Case Note & Summary
The petitioner, BASF India Ltd, a factory manufacturing construction chemicals, employed about 35 workmen directly and engaged contract labourers through independent contractors M/s Omkar Enterprises, M/s Advanced Enterprises, and M/s Mafoi for housekeeping, material handling, packaging, loading/unloading, and allied services. Each contractor had independent licenses under the Contract Labour (Regulation and Abolition) Act, 1970, and separate PF and ESIC codes. Respondent No.3, B.A.S.F. Kamgar Sanghatana, a trade union claiming to represent the contract labourers, raised a dispute regarding the contract labourers. The Additional Commissioner of Labour (Respondent No.2) passed an order dated 06/11/2013 referring the dispute to the Industrial Tribunal, Thane, under Section 10 of the Industrial Disputes Act, 1947, resulting in Reference (IT) No. 24 of 2013. The petitioner challenged the reference order and the pending reference before the Bombay High Court. The court examined whether the Appropriate Government had jurisdiction to make such a reference without first determining the employer-employee relationship between the principal employer and contract labourers. The court noted that the contractors were independent entities with their own licenses and statutory registrations, and the contract labourers were employees of the contractors, not the petitioner. The court held that the reference order was passed without application of mind and without considering the legal position that a dispute regarding contract labourers cannot be referred against the principal employer under Section 10 of the Industrial Disputes Act, 1947, without prior adjudication under the Contract Labour (Regulation and Abolition) Act, 1970. The court quashed the impugned reference order and the pending reference.
Headnote
A) Industrial Disputes Act, 1947 - Section 10 - Reference of Dispute - Jurisdiction - Appropriate Government cannot refer a dispute regarding contract labourers to Industrial Tribunal without first adjudicating the existence of employer-employee relationship between principal employer and contract labourers under the Contract Labour (Regulation and Abolition) Act, 1970 - Held that the reference order was passed without application of mind and without considering the legal position that contract labourers are employees of the contractor, not the principal employer (Paras 1-20). B) Contract Labour (Regulation and Abolition) Act, 1970 - Sections 7, 12 - Licensing of Contractors and Principal Employers - Contractors having independent licenses, PF and ESIC codes indicate separate legal identity - Dispute raised by union representing contract labourers against principal employer is not maintainable as there is no direct employer-employee relationship - Held that the reference was bad in law (Paras 3-15).
Issue of Consideration
Whether the Appropriate Government can make a reference under Section 10 of the Industrial Disputes Act, 1947 regarding contract labourers without first determining the existence of an employer-employee relationship between the principal employer and the contract labourers, and whether the impugned reference order suffers from non-application of mind.
Final Decision
The impugned order of reference dated 06/11/2013 passed by Respondent No.2-Additional Commissioner of Labour and Reference (IT) No. 24 of 2013 pending before the Industrial Tribunal, Thane, are quashed and set aside. Rule made absolute.
Law Points
- Reference under Section 10 of Industrial Disputes Act
- 1947 cannot be made for contract labourers without prior adjudication under Contract Labour (Regulation and Abolition) Act
- 1970
- Appropriate Government must apply mind to jurisdictional facts before making reference
- Dispute regarding contract labour is not an industrial dispute between principal employer and contract labourers
