Madras High Court
The Management Of vs The President on 29 April, 2025
W.P.No.4804,12576 & 12589 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
(Special Original Jurisdiction)
Reserved on : 13.03.2025
Pronounced on : 29.04.2025
PRESENT:
THE HON’BLE DR. JUSTICE A.D. MARIA CLETE
W.P.No.4804, 12576 & 12581 of 2020
and
W.M.P. Nos.5683, 5684 of 2020, 22191,22192 of 2021,
15506, 15509 of 2020
In W.P.No. 4804 of 2020
1. The Management of
Padma Seshadri Bala Bhavan
Senior Secondary School,
29, Alagirisami Salai,
K.K.Nagar, Chennai – 600078.
2. The Dean and Director
Padma Seshadri Bala Bhavan
Senior Secondary School,
No.7, Lake First Main Road,
Nungambakkam, Chennai – 600034. ….Petitioners
Vs.
1.The President
Southern Employees’ Association,
No.103/68, College Road,
Nanganallur, Chennai – 600 114.
2. The Management of
Service Care Pvt. Ltd
Navarathna Garden First Street,
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Ekkattuthangal, Chennai – 600 032.
3. The Management of
Ferrgra Enterprises,
(Name amended as per orderin
Memo dated 5.7.2019)
No.7, Sir Usman Court,
Second Floor, 63, Eldams Road,
Alwarpet, Chennai 600 018. …Respondents
In W.P.No.12576 of 2020
The Management of
Ferrgra Enterprises,
(name amended as per order in
Memo dated 5.7.2019)
No.7, Sir Usman Court,
Second Floor, 63, Eldams Road,
Alwarpet, Chennai 600 018. …Petitioner
Vs.
1.S.Annapoorani,
Rep. by the President,
Southern Employees Association,
No.103/68, College Road,
Nanganallur, Chennai – 600 1114.
2. The Management of
Padma Seshadri Bala Bhavan
Senior Secondary School,
29, Alagirisami Salai,
K.K.Nagar, Chennai – 600078.
3. The Management of
Padma Seshadri Bala Bhavan
Senior Secondary School,
No.7, Lake First Main Road,
Nungambakkam, Chennai – 600034
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4. The Management of
Service Care Private Ltd.,
No.14, Ground Floor,
Navarathna Garden First Street,
Ekkattuthangal, Chennai – 600 032. ….Respondents
In W.P.No.12581 of 2020
The Management of
Service Care Private Ltd.,
No.14, Ground Floor,
Navarathna Garden First Street,
Ekkattuthangal, Chennai – 600 032 ….Petitioner
Vs.
1. S.Manjula,
Rep. by the President,
Southern Employees Association,
No.103/68, College Road,
Nanganallur, Chenni – 600 114.
2. The Management of
Padma Seshadri Bala Bhavan
Senior Secondary School,
29, Alagirisami Salai,
K.K.Nagar, Chennai – 600 078.
3. The Management of
Padma Seshadri Bala Bhavan
Senior Secondary School,
No.7, Lake First Main Road,
Nungambakkam, Chennai – 600034
4.The Management of
M/s. Citidale Enterprises Pvt.Ltd
No. S-7, Sir Usman Court,
Second Floor, No.63, Eldams Road,
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Alwarpet, Chennai – 600 018. … Respondents
Prayer in W.P.No. 4804 of 2020
To issue writ of Certiorari, or writ in the nature of certiorari, calling for the
records of the Fourth Respondent in I.D.No.254/2017 and quash the Award
dated 10.07.2019 as being illegal and arbitrary and pass such further or
other orders as this Hon’ble Court may deem fit and proper in the facts and
circumstances of the present case.
Prayer in W.P.No.12576 of 2020
To issue a Writ of Certiorari or any other Writ, order, direction, like nature,
calling for the records of the I Addl Labour Court, Chennai and to quash the
Award dated 10.07.2019 passed in Complaint no.1 of 2018 in
I.D.No.254/2017 and to pass such further or other orders as this Hon’ble
Court may deem fit and proper in the circumstances of the case.
Prayer in W.P.No.12581 of 2020
To issue a Writ of Certiorari or any other Writ, Order, direction, like nature,
calling for the records of the I Addl Labour Court, Chennai and to quash the
Award dated 10.07.2019 passed in Complaint No.3 of 2018 in
I.D.No.254/2017 and to pass such further or other orders as this Hon’ble
Court may deem fit and proper in the circumstances of the case.
Prayer in WMP No.5683 of 2020 (in W.P.No.4804 of 2020)
To permit the petitioners herein to join in filing a single writ petition under
Rule 2(B) of Appendix V of the Appellate Side Rules relating to filing of
writ petition and pass such further or other orders as this Hon’ble Court may
deem fit and proper in the facts and circumstances of the present case.
Prayer in WMP No. 5684 of 2020 (in W.P.No.4804 of 2020)
To grant a stay on the operation of the Impugned Award dated 10.07.2019
passed by the fourth respondent in I.D.No.254/2017, pending disposal of the
present writ petition and pass such further or other orders as this Hon’ble
Court may deem fit and proper in the facts and circumstances of the present
case.
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Prayer in WMP No.22191 of 2021 (in W.P.No.4804 of 2020)
To vacate the stay granted in the order of this Hon’ble Court dated
22.9.2020 in WMP No.5684 of 2020 in W.P.No.4804 of 2020.
Prayer in WMP No.22192 of 2021 (in W.P.No. 4804 of 2020)
To direct the Respondents to not to alter the service conditions of the
workers concerned in ID No.254 of 2017 during the pendency of above said
W.P.No.4804 of 2020.
Prayer in WMP No.15506 of 2020 (in W.P.No.12576 of 2020)
To stay the operation of the Award dated 10.07.2019 passed in Complaint
No.1 of 2018 in I.D.No.254/2017 by the Learned I Additional Labour Court
Chennai pending disposal of the above Writ Petition.
Prayer in WMP No. 15509 of 2020 (in W.P.No.12581 of 2020)
To stay the operation of the Award dated 10.07.2019 passed in Complaint
No.3 of 2018 in I.D.No.254/2017 by the Learned I Additional Labour Court
Chennai pending disposal of the Writ Petition.
Appearance of Parties:
For Petitioners in W.P.No.4804 / 2020
and for Respondents 2 and 3 in
W.P.12576/2020 and 12581/2020
Ms. Madhupreetha Elango, Advocate
For M/s. Rahul Balaji, Madhan Babu,
Vishnu Mohan, Advocates
For 1st Respondent in all WPs
Mr.V.Prakash,Senior Counsel
For Ms. Karthikeyani, Advocate
For 2nd and 3rd Respondents in
WP No.4804/2020 & For Petitioners
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in WP No. 12576/2020 & 12581/2020 M/s.Raman Parasuraman and
T.Ravindranathan, Advocates
COMMON JUDGMENT
Heard.
2. In W.P. No. 4804 of 2020, the School Management challenges the
Award dated 10.07.2019 passed by the I Additional Labour Court in I.D.
No. 254 of 2017. By the impugned Award, the Labour Court has directed as
follows:—
“This court holds that the claim of the petitioner’s union to
regularize the employment of all employees from the category of
contract workers to the regular workers from the date of their
employment with the scale of pay, pay arrears, leave salary and
all other benefits claimed by the petitioner union is lawful, and
justified. The respondents 1 and 2 are directed to extend the said
benefits within one month from the date of this order. No costs.”
3. The writ petition was admitted on 26.02.2020, and an interim stay
was granted. Upon notice, the contesting first respondent entered
appearance, and this Court passed the following interim order:—
“In that view of the matter, the interim order earlier granted on
26.02.2020 is extended till the next hearing on condition that the
Petitioners shall deposit the entire monetary benefits due as per
the impugned order from the date of termination till the date of
filing of the Writ Petition in an interest fetching fixed deposit in
the name of the Presiding Officer, I Additional Labour Court,
Chennai in any Nationalized Bank in Chennai initially for a
period of one year and renewable automatically for the same
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period from time to time and hand over the original Fixed
Deposit receipt to the I Additional Labour Court, Chennai along
with a working-sheet showing calculation of the amount
deposited, under written acknowledgment and file proof of such
compliance before the Registrar (Judicial) of this Court by
02.11.2020 without fail.”
4. By an affidavit dated 25.02.2020, the writ petitioner informed this
Court that the workmen, who continued to be in employment, had filed
claim petitions before the Labour Court in C.P. Nos. 168 and 169 of 2019,
seeking wages totaling Rs.6,62,09,053/- against the School Management. In
the meantime, during the Covid-19 lockdown, while the School
Management continued to pay wages to other teachers and employees, it
failed to pay lockdown wages to the workers covered by the Award.
Consequently, two applications, W.M.P. Nos. 22191 and 22192 of 2021,
were filed seeking (i) to vacate the interim stay granted on 22.09.2020 and
(ii) to restrain the School Management from altering the service conditions
of the workers covered by I.D. No. 254 of 2017. However, no orders were
passed on these applications. The first respondent Trade Union also filed a
counter affidavit dated Nil of January 2021.
5. In the meantime, when the matter was taken up on 07.02.2025, this
Court directed the parties to appear before the Tamil Nadu Mediation and
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Conciliation Centre attached to the High Court for an attempt at settlement.
However, the Centre, by a report dated Nil, informed that no settlement was
arrived at, and accordingly, the matter was posted for final disposal.
6. From the records, it is seen that the first respondent Union raised
an industrial dispute under Section 2(k) of the Industrial Disputes Act, 1947,
before the Government Labour Officer, Circle III, Chennai, by letter dated
04.09.2024, seeking a declaration that the workers represented by the
Union, though engaged as contract workers, should be deemed to be
employees of the petitioner School and be paid time-scale wages, along with
arrears, on par with Government School teachers. The School Management,
in its counter, contended that the workers represented by the first respondent
Union were outsourced employees engaged through two contractors,
namely, the second and third respondents, who are independent legal
entities, and that the School had no direct relationship with the said workers.
It was further asserted that there was no system of direct employment under
the guise of contract labour and that the contractors, being the employers,
had covered the workers under various labour legislations. The allegation
that the contractors were mere benami entities of the petitioner School was
specifically denied. Although notices were issued to the second and third
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respondents by the Labour Officer, they did not submit any remarks.
7. As the Conciliation Officer was unable to bring about a settlement,
he submitted a failure report to the State Government under Section 12(4) of
the Industrial Disputes Act, 1947, by his report dated 17.07.2015. Upon
receipt of the report, the Government of Tamil Nadu declined to refer the
dispute for adjudication before the Labour Court, vide G.O.(D) No. 600,
Labour and Employment Department, dated 03.11.2015. In its order, the
Government stated that, since the employees represented by the Union were
contract employees, they were required to seek remedies under the
provisions of the Contract Labour (Regulation and Abolition) Act, 1970.
8. Aggrieved by the refusal of reference by the Government, the first
respondent Trade Union filed a writ petition before this Court in W.P. No.
7499 of 2016, challenging the order declining to make a reference. After
issuing notice to the parties, this Court allowed the writ petition and passed
the following order:—
“2, A perusal of the impugned order would show that absolutely
no reason has been assigned on receipt of the failure report from
the Conciliation Officer. The role of the first respondent is rather
limited. It cannot go into the merits of the case as sought to be
canvassed by the learned counsel for the sixth respondent. The
question as to whether the members of the petitioner are
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working under the sixth respondent or respondents 4 and 5 is a
matter to be decided by the Labour Court.
3.In such view of the matter, the impugned order is set aside.
Consequently, a direction is issued to the first respondent to
refer the dispute to the jurisdictional Labour Court within a
period of eight weeks from the date of receipt of a copy of this
order. Accordingly, the writ petition stands allowed.”
9. Pursuant to the order passed by this Court, the Government issued
G.O.(D) No. 328, Labour and Employment Department, dated 02.06.2017,
thereby referring the dispute for adjudication before the Labour Court,
Chennai, as set out in the Annexure to the Government Order. The terms of
reference read as follows:—
“ brd;id gj;khnrc&hj;jphp ghygtd; rPdpah; brfz;lhp gs;spapy;
gzpg[hpak[ ; 27 bjhHpyhsh;fis xg;ge;j bjhHpyhsh;fs; vd;w epiyapy;
,Ue;J khw;wp mth;fs; gzpapy; nrh;e;j ehs; Kjy; eph;thfj;jpd;
bjhHpyhsh;fs; vd;w me;j!;jpy; fhyKiw Cjpak; (Time Scale of Pay)
epYit rk;gsk; kw;Wk; tpLKiw nghd;w midj;J rYiffSk; mspf;ff;
nfhUk; bjhHpwr; ';fj;jpd; nfhhpf;if epahakhdJ jhdh? Mk; vdpy;.
chpa cj;jut[ gpwg;gpf;f/”
10. Upon receipt of the order of reference, the I Additional Labour
Court took up the dispute as I.D. No. 254 of 2017 and issued notice to the
parties. The first respondent Trade Union filed a claim statement dated
27.06.2017. In the claim statement, the case put forth by the Union, as set
out in paragraphs 5, 7, and 8, as well as the reliefs sought in paragraph 11,
are as follows:—
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“5, …..The Regular employees on the rolls of the 1st and 2nd
Respondent get salary as per Government time scale of pay in
accordance with the Bye Law of the CBSE, but, the employees
under the cover of ‘Contract workers” are paid less than 50% of
their legitimate dues, since they are falsely termed as ‘Contract
Worker’ to avoid liabilities under various Labour Laws.”
“7. …..The Labour Commissioner Officer, after verifying with
the Respondents, through the Inspector of Labour-2, Chennai
wrote to the Petitioner / Union vide his letter No.A/4087/2014
dated 22-12-2015 informing that there are two contractors by
name M/s.Citadale Enterprises Pvt. Ltd and M/s. Service Care
Pvt. Ltd under the 1st and 2nd Respondents supplying labours for
doing sanitary jobs but they are not licensed contractors as
required under law.”
“8. ...as already stated the 1st and 2nd Respondents are covered by
the Bye-laws of CBSE and as per the said Bye-laws the
employees working under the 1st and 2nd Respondents are entitled
to salary, leave and all other benefits on par with the government
employees working in the similar categories and which is being
granted to the employees on the rolls of the 1st and 2nd
Respondent; the services of all the 46 workers mentioned in para-
2 above should be regularized as employees of Padma Seshadri
Bala Bhavan Senior School herein, from the first date of their
joining. They are entitled to receive time scale of pay as fixed by
the Government and paid to the regular employees of the 1st and
2nd Respondents, from their first day of joining the service. These
employees should be granted annual increments and arrears of
salary also from that date.”
“11. … the Petitioner/Union humbly prays that this Hon’ble Court
may be pleased to pass an award directing the 1st and 2nd
Respondents to regularize all the employees now working under
the cover of “Contract Labours” as employees of the Management
of M/s. Padma Seshadri Bala Bhavan Senior Secondary School,
Chennai, from the first date of their joining the services, fit them
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in proper time scale of pay from the first date of their joining the
services and grant all leave and other facilities that are being
granted to the employees on the rolls of the 1st and 2nd
Respondents, and also to pay the arrears arising out of the
difference of salary due as per Government scale of pay and the
salary actually paid from their first joining the service and pass
such other order or orders as this Hon’ble Court may deem fit and
proper in the circumstances of the case and thus render justice.”
11. Curiously, while the first respondent Union sought regularization
of the workers as against the writ petitioners, it also impleaded the second
and third respondents—being the contractors who had entered into
agreements for supply of labour with the petitioner School—as parties to the
industrial dispute. The petitioner School filed a counter statement dated Nil
of January 2019, wherein it specifically denied any employer-employee
relationship with the workers represented by the first respondent Union. It
was further contended that the workers supplied by the second and third
respondents could not claim any rights under the CBSE Affiliation Bye-laws
and would be governed solely by the terms and conditions of employment
prescribed by their respective contractors.
12. The 2nd Respondent filed a counter statement dt. Nil, February
2018. In that counter statement, they admitted the recruitment of 20 workers
represented by the 1st Respondent Union and also claimed that the relevant
labour legislations such as PF and ESI were also extended to those
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employees. In para 3 of the counter statement it was stated as follows:-
“The said 20 Employees are the employees of the Third
Respondent herein. Therefore, there is no question arises
whether they are employees of Respondents 1 & 2 or not? All
the Interviews are conducted and Appointments are made by
this Respondent for the above employees. All their Salaries are
paid / transferred every month to the respective bank accounts
through this Respondent’s Bank Account only. The provident
fund, Employees Provident Fund / Employees State Insurance
Corporation, are being paid through this Respondent accounts
viz., TN/MAS/49456 and 51000758060001011 respectively.
All the Pay Slips and Sign Slips are being provided by this
Respondent to all the above employees. The employees are
carrying / wearing / holding the Identity Cards of this
Respondent only from the date of appointment till date. All the
salaries are fixed based on the Tamilnadu Minimum Wages Act
for Shops and Commercial Establishments for all the above
employees where basic salary and dearness allowance are paid
as per the Act.”
13. In support of their stand, the second respondent filed several
documents, which were subsequently marked during the trial, including the
agreement dated 01.07.2016 between the second respondent and the
petitioner Management (Exhibit M3), the EPF Annual Statement (Exhibit
M5), the ESI e-Pehchan Card (Exhibit M7), and the License for supply of
contract labour dated 28.07.2017 (Exhibit M8). The third respondent also
filed a written statement dated Nil, January 2018, wherein they admitted to
having supplied 18 workers to the petitioner Management, three of whom
had subsequently left their employment. It was further stated in paragraph 9
that, since the number of employees supplied by them was less than 20, the
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requirement of obtaining a licence under the Contract Labour (Regulation
and Abolition) Act, 1970, did not arise.
14. In support of their written statement, the third respondent also
filed several documents, which were subsequently marked as exhibits during
the trial. These included the agreements entered into between the third
respondent and the petitioner Management dated 01.06.2009, 01.07.2011,
01.07.2014, and 01.07.2016 (marked as Exhibits M9, M10, M12, and M13
respectively). The EPF Annual Statement was marked as Exhibit M16, and
the ESI e-Pehchan Card was marked as Exhibit M18.
15. Before the Labour Court, the President of the first respondent
Union was examined as WW1. On behalf of the workmen, 35 documents
were filed and marked as Exhibits W1 to W35. In addition, three other
witnesses were examined: Shanthi (WW2) and M. Vela (WW3), who were
allegedly contract labourers supplied by the second and third respondents,
and R. Murugan (WW4), who was a regular employee. During cross-
examination, WW1 made the following admissions:—
1 kw;Wk; 3.4 gpujpthjpfSf;fpilapy; xU xg;ge;jk; ,Ug;gJ ,e;j
tHf;F nghl;l gpwF jhd; bjhpa[k;/ Labour Officer Kd;g[ bjhpa[k;/
bjhrh M 7 apy; jkpH; ehL muR outsourcing f;fh 3 Mk;
gpujpthjpfF; tH';fg;gl;l outsourcing license vd;why; rhpjhd;////
eph;thf jug;g[ Mtzg;gl;oaypy; ,Uf;Fk; Kjy; Mtzk; 3Mk;
gpujpthjpfF ; k; 1Mk; gpujpthjpf;Fk; Vw;gl;l xg;ge;jk;/ ,e;j xg;ge;jj;jpy;
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epue;juk; my;yhj kw;w gzpfSf;F gzp Ml;fis mDg;gt [ jw;fhd
xg;ge;jk; vd;W cs;sJ/
////,e;j xg;ge;jg;go 3 Mk; gpujpthjp 1 Mk; gpujpthjpf;F gzp
Ml;fis mDg;gpdhh;fs; vd;why; mJ nghy; thrfk; mjpy; cs;sJ/
eph;thf jug;gpy; cs;s gl;oaypy; 2tJ Mtzk; gzpahsh;fspy; tptu';fs;
vd;why; ,Uf;fyhk;/ eph;thf jug;gpy; cs;s gl;oaypy; 3tJ Mtzj;jpy;
bjhHpyhsh;fspd; PF kw;Wk; ESI nghd;w tptu';fs; ,Uf;fpwJ vd;why;
mJ ,e;j tHf;fpwF ; rk;ke;jk; ,y;iy/ eph;thf jug;gpy; cs;s gl;oaypy;
4tJ Mtzj;jpy; 3Mk; gujpthjpapd; bjhHpyhsh;fs; vd;W cs;sJ
vd;why; ,Jt[k; v';fSf;F njitapy;yhj xd;W/ eph;thf jug;gpy; cs;s
gl;oaypy; 5tJ Mtzj;jpy; ESI gw;wp cs;sJ vd;why; mJt[k; v';fs;
nfhhpf;iff;F rk;ke;jk; ,y;yhj xd;W/
/////xg;ge;j bjhHpyhspfs; Fiwe;j gl;rk; 20 ngUf;F mjpfkhFk;
nghJ jhd; chpkk; th';f ntz;Lk; vd;why; rhpjhd;/
ehd; brhy;Yk; bjhHpyhsh;fs; 1 kw;Wk; 2 Mk; vjph;kDjhuuplk;
rk;gsk; th';fpajw;F ehd; Mtzk; jhf;fy; bra;atpy;iy/
16. Shanthi, who was examined as WW2 and was one of the
workers supplied by the third respondent, made the following admissions:—
PF kw;Wk; ESI Mfpatw;wpd; gpoj;jk; jw;nghJ 3Mk; vjph;kDjhuh;
jhd; bra;fpwhh;/ ehd; gzpapy; nrh;e;jjpypUe;J mth;fs; jhd;
bra;fpwhh;fs; vd;why; mJ gw;wp vdf;F bjhpahJ/
vd;dplk; fhl;lg;gLk; Mtzj;jpy; ESI kw;Wk; PF Mfpatw;wpd;
gpoj;jk; Service care private limited mth;fspd; Kj;jpiu gjpj;Jj;
jhd; ,Uf;fpwJ vd;why; rhpjhd;/
3Mk; vjphk; Djhuhplk; mth; v';fSf;F employer, , y; iy
vd;W brhy;ypf; bfhz;L jhd; ,Ue;njhk;/ mthplk; rk;gsk; th';fpf;
bfhz;oUe;njhk; vd;why; rhpjhd;/ 3 Mk; vjph;kDjhuUf;Fk; gs;spf;Fk;
cs;s xg;ge;jk; gw;wp bjhpahJ/ 3Mk; vjph;kDjhuh; nghynt 4Mk;
vjph;kDjhuUk; gs;spal[ d; xU xg;ge;jk; nghl;oUf;fpwhh; vd;why; mJ
gw;wp bjhpahJ/
17. M. Vela, who was examined as WW3, made the following
admissions during his cross-examination:—
2004 apnyna ehd; contract employee vd;W brhd;dhh;fs;/
mjd; gpwF gs;spapd; kPJ ve;j eltof;ifa[k; vLf;ftpy;iy vd;why;
rhpjhd;/
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vdf;F khjhkhjk; rk;gsk; bfhLj;J tpLfpdw; hh;fs; vd;why;
rhpjhd;/ PF gpoj;J rhpahfj;jhd; rk;gsk; bfhLf;fpd;whh;fs;/ ESI 4
Mk; vjphk; Djhuh; jhd; gpof;fpwhh; vd;why; rhpjhd;/
ESI, PF rk;gsk; Mfpait 4Mk; vjph;kDjhuh; bfhLf;fpd;whh;
vd;why; rhpjhd;/
18. One Murugan was examined as WW4, who was a direct employee
of the Petitioner School and who was examined to show the difference in his
wages paid to the employees under Labour supply contract. The admissions
made by him were as follows:-
“ ehd; gs;spapy; neuoahf jhd; nrh;e;njd;/ vdf;Fk; 3 kw;Wk; 4
Mk; vjphk; DjhuUf;Fk; rk;ke;jk; ,y;iy/ ehd; neuoahf epue;ju
bjhHpyhspahf gs;spapy; nrh;e;njd;/
kDjhuh; 3 kw;Wk; 4 Mk; vjph;kDjhuh;fspd; xg;ge;j
bjhHpyhsh;fs; vd;gjpdhy; mtiu regularize bra;a KoahJ vd;why;
mJ gw;wp vdf;F bjhpahJ/
,e;j kDjhuh; neuoahf gs;spapd; xg;ge;j bjhHpyhsp ,y;iy
vd;why; rhpjhd;/ 3 tJ 4tJ vjph;kDjhuh;fs; jhd; gs;spf;F
bry;YkhW brhy;thh;fs;/”
19. On behalf of the petitioner Management, no witnesses were
examined. However, on behalf of the second respondent (cited as the third
respondent before the Labour Court), one Anuroop was examined as MW1.
Similarly, on behalf of the third respondent (cited as the 4th respondent
before the Labour Court), one Shenbagarajan was examined as MW2. On
their side, 33 documents were filed and marked as Exhibits M1 to M33.
Upon analysing the materials placed on record and examining both the oral
and documentary evidence, the Labour Court passed its final Award dated
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10.07.2019. In paragraph 29 of the Award, it was held that the 1st
respondent Union had proved that the petitioner Management, along with
the 2nd and 3rd respondents, had engaged in unfair labour practices with the
object of depriving the employees and members of the first respondent
Union of their rightful entitlements.
20. Therefore, it passed the following Award: -
“This court holds that the claim of the petitioner’s union to
regularize the employment of all employees from the category
of contract workers to the regular workers from the date of
their employment with the time scale of pay, pay arrears, leave
salary and all other benefits claimed by the petitioner union is
lawful, and justified. The respondents 1 and 2 are directed to
extend the said benefits within one month from the date of this
order. No costs.”
1. In its Award, the Labour Court recorded its findings in paragraphs 8,
9, 10, 11, 13, 14, 16, 17, 19, 20, 21, 22, 23, 24, 27, and 28 as follows:
—
Para 8:
Therefore the rival contentions with evidences adduced by
them have to be analysed to ascertain whether the alleged
contractual employment of the employees mentioned in para
2 of the claim petition by the respondents 1 and 2 through the
respondents 3 and 4 is sham and nominal.
Para 9:
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As far as the payment of salary and the granting of leave by
the respondents 3 and 4 respectively with the identity cards of
these respondents are all not disputed by the petitioner’s
union who examined W.W.1 to W.W.4. Among these
witnesses W.W.2 and W.W.3 are the employees who claimed
regularization by the respondents 1 and 2 and they have
categorically admitted that the payment of salary is made by
these respondents.
Para 10:
Therefore these facts were pleaded and evidences were
adduced to substantiate the contention of the respondents 3
and 4 that the employees mentioned in their written statement
are their employees.
Para 11:
Therefore from these pleading and evidences, this court is
able to find that the employees of the petitioner union are
employed in the premises of the respondents 1 and 2 as stated
by the petitioner union for the years, ranging from 2 to 18
years continuously but with the claim of the respondents that
they are the contract employees of the respondents 3 and 4
respectively.
Para 13.
When the respondents 3 and 4 claimed to have control over
these employees for payment of ESI and PF to their
labourers, the petitioner union claimed that it is nothing but
payment routed through R3 and R4 with a commission of
15% and nothing more than that. The petitioner union further
referred the Clause 7 which provides for the deduction of
salary even for the absence of ½ day or one day which retains
control over the employees by the school.
Para 14:
Further referred Clause 10 which also provides for work
under the school which is clear violation of the provisions of
the Industrial Disputes Act. This would also amount to unfair
labour practice u/s 2(ra) r/w 1(1) of the V Schedule in
Industrial Disputes Act 1947. Therefore by referring these
classes, it is contended by the petitioner union that there is no
actual control by the contractor and these employees are
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controlled by the school management and that the alleged
contract is sham.
Para 16:
Therefore the contention of the petitioner union that these
petitioners are employed in the school premises of the
respondents 1 and 2 and they are controlled by the respondent
management applying the rules applicable for other regular
employees by themselves are not decisive to decide whether
the contract is sham and nominal or whether these members
of the petitioner union are employees of the school
management namely respondents 1 and 2
Para 17:
In this case, there is a claim by the petitioner’s union that the
employees were initially employed by the school and were
later informed that they are the contractual employees of the
respondents 3 and 4. Further the respondents 3 and 4 have
not filed any documents to show their appointment order and
the commencement of employment with them. At the same
time, the evidences would substantiate the payment of salary
by the respondents 3 and 4 to the accounts of the petitioner
employees directly and not by the school. But at the same
time, a contention is also advanced by the petitioner’s union
that this payment is not made by the respondents 3 and 4
from their pocket and the payment is received from the
school and paid to the employees after making a deduction of
15% commission. Therefore this claim of payment of salary
by the respondents is also shown to be not genuine.
Para 19:
The first point is who is the appointing authority? When it is
claimed by the respondents 3 and 4 that they are the actual
appointing authorities, the employees of the petitioner union
have claimed that the respondents 1 and 2 alone have
appointed them and categorize them as contractual employees
of the respondents 3 and 4. The employment of these
employees ranging from 2 to 18 years is evident from these
pleadings and evidences and the respondents 1 to 4 have not
filed any documents showing that the respondents 3 and 4
have conducted interview and selected these persons for the
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employment in the school premises.
Para 20:
The provision of the said agreement also speaks about the
right of the school management in withholding these salaries
and in fixing the amount at particular time intervals. In the
same way, the extent of control and supervision also is made
by the respondents 1 and 2 though not directly on records but
by having an agent outside in the name of contractors as
respondents 3 and 4.
Para 21:
Hence the actual organization control and administrative
control as claimed by the respondents 3 and 4 over these
employee is not sustainable to these facts and circumstances
and it is seen from these available facts established before
this court, these employees were employed by the school
management under the pretext of contractual employees for
using regular work. This can be seen even from the document
marked by the petitioner union as Ex.W10 and Ex.W11.
Certificate of appreciation to Shanthi and Manjula.
Para 22:
Hence it is clear admission which would show that its recitals
have been cleverly inserted in the agreement to hide the real
facts of the employment of these employees for the regular
employment of the school management under the guise of
contractual employment. Thereforethe claim that they have
been engaged for other works is not true.
Para 23:
It is further clear from the pleadings and evidences of the
respondents that the respondents 3 & 4 were engaged only for
supply of manpower to the respondents 1 &2. Further it is a
clear evidence that the work is a perennial one, the ultimate
control of work is vested with the school management, the
economic control is with the school and it is a clear form of
violation of the provisions of the Industrial Disputes Act to
avoid the benefits ensuring to the labours if they are shown as
the regular employees of the respondents 1 and 2.
Para 24:
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As far as the terms of employments and their regulations are
purely governed by the provisions of the Industrial Disputes
Act and further by the provisions of the Abolition of Contract
Labour Act and the relevant citations thereto. Therefore this
contention does not in anyway improve the case of the
respondents either factualy or legally.
Para 27:
The actual dispute required to be answered by the
Government in this case is the so-called employment of
contractual workers by the respondents 1 and 2 through the
respondents 3 and 4. These 19 employees are also employed
through the respondents 3 and 4 and this reference is
indicated as a whole, holding that the respondents 1 and 2
have engaged the workers under the guise of contractual
employees through the respondents 3 and 4. Normally even
for any monetary benefits of increase in wages or other
benefits granted in a collective dispute will enure to the
benefit to all the workers. So also in this case, this finding of
this court about the contractual employment of the
respondents 1 and 2 through the respondents 3 and 4 will
ensure to all the employees employed with the respondents 1
and 2 through the respondents 3 and 4. Therefore this
objection of the respondents is rejected.
Para 28:
These details of payment of salaries are available with the
respondents. The burden of showing the fairness lies upon the
respondents. Further it is also claimed that one of the worker
died and some of them left the charge. These circumstances
have clearly given an inference of some force exercised by
the respondents 1 to 4 as against its workers.
22. Before the Labour Court, on behalf of the Petitioner School
reliance was placed upon the following judgments of the Supreme Court: -
a. Bharat Heavy Electricals Vs. Mahendra Prasad Jakhmola
reported in 2019 (13) SCC 82
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b. General Manager (OSD), Bengal Nagpur Cotton Mills Vs.
Bharat Lal reported in 2011 (1) SCC 635
c. International Airport Authority of India Vs. International Air
Cargo Workers’ Union reported in 2009 (13) SCC 374
d. Balwant Rai Saluja Vs. Air India Ltd reported in 2014 (9)
SCC 407
e. Workmen of NilgiriCoop.Mkt. Society Ltd Vs. State of T.N.
reported in 2004 (3) SCC 514
23. A reading of the Award clearly reveals that the Labour Court
failed to keep in mind either the terms of reference sent for adjudication or
the ratio of the judgments brought to its notice. A perusal of the reference
would show that the issue for consideration was whether the demand of the
first respondent Union for converting 27 existing workers from their status
as contract workers to employees of the petitioner School, and for extending
to them time-scale pay from the date of their initial appointment along with
arrears of pay, leave benefits, and other concessions, was justified, and if so,
to pass appropriate orders to that effect.
24. The terms of reference made to the Labour Court consist of two
parts. Firstly, the Government itself had proceeded on the basis that the
workers were contract employees, and therefore the primary issue was
whether they should be converted from contract employees to direct
employees of the principal employer, namely, the petitioner School. It is
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only upon such conversion that the secondary issue — relating to their
entitlement to time-scale pay from the date of joining, regularization, arrears
of pay, and other service concessions — would arise for consideration.
25. It is not the case of the first respondent Union that the
employment in which its members were engaged by the petitioner School
was one where the engagement of contract labour had been abolished. On
the contrary, the second respondent produced a valid licence for engaging
contract labour (Exhibit M8). As for the third respondent, their stand was
that, since they had engaged only 18 workers, the requirement of obtaining a
licence under the Contract Labour (Regulation and Abolition) Act, 1970,
did not arise — a position that was also accepted by WW1 during cross-
examination.
26. In this context, it is necessary to note that, following the
enactment of the Contract Labour (Regulation and Abolition) Act, 1970,
Labour Courts exercising jurisdiction under the Industrial Disputes Act,
1947, no longer possess the authority to adjudicate disputes relating to the
abolition of contract labour. Such power is now vested exclusively with the
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appropriate Government under Section 10(1) of the Contract Labour Act.
The Supreme Court, in Vegoils (P) Ltd. v. Workmen, reported in (1971) 2
SCC 724, held as follows:—
“Under s. 10 of the said Act tin jurisdiction to decide matters
connected with prohibition of contract labour is now vested in
the appropriate Government. Therefore, with effect from
February 10, 1971, it is only the appropriate Government that
can prohibit contract labour by following the procedure and in
accordance with the provisions of the Central Act. The
Industrial Tribunal, in the circumstances, will have no
Jurisdiction”.
27. This position of law was further affirmed by a Constitution Bench
of the Supreme Court in Steel Authority of India Ltd. v. National Union
Waterfront Workers, reported in (2001) 7 SCC 1. In paragraph 93 of the
judgment, the Supreme Court explained as follows:—
“In Vegoilss case (supra), the question before this Court was:
had the Industrial Tribunal jurisdiction to issue direction to the
establishment to abolish contract labour with effect from the
date after coming into force of the CLRA Act? The appellant-
company had engaged contract labour in seeds godown and
solvent extraction plants in its factory. The appellant took the
plea that the type of work was intermittent and sporadic for
which the contract labour was both efficient and economic. On
the other hand, the union of the workmen submitted that the
work was continuous and perennial in nature and that in similar
companies the practice was to have permanent workmen; it
claimed that the contract labour system be abolished and the
contract labour be absorbed as regular employees in the
concerned establishment of the appellant. The Tribunal having
found that the work for which the contract labour was engaged
was closely connected with the main industry carried on by the
appellant and that the work was also of perennial character,
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directed abolition of contract labour system from a date after
coming into force of the CLRA Act but rejected the claim for
absorption of contract labour in the establishment of the
appellant. On appeal to this Court, after pointing out the scheme
of Section 10 of the Act, it was held that under the CLRA Act,
the jurisdiction to decide about the abolition of contract labour
had to be in accordance with Section 10, therefore, it would be
proper that the question, whether the contract labour in the
appellant industry was to be abolished or not, be left to be dealt
with by the appropriate Government under the Act, if it became
necessary. From this judgment, no support can be drawn for the
proposition that absorption of the contract labour is a
concomitant of the abolition notification under Section 10(1) of
the Act.”
28. It is an admitted position that the Labour Court failed to address
the specific aspect of the reference concerning whether the demand raised
by the 1st Respondent union — seeking absorption of contract employees as
direct employees of the Petitioner Management — was justified. It is well-
settled that such an issue can be examined by an industrial adjudicator only
under limited circumstances, namely where the engagement of contract
labour has been abolished through a notification issued under Section 10(1)
of the Contract Labour (Regulation and Abolition) Act, 1970, and a further
dispute arises regarding the conditions of service of such labour under the
Industrial Disputes Act, 1947. This principle has been authoritatively laid
down by the Supreme Court in Steel Authority of India Ltd. v. National
Union Waterfront Workers, wherein, at paragraph 125(5), it was held as
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follows:–
“On issuance of prohibition notification under Section 10(1) of
the CLRA Act prohibiting employment of contract labour or
otherwise, in an industrial dispute brought before it by any
contract labour in regard to conditions of service, the industrial
adjudicator will have to consider the question whether the
contractor has been interposed either on the ground of having
undertaken to produce any given result for the establishment or
for supply of contract labour for work of the establishment under
a genuine contract or is a mere ruse/camouflage to evade
compliance of various beneficial legislations so as to deprive the
workers of the benefit thereunder. If the contract is found to be
not genuine but a mere camouflage, the so-called contract labour
will have to be treated as employees of the principal employer
who shall be directed to regularise the services of the contract
labour in the concerned establishment subject to the conditions
as may be specified by it for that purpose in the light of para 6
hereunder”
29. On the other hand, the Labour Court, instead of confining itself to
the terms of the reference and, if necessary, holding that the reference itself
was invalid, exceeded its jurisdiction by passing the impugned award
beyond the scope of the reference. The learned counsel for the petitioners
rightly contended that the Labour Court derives its jurisdiction strictly from
the terms of the reference. In support of this proposition, reliance was
placed on the judgment of the Supreme Court in Bhogpur Cooperative
Sugar Mills Ltd. v. Harmesh Kumar, reported in 2006 (13) SCC 28,
drawing attention to the following passage in paragraph 7:
“The Labour Court derived its jurisdiction from the terms in
reference. It ought to have exercised its jurisdiction within the
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four corners thereof.”
30. Further reference was also made to the decision of the Supreme
Court in Tata Iron and Steel Company Ltd. v. State of Jharkhand,
reported in (2014) 1 SCC 536, wherein the following passage from
paragraph 16 of the judgment was relied upon:—
“The Industrial Tribunal/ Labour Court constituted under
the Industrial Disputes Act is a creature of that statute. It acquires
jurisdiction on the basis of reference made to it. The Tribunal has
to confine itself within the scope of the subject matter of
reference and cannot travel beyond the same. This is the view
taken by this Court in number of cases including in the case
of National Engineering Industries Limited v. State of Rajasthan
& Ors. (2000 (1) SCC 371). It is for this reason that it becomes
the bounden duty of the appropriate Government to make the
reference appropriately which is reflective of the real/ exact
nature of “dispute” between the parties.”
31. Instead of addressing the legal issue regarding the validity of
the reference and deciding it against the first respondent Union, the Labour
Court took a shortcut by holding that the contracts between the petitioner
Management and the second and third respondents were sham and nominal.
Applying the "control test," the Labour Court concluded that the actual
control over the workers vested with the petitioner Management. It further
held that the claim made by the second and third respondents that they had
independently recruited the employees was not believable, as no material
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had been produced to show that applications were called for or that
interviews were conducted.
32. If the workers represented by the first respondent Union were
initially engaged directly by the petitioner School and were subsequently
sought to be routed through the second and third respondents, then the
questions as to when the initial direct link was severed and when the
purported contractual arrangement was established are matters to be proved
through both oral and documentary evidence. The burden of proof lies upon
the party alleging such facts. This principle was affirmed by the Supreme
Court in R.K. Panda v. Steel Authority of India Ltd., reported in (1994) 5
SCC 304, wherein, at paragraph 7, it was held as follows:—
“7. It is true that with the passage of time and purely with a
view to safeguard the interests of workers, many principal
employers while renewing the contracts have been insisting that
the contractor or the new contractor retains the old employees. In
fact such a condition is incorporated in the contract itself.
However, such a clause in the contract which is benevolently
inserted in the contract to protect the continuance of the source of
livelihood of the contract labour cannot by itself give rise to a
right to regularisation in the employment of the principal
employer. Whether the contract labourers have become the
employees of the principal employer in course of time and
whether the engagement and employment of labourers through a
contractor is a mere camouflage and a smokescreen, as has been
urged in this case, is a question of fact and has to be established
by the contract labourers on the basis of the requisite material. It
is not possible for the High Court or this Court, while exercising
writ jurisdiction or jurisdiction under Article 136 to decide such
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questions, only on the basis of the affidavits. It need not be
pointed out that in all such cases, the labourers are initially
employed and engaged by the contractors. As such at what point
of time a direct link is established between the contract labourers
and the principal employer, eliminating the contractor from the
scene, is a matter which has to be established on material
produced before the court. Normally, the Labour Court and the
Industrial Tribunal, under the Industrial Disputes Act are the
competent fora to adjudicate such disputes on the basis of the oral
and documentary evidence produced before them.”
33. The Supreme Court also held that it is for the person who sets up
a plea of existence of relationship of employer-employee, the burden is upon
him to prove the same vide its decision in Workmen of Nilgiri Coop. Mkt.
Society Ltd Vs. State of T.N. reported in 2004 (3) SCC 514 and in paras 47
to 50 it was held as follows:-
“It is a well-settled principle of law that the person who sets up a
plea of existence of relationship of employer and employee, the
burden would be upon him.
In N.C. John Vs. Secretary Thodupuzha Taluk Shop and
Commercial Establishment Workers' Union and Others [1973
Lab. I.C. 398], the Kerala High Court held:
"The burden of proof being on the workmen to establish the
employer- employee relationship an adverse inference cannot be
drawn against the employer that if he were to produce books of
accounts they would have proved employer-employee
relationship."
In Swapan das Gupta and Others Vs. The First Labour Court of
West Bengal and Others [1975 Lab. I.C. 202] it has been held:
"Where a person asserts that he was a workmen of the Company,
and it is denied by the Company, it is for him to prove the fact. It
is not for the Company to prove that he was not an employee of
the Company but of some other person."
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The question whether the relationship between the parties is one
of the employer and employee is a pure question of fact and
ordinarily the High Court while exercising its power of judicial
review shall not interfere therewith unless the finding is
manifestly or obviously erroneous or perverse.”
34. The counsel also referred to another judgment of the Supreme
Court in General Manager (OSD), Bengal Nagpur Cotton Mills,
Rajnandgaon Vs. Bharat Lal reported in 2011 (1) SCC 635 and referred to
the passage found in para 11 which is as follows:-
“On a careful consideration, we are of the view that the Industrial
Court committed a serious error in arriving at those findings. In
regard to the first test as to who pays the salary, it placed the onus
wrongly upon the appellant. It is for the employee to aver and
prove that he was paid salary directly by the principal employer
and not the contractor. The first respondent did not discharge this
onus. Even in regard tosecond test, the employee did not establish
that he was working under the direct control and supervision of
the principal employer. The Industrial Court misconstrued the
meaning of the terms `control and supervision' and held that as
the officers of appellant were giving some instructions to the first
respondent working as a guard, he was deemed to be working
under the control and supervision of the appellant.”
35. The concepts of "control" and "supervision" exercised by an
employer in the context of contract labour were considered by the Supreme
Court in International Airport Authority of India v. International Air
Cargo Workers’ Union, reported in (2009) 13 SCC 374, wherein, at
paragraphs 38 and 39, the Court held as follows:—
"If the contract is for supply of labour, necessarily, the labour
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supplied by the contractor will work under the directions,
supervision and control of the principal employer but that would
not make the worker a direct employee of the principal employer,
if the salary is paid by contractor, if the right to regulate
employment is with the contractor, and the ultimate supervision
and control lies with the contractor.
The principal employer only controls and directs the work to be
done by a contractlabour, when such labour is
assigned/allotted/sent to him. But it is the contractor as employer,
who chooses whether the worker is to be assigned/allotted to the
principal employer or used otherwise. In short, worker being the
employee of the contractor, the ultimate supervision and control
lies with the contractor as he decides where the employee will
work and how long he will work and subject to what conditions.
Only when the contractor assigns/sends the worker to work under
the principal employer, the worker works under the supervision
and control of the principal employer but that is secondary
control. The primary control is with the contractor."
36. The two contract employees and members of the first
respondent Union, who were examined as WW2 and WW3, categorically
admitted that they were drawing their salaries only from the second or third
respondent, as the case may be, and that they were covered under labour
welfare legislations such as the Employees’ Provident Fund (EPF) and
Employees’ State Insurance (ESI) schemes, with the relevant registers and
contributions being maintained and paid by the respective labour supply
contractors. Even the President of the first respondent Union, who was
examined as WW1, admitted to these facts, though he attempted to contend
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that the arrangements were merely paper transactions. The petitioners
established that both the second and third respondents are registered
companies, that they had entered into agreements with the petitioner School
for the supply of labour, that such agreements were renewed from time to
time, and that the petitioner School did not exercise direct control over the
employees. In such circumstances, it was erroneous on the part of the
Labour Court to disregard the material evidence and conclude that the
contracts were sham and nominal.
37. The finding of the Labour Court that the second and third
respondents failed to prove that they had called for applications and
conducted interviews before supplying labour to the petitioner Management,
and that this indicated a lack of control over the workers, was erroneous.
The mere fact that a principal employer does or does not conduct interviews
or tests does not, by itself, satisfy the "control test" applied for determining
the existence of an employer-employee relationship. In this context, learned
counsel for the petitioner relied upon the judgment of the Supreme Court in
Haldia Refinery Canteen Employees Union v. Indian Oil Corporation
Ltd., reported in (2005) 5 SCC 51, particularly upon paragraph 16 of the
judgment, which reads as follows:—
“The management has kept with it the right to test, interview or
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otherwise assess or determine the quality of the
employees/workers with regard to their level of skills, knowledge,
proficiency, capability etc. so as to ensure that the
employees/workers are competent and qualified and suitable for
efficient performance of the work covered under the contract.
This control has been kept by the management to keep a check
over the quality of service provided to its employees. It has
nothing to do with either the appointment or taking disciplinary
action or dismissal or removal from service of the workmen
working in the canteen. Only because the management exercises
such control does not mean that the employees working in the
canteen are the employee of the management. Such supervisory
control is being exercised by the management to ensure that the
workers employed are well qualified and capable of rendering the
proper service to the employees of the management.”
38. The demand of the 1st Respondent Union was that their members
who are engaged by the Petitioner Management must be paid same wages as
that of government school employees as per the affiliation bye-laws of the
Central Board of Secondary Education (CBSE). That even a regularly
employed teachers and non-teaching staff cannot claim such pay parity was
held to be so by the Supreme Court vide its judgment in Satimbla Sharma
& Ors vs St.Paul Sr.Secondary School reported in 2011 (13) SCC 760 has
held as follows:-
“We cannot also issue a mandamus to respondent nos.1 and 2 on
the ground that the conditions of provisional affiliation of schools
prescribed by the Council for the Indian School Certificate
Examinations stipulate in clause (5)(b) that the salary and
allowances and other benefits of the staff of the affiliated school
must be comparable to that prescribed by the State Department of
Education because such conditions for provisional affiliation are
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not statutory provisions or executive instructions, which are
enforceable in law.
Similarly, we cannot issue a mandamus to give effect to the
recommendations of the report of Education Commission 1964-
66 that the scales of pay of school teachers belonging to the same
category but working under different managements such as
government, local bodies or private managements should be the
same, unless the recommendations are incorporated in an
executive instruction or a statutory provision. We, therefore,
affirm the impugned judgment of the Division Bench of the High
Court.”
39. Even a Full Bench of this Court, while considering a similar
provision contained in the Matriculation Code regarding pay parity with
Government teachers, has held that teachers employed in unaided private
schools cannot seek any such direction for pay parity from this Court. This
was laid down in The Correspondent/Principal, Arokiamada
Matriculation Higher Secondary School, Pollachi v. Tmt. Sorubarani,
reported in (2015) 5 Law Weekly 544 (FB), wherein it was held as follows:
“In view of the clear and unambiguous legal proposition set out
by the Hon'ble Supreme Court in its various decisions and the
fact that the Code is only an enabling provision and not statutory,
there can be no manner of doubt that the private institutions are
at liberty to fix their own norms in administration with
reasonable restrictions. As such, no direction can be issued
against an unaided private institution to enforce the policy of the
Government in its administration.”
40. Accordingly, it is evident that the Labour Court has travelled
beyond the scope of the reference and has failed to properly address both the
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legal issues and the factual matrix of the case. The impugned Award,
therefore, suffers from legal infirmities and is liable to be quashed.
41. Insofar as W.P. No. 12476 of 2020 is concerned, the petitioner
therein is a labour supply contractor, who was the third respondent in the
earlier writ petition. The challenge in this case is to the Award passed by the
I Additional Labour Court in Complaint No. 1 of 2018, dated 10.07.2019.
The first respondent in the writ petition, who was employed by the said
contractor in the second and third respondent School Managements (the
petitioners in the earlier writ petition), filed a complaint under Section 33A
of the Industrial Disputes Act, 1947, before the I Additional Labour Court,
where the dispute raised by the Union in I.D. No. 254 of 2017 was pending.
While the main dispute regarding absorption and regularization by the
School Management was still pending, the first respondent (Annapoorani)
was terminated from service while she was on leave due to health issues.
42. After undergoing treatment, when she reported for duty on
22.01.2018, she was directed to contact the fourth respondent, who
informed her that they were not interested in continuing her employment
and that no work was available for her. Consequently, she was terminated
from service with effect from 22.01.2018. Despite the termination, which
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undoubtedly amounted to one for misconduct, the employer did not file any
petition seeking approval under Section 33(2)(b) of the Industrial Disputes
Act, 1947, before the same Labour Court. It was in these circumstances that
she filed the complaint before the Labour Court.
43. The complaint was taken on file as Complaint No. 1 of 2018, and
notice was issued to all concerned. On behalf of the fourth respondent, a
counter affidavit dated Nil, April 2018, was filed. Similarly, on behalf of the
second and third respondents, a counter statement dated Nil, January 2019,
was filed. Before the Labour Court, the first respondent, S. Annapoorani,
examined herself as PW1 and filed eight documents, which were marked as
Exhibits P1 to P8. On the side of the writ petitioner, K. Shenbagarajan was
examined as RW1, but no documents were filed on their behalf.
44. The Labour Court held that the termination of the 1strespondent
was not valid. The plea taken by the employer that she had not reported for
work, and therefore there was no question of termination warranting
compliance with statutory requirements, was rejected by the Labour Court.
It found that the workman, Annapoorani (R1), had been unwell and that her
complaint was both fair and genuine. Accordingly, by its Award dated
10.07.2019, the Labour Court held as follows:—
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“In the result, the termination of service of the petitioner is set
aside. The respondents are directed to reinstate the petitioner
with continuity of service and to pay back wages and all other
attendant benefits from the date of termination of service to the
date of reinstatement.”
45. A perusal of the above direction reveals that it was issued
against all the respondents in the complaint, including the writ petitioner
contractor, the 2nd and 3rd respondent School Managements, as well as
another contractor who was the fourth respondent. However, the present
writ petition has been filed only by the writ petitioner contractor challenging
the Award. In paragraph 2 of the affidavit, the petitioner acknowledged that
the first respondent workman, Annapoorani, was their employee and that her
Provident Fund and ESI contributions were paid by them. However, the
grounds raised in the affidavit filed in support of the writ petition are
directed only against the Award passed in I.D. No. 254 of 2017 dated
10.07.2019, and not against the merits of the order passed in the complaint.
46. When the matter was taken up on 22.09.2020, this Court, while
ordering notice, also directed that security be provided. In paragraph 4 of
the order, it was observed as follows:—
“In that view of the matter, having regard to the contentions raised
in the writ petition, there shall be an order of interim stay of the
impugned order till the next hearing on condition that the
petitioner shall deposit the entire monetary benefits due as per the
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impugned order from the date of termination till the date of filing
of the Writ Petition in an interest fetching fixed deposit in the
name of the Presiding Officer, I Additional Labour Court,
Chennai in any Nationalized Bank in Chennai initially for a
period of one year and renewable automatically for the same
period from time to time and hand over the original Fixed Deposit
receipt to the I Additional Labour Court, Chennai along with a
working sheet showing calculation of the amount deposited,
under written acknowledgement and file proof of such compliance
before the Registrar (Judicial) of this Court by 02.11.2020
without fail.”
47. It is not clear whether the writ petitioner complied with the
order regarding security. However, when the matter was taken up for
hearing along with the connected case, both matters were referred to
mediation for an attempt at settlement. As no settlement could be arrived at,
the Mediation Centre submitted a report dated 04.03.2025, stating that no
agreement had been reached. Consequently, the matter was directed to be
listed for final hearing along with the other connected cases.
48. Similarly, W.P. No. 12581 of 2020 was filed by the
Management of Service Care Pvt. Ltd., challenging the Award passed by the
I Additional Labour Court in Complaint No. 3 of 2018, dated 10.07.2019.
The Labour Court, after holding that the termination of the 1st respondent,
S. Manjula, was illegal, directed her reinstatement with continuity of
service, back wages, and other attendant benefits from the date of
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termination. When the writ petition was taken up on 22.09.2020, this Court,
while ordering notice, also passed an interim order, which reads as follows:-
“In that view of the matter, having regard to the contentions raised
in the writ petition, there shall be an order of interim stay of the
impugned order till the next hearing on condition that the
petitioner shall deposit the entire monetary benefits due as per the
impugned order from the date of termination till the date of filing
of the Writ Petition in an interest fetching fixed deposit in the
name of the Presiding Officer, I Additional Labour Court,
Chennai in any Nationalized Bank in Chennai initially for a period
of one year and renewable automatically for the same period from
time to time and hand over the original Fixed Deposit receipt to
the I Additional Labour Court, Chennai along with a working
sheet showing calculation of the amount deposited, under written
acknowledgement and file proof of such compliance before the
Registrar (Judicial) of this Court by 02.11.2020 without fail.”
49. It is not clear whether the said order has been complied with or
not. However, the matter was also sent for settlement by mediation and
came back unsettled. Before the Labour Court, the 1st respondent as a
complainant examined herself as PW1 and marked 8 documents as Ex.P1 to
Ex.P8. On the side of the Respondent, one Anuroop was examined as RW1
and 3 documents were filed and marked as Ex.R1 to Ex.R3.
50. The case of the first respondent complainant, as set out in her
complaint dated 25.07.2018 before the Labour Court, was that her services
were terminated without the issuance of any charge memo, by a letter dated
23.07.2018, with effect from 20.07.2018. The complaint was taken on file as
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Complaint No. 3 of 2018, and notice was issued to the petitioner, the School
Management, and another contractor. The writ petitioner filed a counter
statement in November 2018, while the 2nd and 3rd third respondents, being
the School Management, filed their counter statement in January 2019.
51. It was alleged that the first respondent had slept during duty
hours and had pinched a UKG student during lunch time. However, no
written complaint was produced, and she was terminated from service
without any domestic enquiry. The Labour Court found the termination to
be illegal and, accordingly, directed her reinstatement. Although the Labour
Court did not specifically indicate which of the respondents was responsible
for reinstating her and extending the benefits under the Award, it is the
present writ petitioner, being the labour contractor, who has filed the writ
petition claiming that the first respondent was their employee.
52. It must be noted that in Mahendra Singh Dantwal v.
Hindustan Motors Ltd., reported in (1976) 4 SCC 606, the Supreme Court
held that the employer does not have the final word on the question of
termination. The Labour Court, while dealing with a complaint under
Section 33A of the Industrial Disputes Act, 1947, is empowered to examine
whether the termination was effected in compliance with the requirements
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of Section 33(2)(b) of the Act.
53. The Supreme Court, in its judgment in Jaipur Zila Sahakari
Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma, reported in (2002) 2
SCC 244, held that non-compliance with the provisions of Section 33(2)(b)
of the Industrial Disputes Act renders the action of the employer invalid. In
such cases, it is not even necessary for the aggrieved workman to file a
complaint under Section 33A.
54. In the present case, it is admitted that a collective dispute was
pending before the I Additional Labour Court, and that the two
complainants, who are the first respondents in W.P. No. 12576 of 2020 and
W.P. No. 12581 of 2020, are workmen covered by the said dispute.
Although the Labour Court did not specifically indicate which of the
respondents was responsible for reinstating the workmen, the writ
petitioners in W.P. No. 12576 of 2020 and W.P. No. 12581 of 2020 have
voluntarily claimed themselves to be the employers and have challenged the
respective awards. Notwithstanding the quashing of the Award in I.D. No.
254 of 2017 dated 10.07.2019 in W.P. No. 4804 of 2020, the awards passed
in Complaint No. 1 of 2018 and Complaint No. 3 of 2018 do not warrant
any interference.
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55. In the result,
(i)W.P.No.4804 of 2020 will stand allowed and the Award in I.D.No.254 /
2017 dt. 10.7.2019 will stand set aside.
(ii)Consequently, all the connected WMPs will stand dismissed.
(iii)W.P.No.12576 of 2020 and W.P.No.12581 of 2020 will stand dismissed.
Consequently all connected WMPs will also stand dismissed.
(iv) There will be no order as to costs.
(v)In view of the dismissal of W.P.No. 12756 of 2020 and W.P.No.12581 of
2020, the contesting 1st Respondents can seek for withdrawal of the amount
from the labour court and in case of non-deposit they can execute the award
in the manner known to law.
29.04.2025
NCC : Yes / No
Index : Yes / No
Internet : Yes / No
ay
Copy to:
The Presiding Officer,
I Additional Labour Court,
Chennai
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W.P.No.4804,12576 & 12589 of 2020
DR. A.D.MARIA CLETE, J.
ay
Pre-delivery Judgment in
W.P.No.4804, 12576 & 12581 of 2020
and
W.M.P. Nos.5683, 5684 of 2020, 22191,
22192 of 2021, 15506, 15509 of 2020
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29.04.2025
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