Back
2025 Supreme(Online)(Mad) 64328
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Krishnan Ramasamy, J
M.Arulprakasam – Appellant
Versus
The Presiding Officer, Labour Court, Tiruchirapalli – Respondent
W.P.(MD)Nos.10133 to 10137 | W.P.(MD)Nos.10139 to 10161 | W.P.(MD)Nos.10163 to 10170 | W.P.(MD)No.2245 of 2014
For the Appellants/Petitioners: Mr.V.Ajay Khose, Mr.M.E.Ilango, Mr.S.Vedachalam, Mr.K.Jayaraman
For the Respondents: Mr.Krishna Srinivasan, Sr.Counsel, Mr.Ramasubramaniam, Mr.V.Ajay Khose, for Ms.S.Anji
Employment status determined through indirect contractor arrangements; workers entitled to statutory benefits under applicable labour laws, including terms ensuring permanent status after continuous service.
Headnote:(A) Contract Labour (Regulation and Abolition) Act, 1970 - Section 2(i) - Interpretation of employment status - Labour Court determined that workers engaged through contractors are not employees of the main company - Workers argued that contractor arrangements were sham to evade statutory benefits. (Paras 6-8)
(B) Employment Relations - The court recognized indirect employment through contractors but ruled that workers were not directly employed by the company - Emphasized that all labour relations should comply with labour statutes, despite work conditions. (Paras 9-10)
(C) Compensation Claims - Workers entitled to benefits under the CLRA despite working indirectly; right to permanency recognized under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. (Paras 28-36)
Facts of the case:
The case involved numerous writ petitions challenging a Labour Court's award regarding the employment status of workers engaged through contractors who asserted their direct employment with the company.
Findings of Court:
The Labour Court found workers to be contractors' employees, prompting petitions from the workers claiming rights to be recognized as direct employees.
Issues: The main issues addressed were the nature of the employment relationship and the validity of contractor agreements regarding employee status.
Ratio Decidendi: The court concluded that the contractor agreements were not sham but upheld the principle that workers could still claim rights under other laws despite being indirect hires.
Result: Writ petitions dismissed with directives for compensation payment from both the company and contractors.
| Table of Content |
|---|
| 1. introduction and identification of parties (Para 1 , 2) |
| 2. petitioners' claims and arguments (Para 3) |
| 3. court's observations on evidences presented (Para 5 , 6 , 7 , 9) |
| 4. nature of employment and contractors (Para 10 , 11 , 12 , 17) |
| 5. application of labor laws and court's reasoning (Para 18 , 20 , 22 , 24) |
| 6. determination of workmen's claims (Para 29 , 30 , 31) |
| 7. final determination of status under statutes (Para 32 , 34 , 36) |
| 8. conclusion and directive for payment (Para 38 , 39) |
COMMON ORDER
The writ petitions, in W.P.(MD)Nos.10133 to 10137, 10139 to 10161, 10163 to 10170, 14234 to 14246, 14248, 14249, 14252 to 14270 of 2013, have been filed by the Contractors, whereas, the writ petition, in W.P.(MD)No.2245 of 2014, has been filed by the labours/workmen challenging the impugned Award dated 22.10.2012 passed by the Labour Court.
2. Though very many writ petitions were filed, this Court is inclined to refer the status of the parties as mentioned in the W.P.(MD).No.2245 of 2014, which was filed by labours/workmen against the Management and Contractors. For the sake of brevity, convenience and better understanding, the petitioners in W.P.(MD)No.2245 of 2014 shall be referred to as “Workmen” or “petitioners”, the 1st respondent shall be referred to as “Labour Court”, the 2nd respondent in W.P.(MD)No.2245 of 2014 shall be referred to as “Management” or “TAFE” or “Company” and the respondents 3 to 19 in W.P.(MD)No.2245 of 2014 shall be referred to as “Contractors”.
3. Petitioners' submission:
3.1 Mr.V.Ajay Khose, learned counsel, had appeared for Mr.V.Arunachalam, learned counsel on behalf of the petitioners/workmen and submitted that the writ petition in W.P.(MD)No.2245 of 2014 has been filed challenging the impugned award dated 22.10.2012 passed by the 1st respondent/Labour Court.
3.2 He would submit that all the petitioners, who were the workmen of the Company, were directly engaged by the said Company and their salary, wages, including appointments were also provided by the said Company.
3.3 However, Company, in order to camouflage the act of direct engagement of petitioners, they had set up the respondents 3 to 19 as Contractors. Thereafter, without the knowledge of petitioners, the Company had entered into the contracts with the Contractors and subsequently, the contractors had issued the appointment orders and paid salaries and wages to the petitioners, on behalf of the Company.
3.4 Upon the direction of the 2nd respondent, the name of the Contractors have also been changed from time to time, in order to show that at any point of time, the petitioners had not worked under one Contractor for a period of more than 480 days in 2 years.
3.5 At the time of oral termination made by the Contractors, all the petitioners had completed 7 years of service with the Company. Even after the completion of 7 years as temporary employees, the petitioners were not made as permanent employees by the Company. Therefore, the petitioners were constrained to raise the industrial dispute before the Labour Court. However, without considering the sham and nominal act of the 2nd respondent against the workmen, the Labour Court had passed the impugned award, in favour of the 2nd respondent, based on the documents provided by the Company and the Contractors.
3.6 In the said impugned award, it was held that the petitioners are not the employees of Company, but, they are the employees of their respective Contractors. Accordingly, the oral termination made by the Contractors was set aside. However, since the petitioners were not inclined to work under the Contractors, no order had been passed for reinstatement of the petitioners and the Labour Court had declined the prayer of the petitioners, to declare them as workmen of the Company.
3.7 The Contracts, which are sham and nominal, should have been declared as null and void by the Labour Court, in which case, the impugned award would have been passed by holding that the petitioners are the workmen
