3) was referred to the 9th Industrial Tribunal at Durgapur for adjudication. The Tribunal was required to decide the following issue:

“Whether retrenchment of Sarbashree Narayan Chandra Jhariat, Balaram Hela, Jaharwarilal Bauri, Lakshmi Kumar Karmakar and Sridhar Tantubay by Indian Iron & Steel Co. Ltd. Burnpur Works, Burnpur by way of nonrenewal of contract with M/s. Kaycee Industries is justified? To what relief, if any, are these workmen entitled?”

2. The Tribunal after hearing the parties passed an award dated 11th December, 2000. It was ordered as follows:

“The reference case u/s. 10 is allowed on contest. An award be passed to the effect that the order of retrenchment of Sarbashree Narayan Chandra Jhariat, Balaram Hela, Jaharwarilal Bauri, Lakshmi Kumar Kar and Sridhar Tantubay by Indian Iron & Steel Co. Ltd., Burnpur Works, Burnpur, by way of non-renewal of contract with M/s. Kaycee India is unjustified. The Employer is directed to reinstate them with full back wages.”

3. The said award of the Tribunal is the subject matter of challenge in the present petition.

4. Mr. L.K. Gupta, learned senior advocate appearing for the company, contended that the award entirely satisfies the ingredients for which it could be termed perverse. Relevant evidence on record that would have, in ordinary circumstances, demolished the claim of the five workmen (hereafter the added respondents) was not considered. On the face of the evidence, no reasonable person would come to the conclusion the Tribunal reached. There was no evidence that the added respondents applied for appointment in the company. No plea of the contract being sham was raised. Existence of contracts could be evident on bare perusal of the three tripartite settlements, which were exhibited before the Tribunal. The witness adduced by the respondent no.3 also did not dispute the existence of the said settlements whereby more than 1500 contract labours had been absorbed excluding the added respondents. Such witness admitted that since the contract between M/s. Kaycee Industries (hereafter Kaycee) and the company was not renewed, the added respondents’ services were no longer required. Payments were admittedly made to the added respondents through Kaycee and that the company had not issued any appointment letter in their favour. They had not even been interviewed for appointment on any post. They were not paid directly by the company. No disciplinary control was exercised by the company and on a couple of occasions when some of the added respondents did not conduct themselves properly, Kaycee was advised to initiate appropriate action. It was, therefore, not proper on the part of the Tribunal to come to a finding that the added respondents should be deemed to be the direct employees of the company and that existence of Kaycee has no relevance.

5. It was also contended that the Tribunal approached the issue from a wrong angle and did not pose the correct question before it. The added respondents were demonstrably contract labours, and even if the contract with Kaycee had been renewed their status would not have changed. Their status would continue to be that of contract labours and, therefore, remedy of the added respondents’ lies with Kaycee, which employed them. From the evidence on record it could not have been shown that the contract was sham and, therefore, no relief ought to have been granted.

6. In support of his submissions, Mr. Gupta relied on several decisions. According to him, the present dispute squarely falls within the parameters of the decision in International Airport Authority of India vs. International Air Cargo Workers’ Union, reported in (2009) 13 SCC 374 where the expression ‘control and supervision’ in the context of contract labo