2003 (11) TMI 603 - SC - Indian Laws

SC Dismisses Appeals; Urges Industrial Adjudication for Employer-Employee Relationship in Contract Cases.

Ram Singh and others Versus Union Territory, Chandigarh & Ors

The SC dismissed the appeals, ruling that the determination of the employer-employee relationship requires industrial adjudication. The CAT lacked ... Seeking to regularise their services in the Administration - relationship of employer and employee - Work of the employees for maintaining supply of electricity in the College and Hospital premises being of a perennial nature - Jurisdiction of the Central Administrative Tribunal (CAT) over contract employees - Trained electricians and skilled workmen - HELD THAT:- Normally, the relationship of employer and employee does not exist between an employer and Contractor and servant of an independent Contractor. Where, however, an employer retains or assumes control over the means and method by which the work of a Contractor is to be done it may be said that the relationship between employer and the employee exists between him and the servants of such a Contractor. In such a situation the mere fact of formal employment by an independent Contractor will not relieve the master of liability where the servant is, in fact, in his employment. In that event, it may be held that an independent Contractor is created or is operating as a subterfuge and the employee will be regarded as the servant of the principal employer. Where a particular relationship between employer and employee is genuine or a camouflage through the mode of Contractor is essentially a question of fact to be determined on the basis of features of relationship, the written terms of employment, if any, and the actual nature of the employment. The actual nature of relationship concerning a particular employment being essentially a question of fact, it has to be raised and proved before an industrial adjudicator. Relying on the Constitution Bench decision of this Court, in the case of Municipal Corporation of Greater Mumbai vs. KV Shramik Sangh, the employer who had lost the case in the writ petition before the High Court was directed to approach the appropriate court for industrial adjudication. The rulings of this Court which have been relied but which are earlier to the decision of the Constitution Bench in case of Steel Authority of India [2001 (8) TMI 1334 - SUPREME COURT] can be of little assistance to support the contentions on behalf of the appellants. The decision in favour of the workmen was rendered in that case after an industrial adjudication had ended in their favour. In view of clear and binding pronouncement of law by the Constitution Bench of this Court in the case of Steel Authority of India [2001 (8) TMI 1334 - SUPREME COURT], in the present appeals which arise from writ petitions preferred against the adverse judgment of the Central Administrative Tribunal (CAT), none of the reliefs, as prayed for, can be granted to the employees. Without ascertaining through the industrial forum, factual aspects of inter se relationship between the Chandigarh Administration, the Contractor and the contract employees, no relief can be granted. Thus, these appeals are dismissed but without prejudice to the rights of the employees to resort to the remedy of industrial adjudication in accordance with law as explained above. In the circumstances, we make no order as to costs in these appeals. Issues Involved:1. Jurisdiction of the Central Administrative Tribunal (CAT) over contract employees.2. Regularization of contract employees by the Engineering Department of Chandigarh Administration.3. Prohibition of contract labor under the Contract Labour (Regulation and Abolition) Act, 1970.4. Determination of employer-employee relationship.Summary:1. Jurisdiction of the Central Administrative Tribunal (CAT) over contract employees:The employees working at the sub-station in the Medical College and Hospital premises approached the CAT, Chandigarh, seeking regularization of their services. The Tribunal rejected the petitions on the grounds that the employees engaged through contractors cannot be held to be holders of a 'civil post' as defined u/s 3(q) of the Administrative Tribunals Act, hence the Tribunal has no jurisdiction to grant any relief.2. Regularization of contract employees by the Engineering Department of Chandigarh Administration:The employees contended that the Engineering Department exercises complete control over their work, making the department their real employer. They argued that employing staff through contractors for permanent and perennial work is an unfair labor practice. The High Court dismissed their writ petitions, and the Supreme Court noted that the employees had shifted their stance, now arguing that the contractual appointment is a camouflage and that they are, in fact, employees of the Engineering Department.3. Prohibition of contract labor under the Contract Labour (Regulation and Abolition) Act, 1970:The employees sought directions to prohibit engagement of labor through contractors for maintaining electricity supply to government hospitals and college premises. The Supreme Court referred to the Constitution Bench decision in Steel Authority of India Ltd. vs. National Union Waterfront Workers [2001 (7) SCC 1], which explained the legal position of contract labor and the conditions under which contract labor can be considered employees of the principal employer.4. Determination of employer-employee relationship:The Supreme Court emphasized that determining the relationship of employer and employee requires considering all relevant facts and circumstances, including the terms and conditions of the contract. The Court highlighted that the actual nature of the relationship is a question of fact to be determined by industrial adjudication. The Court cited the Constitution Bench decision in Steel Authority of India (supra), which mandates that such disputes should be resolved through industrial adjudication rather than writ petitions.Conclusion:The Supreme Court dismissed the appeals, stating that without ascertaining the factual aspects of the relationship between the Chandigarh Administration, the contractor, and the contract employees through industrial adjudication, no relief can be granted. The employees were advised to resort to the remedy of industrial adjudication in accordance with the law. No order as to costs was made in these appeals.