Kerala High Court
The Unit Chief vs M/S. Sapthazeal Private Limited on 21 May, 2024
"C.R"
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
TUESDAY, THE 21ST DAY OF MAY 2024 / 31ST VAISAKHA, 1946
WP(C) NO. 1589 OF 2018
PETITIONER/S:
HLL LIFE CARE LIMITED,
HEAD OFFICE, POOJAPURA,
THIRUVANANTHAPURAM, 695012,
REPRESENTED BY ITS UNIT CHIEF
BY ADVS.
SRI.P.RAMAKRISHNAN
SRI.C.ANIL KUMAR
SMT.ASHA K.SHENOY
SMT.PREETHI RAMAKRISHNAN P-212
SRI.PRATAP ABRAHAM VARGHESE
RESPONDENT/S:
1 M/S. SAPTHAZEAL PRIVATE LIMITED
POTTAKUZHI, PATTOM,
THIRUVANANTHAPURAM, 695001
REPRESENTED BY ITS MANAGING DIRECTOR
2 HLL LIFE CARE CONTRACT LABOUR UNION (AITUC)
MOSQUE LANE, THAMPANOOR,
THIRUVANANTHAPURAM 695001
3 THE REGIONAL LABOUR COMMISSIONER
(CENTRAL), RAMA NILAYAM, TC 25/3453,UPPALAM ROAD,
THIRUVANANTHAPURAM, PIN 685001
4 ADDL.R4- HINDUSTAN LATEX LABOUR UNION(AITUC)
C/O. HLL LIFECARE LIMITED,
PEROORKADA, TRIVANDRUM-695005,
REPRESENTED BY GENERAL MANAGER, AJAI K.PRAKASH.
5 ADDL.R5- HLL LIFE CARE CONTRACT WORKERS CONGRESS,
BALARAMAPURAM SPINNING MILL COMPOUND,
BALARAMAPURAM-695501,REPRESENTED BY GENERAL
SECRETARY, S.NANDAKUMARAN NAIR.
WPC 1589/2018
2
6 ADDL.R6-HLL LIFE CARE CONTRACT LABOURS UNION
CONGRESS, AKKULAM, SREEKARIYAM P.O,
THIRUVANANTHAPURAM-695017,
REPRESENTED BY WORKING PRESIDENT, ANEESH.
ADDL.R4 TO R6 ARE IMPLEADED AS PER ORDER DATED
14.6.2019 IN IA.NO, 1/2019 IN THE WP(C))
BY ADVS.
SRI.P.E.SAJAL
P.N.MOHANAN FOR R4
SRI.GOPAKUMAR R.THALIYAL FOR R2
SRI.THIRUMALA P.K.MANI FOR R1
SRI.M.S.VIJAYACHANDRAN BABU
OTHER PRESENT:
SRI.H.GOPAKUMAR, CGC FOR R3
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 12.04.2024, THE COURT ON 21.05.2024 DELIVERED THE
FOLLOWING:
WPC 1589/2018
3
"C.R"
JUDGMENT
Does the Regional Labour Commissioner (Central) have the
Jurisdiction to direct the principal employer to pay the
differential wages payable to an employee of a contractor, under
Section 21(4) of the Contract Labour (Regulation and Abolition)
Act, 1970 while dealing with a conciliation proceedings under
Section 12 of the Industrial Disputes Act, 1947? The answer
lies intrinsically interwind under various provisions of multiple
enactments.
2. M/s.HLL Life Care Limited, which is a public sector
undertaking under the Ministry of Health and Family Welfare,
Government of India, is before this Court against Ext.P4 order
issued by the 3rd respondent, Regional Labour Commissioner
(Central), Thiruvananthapuram by which it is made liable for the
alleged non-payment of minimum wages by the 1 st respondent,
M/s. Sapthazeal Private Limited, under the provisions of the
Contract Labour (Regulation & Abolition) Act, 1970.
3. As per Ext.P1 agreement of contract entered into
between the petitioner and the 1 st respondent, the 1st
respondent was entrusted with the job of providing house
keeping facility at the petitioner's factory at Peroorkkada,
Thiruvananthapuram. The 2nd respondent, which is a Trade
Union and claims to be representing the workers of the 1 st
respondent, submitted a complaint before the 3rd respondent
stating that they have not received minimum wages notified by
the Government of India. The said complaint is produced as
Ext.P2. Pursuant to Ext.P2, the 3rd respondent issued Ext.P3
notice dated 28.7.2017 calling for the petitioner and the 1 st
respondent for conciliation meeting under Section 12 of the
Industrial Disputes Act, 1947. By Ext.P4 order dated
8.12.2017, the 3rd respondent came to the conclusion that the
petitioner is liable to pay minimum wages to the workers of the
2nd respondent Trade Union employed by the 1 st respondent on
its failure to pay the same under the provisions of law. It is
challenging Ext.P4 order passed by the 3 rd respondent, this writ
petition is filed.
4. During the pendency of the writ petition by I.A.No.1
of 2019, other Unions, who represent similarly situated
employees engaged in the work by the contractor attached to
the petitioner, were also impleaded as additional respondents 4
to 6.
5. I have heard Sri.P.Ramakrishnan, learned counsel
appearing for the petitioner; Sri.Thirumala P.K.Mani, learned
counsel appearing for the 1 st respondent; Sri.Gopakumar
R.Thaliyath, learned counsel appearing for the 2 nd respondent;
and Sri.P.N.Mohanan, the learned counsel appearing for
additional respondents 4 to 6.
6. While answering the question posed before this
Court, necessarily the liability of the petitioner to pay the wages
to the members/workers of respondents 2, 4, 5 & 6 Unions may
also have to be decided.
7. Sri.P.Ramakrishnan, learned counsel appearing for
the petitioner, refers to the various clauses under Ext.P1
agreement to assert before this Court that the intention behind
Ext.P1 was to secure certain house keeping services at
Peroorkkada factory and the packaging unit at Balaramapuram
of the HLL Life Care Limited (hereinafter referred to as "HLL", for
short). Still further, it is contended that the contractor shall
have no right, title or interest in the site made available by the
HLL for execution of the work or in the building structures etc.
The agreement also envisages that the contractor be paid the
respective amounts for the work done by it and approved by the
HLL. Therefore, according to the learned counsel for the
petitioner, when Ext.P2 complaint was raised by the 2 nd
respondent Union, the specific grievance was that the 1 st
respondent was not paying the minimum wages. Ext.P3 is a
notice issued under the provisions of Section 12 of the Industrial
Disputes Act, 1947 calling for the parties for a conciliation
process and further that if the conciliation did not materialise,
the only option available before the 3 rd respondent was to refer
the matter before the appropriate labour court on failure of the
conciliation measures. Therefore, it is the specific case of the
learned counsel for the petitioner that the 3 rd respondent acted
beyond his jurisdiction and, therefore, Ext.P4 order is liable to
be quashed.
8. On the other hand, learned counsel appearing for the
2nd respondent as well as additional respondents 4 to 6
supported the findings in Ext.P4 order and sought for dismissal
of the writ petition.
9. I have considered the rival submissions raised across
the bar.
10. This Court would first deal with the contention of the
learned counsel for the petitioner that the 3 rd respondent acted
beyond his powers conferred under the provisions of the
Industrial Disputes Act, 1947 in passing Ext.P4 order.
Admittedly, Ext.P3 notice is one issued under Section 12 of the
Industrial Disputes Act, 1947. Sub-section (4) of Section 12 of
the Industrial Disputes Act, 1947 specifically provides that if no
settlement is arrived at, the conciliation officer shall, as soon as
practicable after the close of investigation, send a report to the
appropriate Government setting forth the steps taken by him for
ascertaining the facts and circumstances relating to the dispute
and for bringing about a settlement thereof, together with a full
statement of such facts and circumstances, and the reasons on
account of which, in his opinion, a settlement could not be
arrived at. The report will be then assessed by the appropriate
Government as provided under sub-Section (5) of Section 12
and if it deems fit, it may make a reference to the labour court,
industrial tribunal, or national tribunal. Pertinently, the
Appropriate Government is vested with power, not to make a
reference based on the report.
11. Having discussed the scheme of Section 12 of
Industrial Disputes Act, 1947, it becomes clear that the Regional
Labour Commissioner has no power to decide the dispute on his
own. Once he finds that the conciliation has failed, he is obliged
to send a report to the appropriate Government which in turn
may decide either to refer the dispute to the court/tribunal or
decide it not to refer. The above being the scheme under the
Industrial Disputes Act, 1947 and when the same is read along
with the provisions of the Contract Labour (Regulation and
Abolition) Act, 1970 and provisions of the Minimum Wages Act,
1948, the irresistible conclusion that is possible is that the order
impugned has been passed without Jurisdiction. The 3 rd
respondent at best could have submitted a report on the failure
of conciliation before the appropriate Government to follow the
procedure under sub-Section (5) of Section 12 of the Industrial
Disputes Act, 1947.
12. There is yet another reason as to why this Court is
persuaded to conclude that the 3rd respondent acted beyond his
powers. Admittedly, the claim under Ext.P2 is for minimum
wages. The 3rd respondent miserably failed to address the issue
as to whether he had the authority under the provisions of the
Minimum Wages Act, 1948. Section 20 of the Minimum Wages
Act, 1948 provides for the manner in which a claim of a
workman for minimum wages should be enforced. Admittedly, it
appears that the 3rd respondent is not the appropriate authority
under the Minimum Wages Act, 1948. It is pertinent to note
that the claim of the members of the 2 nd respondent Union was
purely under the Minimum Wages Act, 1948. Therefore, it was
not open for the 3rd respondent to have taken up the task of
adjudication of an issue for which he had no power. On that
count also, the order impugned is liable to be interfered.
13. Once this Court has found that the 3 rd respondent has
acted without Jurisdiction, this Court under normal
circumstances, has to remit the matter back to the 3 rd
respondent to initiate course of action under sub-Section (4) of
Section 12 of the Industrial Disputes Act, 1947. However, the
learned counsel for the petitioner, Sri.Ramakrishnan, would
further urge before this Court that the petitioner-company can
never be held liable under any circumstances, since it would fall
outside the scope of Act 37 of 1970. Since the question of
Jurisdiction of the 3rd respondent qua the applicability of Act 37
of 1970 is raised, the same requires to be addressed by this
Court.
14. The entitlement of the petitioner to succeed in this
writ petition on the point as raised above would arise only when
this Court finds that the Act 37 of 1970 will not apply to it.
Before dealing with the said issue, it would be apposite to
extract the definition of the term "contractor" under Section
2(1)(c) of the Contract Labour (Regulation and Abolition) Act,
1970.
"2. Definitions.-(1) In this Act, unless the
context otherwise requires,-
xxx xxx xxx
(c) "contractor", in relation to an establishment,
means a person who undertakes to produce a
given result for the establishment, other than a
mere supply of goods or articles of
manufacture to such establishment, through
contract labour or who supplies contract
labour for any work of the establishment and
includes a sub-contractor;"
(emphasis supplied by court)
15. Section 2(1)(i) of the Contract Workers
(Regulation and Abolition) Act, 1970 reads as under:
"2. Definitions.-(1) In this Act, unless the context
otherwise requires,-
xxx xxx xxx
(i) "Workman" means any person
employed in or in connection with the work of
any establishment to do any skilled, semi-
skilled or unskilled manual, supervisory,
technical, or clerical work for hire or reward,
whether the terms of employment be express
or implied, but does not include any such
person-
(A) Who is employed mainly in a managerial
or administrative capacity; or
(B) Who, being employed in a supervisory
capacity draws wages exceeding five
hundred rupees per mensem or
exercises, either by the nature of the
duties attached to the office or by reason
of the powers vested in him, functions
mainly of a managerial nature; or
(C) Who is an out-worker, that is to say, a
person to whom any articles or material
are given out by or on behalf of the
principal employer to be made up,
cleaned, washed, altered, ornamented,
finished, repaired, adapted or otherwise
processed for sale for the purposes of the
trade or business of the principal
employer and the process is to be carried
out either in the home of the out-worker
or in some other premises, not being
premises under the control and
management of the principal employer."
16. On a combined reading of Sections 2(1)(c) and 2(1)
(i), it becomes evident that a person who supplies goods or
articles of manufacture to such establishments through contract
labour or who supplies contract labour for any work at the
establishment will not come within the definition of the term
"contractor". That be so, the 1 st respondent, who is under a
contract of housekeeping, will be definitely taken out of the
purview of Act 37 of 1970. It is also advantageous to note that
such workers employed by the 1st respondent will also not come
within the definition of 'workman' under the Contract Labour
(Regulation and Abolition) Act, 1970. Even assuming that the
workers, employed by 1st respondent are deemed to be the
workman employed by the petitioner, even then the order
impugned cannot be sustained because of lack of an
adjudicatory mechanism under the Act 37 of 1970.
17. Read as it may, this Court could not find any such
provision which enables the 3rd respondent to exercise such a
power. The only mechanism provided is to file a complaint
under Section 27 of Act 37 of 1970 within a period of 3 months
from the date of occurrence of the offence. Apparently,
therefore, the 3rd respondent misguided himself and assumed
Jurisdiction over a subject which he did not have under law.
Hence, while passing Ext.P4 order, the 3 rd respondent clearly
exceeded his powers in directing the principal employer to pay
the differential wages under sub-Section (4) of Section 21 of the
Contract Labour (Regulation and Abolition) Act, 1970. Hence,
the order impugned is clearly unsustainable.
18. The finding of this Court on the point of law that the
Act 37 of 1970 will not apply to the petitioner when Ext.P1
contract was entered, is surely supported by the principles laid
down by the Hon'ble Supreme Court of India in Workmen of
Nilgiri Co-op. Mkt. Society Ltd. v. State of TN [(2004) 3
SCC 514], wherein the Hon'ble Apex Court had an occasion to
consider the question as to whether the workers engaged by the
marketing service society for getting works in vegetable yards
done for its members through the 3 rd party contractors, would
come within the definition of the term 'workman' of the society
under Section 2(g) and 2(i) of the Contract Labour (Regulation
and Abolition) Act, 1970 and held in affirmative that such
workers were not workers of the society. A more or less similar
issue came up before this Court in Sarovar Hotels (P) Ltd. v.
State of Kerala [2022 (2) KLT 320], wherein this Court was
called upon to consider the definition of a "contractor" under
Section 2(1)(c) of the Contract Labour (Regulation and
Abolition) Act, 1970 and it was held that the Company which is
rendering service on numerous fields like running restaurants,
pantry services, house keeping, front officer services etc. does
not fall within the definition of "contractor" under the Act. In
Sarovar Hotels (P) Ltd. (supra) though this Court was called
upon primarily to test the validity of complaints filed under
Section 27 of the Act 37 of 1970, this Court indeed considered
the definition of a contractor under Section 2(1)(c) of the Act 37
of 1970 and concluded that a contract of housekeeping will not
fall within the purview of the Act 37 of 1970.
19. Applying the principles laid down by the Apex Court
and by this Court as above, to the nature of service rendered by
the 1st respondent to the petitioner, it becomes clear that the
contract is not for supply of labourers, but is for housekeeping
and, therefore, such contracts are taken out of the purview of
Section 2(1)(c) of the Contract Labour (Regulation and
Abolition) Act, 1970. Hence, the petitioner is not bound by the
provisions of the Contract Labour (Regulation & Abolition) Act,
1970 and, hence, the 3rd respondent had no authority of law to
pass Ext.P4 order. Added to the above, since this Court has
found that the petitioner is not liable under the provisions of Act
37 of 1970, it is only appropriate that even on setting aside
Ext.P4 order, no further direction be issued to follow the
procedure under sub-Sections (4) and (5) of Section 12 of
Industrial Dispute Act, 1947, since the entire proceedings
initiated as per Ext.P3 is without Jurisdiction.
In the result, the petitioner is entitled to succeed. Hence
the Writ Petition is allowed. Ext.P4 order is quashed. It is
declared that the petitioner is not liable for any payment to the
workers employed by the 1st respondent on its failure to pay
their wages. However, this judgment shall not prejudice the
claim of the members of the 2 nd respondent union or
respondents 4 to 6 unions to raise the claim of their members
against the 1st respondent, in accordance with law. No order as
to costs.
Sd/-
EASWARAN S.
JUDGE
jg
APPENDIX OF WP(C) 1589/2018
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE CONTRACT ENTERED INTO
BETWEEN THE PETITIONER AND THE 1ST
RESPONDENT
EXHIBIT P2 TRUE COPY OF THE COMPLAINT DATED 24.07.2017
SUBMITTED BY THE 2ND RESPONDENT BEFORE THE
3RD RESPONDENT
EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 28.07.2017
ISSUED BY THE 3RD RESPONDENT
EXHIBIT P4 TRUE COPY OF THE ORDER DATED 08.12.2017
ISSUED BY THE 3RD RESPONDENT
