Indian Airlines vs Central Government Labour Court, ...
1987 Latest Caselaw 187 Del

JUDGMENT

1. This petition under Art. 226 of the Constitution of India is directed against the order of the Presiding Officer, Central Government Labour Court, New Delhi, dated 25 February, 1985, on an application filed by respondents 2 to 20 under S. 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act'), claiming wages and leave wages equal to the wages paid to regular employees of the petitioner-Indian Airlines doing the same type of work.

2. The case of respondents 2 to 20 before the Labour Court was that the respondents were engaged by the Indian Airlines, i.e., the petitioner herein and were posted at the Indian Airlines and Air India Staff Housing Colony, Vasant Vihar, New Delhi, for the purposes of rendering maintenance service for sanitary, water supply and sewage work. These respondents were working under the direct financial supervision and control of the Indian Airlines through its overseer Sri R. B. Singh. The respondents were issued gate passes for that purpose which indicated that they were the workmen of the Indian Airlines. The respondents were paid wages on the basis of vouchers till September 1981. However, thereafter the petitioner changed the mode of payment of wages in order to deprive them equal wages and other benefits provided to other workmen employed by the petitioner. The petitioner, therefore, selected four persons namely S/Sri Pratap Bailey, Naresh Kumar Saxena, Devinder Singh and Mukesh Chand who were given the total amount of earned wages payable to the respondent workmen including their own wages instead of making payment to the respondent workmen individually and described these four workmen as contractors. The petitioner wrongly terminated the services of the respondents with effect from 13 July, 1982, and refused to pay earned wages to the workmen from 1 June, 1982 to 12 July, 1982 and also refused to pay leave wages similar to the other workmen employed by the petitioner and doing same type of work. A joint application was, therefore, made under S. 33C(2) of the Act claiming earned wages with effect from 1 June, 1982, to 12 July, 1982 and arrears, of wages and leave wages paid and given to the other workmen doing the same type of work employed by the petitioner.

3. The petitioner filed a written statement in reply to the said application and submitted that respondents 2 to 20 were employees of the contractors and not of the petitioner and the wages were paid to these respondents by the contractors and the contractors as per the mutual contract had been submitting the bills and charging the petitioner for these services. The petitioner further submitted that these respondents had no right to claim the arrears of wages, leave wages, etc., at the same rate paid to the regular employees of the petitioner, firstly because the right to claim this benefit was disputed by the petitioner which could not be resolved by the Labour Court while dealing with an application under S. 33C(2) of the Act, secondly because there was no relationship of master and servant between the petitioner and respondents 2 to 20 and, therefore, even if such a relief could be granted on an application under S. 33C(2) of the Act, these respondents could claim the same only from the contractors and not from the petitioner. It was further submitted that a dispute was raised by these workmen over their termination but the Central Government in August 1983 (annexure A) refused to refer the same for adjudication on the ground that these workmen were not the employees of the management of Indian Airlines and were engaged by the contractors and this previous decision of the Central Government had become final and the respondents were estopped from filing the application under S. 33C(2) of the Act against the petitioner.

4. The Presiding Officer, Central Government Labour Court vide order dated 26 February, 1985, however, allowed the application filed by the respondent workmen on the principle of equal pay for equal work and held that the respondents were entitled to get the same wages as other employees of the petitioner doing the same type of work. The Labour Court further held that the application under S. 33C(2) of the Act was maintainable.

5. The order of the Presiding Officer, Central Government Labour Court was assailed by the learned counsel for the petitioner in this Court mainly on two grounds. Firstly, it was contended that the Labour Court was not competent to decide whether the respondents 2 to 20 who were employed by the contractors had the right to the same wages as are paid or payable to the similar category of employees employed by the petitioner on an application under S. 33C(2) of the Act, particularly because the very existence of the right of the respondents to claim the wages had first to be adjudicated and the Labour Court had no jurisdiction to adjudicate upon this right. Secondly, it was contended that assuming the respondents could claim this benefit by way of an application under S. 33C(2) of the Act, and the Labour Court could inquire into the existence of that right, even then the same could be claimed only from the contractors and not from the petitioner because there is no relationship of master and servant between the petitioner and respondents 2 to 20.

6. The scope and jurisdiction of the Labour Court under S. 33C(2) of the Act is well settled. The Labour Court can inquire into the existence of the right of the workman to claim a benefit in terms of money but while conducting this inquiry, which is incidental in nature, the Labour Court cannot arrogate to itself the functions of the Industrial Tribunal and entertain a claim which is based on a right which is the subject-matter of an industrial dispute by way of a reference under S. 10 of the Act. However, if the dispute is not one which can easily be resolved by way of a reference under S. 10(1) of the Act, then the Labour Court must deal with that question and decide whether the workmen had a right to receive the benefit as alleged by them and if the workmen had the right, then it can proceed with the computation of the benefits in terms of money.

7. Thus, the next question which has to be considered is whether the respondents have a right to claim the same wages as their counterparts doing the same type of work but employed directly by the petitioner Indian Airlines. Section 35 of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 'the Act of 1970') invests the appropriate Government a power to make rules for carrying out the purposes of the Act subject to the condition of previous publication. Accordingly, the Central Government framed and published the Contract Labour (Regulation and Abolition) Central Rules, 1971 (hereinafter referred to as the Rules) which are applicable in the present case. Rule 25(2)(v)(a) of the said Rules reads as follows'

"In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work :

Provided that in the case of any disagreement with regard to the type of work the same shall be decided by the Chief Labour Commissioner (Central) whose decision shall be final."

8. Thus, in a case where the type of work done by the workmen engaged by the contractor is the same as done by the workmen directly employed by the principal employer, the workmen employed by the contractor would be entitled to the same wages. It was, however, contended by the learned counsel for the petitioner that under the proviso to rule 25(2)(v)(a) of the Rules, the right of the workmen to claim the wages at the same rate could be determined only by the Chief Labour Commissioner and since a specific provision was made in the special statute, the Labour Court could not decide this question on an application under S. 33C(2) of the Act. Learned counsel referred to the judgment of the Supreme Court in B. H. E. L. Workers' Association, Hardwar, and others v. Union of India and others (1985-I-LLJ-428) in support of this contention.

9. I fail to understand how the observations of the Supreme Court in the case of B.H.E.L. Workers' Association and others (supra), support the contention of the petitioner. In fact, it supports the case of respondent workmen. The Supreme Court has observed that the question whether the work done by the contract labour is the same or similar work as that done by the workmen directly employed by the principal employer of any establishment is a matter to be decided by the Chief Labour Commissioner under the proviso to rule 25(2)(v)(a) of the Rules. In that case, however, the question whether the work done by the workmen employed by the contractor was the same type of work as done by the workmen directly employed by the principal employer in B.H.E.L. Hardwar, had yet to be determined. In the present case, as per the finding recorded by the Labour Court, there is no dispute in this regard. In the present case, it is not disputed by the petitioner in its written statement filed before the Labour Court that the workmen directly employed by the petitioner and doing the same type of work were being paid wages at higher rates. The Labour Court in the impugned order has observed as follows :

"In this case, no dispute has been raised about the non-similarity in kind of work.

It is not disputed by the management that it pays higher rates to regular plumbers, masons, carpenters, electricians, pump operators and labourers engaged by it, and the rates mentioned for such workmen in the chart filed by the workmen have not been challenged."

10. The proviso to sub-rule (v)(a) of rule 25(2) of the Rules would come into operation only if there is a disagreement with regard to the type of work. When there is no such disagreement, sub-rule (v)(a) of rule 25(2) would be applicable. Under rule 25(2)(v)(b) of the Rules, again if the work is not similar, the wage-rates, holidays, hours of work and conditions of service of the workmen of the contractor has again to be specified by the Chief Labour Commissioner (Central). Thus, in the present case, since there is no disagreement regarding the type of work done by respondents 2 to 20 and the workmen directly employed by the petitioner, the right of the workmen to claim equal wages has not to be decided by the Chief Labour Commissioner and the Labour Court could compute the wages payable to the workmen employed by the contractors and determine whether these workmen are entitled to receive more than what they are being paid. Moreover, there is no other specific provision in the Act of 1970 to ensure the payment of these wages to the workmen employed by the contractors. Thus, the only remedy open to such workmen would be to move an application under S. 33C(2) of the Act, before the Labour Court to execute or implement this right. The Supreme Court in the case of B.H.E.L. Workers' Association, Hardwar and others (supra), has observed at pp. 432-433 of (1985-I-LLJ-428) :

"... Contract labour is entitled to the same wages, holidays, hours of work and conditions of service as are applicable to workmen directly employed by the principal employer of the establishment on the same or similar kind of work. They are entitled to recover their wages and their conditions of service in the same manner as workers employed by the principal employer under the appropriate Industrial and Labour Laws. If there is any dispute with regard to the type of work, the dispute has to be decided by the Chief Labour Commissioner (Central) ..."

Thus, the workmen employed by the contractor are entitled to recover their wages and their conditions of service in the same manner as workers employed by the principal employer under the appropriate industrial and labour laws. This means that if the workers directly employed by the petitioner can claim the wages due to them by moving an application under S. 33C(2) of the Act, the workers employed by the contractors are also entitled to claim the wages due to them by moving an application under S. 33C(2) of the Act.

11. The next question that has to be considered is whether a claim for equal wages can be made against the principal employer-petitioner or can the claim be made against the contractor alone. In my opinion, this question is no longer res integra. Even prior to the enactment of Act of 1970, the Supreme Court in Hussainbhai v. Alath Factory Thozhilali Union and others (1978-II-LLJ-397), while dealing with a similar contention observed as follows in Paras 3, 4, 5 and 6 at pages 398 and 399 :

"3. Who is an employee in Labour Law ? That is the short, die-hard question raised here but covered by this Court's earlier decisions. Like the High Court, we give short shrift to the contention that the petitioner had entered into agreements with intermediate contractors who had hired the respondent-union's workmen and so no direct employer-employee vinculum juries existed between the petitioner and the workmen.

4. This argument is impeccable in laissez faire economics 'red in tooth and claw' and under the Contract Act rooted in English common law. But the human gap of a century yawns between this strict doctrine and industrial jurisprudence. The source and strength of the industrial branch of Third World Jurisprudence is social justice proclaimed in the preamble to the Constitution. This Court in Ganesh Beedi case (1974-I-LLJ-367) has raised on British American rulings to hold that mere contracts are not decisive and the complex of considerations relevant to the relationship is different. Indian Justice, beyond Atlantic liberalism, has a rule of law which runs to the aid of the rule of life. And life, in conditions of poverty aplenty, is livelihood and livelihood is work with wages. Raw societal realities, not fine spun legal niceties, not competitive market economics but complex protective principles, shape the law when the weaker, working class sector needs succour for livelihood through labour. The conceptual confusion between the classical law of contracts and the special branch of law hesitative to exploitative situations accounts for the submission that the High Court is in error in its holding against the petitioner.

5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the management, not the immediate contractor. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the life, may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of the law and not be misled by the may of legal appearances.

6. If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefit and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries or the make-believe trappings of detachment from the management cannot snap the real-life bond. The story may vary but the inference defies ingenuity. The liability cannot be shaken off."

This position has not changed because of the enactment of the Act of 1970. After the Act of 1970 came into force the position is further clarified. Section 21 of the Act of 1970 which deals with payment of wages to the contract labour reads thus :

"21 (1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.

(2) Every principal employer shall nominate a representative duly authorised by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.

(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorised representative of the principal employer.

(4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor."

12. Thus, though under sub-section (1) of S. 21, a contractor is responsible for payment of wages to each worker employed by him as contract labour and such wages have to be paid before the expiry of such period as may be prescribed, in order to ensure that payment of wages to each worker employed by the contractor is made during the prescribed period. Under sub-section (2) of S. 21, it is the duty of every principal employer to nominate a representative duly authorised by him to be present at the time of disbursement of wages by the contractor. A duty is also cast upon such a representative to certify the amounts paid as wages in the prescribed manner. Under sub-section (3) of S. 21, a duty is cast upon the contractor to ensure that the disbursement of wages is done in the presence of the authorised representative of the principal employer. More important is that under sub-section (4) of S. 21, in case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer is liable to make payment of wages in full or make up the unpaid balance due to the contract labour employed by the contractor and thereafter recover the amount from the contractor either by deduction from the amount payable to the contractor under any contract or as a debt payable by the contractor. Thus, even if the contractor fails to pay the wages the principal employer is responsible to make the payment.

13. In my view, therefore, the contract labour employed by the contractor can claim wages either from the contractor or from the principal employer and if the claim is made from the principal employer under sub-section (4) of S. 21, the principal employer is bound to pay the wages and thereafter recover it from the contractor as provided in the sub-section.

14. It is not disputed that the petitioner Indian Airlines is the principal employer. Therefore, in my opinion, the petitioner being responsible and liable to pay the wages under the Act of 1970, the claim of wages made by respondents 2 to 20 against the petitioner is maintainable.

15. In my opinion, the order of the Central Government refusing to make a reference in regard to the dispute raised by respondents 2 to 20 regarding their alleged wrongful termination does not change the position in any manner. In any event, learned counsel for respondents 2 to 20 has made statement at the Bar that these respondents have challenged the order of refusal of the Central Government in this Hon'ble Court by way of a separate writ petition under Article 226 of the Constitution of India, which is still pending.

16. In the result, the petition is dismissed with costs. Counsel's fee Rs. 2,000.