1956 (11) TMI 33 - SC - Indian Laws

Supreme Court affirms agarias at Salt Works as workmen under Industrial Disputes Act

DHARANGADHARA CHEMICAL WORKS LTD. Versus STATE OF SAURASHTRA

The Supreme Court upheld the decision of the Industrial Tribunal and the High Court, concluding that the agarias working in the Salt Works at Kuda are ... - Issues Involved:1. Whether the agarias working in the Salt Works at Kuda are workmen within the meaning of the term as defined in the Industrial Disputes Act, 1947.2. The jurisdiction of the Industrial Tribunal to adjudicate the dispute.3. The nature of the relationship between the appellants and the agarias (employer-employee or independent contractor).Detailed Analysis:1. Whether the agarias working in the Salt Works at Kuda are workmen within the meaning of the term as defined in the Industrial Disputes Act, 1947.The primary issue in this appeal is to determine whether the agarias are 'workmen' as per Section 2(s) of the Industrial Disputes Act, 1947. The definition of 'workman' includes any person employed in any industry to do any skilled or unskilled manual or clerical work for hire or reward, excluding those employed in the naval, military, or air service of the Government.The essential condition for a person to be a workman is the existence of an employment relationship between the employer and the employee. The key test applied to determine this relationship is the right of control over the manner in which the work is to be done. This involves distinguishing between a contract for services and a contract of service. In the latter, the employer can control not only what is to be done but also how it is to be done.The Industrial Tribunal, after considering the facts, concluded that despite the absence of certain features typical of a contract of service, the agarias were workmen due to the nature of the industry. The Tribunal found that the appellants exercised supervision and control over all stages of the salt manufacturing process, which was critical and decisive in determining the relationship as that of employer and employee.2. The jurisdiction of the Industrial Tribunal to adjudicate the dispute.The appellants contested the jurisdiction of the Industrial Tribunal, arguing that the agarias were independent contractors and not workmen, and thus the State was not competent to refer their disputes for adjudication under Section 10 of the Act. The Tribunal, however, ruled that the agarias were workmen and that the reference was intra vires. This decision was upheld by the High Court, which dismissed the appellants' writ petition seeking to quash the reference on jurisdictional grounds.The Supreme Court noted that the question of whether the relationship between the parties is one of employer and employee is a pure question of fact. The Tribunal's decision on this matter, being within its jurisdiction, was not liable to be questioned under Articles 226 and 227 of the Constitution unless it was shown to be unsupported by evidence.3. The nature of the relationship between the appellants and the agarias (employer-employee or independent contractor).The appellants argued that the agarias were independent contractors, emphasizing that they were paid on a piece-rate basis and had the freedom to employ and pay their own labor. However, the Tribunal found that the agarias were under the supervision and control of the appellants throughout the salt production process. This included the allocation of pattas, supervision of the quality of work, and the final approval of the salt produced.The Supreme Court agreed with the Tribunal's conclusion, stating that the supervision and control exercised by the appellants over the agarias' work were indicative of an employer-employee relationship. The Court also noted that the fact that the agarias could engage other laborers did not change their status as workmen, as they personally worked along with their families in the production of salt.The Court acknowledged the practical difficulties that might arise if the agarias were treated as workmen, such as the application of rules regarding hours of work. However, these difficulties did not negate the conclusion that the agarias fulfilled the requirements of the definition of workmen under the Act.Conclusion:The Supreme Court upheld the decision of the Industrial Tribunal and the High Court, concluding that the agarias working in the Salt Works at Kuda are workmen within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. The appeal was dismissed with costs.