Case Note & Summary
The case involves two appeals arising from a common order dated 16.04.2010 passed by a Single Judge of the Karnataka High Court in Writ Petition No. 35453/2003. The appellant in WA No. 1980/2010 is BEML Limited (formerly Bharat Earth Movers Ltd.), a government company, and the appellant in WA No. 2179/2010 is the President of the Mysore Division General Labour Association, a trade union representing the canteen workers. The respondents include the trade union and the canteen contractor, Rashmi Caterers. The dispute concerns the regularisation of canteen workers employed through a contractor in the statutory canteen at BEML's Mysore complex. The Labour Court had directed BEML to regularise the services of the canteen workers, which was upheld by the Single Judge. BEML appealed against this order, while the trade union appealed seeking enhancement of the relief. The High Court allowed BEML's appeal and dismissed the union's appeal. The court held that the canteen workers were contract labour employed by the contractor, and in the absence of a notification under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 prohibiting contract labour in the establishment, they cannot be deemed employees of BEML. The Labour Court exceeded its jurisdiction by directing absorption beyond the scope of the reference. The court also noted that the principal employer's liability under Section 21 of the CLRA Act is limited to wage payment in default and does not extend to absorption. The impugned order of the Single Judge was set aside, and the writ petition filed by the union was dismissed.
Headnote
A) Contract Labour - Regularisation - Statutory Canteen - Contract Labour (Regulation and Abolition) Act, 1970, Sections 10, 21 - The issue was whether canteen workers employed through a contractor in a statutory canteen of BEML Limited are entitled to regularisation as direct employees. The court held that mere existence of a statutory obligation to provide a canteen does not automatically make the canteen workers employees of the principal employer; there must be a notification under Section 10 of the CLRA Act prohibiting contract labour in that establishment. In the absence of such notification, the workers remain employees of the contractor, and the principal employer is not liable for absorption. (Paras 10-15) B) Industrial Disputes Act - Reference - Jurisdiction - Industrial Disputes Act, 1947, Section 10 - The Labour Court exceeded its jurisdiction by directing regularisation of contract labour without a valid reference under Section 10 of the ID Act. The reference was limited to adjudication of the dispute regarding the termination of services of the canteen workers, not for absorption. The court held that the Labour Court cannot grant a relief beyond the scope of the reference. (Paras 16-20) C) Contract Labour - Principal Employer - Liability - Contract Labour (Regulation and Abolition) Act, 1970, Section 21 - The principal employer's liability under Section 21 is limited to payment of wages in default of the contractor, and does not extend to absorption or regularisation of contract labour. The court held that the direction to absorb the workers was contrary to the scheme of the CLRA Act. (Paras 21-25)
Issue of Consideration
Whether the canteen workers employed through a contractor in a statutory canteen of BEML Limited are entitled to regularisation as direct employees of the principal employer, and whether the Labour Court and Single Judge correctly directed absorption.
Final Decision
The appeals were allowed. The order of the Single Judge dated 16.04.2010 in Writ Petition No. 35453/2003 was set aside. The writ petition filed by the trade union was dismissed. No order as to costs.
Law Points
- Contract Labour (Regulation and Abolition) Act
- 1970
- Sections 10
- 21
- Industrial Disputes Act
- 1947
- Regularisation of contract labour
- Principal employer's liability
- Statutory canteen
- Absorption of contract labour
