2004 (2) TMI 688 - SC - Indian Laws

Supreme Court affirms no employer-employee relationship in Society's service role

Workmen of Nilgiri Coop. Mkt. Society Ltd. Versus State of Tamil Nadu & Ors

The Supreme Court upheld the findings of the High Court and Industrial Tribunal, ruling that the workmen failed to establish an employer-employee ... Whether the concerned workmen have been able to prove that they are workmen of the Society? Whether the non-employment of the workmen referred in the reference is justified ? Issues Involved:1. Whether the non-employment of the workmen referred in the reference is justified.2. Whether the relationship of employer and employee exists between the Society and the concerned workmen.3. Whether the Society is an industry under the Industrial Disputes Act, 1947.Detailed Analysis:1. Whether the non-employment of the workmen referred in the reference is justified:The appellant-Union served a charter of demands upon the Society, claiming permanency in service and other benefits, leading to conciliation proceedings and a subsequent lockout by the Society. The State of Tamil Nadu issued a notification referring the dispute for adjudication to the Industrial Tribunal. The Tribunal, after examining witnesses and documents, opined that there did not exist any relationship of employer and employee between the Society and the concerned persons. The Tribunal observed, 'there is no convincing evidence placed by the petitioner to establish the master and servant relationship to hold that the persons referred in this dispute are only workmen of the Respondent-Society.' Consequently, the reference was rejected. The High Court dismissed the writ petitions filed by the appellant, and the appeals were also dismissed, affirming the Tribunal's findings.2. Whether the relationship of employer and employee exists between the Society and the concerned workmen:The Tribunal and the High Court examined various factors to determine the relationship of employer and employee. The Tribunal found that the Society does not maintain any attendance or wages register for the concerned workmen, and the third parties (contractors) engage the workers. The Society's role was limited to providing infrastructure and facilitating the auction process. The Tribunal observed that the Society does not exercise complete control and supervision over the workmen, stating, 'the Society has exercised its powers on their own workers and therefore they are employees.' The High Court affirmed these findings, noting that the workmen were engaged by the growers and merchants independently, and there was no obligation on the Society to employ them. The High Court concluded that the concerned workmen failed to discharge their burden of proof that they were employed by the Society.3. Whether the Society is an industry under the Industrial Disputes Act, 1947:The Tribunal and the High Court examined whether the Society's activities constituted an industry. The Tribunal noted that the Society was a service society formed to protect the interests of the growers and merchants, and it did not carry out any manufacturing activities. The Tribunal distinguished the present case from other cases where the employers were manufacturing units and required continuous supervision. The High Court affirmed these findings, stating that the Society's role was limited to providing services to its members and facilitating the auction process. The High Court concluded that the Society's activities did not constitute an industry under the Industrial Disputes Act, 1947.Conclusion:The Supreme Court upheld the findings of the Tribunal and the High Court, concluding that the concerned workmen were not able to prove the existence of an employer-employee relationship with the Society. The Court noted that the Society's role was limited to providing services to its members and facilitating the auction process, and it did not exercise complete control and supervision over the workmen. The Court also observed that the Society's activities did not constitute an industry under the Industrial Disputes Act, 1947. The appeals were dismissed, and the Court affirmed the decision of the Tribunal and the High Court.