2019 (2) TMI 2049 - SC - Indian Laws

Supreme Court rules termination unjustified due to lack of direct employment, contractor relationship established

BHARAT HEAVY ELECTRICALS LTD. Versus MAHENDRA PRASAD JAKHMOLA & ORS.

BHARAT HEAVY ELECTRICALS LTD. Versus MAHENDRA PRASAD JAKHMOLA & ORS. - TMI Issues Involved:1. Justification of the termination of services of workmen.2. Application of the notification dated 24.04.1990 under the Contract Labour (Regulation and Abolition) Act, 1970.3. Determination of the employer-employee relationship.4. Review of the Labour Court's Award and subsequent High Court judgments.5. Exercise of discretionary jurisdiction under Article 136 of the Constitution.Detailed Analysis:1. Justification of the termination of services of workmen:The core issue was whether the termination of the services of the workmen was justified. The Labour Court, by its Award dated 01.11.2009, held that the workmen were entitled to reinstatement without backwages, concluding that they were directly employed by the appellant (BHEL). This conclusion was based on documentary evidence, including gate passes, and a concession allegedly made by the employer’s representative.2. Application of the notification dated 24.04.1990 under the Contract Labour (Regulation and Abolition) Act, 1970:The Labour Court applied the notification dated 24.04.1990, which was argued to be inapplicable as BHEL was exempted from such notification. The Supreme Court found that the Labour Court’s application of this notification was perverse since BHEL was exempted, and there was no prohibition on employing contract labour.3. Determination of the employer-employee relationship:The Labour Court inferred a direct relationship between the appellant and the workmen based on gate passes and a concession made by the employer’s representative. However, the Supreme Court held that such an inference was incorrect. The evidence showed that gate passes were issued for safety and administrative purposes at the contractor's request. The Supreme Court emphasized that a concession on mixed questions of fact and law cannot decide cases, and the evidence as a whole must be weighed.4. Review of the Labour Court's Award and subsequent High Court judgments:The appellant’s review petition was dismissed by the Labour Court, which held that the notification dated 24.04.1990 had already been considered. The High Court dismissed the writ petition against the Labour Court’s Award, stating that the workmen were performing duties identical to regular employees and were under BHEL’s control. The Supreme Court found that the High Court’s findings were contrary to the evidence on record, which showed that the workmen were paid by contractors and were not directly employed by BHEL.5. Exercise of discretionary jurisdiction under Article 136 of the Constitution:The Supreme Court decided to exercise its discretionary jurisdiction under Article 136, finding that the Labour Court’s Award and the High Court’s judgments were perverse. The Court noted that judicial review under Article 226 should be exercised with circumspection, and the Labour Court’s findings were not supported by evidence. Consequently, the Supreme Court set aside the impugned judgments and the Labour Court’s Award, allowing the appeals.Conclusion:The Supreme Court concluded that the Labour Court’s findings were perverse and unsupported by evidence. The High Court’s judgments were also found to be contrary to the evidence on record. The appeals were allowed, and the judgments of the High Court and the Labour Court’s Award were set aside.