1988 (8) TMI 439 - SC - Indian Laws

Canteen workers in Defence establishments granted pension benefits for pre-1980 service

Kanpur Suraksha Karamchari Union and Ors. Versus Union of India (UOI) and Ors.

The Court held that canteen workers in Defence establishments were considered employees of the factories where the canteens were situated. Therefore, ... - Issues Involved:Whether the workmen employed in canteens established under Section 46 of the Factories Act, 1948, in certain Defence establishments are entitled to have their service period prior to 22.10.1980 counted as qualifying service for pension purposes.Issue-wise Detailed Analysis:1. Status of Canteen Workers Prior to 22.10.1980:The primary issue is whether the service rendered by canteen workers before 22.10.1980 qualifies as part of the service period for pension purposes. The canteens in question were established under Section 46 of the Factories Act, 1948, in Defence establishments such as Ordnance Equipment Factory, Central Ordnance Depot, and Air Force Station in Kanpur. These were managed by Canteen Managing Committees, which were responsible for appointing workers, paying their salaries, and controlling the canteens. However, these committees were not incorporated bodies and their financial positions were uncertain.2. Government Order and Its Implementation:A Government Order dated 25th July 1981, later amended to be effective from 22.10.1980, declared all canteen employees in Defence Industrial Installations as Government employees. This order was applicable to all employees of statutory canteens irrespective of their management type. The Defence Department, however, refused to count the service period prior to 22.10.1980 for pension purposes, arguing that the workers became Government employees only from that date.3. Legal Obligations and Definitions:Section 46 of the Factories Act mandates the establishment of canteens in factories employing more than 250 workers. The responsibility to establish these canteens lies with the 'occupier' of the factory, defined under Section 2(n) of the Act as the person with ultimate control over the factory's affairs. For Government-run factories, this would be the person appointed by the Central Government. The Act and the U.P. Factories Rules, 1950, stipulate the formation of a Canteen Managing Committee, whose functions are advisory in nature.4. Role of the Canteen Managing Committee:The Canteen Managing Committee, constituted under Rule 68 of the U.P. Factories Rules, 1950, was responsible for managing the canteen's affairs but was not the true employer of the canteen workers. The occupier of the factory, in this case, the Defence Department, was considered the actual employer responsible for complying with Section 46 of the Act.5. Subsidization and Control by the Government:A letter from the Ministry of Defence dated 24.5.1965 outlined that the Government would subsidize the cost of supervisory and clerical staff, cooks, bearers, and other canteen workers. The canteen's prices were to be reduced proportionate to the subsidy received from the Government. This further indicated that the canteens were an integral part of the Defence establishments and under Government control.6. Judgment and Directives:The Court concluded that the canteen workers were indeed employees of the factories where the canteens were established. Consequently, the service period prior to 22.10.1980 should be counted as part of the qualifying service for pension. The Union Government was directed to treat the pre-22.10.1980 service period as qualifying service for pension purposes and to recompute the pension for those who retired on or after 22.10.1980. This computation was to be completed within six months, and arrears were to be disbursed within three months thereafter.Conclusion:The petitions were allowed, directing the Union Government to treat the pre-22.10.1980 service period of canteen workers in Defence establishments as qualifying service for pension purposes. The pension for retirees was to be recomputed and arrears paid accordingly. No costs were imposed.