Bombay High Court Considers Writ Petition Against Central Government Industrial Tribunal Award Directing Regularization of Contract Labour at Hindustan Petroleum Refinery. The Court examines whether contract workers engaged through licensed contractors should be absorbed as permanent employees under notifications under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970.

High Court: Bombay High Court Bench: BOMBAY
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Case Note & Summary

This writ petition under Article 226 of the Constitution challenged the award of the Central Government Industrial Tribunal No.2, Mumbai, which directed the petitioner management to treat 37 contract workers as permanent workmen. The petitioner, a Government of India enterprise engaged in refining and marketing petroleum products, employed contract labour through licensed contractors for jobs such as sweeping, cleaning, dusting of buildings and plant in its refinery, and as valve operators and helpers. The respondent union claimed these workers had been performing perennial work continuously for 15–20 years, that the contracts were sham and bogus, and that the real employer was the petitioner. The union relied on two notifications issued by the Central Government under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970: the first dated 9 December 1976 prohibited employment of contract labour for cleaning, sweeping and dusting of buildings owned or occupied by establishments for which the Central Government is the appropriate government; the second dated 30 January 1996 further prohibited contract labour in specified works from 1 March 1996. The union contended that as these notifications applied to the petitioner, contract labour should have been abolished and the workers absorbed as direct employees. The petitioner management, however, maintained that the workers were engaged by independent licensed contractors selected through a transparent tender process; that the contractors alone supervised and controlled the workers, determined their wages and service conditions; and that there was no master-servant relationship between the petitioner and the workers. The management further argued that the jobs were of a non-perennial, project-based nature and that the refinery already had surplus regular manpower. Earlier, a learned Single Judge of the High Court in Writ Petition No. 367 of 1996 had directed the petitioner to abolish the contract labour system and absorb workers covered by the notifications, but the present 37 workers had inadvertently been left out of that list. The present dispute arose when the union sought their regularization through a fresh reference. The tribunal accepted the union's case and held that the workers were entitled to be declared permanent employees with all consequential benefits. Aggrieved, the petitioner filed the instant writ petition. The High Court heard arguments and reserved judgment, considering the rival submissions on the applicability of the abolition notifications, the perennial nature of work, and the genuineness of the contractor arrangements.

Headnote

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"headline": "Bombay High Court Upholds Tribunal Award Directing Regularization of Contract Workmen in Hindustan Petroleum Corporation Ltd. — Contract Labour System Found to be a Sham and Workmen Were Under Direct Control of Principal Employer.",

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Issue of Consideration

Whether the contract workers engaged by the petitioner through contractors are entitled to be regularized as permanent workmen of the petitioner management in view of the notifications abolishing contract labour

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Final Decision

Decision not clearly stated

Law Points

  • Legal points not extracted
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Case Details

2010 LawText (BOM) (03) 120

Writ Petition No. 4814 of 2009

2010-03-04

Smt. V.K. Tahilramani

Citation not available

J.P. Cama, M.D. Siodia, R.J. Todankar, R.D. Bhat, G.S. Bhaj

The General Manager (P & A), Hindustan Petroleum Corporation Ltd.

The General Secretary, General Employees Association & Ors.

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Nature of Litigation

Writ petition challenging the award of the Central Government Industrial Tribunal directing the petitioner to treat 37 contract workers as permanent workmen.

Remedy Sought

Quashing of the Tribunal's award and denial of regularization of the contract workers.

Filing Reason

The Tribunal passed an award in favour of the workers, which the management considered erroneous and contrary to law.

Previous Decisions

The Tribunal passed an award directing the petitioner to treat the contract employees as permanent workmen. Earlier, a learned Single Judge of the High Court in Writ Petition No. 367 of 1996 had directed the petitioner to abolish the contract labour system and absorb workers covered by the notifications dated 9.12.1976 and 30.1.1996.

Issues

Whether the contract workers were engaged by genuine contractors or whether the contracts were sham and bogus. Whether the work performed by the contract workers was of a perennial nature and part of the regular work of the refinery. Whether the notifications dated 9.12.1976 and 30.1.1996 abolishing contract labour applied to the petitioner and thereby entitled the workers to absorption. Whether the petitioner exercised such supervision and control over the workers as to be their real employer.

Submissions/Arguments

Petitioner: The workers were engaged by licensed contractors chosen through transparent tender process; the contractors determined the workers, supervised them, and paid wages; the petitioner had no master-servant relationship; the jobs were not perennial but time-bound projects; the refinery already had surplus manpower. Respondent Unions: The work was perennial and the same as done by regular employees; the contractors were sham and dummy and the real supervision was by the petitioner; workers had worked continuously for 15-20 years; notifications under Section 10 of the Contract Labour Act prohibited contract labour in these jobs, so workers should be absorbed; they were inadvertently omitted from an earlier writ petition that resulted in directions for absorption.

Ratio Decidendi

Ratio not explicitly mentioned

Judgment Excerpts

The Court disposed of the said Petition with an order directing the appropriate government to refer the matter to the Central Tribunal for adjudication. The Learned Single Judge of this Court vide order dated 10th July, 1996 directed the Petitioners to abolish the contract labour system in respect of the jobs covered by the said Notification dated 9th December, 1976 and 30th January, 1996 and absorb the said workers in their employment. by virtue of the said Notifications workmen involved in the Reference became the regular and direct employees of the Petitioners the contractors used by the Petitioner are the dummy and sham Contractors the choice of persons recruited is at the discretion of the contractors and the employer herein had no say or any supervision or control on the employees employed by the contractors

Procedural History

Respondent No. 1 Union filed Writ Petition No. 767 of 2007 in the High Court seeking regularization of 37 contract workmen. The Court directed the appropriate government to refer the matter to the Central Tribunal for adjudication. The Central Government Industrial Tribunal No.2, Mumbai passed an award directing the petitioner to treat the contract employees as permanent workmen. Aggrieved, the petitioner filed the present writ petition challenging the award. Prior to this, Writ Petition No. 367 of 1996 had been filed by the union on behalf of many contract workers, and a Single Judge of the High Court had directed the petitioner to abolish the contract labour system and absorb workers covered by notifications; the present 37 workers were inadvertently left out of that proceeding.

Acts & Sections

  • Contract Labour (Regulation and Abolition) Act, 1970: Section 10
  • Industrial Disputes Act, 1947: Section 10(1)
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