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High Court Of Madhya Pradesh
P.V. Dixit, C.J. and R.J. Bhave, J.
JAMUL CEMENT WORKS
Versus
STATE INDUSTRIAL COURT
Decided On : Nov 10,1967
The Notification issued on 31st December 1960 under section 1 (3) of the Act applied the provisions of the Act, other than sections 1 and 112, inter alio to' Cement'. The word 'Cement' means cement manufacturing industry and activities and operations incidental to the main industry of manufacturing Cement. The setting up and construction of a Cement Factory is no doubt essential before cement can be manufactured and thereafter distributed and sold. But \he construction of a Cement Factory cannot in any way be likened to any activity or operation in the manufacture of cement or its distribution or sale. The constitution of a Cement Factory is in itself an independent primary work.
As the Act does not apply to all industries or undertakings therein but only to those which the Government may select for being governed by the Act, the industries that may be specified in a notification under section 1 (3) must be understood in a limited sense and not in a wider sense.1966 JLJ 308 relied on. [Para 5]
(2) Industrial Relations Act, 1960 (M.P.) - S. 2 (13) & 2 (19) - 'industry' and 'workman' -construction work undertaken by a Cement Factory is not an 'industry' - workers temporarily employed for such construction - are not workmen – activity of an undertaking when its industry - construction work carried on by a Cement Factory - is not 'industry'.
The working principle for determining whether a particular form of activity is an undertaking making it an industry is that (i) the activity must he systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of the employees; (ii) the activity must involve co-operation if the employer and the employees; (iii) the object must be the satisfaction of material human needs; (iv) the activity must be an organised one in a manner in which trade or business is generally organised; (v) it must not be casual; and (vi) no quid pro quo is necessary for constituting the activity an "industry". Judged by these tests, the constructional work of factory undertaken by cement company cannot be said to be an "industry" ; it is a casual activity and not an activity systematically or habitually undertaken, The company is not an engineering company, Its business is to manufacture cement and not the construction of Cement Factories as an organised trade or business. AIR 1953 SC 58, AIR 1960 SC 610 & AIR 1963 SC 1873 referred to. [Para 6]
If the constructional work of the factory undertaken by the company is neither an industry in itself nor a part of the cement industry, then it is wholly immaterial whether the constructional activity began before the factory went into production or it continued thereafter or whether the company embarked on an expansion of the factory.
The constructional work of the setting up of a cement factory undertaken by the company not being an "industry", as defined in section 2 (19) of the Act, or a pan of the "cement industry", the employees working on the constructional side cannot be regarded as "employees" within the definition of the term given in section 2 (19) of the Act. [Para 7]
(3) Industrial Relation Art, 1960 (M.P.) - Ss. 51, 2 (17), 2 (13) & 2 (19) - reference when competent - there should exist an 'industrial dispute' in an 'industry' regarding 'employees' - effect of non obstante clause.
If an undertaking in not an 'industry', as defined in section 2 (19) of the Act, and the persons working under it are not 'employees' within the definition of the term given in section 2 (13) thereof, a reference made by the Government under section 51 of the Act would be incompetent and invalid. [Para 7]
The non-obstante clause, with which section 51 opens, only overrides the procedure with regard to raising of disputes, their settlement by conciliation and arbitration. It does not in any way abrogate the requirement of the Act that before any dispute can be referred to a Labour Court on an Industrial Court or a Board for Arbitration it must be ;an "industrial dispute", as defined in sect ion 2 (17) of the Act this is clear from the fact that section 51 Itself says that the Government must be satisfied that an industrial dispute exists before it can be referred for arbitration to a Labour Court or an Industrial Court or a Court or a Board. "industrial dispute" means any dispute or difference between an employer and employee or between employers and employees or between employees and employees in an 'industry' as defined in section 2(19) of the Act. [Para 8]
(4) Industrial Employment (Standing Orders) Act, 1961 (M.P.) – S. 6 – Notification -apply to 'cement' and, not to constructional work carried on by a Cement factory.
The notification, which was issued by the Government on 14th March 1963 applying the standard standing orders to certain undertakings specified in the table appended to that notification, does not contain anything to indicate that the standard standing orders have been made applicable to the constructional work of a Cement Factory. In the table appended to that notification also "Cement", "asbastos Cement" and "engineering" have been specified as undertakings to which standard standing orders apply.
The standard standing orders have no applicability to the employees working on the constructional work of a Cement Factory. [Para 9]
(5) Industrial Employment (Standing Orders) Act, 1961 (M.P.) - S. 6 - Standard Standing Orders No. 2 - Cl. (VI) - 'temporary employees' - may be employed in a work of temporary nature – constructional work of a factory - is of a temporary nature - employees do not become permanent - practice of employing employees - when not illegal.
The constructional work of a factory is essentially of a temporary character. That being so, a person employed to work continuously for less than six months cannot under the very definition of "temporary employee", be regarded as a permanent employee.
The employment of a person in a work of a temporary character for a period of less then six months and his re-employment again with a break may be open to objection and may be described as a practice adopted to avoid the effect of his being deemed to be a permanent employee. But if the employment for a duration of less than six months is legal, then its propriety must be determined not merely on theoretical or abstract objections to contract - labour, but also on the terms and conditions of employment and the grievance made by the employee in respect thereof.
Merely because a person, who has completed six months satisfactory service in a dear vacancy in one or more post is a permanent employee, or that a temporary employee has worked continuously fore more than six months and, therefore, is entitled to be deemed to be a permanent employee, it does not follow that the practice of employing workers on the constructional work of the factory for less than six months is not proper. AIR 1963 SC 495 & AIR 1964 SC 737 at referred to. [Para 3]
In the errection works for the extension and enlargement of Cement Factories there can be a number of temporary employees. AIR 1957 SC 1 relied on. [Para 9]
( 1. ) THE petitioner is a company owning a factory at Jamul for manufacturing cement.
( 2. ) BY a notification, dated 31 December 1960, issued by the State Government In exercise of its powers under Section 1 (3) of the Madhya Pradesh Industrial Relations Act, 1960 (hereinafter referred to as the Act), the Government applied the provisions of the Act to "undertakings in the industries" specified in the schedule to the notification, which included " (cement" The construction of the petitioners cement factory started in 1960-61. The factory went into production in 1965. Even after 1985 construction of two kilns continued. in December 1965. a dispute arose between the petitioner and respondent 2, the Cement Labour Union, Bhilai, as regards the employment of a large number of workers by the petitioner with intermittent break of a few days; the respondent-union alleged that this practice of the petitioner employing workman with intermittent breaks of a few days in their service was an unfair labour practical adopted with a view to depriving the workman of the benefits of permanency, retrenchment compensation, etc. As the dispute was not resolved by consolidation, the state Government, acting under Section 51 of the Act, referred the dispute to the industrial tribunal for arbitration in the following words: Whether the appointment of the employees on periodical contracts by the Jamul Cement Works of the Associated Cement Company, Ltd. , Jamul, is proper ? If not, to what relief they are entitled and from which date ? On the statements filed before the tribunal on behalf of the petitioner and the respondent-union, the tribunal framed the following issues:
(1) Whether the dispute before the consolidator was restricted only to 33 persons including 28 named in the annexure A to the statement of claim, as alleged by party 2? Or was it of a general nature affecting approximately 400 workmen as stated by party 1? (2) Should the scope of the reference made by the State Government be restricted to the persons who were named in the dispute before the conciliator ? (3) Do the standing orders apply to labour which was engaged in construction work ? If so, what is the effect ? (4) Is the work of construction in this case an industry to which Madhya Pradesh Industrial Relations Act applies ? (5) Is the practice of employing labour for fixed periods an unfair labour practice ? (6) Whether the appointment of the employees on periodical contracts by the Jamul Cement Works of Associated Cement Company, Ltd. , Jamul, is proper ? If not, to what relief they are entitled and from which date ?
The learned president of the tribunal held that the reference nude by the Government was of a general nature, and not with reference to any particular worker; that the constructional work was not is clamed and detached from the work of the factory itself but was essential " for the purpose of bringing into existence the necessary factory building with proper installation of machinery for the purpose of producing cement," and that, therefore, the constructional work was a part of "cement industry," and, consequently, the Act applied and the reference made to the tribunal was not bad. The tribunal further held that the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, applied to the cement Industry, as also to the constructional work therein; that the standard standing orders were also applicable to the petitioners concern; and that in view of the definition of " temporary employee " given in Clause (vi) of standard standing order 2, the practice adopted by the petitioner of employing workmen for less than six months with breaks of three to five days was not bona fide but was one adopted " only to break the continuity of employment to escape from the standing orders. " The tribunal summed up its conclusions thus :
(i) The appointment of employees on periodical contracts is not proper during the period daring which the construction is continuing
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