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2001 (11) TMI 1061
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....shed was to promote, encourage and develop the availability, use, supply and distribution at reasonable cost in the country of artificial limbs to needy persons particularly disabled defence personnel. For this purpose the respondent No. 1 set up a factory where more than 700 persons are employed. The respondent No. 1 also set up a canteen for its employees. From time to time agreements were entered into between the respondent No. 1 and different contractors by which the contractor agreed to prepare and serve food stuffs and other refreshments at the canteen. At the relevant time the concerned contractor was Aditya Shukla, the respondent No. 2 herein. 2. According to the appellants, they were employed by several of the contractors and had ....
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....und by Section 46 of the Factories Act, 1948 to set up the canteen. it was also submitted that the State Government had by notification specified the factory of the respondent No. 1 under the provisions of Section 46(1) of the Factories Act. It was contended that since the respondent No. 1 was statutorily obliged to provide and maintain a canteen for the use of this employees, the canteen was part of the respondent No. 1's establishment and therefore the appellants who were employed in such canteen were the employees of the respondent No. 1. It is the appellants' case that the various terms in the contract between the contractor and the respondent No. 1 clearly showed that the appellants were under the direct supervision and control....
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....espondent No. 1 has disputed that Section 46 of the Factories Act at all applies to it. Indeed, the High Court has noted that this was never the case of the appellants either before the Labour Court or the High Court. Second, assuming that Section 46 of the Factories Act was applicable to the respondent No. 1, it cannot be said as an absolute proposition of law that whenever in discharge of a statutory mandate, a canteen is et up or other facility provided by an establishment, the employees of the canteen or such other facility become the employees of that establishment. It would depend on how the obligation is discharged by the establishment. It may be carried out wholly or substantially by the establishment itself or the burden may be del....
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....rving in the canteen. (See also Barat Fritz Werner Ltd. v. State of Karnataka (2001) ILLJ 763 SC) 7. It may be, and has been often so found, that the employees of a contractor are de facto employees of the establishment despite the existence of a written agreement between the contractor and the establishment. To this end our attention was drawn to the agreement between the contractor and the respondent No. 1. From a scrutiny of the agreement, it is clear that although the respondent No. 1 had agreed to provide the contractor with the basic infrastructure, the actual running of the canteen was the responsibility of the contractor alone. For example, the respondent No. 1 was to give the furnishings, dining tables, chairs, curtains, water coo....
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.... agreed to pay to the contractor service charges of Rs. 73,372.48 per month upto 700 employees with the following break up: a) Rs. 30,895.48 Salary and other statutory expenses b) Rs. 42,477.00 for neutralising the price hike of the raw material but this may have only ensured that the margin of profit of the contractor was reasonable an fixed on relevant considerations. Besides the agreement must be construed in the background of the rules framed by the State Government under Section 46(2) of the Factories Act, 1948. Under Section 46(2) itself State Government is empowered to law down inter-alia: "the standard in respect of construction, accommodation, furniture and other equipment of the canteen; and the foodstuffs to be served t....
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....contract labourers have become the employees of the principal employer in course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such question, only on the basis of the affidavits." 11. The issue is, therefore, primarily and ultimately one of fact to be determined by a fact finding tribunal. In the case before us, the terms of the agreement are inconclusive. 12. Before the Labour Court ....