Z.A. Haq, J.@mdashThe petition takes exception to the award passed by the Industrial Tribunal holding that the demand of Goa M.R.F. Employees Union that the contract between M/ s. Madras Rubber Factory Limited and M/s. Icarus Foods and Farm is sham and bogus and the demand for absorption of three canteen workers namely Shri Ragoba Fallari, Shri Santosh Sangodkar and Shri Subhash Naik, by the management of M/s. Madras Rubber Factory Limited with effect from 1-10-1996 with appropriate fitment in the pay scales is not legal and justified. It is held that the above referred three workmen are not entitled for any relief. This award is passed on the reference made by the Government of Goa. The case of the petitioner is:
Three workmen namely (i) Shri Ragoba Fallari, (ii) Shri Santosh Sangodkar and (iii) Shri Subhash Naik were engaged by the respondent No. 2 - M/s. M.R.F. Limited through the respondent No. 1 - contractor for working in its canteen which is run as contemplated by Section 46 of the Factories Act, 1948. In 1984, the respondent No. 2 - M/s. M.R.F. Limited had entered into contract with the respondent No. 1 for running the canteen. This contract was a sham contract only to show the workers of the canteen as the contract workers and to deny these workmen the benefits conferred on the regular workmen. On 3-10-2002, the petitioner-union made representation to the respondent No. 4 - Government of Goa raising the dispute/demand. The conciliation proceedings which were taken failed. The respondent No. 4 - Government of Goa made the order of reference of the disputes as follows:
"(1) Whether the demand of the Goa M.R.F. Employees Union, on the ground that the contract between M/s. Madras Rubber Factory Ltd., and M/s. Icarus Foods and Farms is a sham and bogus, for absorption of three canteen workers namely S. Shri Ragoba X. Fallari, Santosh Sangodkar and Subhas Naik by the management of M/s. Madras Rubber Factory Ltd., with effect from 1-10-1996 with appropriate fitment in the pay scales is legal and justified?
(2) If not, what relief the said three workmen are entitled to
After receiving the reference, the Industrial Tribunal proceeded with the matter and by the impugned order concluded that the petitioner failed to prove that the contract between respondent No. 2 - M/s. M.R.F. Limited and the respondent No. 1 - contractor is sham and bogus. The Tribunal held that the petitioner has failed to prove that the three workers were entitled for absorption by the respondent No. 2 - M/s. M.R.F. Limited with effect from 1-10-1996 with appropriate fitness in the pay scales. It is held that the respondent No. 1 - contractor has failed to prove that the reference is not maintainable. It is held that the petitioner is not entitled for any relief. The petitioner - Union, being aggrieved by the award passed by the Industrial Tribunal, has filed this writ petition.
2. The main submission of Shri V. Menezes, learned Advocate on behalf of the union is that the Industrial Tribunal has committed an error of jurisdiction by independently considering the issue as to whether the three workmen are entitled for absorption in the respondent No. 2 - M/s. M.R.F. Limited overlooking the provisions of Section 46 of the Factories Act. According to the petitioner, it is undisputed that the respondent No. 2 - M/s. M.R.F. Limited is having more than 250 workers in its employment and therefore, the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited is a statutory canteen as required by Section 46 of the Factories Act. Consequently, according to the petitioner, the above referred three workmen have to be treated as the employees of the respondent No. 2 - M/ s M.R.F. Limited and they are, accordingly entitled for absorption on the establishment of the respondent No. 2 - M/s. M.R.F. Limited with effect from 1-10-1996 with appropriate fitment in the pay scales. It is submitted that the petitioner - Union had filed Writ Petition No. 374/1996 before this Court praying for directions to the respondent No. 2 - M/s. M.R.F. Limited to treat the workers employed by the contractors running the canteen as the permanent workmen of the respondent No. 2 - M/s. M.R.F. Limited and this writ petition was disposed of by the judgment dated 18-9-2002 permitting the petitioner-Union to make appropriate representation to the respondent No. 4 - Government and the respondent No. 4 - Government was directed to decide whether reference should be made or not. It is submitted that the respondent No. 2 - M/s. M.R.F. Limited has above 1500 workmen in its factory and therefore, the statutory canteen as required by Section 46 of the Factories Act is provided by it. It is stated that the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited is administered under the direct supervision and administration of the respondent No. 2 - M/s. M.R.F. Limited and the day to day running of the canteen is controlled and monitored by an officer of the respondent No. 2 - M/s. M.R.F. Limited. It is submitted that the respondent No. 2 - M/s. M.R.F. Limited takes the decision regarding functioning, menu, supply of furniture and utensils, cooking materials and other related matters. It is submitted that the contract signed between the respondent No. 2 - M/s. M.R.F. Limited and the respondent No. 1 - contractor is sham and bogus and is made to deny the workmen the benefits of permanency and regular employment with the respondent No. 2 - M/s. M.R.F. Limited.
3. Shri V. Menezes, learned Advocate has submitted that the above referred three workmen had been in continuous service from the date of their employment. It is submitted that though the respondent No. 2 - M/s. M.R.F. Limited is projecting that the three workmen had been the employees of the contractor, in fact, the three workmen had been the employees of the respondent No. 2 - M/s. M.R.F. Limited. It is submitted that the three workmen continued to work in the canteen continuously though the contractors, who had been running the canteen have changed. It is submitted that Shri Ragoba Fallari had joined the service on 1-8-1975 and had been working in the canteen of respondent No. 1 - M/s. M.R.F. Limited continuously. It is submitted that Shri Santosh Sangodkar was appointed on 1-4-1989 and Shri Subhash Naik was appointed on 1-6-1990 and they also continued to work in the canteen from the respective dates. It is submitted that the above referred three workmen were not assigned any other work and they continued to work in the canteen of the respondent No. 2 - M/s. M.R.F. Limited continuously though the contractor changed.
4. It is submitted that the respondent No. 2 - M/s. M.R.F. Limited had been providing premises, equipments, furniture, fridges, utensils, crockery and cutlery for the canteen without charging anything to the contractor. It is submitted that the water and electricity charges are also borne by the respondent No. 2 - M/s. M.R.F. Limited. It is submitted that the agreement made between the respondent No. 2 - M/s. M.R.F. Limited and the contractor provided that the respondent No. 2 - M/s. M.R.F. Limited would procure all the required items for preparation of the food through the Goa M.R.F. Employees Credit Cooperative Limited (Consumer Section) and the menu of the items served in the canteen had been monitored by the respondent No. 2 - M/s. M.R.F. Limited. The submission on behalf of the petitioner is that as per the practice followed, the workmen submitted coupons at the counter of the canteen and collected food items and the contractor was required to surrender the coupons collected by him to the respondent No. 2 - M/s. M.R.F. Limited. It is submitted that the respondent No. 2 - M/s. M.R.F. Limited made payments directly to the Goa M.R.F. Employees Credit Co-operative Limited for the supplies of grains, vegetables, foodstuff, oil etc. It is submitted that six permanent workmen were charge-sheeted by the respondent No. 2 - M/s. M.R.F. Limited for committing fraud in the supply of material to the canteen. According to the petitioners, during the enquiry of six permanent workers, the respondent No. 2 - M/s. M.R.F. Limited took the stand that it had complete control over the functioning of the canteen and the Goa M.R.F. Employees Credit Co-operative Limited. It is submitted that the respondent No. 2 - M/s. M.R.F. Limited had entered into a settlement with the petitioner - Union on 20-11-1991 pursuant to which thrift loans were sanctioned by the respondent No. 2 - M/s. M.R.F. Limited to the three workmen along with other canteen workers and the recovery of the loan amount was made from their wages. It is submitted that the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited being a statutory canteen and as per various settlements, the respondent No. 2 - M/s. M.R.F. Limited provided subsidies on meals served at the canteen to its employees as a condition of service of the permanent workman. The petitioner has submitted that six workmen namely (i) Rohidas S. Naik (T. No.: 2084), (ii) Giridas K. Naik (T. No. 2085), (iii) Datta K. Kottarkar (T. No. 2086), (iv) Premanand D. Govekar (T. No. 3650), (v) Dnyaneshwar Rane (T. No. 3651) and (vi) Ganshyam Ghadkar (T. No. 3652) who were appointed through the contractor were absorbed in the employment of the respondent No. 2 - M/s. M.R.F. Limited and were given permanent status and all benefits.
5. Thus, the endeavor of Shri Menezes, the learned Advocate is to show that the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited is the statutory canteen as contemplated by Section 46 of the Factories Act and the workmen working in the canteen had been continued in the employment without any break, though the contractor who run the canteen, has changed. The learned Advocate for the petitioner has submitted that the Tribunal has committed an error by restricting its consideration of the matter on the misconception that the petitioner could not have raised the contention that the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited is the statutory canteen as contemplated by Section 46 of the Factories Act as according to the Tribunal, that was not the dispute referred to it. Shri V. Menezes, learned Advocate has submitted that the Tribunal has wrongly recorded in paragraph 18 of the impugned order that as per the settled law, the Tribunal cannot travel beyond the terms of the reference while deciding the dispute. According to the learned Advocate for the petitioner, this approach of the Tribunal is legally perverse and cannot sustain the scrutiny of law. Shri V. Menezes, the learned Advocate has pointed out that the contracts entered into between the respondent No. 2 - M/s. M.R.F. Limited and the contractors dated 1-5-1983, 1-10-1992, 15-3-1993, 1-10-1993 and 30-9-1994 are produced on the record which show that the respondent No. 2 - M/s. M.R.F. Limited had complete control over the running of the canteen. It is submitted that the amount of subsidy which was provided on the meals served at the canteen was reimbursed by the respondent No. 2 - M/s. M.R.F. Limited. The learned Advocate for the petitioner has pointed out that Mr. Anthony D. Souza, an officer of the respondent No. 2 - M/s. M.R.F. Limited was supervising the functioning of the canteen and to substantiate this, the bills submitted by the contractor to the respondent No. 2 - M/s. M.R.F. Limited are produced which shows that Mr. Anthony D. Souza has signed the bills as Supervisor.
6. Shri V. Menezes, the learned Advocate for the petitioner has relied on the following judgments:
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Relying on the judgment given in the case of
(i) Canteens maintained under obligatory provisions of the Factories Act for the use of the employees become a part of the establishment and the workers employed in such canteens are employees of the management.
(ii) Even if there is a non-statutory obligation to provide a canteen, the position is the same as in the case of statutory canteens. However, if there is a mere obligation to provide facilities to run a canteen, the canteen does not become part of the establishment.
(iii) The obligation to provide canteen may be explicit or implicit. Whether the provision for canteen services has become a part of the service conditions or not, is a question of fact to be determined on the facts and circumstances in each case.
(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among other, 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.
Relying on the above principles laid down by the Hon''ble Supreme Court, the learned Advocate for the petitioner has submitted that once, it is held that the canteen is run by the respondent No. 2 - M/s. M.R.F. Limited, then there cannot be any other conclusion except that the workmen working in the canteen including the above referred three workmen are the employees of the respondent No. 2 - M/s. M.R.F. Limited.
7. Learned Advocate for the petitioner has relied on the judgment given in the case of
8. The learned Advocate for the petitioner has submitted that considering the facts on the record and the law, the impugned award has to be quashed and the reference made by the Government of Goa has to be answered in favour of the petitioner and the three workmen.
9. Shri Sardessai, the learned Advocate for the respondent No. 2 has submitted that the workmen working in the canteen cannot be automatically treated as workmen of the respondent No. 2 - M/s. M.R.F. Limited. It is submitted that if the canteen is run by contractor under an agreement with the industry, then the issue as to whether the workmen working in the canteen are the employees of the Industry or the contractor is an issue which has to be determined by the fact finding Tribunal. It is submitted that the workmen of the statutory canteen would be the workmen of the establishment only for the purposes of the Factories Act and not for all other purposes unless it was proved that the establishment/industry exercised complete administrative control over the employees working in the canteen. In support of this submission, Shri Sardessai, the learned Advocate has relied on the judgment given in the case of
10. Shri Sardessai, learned Advocate for the respondent No. 2 has submitted that the case of the petitioner that the respondent No. 2 - M/s. M.R.F. Limited had been reimbursing the amount to the contractor spent by him on the expenditure for running the canteen is of no consequence unless the petitioner proves that the respondent No. 2 - M/s. M.R.F. Limited had been paying the salary of the three workmen. According to the respondent No. 2 - M/s. M.R.F. Limited, even if the submissions as made on behalf of the petitioner regarding reimbursement of the amount are accepted, it cannot lead to the conclusion that the above referred three workmen are the employees of the respondent No. 2 - M/s. M.R.F. Limited. To support the submission, reliance is placed on the judgment given by the High Court of Bombay at Goa in the case of M/s. Sesa Goa Limited Vs. The Mormugao Waterfront Workers Union and Ors. in Writ Petition No. 182/2004.
11. The learned Advocate for the respondent No. 2 - M/s. M.R.F. Limited has submitted that if the arguments made on behalf of the petitioner that workmen working in the statutory canteen as provided under Section 46 of the Factories Act became the workmen of the industry by deeming fiction are then accept no evidence is required to be recorded by the fact finding Tribunal and the entire exercise would be futile. It is submitted that the management exercises effective control over the contractor for running of the canteen, but such control is exercised to ensure that the canteen is run in efficient manner and to provide wholesome and healthy food to the workmen of the establishment. It is submitted that this does not mean that the employees working in the canteen automatically become the employees of the management. The control of the management is to keep a check over the quality of services provided to its employees. The learned Advocate for the respondent No. 2 - M/s. M.R.F. Limited has submitted that one of the tests to determine whether the workman is the employee of the industry is that the appointment of the workman is made by the industry and the power to take disciplinary action against the workman is with the management/industry. It is submitted that some supervisory control exercised by the management/industry to ensure that the workers employed to work in the canteen are well qualified and capable of rendering proper services to the employees/workers of the management/industry does not mean that the workman employed in the canteen automatically becomes workman of the management/industry. To support this submission, Mr. Sardessai, the learned Advocate has relied on the judgment given in the case of
12. To counter the submission made on behalf of the learned Advocate for the petitioner, by relying on the judgment given in the case of
13. The learned Advocate for the respondent No. 2 - M/s. M.R.F. Limited has pointed out clause 4(g) of the agreement dated 15-3-1993 between the respondent No. 2 - M/ s M.R.F. Limited and the contractor, which reads as follows:
(g) P.F. ESI, Bonus amounts in respect of the persons employed by the Contractor shall be reimbursed by the company on submission of proper challans/receipts.
It is submitted that as per the agreement, the respondent No. 2 - M/s. M.R.F. Limited has been reimbursing the amount paid by the contractor towards P.F., ESI, bonus in respect of the workmen employed by the contractor. Shri Sardessai, the learned Advocate for the respondent No. 2 has submitted that the respondent No. 2 is not paying the amounts of P.F., ESI, bonus in respect of the workmen employed in the canteen, but the contractor is paying the amount and the respondent No. 2 - M/s. M.R.F. Limited is only reimbursing it to the contractor. The learned Advocate has submitted that there is distinction between "payment" and "reimbursement" and reimbursement of the amount by the respondent No. 2 - M/s. M.R.F. Limited cannot mean that the respondent No. 2 - M/s. M.R.F. Limited is making the payment towards P.F., ESI, bonus in respect of the workmen working in the canteen. Clauses 4(d) and 4(e) of the above referred agreement are also relied upon by the learned Advocate for the respondent No. 2 which read as follows:
(d) The persons engaged by the contractor shall be the employees of the contractor and shall not be workmen of the company. It shall be the responsibility of the contractor to discharge the obligations of the employer and ensure that proper discipline is maintained by his workmen.
(e) The contractor shall initiate disciplinary action against his workmen as and when required.
The other clauses of the above referred agreement which are relevant for the purposes of the adjudication of the writ petition are 5(a), 5(b) and 5(c) which read as follows:
5(a) The number of persons to be employed by the Contractor shall be decided by the Management and is shown in Annexure-8.
(b) The number of persons employed will be subject to the study made by IED of the Company from time to time.
(c) The salaries of the workmen employed by the contractor shall be disbursed in the presence of the company representative and will be in accordance with the settlement arrived at between the Contractor and his workmen. The salary register shall be properly maintained by the contractor and the same will be initiated by the company representative after each payment is made. The salaries paid to the above workmen shall be reimbursed by the Company.
14. The learned Advocate for the respondent No. 2 has submitted that the Tribunal has considered all the relevant factors independently and exhaustively and has given finding of fact that the control exercised by the respondent No. 2 - M/s. M.R.F. Limited for running of the canteen is not of such a type that it can be said to be absolute and therefore, the three workmen in respect of whom, the claim is made cannot be absorbed as the workmen of respondent No. 2 - M/s. M.R.F. Limited and the three workmen are not entitled for the appropriate fitment in the pay scales as demanded by the petitioner - Union. The learned Advocate has prayed for dismissal of the writ petition.
15. Miss S. Linhares, learned Additional Government Advocate for the respondents No. 3 and 4 has submitted that the respondents No. 3 and 4 are formal parties and no relief is sought against them. However, she has supported the impugned award.
16. After hearing the learned Advocates for the respective parties, we have examined the record with their assistance. It is undisputed that Shri Ragoba Fallari had joined the services on 1-8-1975, Shri Santosh Sangodkar was appointed on 1-4-1989 and Shri Subhash Naik was appointed on 1-6-1990 and they had been working continuously in the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited. It is undisputed that there are more than 250 employees working with the respondent No. 2 - M/s. M.R.F. Limited. The Tribunal has given the finding that the canteen provided by the respondent No. 2 - M/s. M.R.F. Limited is a statutory canteen as contemplated by the provisions of Section 46 of the Factories Act. The respondent No. 2 - M/s. M.R.F. Limited has not controverted the fact that the three workmen, in respect of whom the claim is made, are continuously working in the canteen without any break though the contractors have changed. The respondent No. 2 - M/s. M.R.F. Limited has not disputed that no fresh appointments are given to the three workmen by the new contractors. It is undisputed that the respondent No. 2 - M/s. M.R.F. Limited is exercising complete control over the canteen and the space is provided by it without charging anything to the contractor. It is undisputed that the respondent No. 2 - M/s. M.R.F. Limited is providing the equipments, furniture, freezers, utensils, crockery, cutlery etc. for running the canteen without charging anything to the contractor. It is undisputed that the respondent No. 2 - M/s. M.R.F. Limited is making payments directly to the Goa M.R.F. Employees Credit Co-operative Limited which is supplying grains, vegetables, foodstuffs, oil etc. to the contractor. The petitioner - Union has proved that Mr. Anthony D. Souza, officer of the respondent No. 2 - M/s. M.R.F. Limited is supervising the running of the canteen and he has signed the bills. In paragraph No. 19 of the impugned award, the Tribunal has recorded that there is no dispute that the canteen is a statutory canteen which is required to be maintained under Section 46 of the Factories Act. However, the Tribunal has observed that even if the canteen is a statutory canteen under Section 46 of the Factories Act, it cannot be said that the above referred three workers are deemed to be workmen of respondent No. 2 - M/s. M.R.F. Limited and if it is deemed to be so, then it will amount to travelling beyond the scope of the terms of reference which is not permissible under law.
17. The Constitution Bench of the Hon''ble Supreme Court in the judgment given in the case of
107. An analysis of the cases, discussed above, shows that they fall in three classes: (i) where contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited either because the industrial adjudicator/court ordered abolition of contract labour or because the appropriate Government issued notification under Section 10(1) of the CLRA Act, no automatic absorption of the contract labour working in the establishment was ordered; (ii) where the contract was found to be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal employer were held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared the correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining a canteen in an establishment the principal employer availed the services of a contractor the courts have held that the contract labour would indeed be the employees of the principal employer.
Considering the facts of the present case and the above referred judgment given by the Constitution Bench of the Hon''ble Supreme Court, we are of the view that the Tribunal has committed jurisdictional error in concluding that the above referred three workmen cannot be treated and absorbed as the employees of the respondent No. 2 - M/s. M.R.F. Limited and that they are not entitled for the appropriate fitment in the pay scales as claimed by them. The Tribunal, having given specific finding in paragraph 19 of the impugned award that it is not in dispute that the canteen of the company is a statutory canteen which is required to be maintained under Section 46 of the Factories Act, the Tribunal has committed error in accepting the objection of the respondent No. 2 - M/s. M.R.F. Limited that the petitioner cannot be permitted to raise the contention as raised in the reference as it will be beyond the scope of the reference.
18. The writ petition was initially placed before the learned Single Judge of this Court in view of the provisions of Chapter XVII of the Bombay High Court Appellate Side Rules, 1960 as the award passed by the Industrial Tribunal was challenged. However, in view of the prayer clause (b) by which the petitioner has sought writ of mandamus to the Government of Goa to refer the demands/ disputes as shown in paragraph No. 19(1), 19(2) and 19(3) of the writ petition, the writ petition was directed to be listed before the Division Bench of this Court. Accordingly, this petition is placed before us. After hearing the learned Advocates for the respective parties, we are of the view that the reference made by the Government of Goa by the order dated 31-1-2003 includes adjudication of the issues raised by the petitioner - Union and therefore, there is no need to issue any writ or the directions to the Government of Goa as prayed for by the petitioner vide prayer clause (b).
19. In view of the above, the impugned award passed by the Industrial Tribunal is set aside.
20. It is held that the demands of the petitioner-Union in respect of Shri Ragoba Fallari, Shri Santosh Sangodkar and Shri Subhash Naik are just and they have to be absorbed as the workers of the respondent No. 2 - M/s. M.R.F. Limited with effect from 1-10-1996 and they are entitled for appropriate fitment in the pay scales. Rule is made absolute in terms of the prayer clause (a). In the circumstances, the parties to bear their own costs.
