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2024 Supreme(Online)(Kar) 39270
KARNATAKA HIGH COURT
V KAMESWAR RAO, C M JOSHI, JJ
THE MANAGEMENT OF M/S STUMPP, SCHULE AND SOMAPPA SPRINGS PVT LTD. – Appellant
Versus
SRI.U. MALLIKARJUNA – Respondent
WA 1685 / 2018
For the Appellants/Petitioners:SRI. S.N. MURTHY, SENIOR ADVOCATE FOR SRI. SOMASHEKAR
For the Respondents: SRI. NAGENDRA NAIK .R.
The employment relationship is determined by actual control and payment of wages, not merely by the nature of work performed under contractors.
Headnote:(A) Contract Labour (Regulation and Abolition) Act, 1970 - The appellant challenged a Single Judge's order allowing the respondent's writ petition against the Labour Court's award regarding employment status. The respondent claimed to be an employee despite being paid through contractors. The Labour Court found the respondent was never directly employed by the appellant. The Single Judge ruled otherwise, citing the nature of work. (Paras 10-22)
(B) Employment Status - The court emphasized that the payment of wages by contractors does not establish employer-employee relations with the principal employer. The contractor's role and the control over the work were pivotal in determining employment status. (Paras 18-22)
Facts of the case:
The respondent worked as an operator since 1981, initially through a contractor, with the appellant claiming no direct employment relationship. The Labour Court found the respondent was not an employee of the appellant.
Findings of Court:
The Labour Court's ruling was upheld, stating the respondent was under the contractors, and the Single Judge's findings were perverse.
Issues: The main issue was whether the respondent was an employee of the appellant or the contractors.
Ratio Decidendi: The court ruled that the evidence did not support the respondent's claim of direct employment with the appellant, emphasizing the role of contractors in the employment structure.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. employment status of the respondent as a contractor's worker. (Para 3 , 4) |
| 2. evidence of employment and contractor relationships established. (Para 10 , 14 , 15 , 16) |
| 3. legal implications of esi and pf contributions in employment status. (Para 18 , 19 , 20) |
| 4. judgment on the nature of control and supervision in contract labor. (Para 21 , 22) |
CAV JUDGMENT
(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO)
The challenge in this appeal is to an order dated 04.04.2018 passed by the learned Single Judge in WP No.8167/2009 filed by the respondent herein, whereby the learned Single Judge has allowed the petition filed by the respondent.
2. Suffice to state, the writ petition was filed by the respondent challenging the award dated 15.09.2008 passed by the III Additional Labour Court, Bengaluru (‘Labour Court’ for short) in ID No.71/2000 whereby the Labour Court has answered the reference made by the appropriate Government against the respondent herein.
3. The facts that need to be noted for the purpose of decision of this appeal are, the case of the respondent before the Labour Court was that he was appointed by the appellant as an operator in the Hardening Department in the year 1981. His salary was paid through one contractor viz., Vijaya Engineering at the rate of Rs.7/- per day initially. The work he was doing was perennial in nature. At the time of termination, he was paid Rs.90/- per day. The contractor Vijaya Engineering was subsequently changed and Hemadri was appointed as a contractor and thereafter, Shivashakti Enterprises was appointed as contractor. Irrespective of contractors, the respondent continued to work as an employee of the appellant. His PF and ESI were deducted by the appellant. On 13.11.1999, when he went to work as usual, it was mentioned in the attendance register as ‘not allowed’. On inquiry, he came to know that his services have been terminated by the appellant. No enquiry was held and no notice was issued to him. At the time of termination, he was aged about 47 years. According to him, there was no prospect of getting alternative employment. It was also his case that the respondent, to avoid statutory liabilities, appointed contractors and paid salary in the name of contractors. Irrespective of change of contractors, all the workmen continued to work. They are only name-lending contractors. They have nothing to do with the workmen and as such, he sought for his reinstatement including back wages.
4. The case of the appellant before the Labour Court was that, it had given some work on contract basis to the contractors. Contractors used to raise bill every month in respect of the contract work carried out by them. The contractor was paying wages to the workmen engaged by them and they were allotting and supervising the work of the workmen. The appellant is registered as a principal employer under Contract Labour (Regulation and Abolotion) Act, 1970 (‘Act of 1970’ for short). The contractor is also a licensee under the Act. The respondent was not an employee of the appellant at any point of time. There is no master and servant relation. The respondent was governed by the action of his contractor employer.
5. The Labour Court had framed the following issues:
“1. Whether the II Party proves that the I Party was not an employee of the II Party and he was appointed by a contractor by name Shivashakti Enterprises?
2. Is this dispute not maintainable?
3. Is the dispute is bad for non-joinder of necessary parities.
4. Is the I Party entitled for the reliefs of reinstatement, backwages, etc.?
5. What reliefs, is the parties entitled?”
6. Insofar as issues No.1 and 2 are concerned, the Labour Court had referred to the evidence of appellant/ management witnesses i.e., MW-1 Sri. K.R.Viswanathan, MW-2 Sri. M.Rajendra and MW-3 Sri. S.Sidda Reddy,
7. The respondent had also produced three witnesses i.e., WW-1 Sri. U.Mallikarjuna, WW-2 Sri. N.Shankaraiah and WW-3 Sri. P.Krishna Reddy. The Labour Court on issue No.1, in parag
