Madras High Court
The Executive Officer vs The Assistant Commissioner Of Labour on 11 September, 2025
Author: R.Vijayakumar
Bench: R.Vijayakumar
W.P(MD).Nos.12823 & 12824 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ORDER RESERVED ON : 11.07.2025
ORDER PRONOUNCED ON : 11.09.2025
CORAM:
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P.(MD).Nos.12823 & 12824 of 2023
and WMP(MD).Nos.10822 & 10825 of 2023
WP(MD).No.12823 of 2023:
The Executive Officer
Seithur Selection Grade Town Panchayat
Seithur
Virudhunagar District ....Petitioner/Petitioner
Vs
1.The Assistant Commissioner of Labour
(Enforcement) Authority under Tamil Nadu
Conferment of Permanent Status) Act, 1981)
Virudhunagar
2.V.Pechimuthu ....Respondents/Respondents
WP(MD).No.12824 of 2023:
The Executive Officer
Seithur Selection Grade Town Panchayat
Seithur
Virudhunagar District ....Petitioner/Petitioner
Vs
1/13
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W.P(MD).Nos.12823 & 12824 of 2023
1.The Assistant Commissioner of Labour
(Enforcement) Authority under Tamil Nadu
Conferment of Permanent Status) Act, 1981)
Virudhunagar
2.K.Mariappan ....Respondents/Respondents
Prayer in WP(MD).No.12823 of 2023: This Petition filed under Article 226
of the Constitution of India, to issue a Writ of Certiorari, calling for the
records relating to the impugned order passed by the first respondent dated
12.10.2022 in Na.Ka.No.1854-1/2019 and quash the same.
Prayer in WP(MD).No.12824 of 2023: This Petition filed under Article 226
of the Constitution of India, to issue a Writ of Certiorari, calling for the
records relating to the impugned order passed by the first respondent dated
12.10.2022 in Na.Ka.No.1854-2/2019 and quash the same.
(In both petitions)
For Petitioner : Mr.Veerakathiravan
Additional Advocate General
Assisted by
M/s.D.Farjana Ghoushia
Special Government Pleader
For Respondents : Labour Court -R1
: Mr.I.Suthakaran for R2
COMMON ORDER
The writ petitions have been filed by the Executive Officer of a Town
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W.P(MD).Nos.12823 & 12824 of 2023
Panchayat challenging the orders passed by the authority under Tamil Nadu
Industrial Establishments (Conferment of Permanent Status to Workmen) Act,
1981 (CPS Act) wherein a Gate Valve Opener and a Plumber in the petitioner
Town Panchayat have been conferred with permanent status.
(A) Factual Matrix:
2.A perusal of the application filed by the workmen before the CPS
authority reveals that they have claimed that they are employed by the
petitioner Town Panchayat from 05.02.2005 onwards. According to them,
though there are vacancies in the sanctioned post, instead of making regular
appointment, work is being extracted from them.
3.A counter has been filed by the Town Panchayat contending that the
workmen are the contract labourers and they are employed through Puthumai
Magalir Self Help Group who are successful bidder on tender being floated
by the Town Panchayat towards supply of men and material for maintenance
of street lights, water supply and public sanitation and solid waste
management by offering their bids with deposit of earnest money. In the
counter, it has been further contended that the monthly emoluments are being
paid only to the said Self Help Group under proper acknowledgement
inconsonance with the policy decision taken by the Government to empower
and strengthen the Women Self Help Groups. According to the counter filed
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W.P(MD).Nos.12823 & 12824 of 2023
by the Town Panchayat, the petitioner is the worker attached to the said Self
Help Group and their attendance is being maintained only by the Magalir Self
Help Group.
4.After considering the submissions made on either side, the authority
under CPS Act has arrived at a finding that there is an employer employee
relationship between the Town Panchayat and the workmen concerned. It has
also arrived at a finding that the workmen have completed 480 days of
service in a span of 24 months and has proceeded to conferment of permanent
status with effect from the date on which the workmen have completed 480
days of service. Challenging the same, the present writ petitions have been
filed by the Town Panchayat.
(B).Submissions of the counsels appearing on either side:
5.According to the learned Additional Advocate General appearing for
the petitioner Town Panchayat, the workmen are only contract workers in the
petitioner Town Panchayat and there is no privity of contract of employment
between the petitioner Town Panchayat and the workmen. He further
submitted that the Town Panchayat cannot be considered to be an industrial
establishment conforming to the definition of factory under the Factories Act.
According to him, it is a Government run institution and therefore, the CPS
Act is not applicable to them.
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W.P(MD).Nos.12823 & 12824 of 2023
6.The learned Additional Advocate General had further submitted that
the workmen are employed through Puthumai Magalir Self Help Group who
are successful bidders on a tender floated and published by the petitioner
Town Panchayat calling for bidding from eligible Self Help Magalir Groups
for supply of men and material. The monthly emoluments are being paid only
to the said Self Help Group under proper acknowledgement. According to
him, the attendance register is being maintained by the Magalir Self Help
Group. In such circumstances, there is no employer employee relationship
between the petitioner and the workmen.
7.The learned Additional Advocate General had further submitted that
since the attendance registers are not been maintained by the petitioner Town
Panchayat and there is no employer employee relationship, the authority
under CPS Act could not have arrived at a finding that the workmen have
completed 480 days in a span of 24 months. He had also relied upon a
Division Bench judgment of our High Court in WA(MD).No.1334 of 2019
(The Executive Officer, Eriyodu Town Panchayat Vs. The Inspector of
Labour, Dindigul and another) dated 26.06.2025 wherein the Hon'ble
Division Bench was pleased to hold that the as far as the contract labourers
are concerned, the CPS Act is not applicable. He also relied upon the
decisions of the learned Single Judges of this Court in WP(MD).No.18955 of
2014 (The managements, Rep.by the Executive Officer, Karur District Vs.
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W.P(MD).Nos.12823 & 12824 of 2023
The Inspector of Labour, Karur and others) dated 18.12.2020; WP(MD).No.
5411 of 2016 ( P.Thangavel Vs. The Director of Town Panchayats, Chennai
and others) dated 05.04.2023 and W.P.No.15244 of 2011 (The Management,
Tamil Nadu Forest and Social Department,Villupuram Vs. Radhakrishnan
and another) dated 12.11.2019 in support of his contention.
8.Per contra, the learned counsel appearing for the respondent
workmen relying upon the decision of the Hon'ble Division Bench of this
Court reported in 2022 (2) MLJ 659 submitted that the Municipality would
certainly fall within the definition of Factory and therefore, the application of
CPS Act to the said factory is indisputable. He also relied upon a decision of
this Court in WP(MD).No.2991 of 2018 (The Commissioner, Sivagangai
Municipality, Sivagangai Vs. The Inspector of Labour, Sivagangai and
others) dated 12.06.2025 wherein this Court has confirmed the order of CPS
authority passed against the Sivagangai Municipality. The workmen are being
employed in the concerned Town Panchayat from the year 2005 onwards for
more than 20 years. In such circumstances, the order passed by the authority
under CPS Act may be sustained.
9.Heard both sides and perused the material records.
(C).Discussion:
10.In the counter filed before the CPS Authority, the Town Panchayat
has taken a specific stand that these two workmen are employed through Self
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W.P(MD).Nos.12823 & 12824 of 2023
Help Group and the emoluments are paid only through the said Self Help
Group and therefore, there is no employer employee relationship. It has also
been pleaded that the tenders have been floated and published in the
newspaper through which the Self Help Group is the successful bidder and
concerned workmen are attached only to these Self Help Group.
11.A perusal of the order impugned in the writ petition reveals that this
issue has not been taken into consideration by the CPS authority.
12.The Hon'ble First Bench of our High Court in a judgment reported
in 2022 SCC Online Mad 1003 (Superintending Engineer, Erode Electricity
Distribution Circle Vs. The Inspector of Labour and others)in Paragraph
Nos. 25 to 27 has held as follows:
“25.In view of the above, we can safely hold that the
Lbaour Inspector can exercise jurisdiction only in the
nature of summary enquiry, while a case involving
complicated question of fact and law to be left for its
adjudication under the Act of 1947.The question of fact
and law to be left for its adjudication under the Act of
1947. The Labour Inspector can exercise his power under
the framework of the Act of 1981. He has no power to
adjudicate the issue in reference to other statutes, which
includes the Act of 1970.
26.Since we have analyzed the issue afresaid, we
would like to refer to the impugned order of the Labour
Inspector to find out as to whether he has caused a
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W.P(MD).Nos.12823 & 12824 of 2023
summary enquiry or has travelled beyond his jurisdiction
to adjudicate the questions of of fact and law pertaining
to the other statute.
27.A perusal of the order passed by the Labour
Inspector in the case on hand shows an adjudication of
the issue in reference to the Act of 1970 also, though it
was not within his competence. He is not having powers to
comment on the nature of employment and the policy
adopted by the petitioner corporation. He was required to
simply see whether the workman has rendered continuous
service for 480 days in 24 calender months. Thus, on the
aforesaid issue, the interference therein may require to be
made. “
13.The Hon'ble Division Bench of our High Court in a judgement
rendered in W.A.Nos.273 and 275 of 2020 dated 20.01.2023 in paragraph
No.3 has held as follows:
“3.In view of the above said decision of this Court, these
writ appeals are also disposed of. However, we make it clear that
the authority can go into the question as to whether the contract is
sham and nominal and, if it is sham and nominal, he has no
authority to decide the issue and the matter has got to be decided
either before the Industrial Adjudicator or the authority under the
Contract Labour (Regulation and Abolition) Act, 1970. The
authority is expected to decide the issue as early as possible on
day-to-day basis, without adjourning the matter beyond seven
working days at any point of time, as the same is pending for more
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than 25 years. No costs.”
14.The Hon'ble Division Bench of our High Court in WA(MD).No.
1334 of 2019 (The Executive Officer, Dindigul District Vs. The Inspector of
Labour, Dindigul and another) dated 26.06.2025 while considering the writ
appeal filed by the Executive Officer, Eriyodu Town Panchayat challenging
the order passed by the CPS authority was pleased to hold as follows:
“11.It is indeed unfortunate, but the legal position is clear
— for a person to claim the benefit of permanent status under the
Tamil Nadu Act 46 of 1981, two conditions must be satisfied.
First, he must be employed in an industrial establishment as
defined under Section 2 (3) of the Act. Second, he must also fall
within the definition of a “workman” under the Industrial
Disputes Act, 1947. In the present case, it was the specific stand
of the appellant Panchayat that the second respondent had
participated in a tender process and was awarded the contract
for operating the Overhead Tank. This factual position was not
denied by the second respondent, nor was it rejected by the
learned Single Judge. If that is so, the question that naturally
arises is — how can such a person, who secured the engagement
through a tender process and was not directly employed by the
Panchayat, be considered a “workman” so as to attract the
benefits under the Tamil Nadu Act 46 of 1981?
12.Thus, this Court is of the view that both the first
respondent authority as well as the learned Single Judge have
misdirected themselves on a fundamental question of law. They
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have erroneously conferred the benefit of permanent status on the
second respondent, despite the admitted position that he was a
contractor who had been engaged to perform a contract for
service. A person so engaged cannot, by any stretch of
interpretation, be treated as a “workman” within the meaning of
Section 2(s) of the Industrial Disputes Act, 1947. As a result, he
cannot seek or be granted the statutory benefits which are
exclusively meant for workmen who are employed under a
contract of service.”
15.The Hon'ble Supreme Court in a judgment reported in 2001 (7)
SCC 1 (Steel Authority of India Ltd., & others Vs. National Union Water
Front Workers and others), in Paragraph No.125 (5) and 126 has held as
follows:
“125.....
(5).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
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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
establishment concerned subject to the conditions as may be
specified by it for that purpose in the light of para 6 hereunder.
126.We have used the expression “industrial adjudicator” by
design as determination of the questions aforementioned requires
inquiry into disputed questions of facts which cannot conveniently
be made by High Courts in exercise of jurisdiction under Article
226 of the Constitution. Therefore, in such cases the appropriate
authority to go into those issues will be industrial tribunal/court
whose determination will be amenable to judicial review.”
(D).Conclusion:
16.In view of the judgment of the Hon'ble Supreme Court and that of
the Hon'ble Division Bench of our High Court, the authority under CPS Act,
would not have any jurisdiction whatsoever to entertain a claim seeking
conferment of permanent status from the contract labourers. Therefore, the
orders impugned in the writ petitions are not sustainable in the eye of law and
the same are set aside. The writ petitions stand allowed. No costs.
Consequently, connected miscellaneous petitions are closed.
11.09.2025.
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W.P(MD).Nos.12823 & 12824 of 2023
Internet : Yes/No
Index : Yes/No
NCC : Yes/No
msa
To
The Section Officer
V.R.Section
Madurai Bench of Madras High Court
Madurai
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W.P(MD).Nos.12823 & 12824 of 2023
R.VIJAYAKUMAR, J.
msa
Pre-delivery Common Order made in
W.P.(MD).Nos.12823 & 12824 of 2023
and WMP(MD).Nos.10822 & 10825 of
11.09.2025
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