1. Dispute regarding termination of services and claims for reinstatement of contract laborers as direct employees under the Industrial Disputes Act. (Para 3 , 4 , 5 )
Back
Next 
2019 Supreme(SC) 650
SUPREME COURT OF INDIA
Rohinton Fali Nariman, Vineet Saran, JJ.
Bharat Heavy Electricals Ltd. - Appellant
Vs.
Mahendra Prasad Jakhmola - Respondent
Civil Appeal Nos. 1799-1800 of 2019 (Arising out of SLP (C) Nos. 33747-33748 of 2014)
Decided On : 20-02-2019
Important Points
IMPORTANT POINTS
A judgment contrary to the evidence or without evidence is perverse.
Concession of counsel on such facts and law does not bind the party.
Master-servant relationship.
A judgment contrary to the evidence or without evidence is perverse.
Concession of counsel on such facts and law does not bind the party.
Master-servant relationship.
Subject
Labour Law - Contract Labour
Act Referred
Headnote
(a) Administration of justice - Perversity of judgment - Appellant exempted from operation of notification dated 24.04.1990, yet labour court applied the same - Labour court inferring direct relationship of master-servant only on basis of gate passes ignoring all other evidence - Labour court basing its judgment on basis of a concession allegedly given by appellant’s counsel which is consistently denied by appellant - Labour court judgment held perverse. (Para 10, 13)
(b) Administration of justice - Concession by counsel - Facts disputed in written statement - Concession of counsel on such facts and law - Does not bind the party. (Para 11)
(2002) 3 SCC 39; (1976) 1 SCC 863 - Relied upon
(c) Uttar Pradesh Industrial Disputes Act, 1947 - Section 2(i)(iv) - Employer - Application - Necessity to show that the work performed by contract labour is a work which is ordinarily part of the employer’s industry - Instantly no such evidence led - Labour court’s judgment holding master-servant relationship held perverse. (Para 14)
(1964) 2 SCR 838 - Relied upon
(d) Administration of justice - Perversity of judgment - Judgment of Labour court as also High Court contrary to the evidence - Held perverse. (Para 15, 16)
(2014) 9 SCC 407 - Relied upon
(2011) 1 SCC 635 - Distinguished
(e) Constitution of India - Article 226 - Mere errors of law or fact - Not sufficient to attract jurisdiction of High Court under Article 226 - However, instantly it is not error, Labour court judgment was perverse - Ought not be entertained. (Para 22)
1988 (Supp) SCC 768; (2016) 4 SCC 493; (2010) 3 SCC 192 - Distinguished
(f) Constitution of India - Article 136 - Labour court granting only reinstatement and no back wages - Plea not to exercise jurisdiction under Article 136 - Cannot be acceded to in view of Labour court judgment being perverse. (Para 23)
(g) Administration of justice - Equity - Contention that appellant did not comply with Labour court award of reinstatement - Contention rejected in view of respondents not preferring any contempt petition. (Para 23)
(h) Labour law - Master-servant relationship - Workmen admitting absence of appointment letter, provident fund number or wage slip from BHEL - No wages ever paid by BHEL - Names of 29 workers on the basis of a list provided by the contractor - Held, no master-servant relationship existed between BHEL and the workmen. (Para 24)
(2001) 7 SCC 1 - Distinguished
Facts of the case:
The Labour Court held that the workmen, who were otherwise employed by a contractor, were directly employed by the appellant. It was also held that supervision, superintendence and administrative control of all these workmen were with the appellant. It was held that all such workers, being 64 in number, were entitled to be reinstated with immediate effect but without backwages. The review was dismissed by the Labour Court
The writ petition as also the review petition was dismissed by the High court.
Finding of the Court:
Impugned judgments are perverse.
Result: Appeals allowed.
Legal Category Hierarchy
- labour and industrial law
- practice and procedure
Advocates appeared:
Sudhir Chandra, Sr. Adv., Parijat Sinha, Ms. Reshmi Rea Sinha, Gaurav Ghosh, Rudra Dutta, Devesh Mishra, Anil Kumar Mishra, Ms. Asha Jain Madan, Mukesh Jain, Ms. Madhu Talwar, Rahul Verma, Mrs. D. Bharathi Reddy, Ms. Rachna Gandhi, Advs.
Sudhir Chandra, Sr. Adv., Parijat Sinha, Ms. Reshmi Rea Sinha, Gaurav Ghosh, Rudra Dutta, Devesh Mishra, Anil Kumar Mishra, Ms. Asha Jain Madan, Mukesh Jain, Ms. Madhu Talwar, Rahul Verma, Mrs. D. Bharathi Reddy, Ms. Rachna Gandhi, Advs.
Table of Contents
2. Whether the employment contracts were sham transactions and whether the principal employer exercised direct control and supervision over the workmen. (Para 8 , 9 )
3. The court found the reliance on gate passes and counsel's concessions perverse, noting the absence of evidence regarding salary payment and primary control. (Para 10 , 12 , 13 , 14 , 15 , 16 , 21 , 22 , 23 , 24 , 25 )
4. Direct employment is established only if the principal employer pays salaries and exercises primary control, rather than secondary supervision of assigned tasks. (Para 17 , 18 , 19 , 20 )
5. The judgments of the High Court and the Labour Court Award are set aside and the appeals are allowed. (Para 26 , 27 )
6. Does a concession made by a lawyer or representative on a mixed question of fact and law bind the party in appeal?
No, a concession made by a lawyer or authorized representative at the stage of arguments on a mixed question of fact and law cannot preclude the party from re-agitating the point in appeal. (Para 12 )
7. What are the primary tests to determine if contract laborers are direct employees of the principal employer?
The two well-recognized tests are whether the principal employer pays the salary instead of the contractor and whether the principal employer exercises primary control and supervision over the employee. (Para 17 , 18 , 19 , 20 )
8. Does the principal employer's direction of work to contract laborers constitute the control and supervision necessary for direct employment?
No, directing work after a contractor assigns the laborer is secondary control. Primary control remains with the contractor, who decides where, how long, and under what conditions the employee works. (Para 18 , 19 )
9. When does the extended definition of employer under the Industrial Disputes Act apply to a principal employer?
For the extended definition of employer to apply, evidence must be led to show that the work performed by the contract labor is work which is ordinarily part of the industry. (Para 13 , 14 )
JUDGMENT :
R.F. Nariman, J.
The present appeals arise out of a judgment dated 24.04.2014 and a review dismissal from the aforesaid judgment dated 11.09.2014, by which the High Court of Uttarakhand has dismissed a writ petition against a Labour Court's Award.
2. The brief facts necessary to decide these appeals are as follows:
3. By Reference Order dated 09.11.2004 under Section 4(k) of the Uttar Pradesh Industrial Disputes Act, 1947, the following dispute was referred to the Labour Court:
"Whether termination of services of workman Shri Mahendra Prasad Jakhmola, s/o Late Shri Vachaspati Jakhmola, Helper by the employer, w.e.f. 13.11.2001, is justified and/or as per law? If not, what benefit/relief the concerned workman is entitled for and with what other details?"
4. Similar Reference Orders were made in 63 other cases.
5. Pleadings were filed before the Labour Court at Haridwar and evidence was led on behalf of the appellant as well as by the workmen. By an Award dated 01.11.2009, the Labour Court held, referring to a notification, which is, notification dated 24.04.1990 under the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 1970 Act'), that the said notification, on application to the appellant, would show that the workmen were not deployed to do the work mentioned in the notification. It was further held that based on documentary evidence in the form of gate passes, the workmen, who were otherwise employed by a contractor, were directly employed by the appellant. It was also held to have been fairly conceded by the employer's representative that supervision, superintendence and administrative control of all these workmen were with the appellant. It was also held that under the extended definition of "employer" in the Uttar Pradesh Industrial Disputes Act, 1947, even if the workmen are regarded as workmen of a contractor, they would yet be workmen of the appellant as the appellant was within the extended definition of "employer" under the Act. This being the case, it was held that all such workers, being 64 in number, were entitled to be reinstated with immediate effect but without backwages. From this Labour Award, a review petition was filed by the appellant, in which it was clearly stated that no such concession, as recorded by the Labour Court, was made before it. Further, notification dated 24.04.1990 had no application as Bharat Heavy Electricals Ltd. (BHEL) was exempted therefrom and, therefore, to apply this notification to the facts of this case was also wrong. On 18.05.2011, this review was dismissed by the Labour Court holding:
"Considering the above noted discussion, as made in award dated 01.11.2009, I find force in the argument of opposite part-2 that as far as notification dated 24.04.1990 is concerned, this court has already considered and has given its verdict on this notification and now on review application no contrary inference can be drawn by this court as prayed by the applicant. As far as Notification dated 23.07.2010 (supra) is concerned, this notification was not issued by Government when award was passed. As such, this notification cannot be said applicable at that time and no benefit of later issued notification dated 23.07.2010 can be given to applicant. Moreover, if applicant was exempted vide notification on dated 24.04.1990, in such a case what was the necessity to issue the second notification dated 23.07.2010 (supra) for exemption of contract labour.
On perusal of all the documents and legal preposition of law laid down by Apex Court in Uttar Pradesh State Roadway Transport Corporation vs. Imtiaz Hussain (supra). I am in agreement with the Opposite Party-2 that except arithmetical or clerical errors, the order which was passed by the court on merit, cannot be changed, amended or altered. As far as case in hand is concerned no clerical or arithmetical mistake is involved. As such, application A-2 is liable to be rejected."
6. A writ petition was filed, being W.P. No
