K. Chandru, J.@mdashBoth writ petitions challenges the same Award passed by the Labour Court, Coimbatore in I.D. No. 711 of 1999 dated
23.3.2006.
The first writ petition is filed by the Management challenging that portion of the Award wherein and by which the contesting second respondent
was granted the relief of reinstatement with 50% backwages, continuity of service and other attendant benefits. That writ petition was admitted on
30.8.2006, Pending the writ petition, this Court granted an interim stay. Subsequently, the workman filed M.P. Nos. 1 of 2009 and 2 of 2009 to
vacate the interim order and for grant of payment u/s 17-B of the Industrial Disputes Act, 1947 (for short I.D. Act). While making the grant of stay
absolute, this Court directed the Management to comply with the payment u/s 17-B of the I.D. Act. Long after the management''s writ petition was
filed, the workman filed the second writ petition being W.P. No. 6326 of 2009, seeking to challenge that portion of the Award which had denied
him 50% of the back wages. That writ petition came to be admitted by this Court on 15.4.2009.
2. As against the interim order, the Management preferred writ appeals being W.A. Nos. 1166 and 1167 of 2009. The Division Bench passed an
order on 25.11.2009, which is as follows:-
Learned Counsel for the appellant states that the second respondent may join duty, though according to the appellant, he will join duty through the
third respondent. Learned Counsel for the second respondent states that the second respondent is ready to join, though he will do so through the
third respondent, of course, without prejudice to his rights. Learned Counsel for the appellant states that the third respondent is paying a monthly
salary of Rs. 5,250/- to other drivers working under him and he will pay the said amount, i.e., Rs. 5,250/- as monthly salary to the second
respondent also. Both the Counsel agree that the second respondent will join duty on 1st December, 2009, under protest.
3. The second writ petition was dismissed for want of prosecution on 21.7.2010. But however on an application being filed by the workman in
M.P. No. 1 of 2011, the writ petition was restored. In the meanwhile, this Court referred the first writ petition for resolution of the dispute by the
Lok Adalat. But the matter could not be resolved. It was only when the second writ petition came to be posted, on noticing that the earlier writ
petition filed by the Management is pending, it was directed to be heard along with the other writ petition.
4. Hence, both writ petitions were listed together and a common order is passed. Since the parties have not filed the original documents made
available before the Labour Court, this Court directed the Registry to summon those documents for perusal by this Court. Accordingly, they were
produced and perused by this Court.
5. For the sake of convenience, parties are referred to as Management and the workman as the case may be.
6. It is the case of the workman that he was employed as a Driver for about seven years and was drawing a salary of Rs. 3,550/- per month. It
was stated by him that with effect from 2.11.1998, he was stopped from work. When the workman sent a letter dated 7.11.1998, the
Management viz., K.S.B. Pumps Limited sent a reply stating that he was not their employee and he was employed through the third respondent-
Contractor. Thereafter, the workman raised an industrial dispute u/s 2-A (2) of the I.D. Act before the Assistant Commissioner of Labour,
Conciliation III. The said Officer issued notice to the Management. During the conciliation meeting held on 12.3.1999, he gave an agreed advice
by referring that the workman will be re-employed by the Management in the same job, which he was attending prior to his non-employment. As
per the advice given by the Conciliation Officer, the workman was to resume duty on 15.3.1999. But because he was suffering from severe fever,
he could not attend to work and he sent a telegram. When he went to work on 16.3.1999, he was once again informed that his services stood
terminated. This was again objected to by a telegraphic protest letter. Thereafter, without prejudice to his contention that the Management was his
employer, he also sent a letter to the third respondent. The third respondent sent a letter dated 30.3.1999 disputing the contention raised by the
workman. He was also threatened with dismissal and once again the workman sent a letter dated 1.4.1999.
7. The workman went back before the Conciliation Officer and raised an industrial dispute. The Conciliation Officer as he could not bring about
mediation between the parties gave a failure report dated 15.10.1999. It was on the strength of the failure report, the workman filed claim
statement dated 30.11.1999 before the Labour Court, Coimbatore. The Labour Court registered the dispute as I.D. No. 711 of 1999 and issued
notice to the Management as well the Management of Human Resources Syndicate, Gandhipuram. The Management filed a counter statement
dated Nil August, 2000. They also filed an additional counter statement dated 9.11.2005.
8. Before the Labour Court, on behalf of the workman, he examined himself as W.W. 1 and filed 50 documents which were marked as Exs. W1
to W50. On the side of the Management, M/s. S. Felix Joseph, Deputy Manager of Human Resources cum Administration was examined as
M.W. 1 and M. Lakshmanan, claims to be the Proprietor of the third respondent was examined as M.W. 2. M. Lakshmanan, S/o Muthanna
Gounder gave a proof affidavit on 30.12.2005 and he was cross-examined on 14.12.2005. In the Court records, he was described his calling as
Business/Service, whereas it is brought to the notice of this Court that the said M.W. 2 was an Advocate enrolled with the Bar Council of Tamil
Nadu with Enrolment Number 106/82 and a proof of the extract from the Directory maintained by the Coimbatore Bar Association was produced
by the learned Counsel for the workman. On the side of the Management, 38 documents were filed and marked as Exs. M1 to M38.
9. The Labour Court observed that the Management is a Multi National company. Though it was claimed that they had availed the service of the
workman through the agency of the third respondent but any agreement between the Management and the third respondent was not produced.
Therefore, the Labour Court held that there is no relationship between the workman and the third respondent as master and servant. M.W. 1 in his
cross-examination admitted that the workman was appointed by them and he had worked for some period and thereafter, he worked under them
with the assistance of third respondent on contract basis. Therefore, the Labour Court refused to believe the stand of the Management that the
workman was not their employee. Even though in the claim statement, the workman has stated that he worked with the Management as Fork lift
Operator initially, but in the counter statement, the Management denied the said fact. But however, M.W. 1 had stated that he had worked under
the Management as Fork lift operator for the period from 22.8.1992 to 30.9.1992. Therefore, the counter statement was utterly false as per the
evidence of M.W. 1. In respect of the second contention that the car in which workman was driving was sold away and that was why his services
were not required, the Labour Court found that one of the car attached to the Management was sold but since they were ready and willing to
provide employment if he is deputed through the service of the third respondent will show that because of the car being sold out, he was not
continued cannot be accepted and therefore, the third respondent was directed to withdraw his services also was knowingly a false statement and
contrary to truth.
10. The Labour Court also found that the agreed advice given by the Conciliation Officer made in Ex. W27 cannot be a settlement as it runs contra
to the letter written by the workman in Ex. W26, wherein, he has clearly stated that he was not claiming any relief against the third respondent. The
Labour Court also held that he was not a contract employee and that the bills produced in Exs. M27 to M34 do not relate to the workman and on
the perusal of the documents, it found that the Management did not avail the services of the workman through the agency of the third respondent to
prove that he was a contract employee. Even the increment given to the workman was fixed by the Management. The documents in Exs. M17 to
M26 were only maintained by the Management and not by the third respondent contractor. The stand that he worked only upto 30.9.1992 with
the Management was also disproved by making a reference to Ex. W50.
11. The Labour Court on the basis of the evidence both oral and documentary came to the conclusion that the workman was appointed only by
the Management and he was working even as late as 17.6.1997 and that whenever he was addressed by the Management, he was only addressed
as their worker and not as a contract employee. The Management failed to prove that there was any subsisting contract between them and the
third respondent. Therefore, having held that the workman was directly employed by the Management, if the car driven by him was sold out, his
services ought to have been terminated in the manner known to law and refusal to assign work or labeling it as termination either way the workman
is entitled to get relief of reinstatement, but however, it restricted back wages to 50%.
12. In the affidavit filed in support of the writ petition, it was contended by the Management that there was no relationship of master and servant
between the Management and the agreed advise given by the Conciliation Officer envisaged the third respondent granting work to the workman. In
a dispute u/s 2-A (2) of the I.D. Act, the workman cannot decide as to who is his employer as any dispute will have to relate only to a particular
employer and Ex. M13 (Ex. M27) is outside the purview of the Labour Court in deciding the matter since there was a contract between the
Management and the third respondent, no relief can be given to the workman. It was additionally pleaded by the Management that after the interim
order passed by the Division Bench, the third respondent summoned the workman to come and work which was followed by two letters dated
22.9.2006 and 3.11.2006. However, these allegations was denied by the workman. It was contended by the workman that once Labour Court
found as to who was the real employer, the question of workman going to some other employer will not arise.
13. Therefore, the only question that arises for consideration is whether the findings recorded by the Labour Court can be disturbed by this Court
in exercise of power under Article 226 of the Constitution.
14. Consistently, the workman contended that he was workman of the Management and not the third respondent. It is not clear as to how the third
respondent, who is an enrolled lawyer without suspending his practice continued to run a business. That question was not answered as the third
respondent though represented by a lawyer did not chose to file any affidavit before this Court. It is the stand of the workman that he was initially
appointed as fork lift operator which fact was not denied and subsequently he continued as a Driver in the establishment until he was stopped from
work. Even the certificate of registration obtained by the Contractor under the provisions of the Contract Labour (Regulation and Abolition) Act
marked as Ex. M35 do not envisage deployment of driver as per the terms of license and no document was produced by the Management to
prove that they were authorised to out source in the engagement of Driver. Exs. M17 to M26 were maintained by the Management and not by the
third respondent. Even the agreed advise given by the Conciliation Officer is not valid because it was not agreed to by the third respondent. If it is
alleged that he is the employer, advise can be given only in his presence.
15. Mr. S. Ravindran, learned Counsel appearing for M/s. T.S. Gopalan and Co., Counsel for the Management in support of his contentions
referred to a judgment of the Supreme Court in The Workmen and Others Vs. Hindustan Lever Ltd., for contending that a status of an employee
cannot be raised as an issue before the Tribunal and the Tribunal cannot decide the jurisdictional fact.
16. The learned Counsel also referred to the judgment of a Division Bench of the Andhra Pradesh High Court in The Management of Agnigundala
Lead Project Hindustan Zinc Ltd. and Others Vs. Hindustan Zinc Workers Union and Another, wherein the Division Bench held that agreed
minutes before the Conciliation Officer cannot be ignored and a direction was given by the said Court.
17. He further referred to the judgment of the Bombay High Court in Bombay Hospital Trust and Another Vs. Dr. Shailesh Hathi and Another, )
for contending that a mere cuff evidence in the form of salary certificates cannot be a ground to establish master and servant relationship. It is
essential that the employee in order to prove the existence of master and servant relationship must have a series of acts. In paragraph 15, it was
observed as follows:-
15... In my opinion, to establish a master servant relationship, it is necessary that an employee who is claiming to be an employee of a particular
employers should show a series of acts which he has conducted and established that there is always been a master servant relationship between the
parties. The most essential evidence which is required to be produced is control exercised by the employer in discharge of duties by the employee.
A mere of a cuff evidence of salary certificates which are also issued by Dr. Rambhai Patel and not by the petitioner or two letters which are given
to the respondent No. 1 for the purpose of telephone connection tating he is working in Bombay Hospital, would not establish a master servant
relationship between the parties. On perusal of the judgment, the finding given in Para. 11 is unsustainable in law on the basis of material on record
which do not indicate any evidence whatsoever to establish a master servant relationship between the petitioners and respondent No. 1. The
Labour Court could not have arrived at any such finding that their exist a master servant relationship between the petitioners and respondent herein
on the basis of such evidence. In my opinion, the finding given is perverse and is required to be set aside.
18. He also referred to a judgment of the Supreme Court in Dena Nath and others Vs. National Fertilisers Ltd. and others, for contending that in a
writ petition, the High Court cannot issue any mandamus for deeming the contract labour as having become the employees of the principal
employer.
19. The learned Counsel lastly referred to the judgment of the Supreme Court in G.M. Tanda Thermal Power Project Vs. Jai Prakash Srivastava
and Another, for contending that if no post was created or the post was not available, the question of re-instatement will not arise.
20. Per contra, Mr. Ajoy Khose, learned Counsel for the workman placed reliance on the judgment of the Madhya Pradesh High Court in M.P.
State Handloom Weavers Co-operative Federation Ltd. Vs. Shankarlal Gupta and Another, for contending that a settlement has to be a settlement
within the meaning of section 2(p) of the I.D. Act and advice given u/s 12(2) has no sanction of law as the Conciliation Officer has no power to
give any such direction.
21. The learned Counsel also referred to the judgment of the Supreme Court in Secretary, H.S.E.B Vs. Suresh and Others etc. etc., for the
purpose of establishing the real relationship of master and servant one has to lift the veil and see as to who is the real employer.
22. Similar view was taken by the Supreme Court vide its judgment reported in Steel Authority of India Ltd. and Others etc. etc. Vs. National
Union Water Front Workers and Others etc. etc., The larger Bench of the Supreme Court held that if the contract is sham and nominal, the
workman can establish by evidence that it was the principal employer who was his real employer.
23. He further referred to a judgment of a Division Bench of the Andhra Pradesh High Court in M. Ganesh Vs. South Central Railway and Others,
for contending that if the conciliation officer is not able to bring about any settlement between the parties, he has to send only a failure report and
therefore, whatever advice given by him is not binding on the parties.
24. He lastly referred to the judgment of the Supreme Court in Kanpur Electricity Supply Co. Ltd. Vs. Shamim Mirza, for the purpose of
contending that the burden of proving employer-employee relationship though largely lay on the workman who asserts, but it was neither feasible
nor advisable to lay any abstract rule of determining such rule and it has to be determined on a case to case basis. Reliance was placed on the
following passages found in paragraphs 8, 9, 10, 12 to 14 and 20 to 24:-
8. Upon consideration of the evidence produced by both the parties, the adjudicatory authority formed the view that though no appointment letters
had been filed by the workmen but it had come in evidence that before taking the work, letters were issued to them by an Assistant Manager of the
appellant; though signatures of the applicants did not appear in any of the columns of Electricity Cash and Revenue (ECR) rolls but their
designation as cashier had been mentioned on all these sheets and in some of the letters there were signatures of the Assistant Engineer; in the
contract given to M/s. Vivek and Associates for operating Bradma machines it had been mentioned that it would be the responsibility of the
contractor to operate these machines at all the 16 sub-stations but the cash was to be handled by the cashier of the appellant only but the appellant
had failed to prove that any of its other cashiers"" had handled the job of cash collection.
9. The adjudicatory authority finally concluded that on the basis of the documents submitted by the workmen and for lack of proper rebuttal to
these documents, there was no ground to presume that the workmen were the employees of the contractor and it stood proved that, in fact, they
were in the regular employment of the appellant as cashiers. Thus, it was held that the workmen having worked for more than 240 days, their
termination without notice and payment of compensation as contemplated u/s 6-N of the Act, was illegal.
10. Being aggrieved, the appellant filed writ petitions under Article 226 of the Constitution, which have been dismissed by the impugned orders.
The High Court has held that the Labour Court/Industrial Tribunal having considered all the aspects of the matter in the light of the evidence on
record, no interference in exercise of power under Article 226 of the Constitution was called for. However, while dismissing the writ petition
arising out of ID No. 46 of 1997, the High Court modified the award to the extent that the workman in that case would be entitled to 50% of the
back wages pursuant to the award.
12. Learned Counsel appearing for the appellant strenuously urged that both the adjudicatory authorities as well as the High Court committed
grave error by acting on factually and legally erroneous premise. It was submitted that it was a clear and definite stand of the appellant before the
Courts below that the workmen were never employed by the appellant and they were the employees of the contractor working on the Bradma
machines installed by him for collection of the electricity bills from the consumers; there was no privity of contract between the appellant and the
workmen and, therefore, the provisions of the Act were not attracted at all. Learned Counsel contended that for determining the employer-
employee relationship both the Courts have failed to apply the test laid down by this Court in Ram Singh v. UT, Chandigarh.
13. It was also submitted that having observed that the workmen had neither produced the letters of appointment nor the salary slips, the Courts
below committed a patent illegality in relying on the documents signed by the staff of the appellant for internal use to return a finding that the
workmen were the regular employees of the appellant, which had the effect of putting the onus on the employer to prove that the workmen were
not his employees. Reliance was placed on Range Forest Officer v. S.T. Hadimani to support the plea that it is for the claimant to prove that he
had worked for a particular management.
14. Lastly, relying on Nagar Panchayat Kharkhauda v. Yogendra Singh, learned Counsel submitted that the Courts below again erred in awarding
back wages to the workmen in routine.
20. It is trite that the burden to prove that a claimant was in the employment of a particular management, primarily lies on the person who claims to
be so but the degree of proof, so required, varies from case to case. It is neither feasible nor advisable to lay down an abstract rule to determine
the employer-employee relationship. It is essentially a question of fact to be determined by having regard to the cumulative effect of the entire
material placed before the adjudicatory forum by the claimant and the management.
21. It is true that in the instant case, the workmen did not produce the letters of appointment as also their salary slips but they have been successful
in adducing some contemporaneous documentary evidence, including ECR sheets bearing the signatures of the workmen and that of another senior
officer of the appellant-Company (Ext. W-7, Exts. W-10 to W-15), which shows that they were collecting cash on behalf of the appellant;
depositing it in the van or central office of the appellant and were answerable to the officials of the appellant. In this regard, Clause 5 of the terms
and conditions of the contract awarded to M/s Vivek and Associates is also relevant, which provides as under:
You will be responsible for the operation of machines only. The cash handling is to be done by KESA, cashier or a representative of KESA duly
authorised by Dy. CAO/Head Cashier.
22. It has come in evidence of the witnesses examined on behalf of the workmen that it was only the respondents who were collecting the cash and
no other employee of the appellant. No evidence was led by the appellant in rebuttal. Furthermore, the appellant was called upon to produce the
official records but they failed to do so, with the result that the adjudicatory authority drew adverse inference against the appellant. In the light of
the factual scenario as emerging from the evidence on record, we are convinced that the workmen had discharged the burden which lay on them to
prove the employer-employee relationship with the appellant
23. It is also pertinent to note that in both the cases, evidence on record shows that the engagement of the workmen was prior to the award of
contract to M/s Vivek and Associates for the period starting 1.7.1995. Workman Shamim Mirza claims to have joined the appellant on 13.6.1995
while workman Manoj Srivastava claims to have joined on 17.6.1994, which fact was not controverted by the appellant. On the contrary, this fact
stands proved from Ext. 34, an office note dated 26.7.1994, containing the name of Manoj Srivastava as one of the defaulting cashiers.
24. Workman Shamim Mirza has also placed on record a certificate dated 9.9.1996 issued by the Assistant Engineer, Sub-Station Kalyanpur,
certifying that he had worked at the cash collection office in the capacity of a cashier with effect from 13.6.1995 to 31.8.1996 with honesty and
hard labour. Other than this, he had also done a good job on his directions at other places. The stand of the appellant on the said certificate was
that this Assistant Engineer was not competent to issue such a certificate. Be that as it may, the said document does show that the workman did
work with the appellant even prior to the award of the contract to M/s Vivek and Associates.
25. In the light of the factual matrix and the legal precedents referred to above, it is clear that the Award of the Labour Court does not call for any
interference. The Labour Court has correctly kept in mind the parameters of determining as to whether a person is a workman or not. In fact the
workman was in their employment earlier and thereafter by a paper arrangement he was made to work as if he is a contract labour. At the
maximum, the third respondent can be only referred to as a labour supervisor and not a contractor. The documents were meticulously analysed to
hold that the bills produced by them were in effect issued by the Management and not by the third respondent. The Labour Court also correctly
held that the agreed advice given by the Conciliation Officer is not binding and the workman wanted to have employment only with the
Management who is the real employer. Before terminating his services, there was no procedure adopted including compliance of section 25-F of
the I.D. Act.
26. Therefore, it is not a fit case where it calls for any interference with the impugned Award. Hence, W.P. No. 28724 of 2006 will stand
dismissed. No costs.
27. As noted already, W.P. No. 6326 of 2009 came to be filed by the workman after a period of three years from the date on which the
Management filed the writ petition and the delay is not explained. Secondly, while ordering reinstatement it is open to the Labour Court to
determine the quantum of backwages. In the present case, having regard to the facts and circumstances of the case, the Labour Court has denied
50% of the backwages. In this context, it is necessary to refer to the judgment of the Supreme Court in Rajasthan Lalit Kala Academy Vs. Radhey
Shyam, In that case, the Supreme Court held that infraction of section 25-F of the I.D. Act may make a termination invalid and in normal
circumstances, the relief of reinstatement and backwages must be ordered. But while doing so, it must be taken into account several factors like the
manner and method of selection, nature of appointment (ad hoc, daily wages, temporary, permanent etc.) period of service, delay in raising
industrial dispute etc., must also be taken into account. Hence, W.P. No. 6326 of 2009 will also stand dismissed. No costs.
