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2018 Supreme(MP) 108
IN THE HIGH COURT OF MADHYA PRADESH AT INDORE
VIVEK RUSIA, J.
Caparo Engineering India Ltd. - Petitioner
Versus
Pradhanmantri Engineering Shramik Sanghthan - Respondent
W.P. No. 2928 of 2017(s)
Decided On : 02-01-2018
For the Petitioner: Shri J.P. Cama, learned Sr. counsel along with Shri Girish Patwardhan, counsel
For the Respondent: Shri Ramsingh Gour, learned counsel
The burden of proof lies on the party who sets up a plea of existence of relationship of employer and employee.
Headnote:
LABOUR COURT - CONTRACT LABOUR - CLASSIFICATION AS PERMANENT EMPLOYEES - BURDEN OF PROOF - CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 - RULES, 1971 - EVIDENCE ACT, 1872 - INDUSTRIAL DISPUTES ACT, 1947 - CONSTITUTION OF INDIA, ARTICLE 227 - WRIT PETITION - SCOPE - PERVERSE FINDINGS - INDUSTRIAL ADJUDICATION - EMPLOYER-EMPLOYEE RELATIONSHIP - TESTS - CONTROL AND SUPERVISION - PAYMENT OF SALARY - CONTINUITY OF SERVICE - SHAM AND BOGUS AGREEMENTS - LICENSE UNDER CLRA ACT AND RULES, 1971 - MAINTENANCE OF REGISTERS AND RECORDS - SECTION 29 OF CLRA ACT, 1970 - CHAPTER-VII OF RULES, 1971 - RULES 74 TO 82 OF RULES, 1971.
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 1956, purchased a manufacturing unit from Steel Tubes India Ltd (STI) in an auction conducted under the SARFAESI Act, 2002. The petitioner became the principal employer with respect to 34 workmen who were working in the canteen run by STI through a contractor. The petitioner entered into an agreement with M/s Shweta Catering and Nursery (M/s Shweta) for engaging the 34 workmen for the maintenance of the garden and nursery and for running the staff canteen. The petitioner also entered into another agreement with M/s Shweta for providing contract of manpower supplied for the purpose of material handling at the company premises. The petitioner issued a letter to M/s Shweta extending the agreement for another two years and finally an agreement was executed between the petitioner and M/s Shweta, which came into effect from 1st January, 2014 and would be valid for an indefinite period unless mutually terminated. The 34 workmen were still working with the petitioner not in the canteen and garden but in the manufacturing unit. The respondent union raised a demand regarding the status and working conditions of these 34 workmen. The petitioner contended that they were contract labours and not their permanent workers. The Labour Court directed the petitioner to lead evidence first to prove that the 34 workmen were contract labours. The petitioner challenged the impugned award on the grounds that the Labour Court erred in directing the petitioner to lead evidence first, the findings were perverse and based on wrong appreciation of evidence, and the terms of reference were wrongly framed by the competent authority.
Finding of the Court:
The High Court held that the Labour Court did not commit any error in directing the petitioner to lead evidence to prove that the 34 workmen were contract labours. The burden of proof lies on the party who sets up a plea of existence of relationship of employer and employee. The petitioner failed to discharge the burden that the workmen were appointed through the contractor. The workmen were continuously working with the petitioner since 2006 since when it took over the manufacture unit and started production. The management had decided not to retrench any workers and further decided to give canteen work to the contractor and the employees working in the canteen would be adjusted in the production unit. The agreements executed between the petitioner and M/s Shweta were sham and bogus and prepared only to defend the claim of the respondents. The petitioner also failed to produce any document to show that how much amounts were paid from time to time to the contractor for providing the manpower. The Labour Court's findings were not perverse or pertinacious.
Issues: 1. Whether the Labour Court erred in directing the petitioner to lead evidence first to prove that the 34 workmen were contract labours? 2. Whether the findings of the Labour Court were perverse and based on wrong appreciation of evidence? 3. Whether the terms of reference were wrongly framed by the competent authority?
Ratio Decidendi: 1. The burden of proof lies on the party who sets up a plea of existence of relationship of employer and employee. 2. The Labour Court did not commit any error in directing the petitioner to lead evidence to prove that the 34 workmen were contract labours. 3. The findings of the Labour Court were not perverse or pertinacious. 4. The agreements executed between the petitioner and M/s Shweta were sham and bogus and prepared only to defend the claim of the respondents. 5. The petitioner failed to produce any document to show that how much amounts were paid from time to time to the contractor for providing the manpower.
Final Decision: The High Court upheld the impugned award dated 3rd January 2017, passed by the Labour Court, Dewas and dismissed the writ petition.
1. The petitioner has filed the present writ petition under Article 227 of the Constitution of India against the award dated 3rd January 2017, passed in case no. 9/ID/Reference/2013 by the Labour Court, Dewas, by which, the members of the respondent/Union have been directed to be classified as permanent employees with further direction to grant similar benefits as are being given to its permanent employees.
2. The petitioner is a Company incorporated under the provisions of The Companies Act, 1956 and is a division of Caparo Engineering India Ltd. The petitioner is engaged in the business of manufacture and sale of precision tubes having its Manufacturing Unit at Steel Tubes Road, Kalukheda, Dewas. The said Unit was earlier owned by the Steel Tubes India Ltd, (in short ‘STI’) and purchased by the petitioner in an auction proceedings conducted under the provisions of SARFAESI Act, 2002. The sale certificate to the said effect was issued on 10th August 2006.
3. The respondent is a registered Labour Union having its registration no. 4961 representing cause of 39 so called contract labour (herein after referred as ‘workmen’) working in the unit owned by the petitioner.
4. That on 30th August 2006, the Steel Tubes India Ltd had entered into the settlement/agreement with the then Trade Unions of the workmen viz Engineering Shramik Sanghthan, Dewas, Engineering Udyog Mazdoor Union and Engineering Mazdoor Sangh, Dewas. That after execution of the said agreement/settlement all the exiting workmen had submitted their resignation from the services of STI after their full and final settlement. After the aforesaid purchase on 10.8.2006 of the said manufacturing unit, the permanent workers working therein were given employment by the petitioner.
5. According to the petitioner, these 34 workmen were working in canteen run by the STI through one contractor namely M/S Gayatri Catering and Nursery (hereinafter referred as “M/s Gayatri “). Out of the 34 workmen, 29 workmen were deployed at the canteen work and 5 workmen were deployed at the garden for gardening work. M/S Gayatri was the contractor and the STI was the employer with respect to these 34 workmen. After purchase of the said unit, the petitioner becomes a principal employer with respect to those 34 workmen. M/S Gayatri obtained a certificate dated 5th August 2004 under the Contract Labour (Regulation and Abolition) Act, 1970 (herein after referred as “the CLRA Act “). According to the petitioner, all the 34 workmen were being paid salary by M/S Gayatri who used to deduct EPF and ESI contributions. The petitioner being a principal employer filed an application dated 20th Sept. 2006 with the Registration officer under the CLRA Act and the certificate dated 20th November 2006 was issued to the petitioner by the competent authority.
6. On 08th December, 2006, the petitioner/company and the respondent/union entered into a compromise/settlement before the Assistant Labour Commissioner, Dewas (hereinafter referred as “2006 Settlement“) that the appointment letters in respect of 145 labourers and 28 staffs have been issued and the appointment letters for remaining 288 labourers shall be issued later on and no workers would be retrenched and no workers would be kept on contract basis.
7. According to the petitioner, there was no settlement for these 34 workmen engaged in the canteen through M/s Gayatri, even their names are not there in the list appended with the 2006 Settlement. The list of 429 workers who joined the petitioner from STI along with their date of appointment, provident fund and ESI etc deduction has been filed as annexure-P/9 in the writ petition.
8. These 34 workmen who were previously employed with M/s Gayatri upto December. 2006 were thereafter continued with M/s Shweta Catering and Nursery (hereinafter referred as “M/s Shweta “).
9. The petitioner entered into an agreement dated 26th December, 2006 with M/s Shweta for engaging 34 workmen for the maintenance of garden and nur
