In a recent ruling, the Supreme Court addressed the issue of workers performing permanent or perennial tasks being classified as contract workers under the Contract Labour (Regulation & Abolition) Act, 1970. The bench asserted that such tasks inherently require regular or permanent employment rather than contractual arrangements. Further, they affirmed the decision of the Industrial Tribunal and High Court, ruling in favour of non-regularized workers who were denied regularization benefits despite undertaking permanent or perennial work, such as removing spillages in railway sidings.
Brief Facts:
The Appellant, Mahanadi Coalfields Ltd., floated a tender for the transportation of crushed coal and selected a successful contractor for the performance of the agreement for the period 1984 to 1994. The contractor employed workmen for the execution of this contract. The respondent union sought permanent status for the workmen and relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage Agreement-IV. Following the representation of the Respondent Union, the Assistant Labour Commissioner sent a notice to the appellant for conciliation, which resulted in a settlement dated 05.04.1997.
The dispute was referred to the Industrial Tribunal, Rourkela, Odisha, which allowed the industrial dispute and directed the regularization of 13 workmen. The Tribunal concluded that the work of removing spillages in the railway siding, below the bunker, and operation of chutes were regular and perennial in nature. The High Court affirmed the findings of the Tribunal based on the evidence of witnesses and upheld the view taken by the Tribunal. The Review Petition filed by the management was also dismissed.
Contentions of the Petitioner:
The Learned Counsel for the appellant contended that the Award dated 23.05.2002 is legally flawed. They argued that the settlement reached between the parties is binding under Section 18(1) read with Section 36 of the Industrial Disputes Act and continues to be so under Section 19(2) since it was never terminated. The settlement was based on verification of the nature of work, distinguishing between permanent and casual workers. As there was no provision for regularization under NCWA-IV, Section 25F of the Industrial Disputes Act, which applies to workers directly supervised by the company, does not apply.
Contentions of the Respondent:
The respondent union contended that all 32 workers performed similar tasks, and the industrial reference showed arbitrary deprivation of regularization for certain workers without reason. They argued that work in the railway siding was as perennial and regular as work in the bunker. Evidence from MW3 and MW4 supports this, confirming the regular and perennial nature of tasks. Since there was no resolution regarding the regularization of similarly placed workers, they have the right to pursue a remedy under the Industrial Disputes Act, 1947. Rule 58 of the Industrial Dispute (Central) Rules, 1957, under which the settlement occurred, does not pose a legal obstruction to this remedy.
Observations of the Court:
The Supreme Court dismissed the appellant's contention that the tribunal lacked the authority to grant permanent status to workers due to a prior settlement. Instead, they upheld the Central Industrial Tribunal's decision to grant permanent status to 13 workers, awarding them back wages from the tribunal's decision. The Court concurred with the Tribunal's finding that all workers, including those not included in the settlement, held the same status as regularized employees. Further, they emphasized the lack of distinction between the two sets of workers and modified the calculation of back wages to commence from the tribunal's order date, not from the date of employment.
The decision of the Court:
The Supreme Court dismissed the appeal with the direction that the concerned workmen shall be entitled to back wages with effect from 23.05.2002.
Case Title: Mahanadi Coalfields Ltd. Versus Brajrajnagar Coal Mines Workers' Union
Coram: Hon’ble Mr. Justice P.S. Narasimha and Hon’ble Mr. Sandeep Mehta
Citation: 2024 Latest Caselaw 158 SC
Advocate for the Appellant: Mr. Aman Lekhi, Sr. Adv. Mr. Soumyajit Pani, Adv. Mr. Aishwary Bajpai, Adv. Mr. Siddharth Jain, AOR
Advocate for the Respondent: Mr. Ashok Kumar Panda, Sr. Adv. Mr. Tejaswi Kumar Pradhan, AOR Mr. Mohan Prasad Gupta, Adv. Mr. Manoranjan Paikaray, Adv. Mr. Shashwat Panda, Adv.
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