Chennai Port Trust Vs Chennai Port Trust Industrial Employees Canteen Workers Welfare Association and Others

Prabha Sridevan, J.@mdashThe vexed question of whether Canteen Workers are to be treated as regular employees is the subject matter of this writ appeal. Before beginning, it is best to remember the following signpost put up by S.B. Sinha, J. in J.T. 2006 1 S.C. 84 [State of Karnataka and Ors. v. K.G.S.D. Canteen Employees Welfare Association and Ors.] :

We have referred to the aforementioned decisions in order to show that in each of the aforementioned cases the industrial adjudicator was required to apply the relevant tests laid down by this Court in the fact situation obtaining therein. Most of the cases referred to hereinbefore were considered by this Court in the peculiar facts and circumstances obtaining therein and, thus, it is even not proper for the industrial adjudicator to apply the ratio of one decision to the exclusion of other without considering the facts and circumstances involved therein. The law, however, does not appear to be settled as to whether even in a case where the employer is required to run and maintain a canteen in terms of the provisions of the statute, the employees of the canteen would automatically be held to be the workers of the principal employer for all intent and purport and not for the purpose of the Factories Act alone.

2. The workers of the Chennai Port Trust enjoy the facility of a canteen which is run by the Chennai Port Trust Industrial Employees'' Co-operative Canteen Limited. The Co-operative Society was registered on 25.3.1964 and the canteen has been in existence since then. They prayed for a writ of mandamus to direct the respondents to treat the members of the petitioner Association, which is the canteen workers Association, as regular employees of the Chennai Port Trust and pay them all the attendant benefits on par with the regular employees from the date of their appointment. The learned single Judge ordered the writ petition by declaring the regular and permanent employees of the Canteen as direct employees and the temporary employees of the Canteen to be made permanent with effect from the date on which they are entitled to be appointed as permanent in accordance with the rules and regulations of the Chennai Port Trust. As against this order, the Chennai Port Trust has filed the present appeal.

3. Learned senior counsel appearing for the Chennai Port Trust would submit that the Chennai Port Trust does not have total control over the administration of the canteen, and the question whether the employees of the canteen are to be treated as the employees of the Chennai Port Trust would depend on a consideration of facts, which can be done only by the Tribunal and not by this Court under Article 226 of the Constitution of India. Learned senior counsel submitted that while arriving at the conclusion that no evidence was required in view of the admitted facts, some crucial features had been lost sight of by the learned single Judge. According to the learned senior counsel, it is the Co-operative Society which runs the Canteen; the Port Trust does not have total control over the Canteen; the conditions of service of the employees of the Canteen are determined by the bylaws of the Society; even the President of the Managing Committee is selected only by the Committee, though in consultation with the Chairman of the Port Trust and therefore, out of eleven members of the Managing Committee, four are nominated in consultation with the Chairman, while seven are elected by the workers themselves; the Co-operative Society was superseded and Special Officers have been appointed; there have been settlements between the workers and the Co-operative Society, in which the Port Trust is not a party; and further, out of 9088 employees of the Port Trust, only 2715 employees belong to the Electrical and Mechanical Departments, of which only 1115 members are covered under the Factories Act; therefore, the entire area covered by Chennai Port Trust has not been declared as a factory; in these circumstances, it cannot be said that the workers in the Canteen are the employees of the Port Trust.

4. On the other hand, the learned senior counsel appearing for the employees would submit that the senior most employee of the Canteen has been working in the Canteen right from its inception and most of the employees have been working there for several decades. Learned senior counsel further submitted that the learned single Judge had correctly identified the features which would establish that the Co-operative Society was only a facade and the real employer is the Port Trust. Learned senior counsel also submitted that when the averments made in the affidavit have not been denied, it is not necessary for the workmen to be driven to the Tribunal to once again agitate their claims.

5. In support of their respective contentions, the following decisions were cited on either side :

Parimal Chandra and Others Vs. Life Insurance Corporation of India and Others,

National Thermal Power Corporation Ltd. Vs. Karri Pothuraju and Others,

Mishra Dhatu Nigam Ltd. and Ors. v. M. Venkataiah and Ors. (2003) S.C.C. (L&S) 1066

Dharma Nand and Anr. v. Union of India and Ors. (2004) S.C.C. 1034 : AIR 2004 S.C.W. 7295

M.M.R. Khan and others etc. Vs. Union of India and others, etc.,

Transport & Dock Workers Union v. Union of India W.P. No. 3513 of 1991

Tamil Manila Thozhilalar Sangam v. Tamil Nadu Electricity Board, Madras 1998 (II) L.L.J. 751

Indian Petrochemicals Corpn. Ltd. and Another Vs. Shramik Sena and Others,

Union of India v. M. Aslam and Ors. (2001) 1 S.C.C. 720

Tuticorin Port Trust Democratic Staff Union v. Tuticorin Port Trust W.P. No. 10907 of 1998

Haldia Refinery Canteen Employees Union and Others Vs. Indian Oil Corporation Ltd. and Others,

Workmen of Ashok Leyland Ltd. and others Vs. Ashok Leyland Ltd. and Others,

Hari Shankar Sharma and Others Vs. Artificial Limbs Manufacturing Corporation and Others,

Workmen of the Canteen of Coates of India Ltd. v. Coates of India Ltd.

Workmen of Nilgiri Coop. Mkt. Society Ltd. Vs. State of Tamil Nadu and Others,

State of Karnataka and Others Vs. KGSD Canteen Employees Welfare Association and Others,

6. Most of the above cases have, in fact, arisen from the decisions of the Industrial Tribunals. But, the I Indian Petrochemicals Corpn. Ltd. and Another Vs. Shramik Sena and Others, , which was decided by a three Judge Bench on reference by a Division Bench to decide the questions involving considerable importance, arose out of a writ petition filed in the Bombay High Court. In that case, the Supreme Court observed that normally, this question should in the ordinary course be first decided by a fact finding Tribunal. But however, since the parties had filed detailed affidavits and documents, the Supreme Court proceeded to decided the question without the need for any oral evidence.

7. In Workmen of Nilgiri Coop. Mkt. Society Ltd. Vs. State of Tamil Nadu and Others, , the Supreme Court observed that where a definite plea of camouflage is raised, the Labour Court or the Industrial Tribunal will be entitled to pierce the veil and arrive at a finding whether the appointment of a contractor was sham or nominal and whether it was only a smokescreen put up by the real employer to avoid its statutory liability. This case was relied upon by the appellant to show that for piercing the veil, a finding of fact is necessary and therefore, this Court ought not to have embarked on a fact finding mission.

8. The judgment in Haldia Refinery Canteen Employees Union and Others Vs. Indian Oil Corporation Ltd. and Others, was also relied on by the appellants in support of their case. In that case too, the workmen directly approached the High Court under Article 226, and the reference by the Supreme Court to the settlements arrived at between the workmen and the contractor, to which the management was a party, and the conclusion drawn there from that the workmen were to be treated as employees of the contractor and not that of the management was pointed out by the appellants to support their case. But in the same decision, the Supreme Court has observed that the factors which persuaded the Supreme Court to conclude that the workmen were employees of the management in Indian Petrochemical''s case were missing in the instant case. So, it follows that if the circumstances existing in the Indian Petrochemical''s case are present, the conclusion would have been otherwise.

9. In J.T. 2006 1 S.C. 84, the Supreme Court has considered its previous decisions and observed that when allegations are made that a body is a cloak or a smokescreen, the adjudication of such a disputed question is best left to the Industrial Court.

10. Therefore, the issue involved in the case on hand ultimately boils down to a question of fact and whether the learned single Judge was justified in deciding the factual controversy.

11. Before we go into that question, it is also relevant to note that the Tuticorin Port Trust Democratic Staff Union filed Writ Petition No. 10907 of 1998 claiming the same relief and seeking absorption of their members in the Tuticorin Port Trust. In that case, the relief was granted as prayed for and it is admitted that the Tuticorin Port Trust has given effect to the order of this Court in the said writ petition. Similarly, the Canteen Workers of the Bombay Port Trust have also filed a similar writ petition and that has also been ordered in favour of the workmen.

12. Parimal Chandra and Others Vs. Life Insurance Corporation of India and Others, , was also a case where the Canteen was run by a Co-operative Society. There, the canteen workers approached the Supreme Court by way of a writ petition under Article 32. However, they withdrew the writ petition with liberty to move the High Court under Article 226. On a consideration of all the circumstances in that case, the Supreme Court came to the conclusion that the Co-operative Society and the Canteen Committees are really agencies of the Corporation.

13. In the present case, the writ petitioners, namely the Workmen, have listed in their affidavit, several factors to show that the canteen was under the total control of the Port Trust. In the counter filed by the Port Trust, this was not denied except to state that the canteen employees are inducted directly by the canteen management and that disciplinary action also lies with the canteen management. In fact, as regards the wage settlement, it is specifically stated that the wage settlement agreement implemented by the canteen management is on the same lines as that of the wage settlement that has been arrived at by the Port Trust employees. The fourth respondent has filed a separate counter in the writ petition, in which it is stated that the canteen employees do not have any separate service regulations, but they are governed by the settlement and that the Co-operative Society is governed by the provisions of the Tamil Nadu Co-operative Societies Act and that they are not entitled to claim the same status as that of the Port Trust employees.

14. Even before the learned single Judge, the Port Trust objected to deciding the factual issues in proceedings under Article 226 since the appropriate forum is only the Labour Court or the Tribunal. The learned single Judge observed that the averments in the affidavit have not been specifically denied in the counter affidavit except to state that the Management of the Port Trust has no control over the functioning of the canteen. Therefore, apart from a general denial, the various assertions were not specifically denied. The learned single Judge then proceeded to set down the various facts and circumstances that show the administrative control exercised by the Port Trust over the Canteen, and they are as follows :

(i) The fact that the establishment is kept open during the entire 24 hours with employees working in several shifts is not denied. Thereby, the necessity of the workmen to have their food inside the factory itself is confirmed and that the canteen is mainly intended only for the workers.

(ii) The fact that the Rules framed by the Society for running the canteen shall be subject to the approval of the Chairman is not denied. This proves that the ultimate control of the administration of the canteen is with the Port Trust.

(iii) It is only the workers belonging to the Port Trust who are eligible to become members of the Society and not others.

(iv) It is only the nominee of the Port Trust who can act as the Chairman of the Co-operative Society.

(v) The Port Trust administration has the right to audit the accounts of the canteen.

(vi) Electricity and water are supplied by the Port Trust free of charge. The premises is also held by the Society rent free.

(vii) As per bye-law 15, the fourth respondent Society, the President as well as four other contractors shall be nominated by the Registrar only in consultation with the Chairman of the Chennai Port Trust.

(viii) The Port Trust provides cost of the staff employed by the canteen, maintains the building, reimburses 100% of the fuel costs and all the benefits to the canteen employees.

(ix) The prices of the food stuff are very cheap and the food is carried in tricycles to the workers in the Marshalling Yard, ONGC Pipeline, Oil Dock, Diesel Loco and such other places where a canteen cannot be established and specifically intended only for the workers.

(x) The Executive Engineer (Mechanical) of the Port Trust has been nominated as the President of the canteen and the entire canteen affairs are handled and controlled by the Chief Mechanical Engineer of the Port Trust.

(xi) The financial matters are controlled by the Financial Adviser and Chief Accounts Officer of the Port Trust.

(xii) The President of the fourth respondent controls all policy matters concerning the canteen.

(xiii) It is a matter of common knowledge that at least as far as Chennai Port Trust is concerned, it is located in a place that the nearest restaurant or canteen would be at least two to three kilometres away from the entrance of the Port Trust. Therefore, the canteen is a must not only for employees, but also for the entire staff at various levels and also visitors having official and commercial dealings with the Port Trust. The Port Trust itself is a very large and sprawling area from one end to the other. Therefore, the canteen is an indispensable necessity to the Port Trust.

The learned single Judge thereafter observed that none of the aforesaid positive claims of the writ petitioner are denied by the respondents. It is only because there was no dispute on facts that the learned single Judge proceeded to decide the matter, though the workmen had directly filed the writ petition without approaching the Tribunal.

15. If we see the Indian Petrochemical''s case, the similarity of the factual issues is quite startling. In that case -

(a) The canteen has been there since the inception of the appellant''s factory.

(b) The workmen have been employed for long years and despite a change of contractors, the workers have continued to be employed in the canteen.

(c) The premises, furniture, fixture, fuel, electricity, utensils etc. have been provided for by the appellant.

(d) The wages of the canteen workers have to be reimbursed by the appellant.

(e) The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of the contract between the appellant and the contractor.

(f) The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the appellant.

(g) The workmen have the protection of continuous employment in the establishment.

On the basis of the above facts, the Supreme Court arrived at the opinion that the workmen were the workmen of the management and by the same process of reasoning, the learned single Judge also came to the conclusion that the canteen workmen were the workmen of the Port Trust. We see no error in this reasoning.

16. When there is no controversy on facts, it is not necessary that the workmen should again be driven to the Industrial Tribunal. Moreover, in respect of the Tuticorin and Bombay Port Trusts, which are identical in nature to the appellant Port Trust, the canteen workers have secured identical benefits. It is unreasonable to deny the workers here the same relief and therefore, the writ appeal fails and it is accordingly dismissed. No costs. Consequently, W.A.M.P. No. 133 of 2006 is closed.