TaxTMI 
TaxTMI 
1995 (3) TMI 507
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.... for in the writ petition before the High Court, we may at the outset summarise the contents of the writ petition filed by them in the High Court. 2. In para 2 of the writ petition, the appellants have averred that they are canteen employees of the Corporation and working in the canteens managed by the Corporation. In para 3, they have stated that they are employed in the canteens of the Corporation and some of them for decades, since the inception of the Corporation and others for a minimum of seven years, and are holding the designations variously of Canteen General Manager, Canteen Manager-cum-Salesman, Kitchen Clerk, Canteen Clerk, Halwai, Assistant Halwai, Cook, Bearer, Wash-boy and Sweeper etc. In para 4 they have specified the four departmental canteens of the Corporation where they have been working. In para 5, they have averred there that they are paid at the rate much below the rate at which canteen employees working under different Government departmental canteens including those run by statutory Corporations and Railways are paid. They have also stated there that the employees of the canteens in different Government offices and Railways throughout the country are enj....
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....n ground No. 3 it is alleged that the canteen facility being condition of service of the staff and employees of the respondent-Corporation as per usage and custom, the appellants, being canteen employees and engaged in operation incidentally connected with the industry carried on by the respondent, "automatically become the direct employees under the respondents and as such they cannot be discriminated against and denied the minimum wages that is prevalent in the Life Insurance Corporation. In ground No. 4, they have stated that the appellants are working under the respondents through the agencies, and being engaged in work incidentally connected with the industry carried on by the Corporation, they are entitled to get the pay that is admissible to regular employees of the Corporation. It is with these averments in the main body of the petition and the grounds that the appellants have in prayer (b) of the petition, claimed the relief of the issuance of the writ of mandamus commanding the respondent-Corporation to comply with the policy of "equal pay for equal work" and pay them the minimum salary that is enjoyed by the staff of the Corporation and also to follow the policy that is ....
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....ppeal. 5. The questions to be answered in this appeal, therefore, are : (i) whether the appellants are or should be deemed to be the regular employees of the respondent-Corporation, and if the answer is in the affirmative, (ii) what pay-scales and other service conditions should be made available to them. 6. A preliminary objection was raised to the framing of the first issue by Shri Sanghi appearing for the respondent-Corporation, as pointed out at the outset, that the appellants had not claimed any such relief in the writ petition itself and hence they cannot widen the scope of the petition and ask for the relief in question in this appeal. We have referred in extenso to the averments made in this writ petition, earlier. They show in unmistakable terms that the appellants approached the High Court with a specific plea that they are the employees of the respondent-Corporation and as such, they should be paid the minimum wages which are being paid to its other regular employees. The relief of minimum wages paid to the other regular employees of the Corporation on the basis of the principle of equal pay for equal work is thus claimed on the ground that they are also the regula....
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....; Provided that any canteen maintained in accordance with the provisions of Section 45 shall be regarded as part of the requirements of this sub-section: There is no dispute that the Factories Act is not applicable to the offices of the respondent-Corporation. What is applicable is the West Bengal Shops and Establishment Act which is a State enactment. However, there is no provision in the said Act with regard to canteens. 8. We may now refer to the law on the subject as is evolved through various judicial decisions. In the Ahmedabad Manufacturing and Calico Printing Company Ltd. (Calico Mills) v. Their Workmen (1953) II LLJ 647, which is a decision of the Labour Appellate Tribunal of India and which is quoted approvingly in Saraspur Mills Co. Ltd. v. Ramanlal Chimanlal and Ors. (India), the facts were that by notifications issued by the State Government, the provisions of Section 46 of the Factories Act, 1948 were made applicable to a large number of textile mills including the appellants before the Tribunal . As a result, it was compulsory for the mills to maintain suitable canteens for the use of their workmen. The contention of the appellant-Mil....
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....n area, it was allotted to two agarias. After the manufacture of salt, they were paid 5 as. 6 pies per maund. At the end of each season, accounts were settled and they were paid the balance due to them. They worked with the members of their families and were free to engage extra labour on their own account and the manufacturer had no concern therewith. No hours of work had been prescribed, no muster rolls maintained nor were working hours controlled by the appellants. There were no rules as regards leave or holidays and they were free to come out of the works after making arrangements for manufacture of salt. On these facts, the Industrial Tribunal found that the agarias were workmen within the meaning of the Industrial Disputes Act, 1947. This finding was confirmed by the High Court which also held that the reference of the dispute made by the Government under Section 10 of the Industrial Disputes Act was competent. This Court while confirming the finding of the Industrial Tribunal and of the High Court, held that it was well-settled that the Prima facie test of the relationship of master and servant was the existence of the right in the employer not merely to direct what work was....
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.... or not. If he has, then he is a workman and the fact that he gets the assistance from other persons would not affect his status. In Basti Sugar Mills Ltd. v. Ram Ujagar and Ors., the case of the appellant-employer was that the work of the removal of the press mud had been given by it to a contractor and the respondent-workmen were employed by that contractor to do that work. It is the contractor who had terminated their services and the management had nothing to do with the workmen who had approached the Court for relief against the termination of their services and also for paying them the minimum wages prescribed under the Government notifications. This Court held that the workmen were persons employed in the industry to do manual work for reward Further, the appellant-Company was their employer as the workmen were employed by the contractor with whom the company had contracted in the course of conducting the industry for the execution by the said contractor, of the work of removal of press mud which is ordinarily part of the industry. The Court also held that the expression "employed by the factory" which occurred in the definition of 'workman' in the standing Orders....
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.... (14) 'employer' includes - X X X X X X X (a) Where the owner of any undertaking in the course of or for the purpose of conducting the undertaking entrusts the execution of the whole or any part of any work which is ordinarily a part of the undertaking, to any person otherwise than as the servant or agent of the owner, the owner of the undertaking. The Court also referred to the definition of 'worker' under the Factories Act, 1948. The Court then referred to its earlier decision in Basti Sugar Mills Ltd. v. Ram Ujagar and Ors. [1963] 2 SCR 838 and held that since under the Factories Act, it was the duty of the appellant to run and maintain the canteen for use of its employees. The ratio of the decision in Ahmedabad Mfg. and Calico Printing Co. Ltd. and Ors. v. Their Workmen (1953) II LLJ 647, would be fully applicable in which the very same provisions of the Act were considered and confirmed the finding of the Industrial Court. In Hussainbhai, Calicut v. The Alath Factory Thozhilali Union, Kozhikode and Ors. (1978 )IILLJ 397 SC, the facts were that the petitioner was a factory owner manufacturing ropes. A number of workers were engaged by him to ma....
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....ces for the benefit and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries of to make-believe trappings of detachment from the management cannot snap the real life-bond. The liability cannot be shaken off. The Court, however, added that if there is total dissociation in fact, between the disowning management and the aggrieved workmen, the employment is, in substance and in real-life terms, by another. The management's adventitious connections cannot ripen into real employment. On this reasoning, the Court confirmed the finding of the High Court and dismissed the petition. In Workmen of the Food Corporation of India v. Food Corporation of India (1985) IILLJ 4 SC, initially the work of handling foodgrains at Siliguri depot of the respondent- Corporation was entrusted by it to a contractor. The contractor engaged handling-mazdoors for the purposes of the work. The mazdoors received the wages from the contractor as determined by him or as agreed between the contractor and the workmen. From January 1973, pursuant to an agreement between the Corporation and the workers working in the Corporation's godown, the direct p....
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....number of bags. Thus, the Corporation was solely concerned with the number of bags handled by the contractor. It was not a contract for supply of labour, but specifically a contract for handling bags of foodgrains. Therefore, when the contractor system was in vogue, the workmen employed by the contractor were not workmen of the Corporation. But introduction of the direct payment system, brought about a basic qualitative change in the relationship between the Corporation and the workmen engaged for handling foodgrains in that on the disappearance of the intermediary contractor, a direct relationship of master and servant came into existence between the Corporation and the workmen. It was obligatory on the Corporation to arrange for handling the bags of foodgrains. The workmen handled the foodgrains for the Corporation and none else. For this service rendered, the Corporation agreed to pay and paid wages at piece rate to each workman whose name appeared in the register maintained for the purpose as per the directions given by the District Manager. If the pay packets were actually distributed by Sardars/Mondals, they can be said to be doing clerical work on behalf of the Corporation, ....
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....egal change would be wholly ineffective. In M.M.R. Khan and Ors. v. Union of India and Ors., the facts were that the canteens run by different railway establishments were classified into three categories, viz., (i) statutory canteens, i.e., canteens required to be provided compulsorily in view of Section 46 of the Factories Act, 1948, (ii) non-statutory recognised canteens set up as a staff welfare measure with the prior approval and recognition of the Railway Board as per the procedure detailed in the Railway Establishment Manual, and (iii) non-statutory non-recognised canteens, i.e., those which were established without the prior approval or recognition of the Railway Board. The Government of India notification dated 11th December 1979 had declared the employees of the departmental canteens/tiffin rooms as holders of civil posts. The Division Bench of the Calcutta High Court had directed the Union of India to recognised the workers of the statutory canteen at Kharagpur as employees of the Railway administration under the Factories Act but had rejected the workers' demand to pay salary and allowances to them as if they were railway employees. The appeal preferred by the Uni....
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.... provided by the railway administration and belong to it. The employees engaged in the canteens have also been in service uninterruptedly for many years. Their wages are reimbursed in full by the railway administration. The entire running of the canteens including the work of the employees is subject to the supervision and control of the agency of the railway administration whether the agency is the staff committee or the society. In the Establishment Manual the legal responsibility for running the canteen ultimately rests with the railways, whatever the agency that may intervene. The number and the category of the staff engaged in the canteen is strictly controlled by the administration. x x x x x x x x x No distinction can be made between the employees of statutory canteens and those of non-statutory canteens. The only difference is that the statutory canteens are established wherever the railway establishments employ more than 250 persons as is mandatory under the provisions of Section 46 of the Factories Act while non-statutory canteens are required to be established under paragraph 2831 of the Railway Establishment Manual where the strength of the staff is 100 or m....
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....employees. The employees were appointed by the committees and the salaries were paid out of the contributions received from the members of the respective institute/club and the grants-in-aid given by the Railway Board to them. The committee of management was presided over by the President who was the concerned Railway Divisional Manager or his nominee. The railway administration had the right to dissolve or to form the ad hoc committees for running the institutes/clubs. It was also the case of the workmen that the Railway Board had always treated the institutes/clubs as an integral part of the railways since not only they received grants-in-aid but also other facilities from the Railways. The Railway Establishment Manual made a special provision for the institutes and clubs and it stated that a railway institute should be looked upon as a club provided by the railway, rent-free for the benefit of its employees and, therefore, the railways should provide everything which a landlord ordinarily would, and the institute should pay for all that a tenant should usually be liable to pay. The Manual stated that the railway administration will bear (a) the first cost of the building includi....
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....f the institutes/clubs are availed of beyond working hours only and not all the members of the railway staff avail of them. One had to be a member by paying fees to do so. The membership was further optional. That is why most of the staff employed in the institutes/clubs was part-time. Out of about 1741 employees engaged in 449 institutes and 332 clubs, nearly half were part- time employees. The services rendered by the employees were also not of a uniform nature. They were engaged for different services with service conditions according to the requirement. The institutes/clubs also do not engage in any uniform activities, the activities conducted by them varying depending upon the infrastructure and the facilities available at the respective places. What is more important is that the provision of the institutes/clubs is not mandatory. They are established as a part of the welfare measure for the railway staff and the kind of activities they conduct depend, among other things, on the fund available to them, the activities having been tailored to the budgets. If the cost of activities goes beyond the means, they have to be curtailed. On these facts, this Court held that the staff me....
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....ecome a part of the service conditions of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the management. (iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing, maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available etc. 10. We may now examine the facts in the present case in the light of the above tests. There is no disput....
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....ged by the Corporation and that it was for the first time that before this Court in the writ petition filed under Article 32 of the Constitution that the appellants had sought, to make out the purported case that they were the employees of the departmental canteens belonging to and/or run and/or managed by the Corporation, these facts are not relevant for the purpose of examining whether, in fact the relationship of employer and employee existed between the Corporation and the appellants. (b) The counter further goes on to say that in the meanwhile, the workers working in the canteens started agitating for higher emoluments and/or other benefits and as such, the contractors abandoned their entrustment and the facilities of canteen available to the employees suddenly came to a stop. Thereafter, a cooperative society of the employees of the Corporation known as LIC Employees Cooperative Society Ltd., was formed and it started managing canteens at different offices, of the Corporation in Calcutta w.e.f September, 1979. While such management was continuing, the work the canteens in or about 1981 started agitation for enhancement of their salary and other benefits and submitted....
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....ation and the Central Government accepted that the canteen workers were not the employees of the Corporation but were the employees of the contractors as is evidence from letter dated 6th February, 1984 addressed by the Central Government to the Zonal Manager, Eastern Zonal Office of the Corporation. It is also the case of the Corporation in the said counter that the Corporation at no point of time exercised any control over the contractors except those covered by the contracts in writing between the contractors and the Corporation. From the aforesaid averments in the counter, the following facts emerge. Even from times much prior to the coming into existence of the respondent-Corporation, canteen services were available to the employees of the insurance companies which were later merged with the Corporation in 1956. Between 1956 and 1978, the canteens were being managed by the canteen committees. Between 1973 and 1979, they were managed by the contractors appointed by the Corporation. In 1979, the management was taken over by the cooperative society of the employees. In 1981, there was an industrial dispute raised by the canteen workers both with the cooperative ....
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....; (ii) The Corporation was desirous of running the canteen through a contractor on the terms offered to him by the Corporation. In other words, the contractor is only an agent of the Corporation; (iii) Clause (1) of the agreement shows that contract deals with quality of foodstuff, tea, coffee and other permissible drinks to the employees of the Corporation and the contract will remain operative for a period of one year only from the date of the contract; (iv) By Clause (2), the Corporation undertakes to provide to the contractor free of cost, space, tables, chairs, fans, lights and water, although the cost of fuel or gas charges were not to be borne by the Corporation; (v) Clause (3) makes it clear that the foodstuff was to be cooked and prepared inside the premises of the canteen and no outside foodstuff except cold drinks would be sold in the canteen. Clause (4) makes it obligatory on the contractor to maintain regular supply of quality food while Clause (5) provides that the existing price of the foodstuff, tea, coffee etc. should be continued for a period of about six months from the date of the contract and revision will be considered thereafter or even before by discussion w....
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....e High Court it was specifically averred in Paragraph 6 thereof that the job done by the canteen employees was of perennial nature and was incidental to the running of the main business of the Corporation. It was being done by the Corporation through their intermediaries - sometimes by contractors, sometimes by cooperative society and sometimes by canteen employees themselves. The intermediaries came and went but the employment of the workers under the Corporation remained constant. These averments have not been denied by the Corporation. (f) In the Writ petition filed by the appellants, further, it was averred that the employees of the Corporation at all its establishments, are provided with facilities of canteen by the Corporation for more than a few decades and as such the provision of canteen facilities was a condition of service of the employees of the Corporation and that by usage and custom the benefits of canteen facilities had become the conditions of service and that the running of the canteen was incidental to the running of the business of the Corporation. This is not controverted specifically by the Corporation in its reply filed before the Court. (g)....
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.... the contractors have only been acting for and on behalf of the Corporation as its agencies to provide the said services. The Corporation has been taking active interest even in organising the canteen committees. It is further the Corporation which has been appointing the contractors to run the canteens and entering into agreements with them for the purpose. The terms of the contract further show that they are in the nature of directions to the contractor about the manner in which the canteen should be run and the canteen services should be rendered to the employees. Both the appointment of the contractor and the tenure of the contract is as per the stipulations made by the Corporation in the agreement. Even the prices of the items served, the place where they should be cooked, the hours during which and the place where they should be served, are dictated by the Corporation. The Corporation has also reserved the right to modify the terms of the contract unilaterally and the contractor has no say in the matter. Further, the record shows that almost all the workers of the canteen like the appellants have been working in the canteen continuously for a long time whatever the mechanism ....
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....r employees of the Corporation. In view of our finding that the appellants who are the canteen workers in the four offices of the Corporation in Calcutta are entitled to be the employees of the Corporation, the appellants are certainly entitled to the first relief they have claimed. The question, however, is to what service conditions they would be entitled. They have prayed for the minimum salary paid to the employees of the Corporation which necessarily means the minimum salary of the lowest paid employees of the Corporation, i.e., of class IV employees. There would be no difficulty in directing the payment to them of the minimum of the salary paid to the Class IV employees of the Corporation. However, there is distinction between the present service conditions of the appellants and the other class IV employees of the Corporation. For example, the appellants get free food, and free tea. Then-hours of service may also differ. There are also different categories of canteen workers such as General Manager, canteen Manager-cum-Sales-man, Kitchen Clerk, Canteen Clerk, Halwai, Assistant Halwai, Cook, Bearer, Wash-boy, Sweeper etc. It is not possible for the Court to evaluate the work d....