P.R. Shivakumar, J.@mdashThis writ appeal is filed against the order of the learned Single Judge dated 01.02.2012 made in W.P.No. 24208 of 2011 wherein the first respondent in the writ appeal (The Management of Hanil Tube Private Limited) had challenged the order of the second respondent [Inspector of Factories, Kancheepuram (First Circle), Sriperumbudur/Competent Authority under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981], dated 26.09.2011 made in Application No. 2639 of 2010 filed by the appellants herein and 9 others seeking a direction to the first respondent management to accord permanent status to them as workmen in the Industrial Establishment of the first respondent.
2. The appellants herein along with 8 others (totally 31 persons) approached the Inspector of Factories, Kancheepuram (First Circle), Sriperumbudur/ the Competent Authority under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981, under Section 3 of the said Act with an application seeking a direction to the first respondent management to accord permanent status to them as workmen in the industrial establishment of the first respondent on the basis of their claim that they had completed 480 days of continuous service in 24 calender months. It was their contention before the second respondent/competent authority that though they were designated as trainees/apprentices/probationers etc., right from the date of their induction, without imparting any training with trainers, they were directly engaged in production activities in the first respondent establishment; that on completion of their engagement continuously for 480 days in 24 calender months, they were entitled to be made permanent and that the first respondent management, adopting unfair labour practice, had denied them such permanent status. The said application filed by them on 16.09.2010 was taken on file and numbered as Application No. 2639 of 2010 by the second respondent/competent authority.
3. Aggrieved by the delay in initiation of proceedings, the applicants in Application No. 2639 of 2010, approached this Court with a writ petition in W.P.No. 23169 of 2010 praying for the issue of a writ of mandamus directing the second respondent/competent authority to pass orders in the said application within a specified time and for a further direction to the first respondent management to maintain status quo without adversely affecting the conditions of their service till the second respondent/competent authority would dispose of the application. Pending disposal of the said writ petition, initially an order of status quo was granted. Thereafter, the said writ petition came to be disposed of by order dated 28.01.2011 directing the second respondent herein / Competent Authority to consider the early disposal of the above said application in accordance with law within a period of seven months from the date of receipt of a copy of the said order. However, the second part of the prayer made in the writ petition seeking a direction against the first respondent management to maintain status quo till the second respondent / competent authority would dispose of the application was rejected.
4. After the disposal of the above said previous writ petition, the second respondent herein/competent authority issued notice to the applicants in the above said application and also to the first respondent management and conducted an enquiry. Meanwhile, the first respondent management terminated the appellants in the writ appeal and took a plea before the second respondent/competent authority that there was no subsisting employer-employee relationship between the appellants herein and the first respondent herein. The above said contention was made in addition to the other contention of the first respondent management that the appellants were engaged as Trainees with the sole aim of making them acquire knowledge and experience in handling and operating equipments; that after the completion of training, they would be furnished with certificate, with the help of which they could either seek employment in the very same industrial establishment or seek better opportunities in other concerns; that as per the model Standing Orders applicable to the first respondent Industrial Establishment, the appellants were taken as trainees and they had to undergo training for three years; that on successful completion of training, suitable persons would be inducted as workmen whereupon they would be placed on probation and that on successful completion of probation alone, they would be made permanent employees of the first respondent Industrial Establishment. It was the further contention of the first respondent management that though 31 persons had made the application before the second respondent, during the pendency of the proceedings before the second respondent, five persons were absorbed by the first respondent as permanent employees and that the remaining persons were terminated either as trainees or as probationers after being inducted as probationers on completion of training and such termination was made in accordance with model Standing Orders applicable to the first respondent industrial concern.
5. After enquiry, the second respondent/competent authority came to the conclusion that though the appellants were inducted in the first respondent Industrial Establishment with specific designation as trainees, they were actually engaged as workmen and that hence, on completion of 480 days of continuous service by them within the period of 24 months, they were entitled to be conferred permanent status in accordance with Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. Besides holding that they were entitled to the benefit of the said Act and to the conferment of permanency in accordance with Section 3 of the above said Act, the second respondent/competent authority also made an observation that the termination of all the appellants subsequent to the filing of the applications by them claiming permanent status as workmen in the Industrial Establishment of the first respondent and well after the first respondent management had got knowledge of the same, would give raise to a presumption that the continued engagement of the appellants as trainees for about three years was with an oblique motive to deprive them of the benefits of the labour statutes, especially the conferment of permanent status under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. The second respondent/competent authority also made an observation that the first respondent management''s contention to the effect that the appellants were engaged as trainees /probationers, termination of such training and termination of some of them after having been absorbed as workers on probation were all done in accordance with the standing orders applicable to the Industrial Establishment of the first respondent was bound to be discountenanced for the simple reason that the Standing Orders applicable to the Industrial Establishment of the first respondent came to be certified only on 28.01.2010 i.e., very much after the appellants had completed 480 days of continuous service. Based on the above said findings, the second respondent / competent authority sustained the claim of the appellants herein by directing the first respondent management to grant permanent status to the appellants with effect from the respective dates on which each one of the appellants had completed 480 days of continuous service.
6. The said order of the second respondent/competent authority dated 26. 09.2011 passed in Application No. 2639 of 2010 was challenged by the first respondent in W.P.No. 24208 of 2011 in which the first respondent had prayed for the issuance of a Writ of Certiorari calling for the records of the second respondent relating to the impugned order and quash the same. The learned Single Judge, allowed the writ petition and quashed the impugned order of the second respondent dated 26.09.2011 holding that the appellants herein, having been engaged as trainees, could not be construed to be workers during the period of training; that they had not completed 480 days of continuous service after being inducted as probationers/regular workmen and that no part of the period during which they were engaged as trainees could be counted for computing 480 days of continuous service as workmen to seek permanent status under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. The learned single Judge has also held that the application filed by the appellants before the second respondent/competent authority became infructuous and not maintainable since all the appellants herein were terminated and discharged as on the date of enquiry made in the above said application, namely Application No. 2639 of 2010 thereby snapping the employer-employee relationship, if any, and that the second respondent''s jurisdiction was lost, the moment the appellants were terminated. The above said order of the learned Single Judge dated 01.01.2012 made in W.P.No. 24208 of 2011 is challenged by the appellants in the writ appeal on various grounds set out in the grounds of writ appeal.
7. The arguments advanced by Mr.Balan Haridas, learned counsel appearing for the petitioners, by Mr.S.Ravindran, learned counsel appearing for the first respondent and by Mrs.A.Sri Jayanthi, learned Special Government Pleader appearing for the second respondent were heard and we paid our anxious considerations to the same.
8. Out of 32 persons, who moved the application under Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, Viz., Application No. 2639 of 2010, the claim of five persons were dismissed by the second respondent as infructuous in view of the admission made by both parties that they were observed by the first respondent as permanent workmen during the pendency of the application. The claims of three more persons were dismissed by the second respondent based on their admission that they had not completed 480 days of continuous engagement as contemplated under Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 on the date of the application and on the date of their termination. They are the persons who figured as Applicant Nos. 1 to 5, 28, 30 and 31 in A.No. 2639 of 2010. None of the above said 8 persons challenged the order of the second respondent in respect of the disallowed portions of their claim. As such we are concerned with the claim of the remaining 23 persons alone, who are the appellants in the writ appeal (respondents 2 to 24 in the writ petition) .
9. Though the writ petition was allowed discountenancing the claims of all the 23 appellants and all of them filed the present writ appeal, at the time of hearing arguments, the learned counsel for the appellants submitted that Appellant Nos. 4, 5 & 6 were subsequently taken into service as permanent employees of the first respondent management and hence, the appeal is not pressed so far as the said appellants are concerned and also made an endorsement to that effect. In view of the said submission made by the learned counsel for the appellants, we have to consider the sustainability or otherwise of the claims made by the remaining 20 appellants alone.
10. The learned single Judge held that the claims of the appellants were unsustainable on two grounds:
1. that the appellants did not prove their case that though they were engaged as workmen and assigned regular work as opposed to training, they were designated as trainees / probationers with a view to deny the benefit of Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and that the finding of the second respondent competent authority, in this regard, was perverse; and
2. that the application filed by the second respondent had become infructuous and the second respondent / competent authority lost his jurisdiction since the appellants were terminated snapping the relationship of employer-employee between the appellants and the first respondent, if any, that subsisted earlier.
11. Let us take the second ground assigned by the learned singe Judge for consideration at the first instance. The learned single Judge referred to a judgment of a Division Bench this Court in
"7. On hearing the arguments advanced by the learned counsel appearing on either side and on perusing the above said decisions of the Supreme Court as well as judgment of this Court, the learned single Judge was of the view that it does not appear that the Court had declared the law positively to the effect that termination from service would be a complete bar to move the authority under the Tamil Nadu Act. The Supreme Court had taken note of the pendency of another writ petition by the same parties questioning the orders of termination and the Court felt that they could pursue or wait for the conclusion of that petition. The learned single Judge was also of the view that in Nellai Cotton Mills case, cited supra, also the issue as to whether the petition under the Tamil Nadu Act can be set in motion by a dismissed employee or not, did not arise for consideration specifically."
12. In the above said judgment, the Division Bench, referring to the view expressed by the Hon''ble Supreme Court in State of Tamil Nadu and Ors. Vs Nellai Cotton Mills Ltd., and others reported in 1990 (1) LLN 685 made the following observations also:
"Therefore, from the above said Supreme Court judgment it is understood that to claim permanent status under Sec.3 of the Act, there must be subsistence of master-servant or employer- employee relationship."
A thorough reading of the said judgment of the Division Bench of this Court will make it clear that the requirement that the employer-employee relationship should be subsisting was made with reference to the date of filing of the application and not with reference to the date of on which the application shall be disposed of.
13. This shall be clear from the following observations made in S.Sivakumar and Ors. Vs The Deputy Inspector of Factories and Anr. cited supra:
"13. ................Therefore, the petitioners on completion of continuous service of four hundred and eighty days in a period of twenty-four calendar months and before their dismissal from service by the respondent Management should have approached the Inspector under the Act seeking conferment of permanent status based on their length of service.
14. In view of the above discussion, we are of the considered view that for claiming the permanent status under Sec.3 of the Act, there must be subsistence of the relationship of master-servant or employer-employee between the parties and if this requirement is not satisfied even though the petitioners have completed four hundred and eighty days in a period of twenty-four calendar months in the respondent industrial establishment, in the absence of master-servant or employer- employee relationship between the petitioners and the respondent Management as on the date of making of the application under Sec.3 of the Act, they cannot maintain the application under Sec.3 of the Act seeking permanent status. Unless and until the order terminating their services are set aside by the competent authority, they cannot approach the competent authority under the Act seeking conferment of permanent status as per Sec.3(2) of the Act."
But the same cannot be stretched further to hold that the existence of employer-employee relationship is needed not only as on the date of application submitted to the competent authority under Section 3 of the Act, but also on the date on which the competent authority passes the order under the Act. If such an extreme view is upheld, it shall amount to granting a licence to unscrupulous employers to terminate the services of the workmen as soon as the competent authority initiates proceedings and thereby defeat the very purpose for which the Act came to be enacted.
14. In this regard, it is worth mentioning that in both
"This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country.
In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end.
Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited.
However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees.
This Court cannot countenance such practices any more. Globalization/ liberalization in the name of growth cannot be at the human cost of exploitation of workers."
In
"A bare perusal of the Section 3(1) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, casts an obligation on the Employer to confer permanent status on an Employee who has completed 480 days work in course of two years. During the life time of the husband of the Petitioner, no such permanent status was actually conferred by any order of the Management. It is true that jurisdiction has been conferred on the Inspector to conduct enquiry if necessary to find out whether an Employee has completed 480 days or not. However, merely because no such enquiry had been conducted by the Inspector, the petitioner''s husband cannot be denied the benefits of the Act. In view of the mandatory nature of the provision, it shall be taken that an employee who had completed 480 days in a period of two years was permanent."
Again a Single Judge in R.Lakshmi Vs The Chief Engineer (Personnel), Tamil Nadu Electricity Board in W.P.No. 5980 of 2004 order dated 08.02.2012 referred to the following question for the decision of a Larger Bench:
"Whether a Workman, who has completed 480 days of continuous service in a period of 24 calendar months, would become automatically a permanent Employee under the Employer or he will become a permanent Employee only on conferment of permanent status either by the Employer on his own or on a direction given by a Competent Authority under the Act?"
The Division Bench of this court in the said reference
"On going through the ingredients of Section 3(1) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, we are of the considered view that the Petitioner''s husband, completed 480 days of work in a period of 24 calendar months (during his lifetime), and would become automatically a permanent Employee under the Respondents/Tamil Nadu Electricity Board, because of the simple fact that the Section mandates the Respondents to confer permanent status on the petitioner''s husband S.Raju and the conferment of permanent status to the petitioner''s husband S.Raju/Employee/Workman would not depend upon his Employer on his own or on a direction given by the Competent Authority under the Act."
15. In the case of a dismissal of an employee, there is some kind of overlapping of the powers of Labour Court/Industrial Tribunal and the Inspector of Factories-cum-Competent Authority under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. While challenging the order of dismissal/non-employment by raising an industrial dispute before the Labour Court/Industrial Tribunal, the question as to whether such employee had acquired right under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, before his termination/non-employment can also be canvassed in the industrial dispute. But that does not mean that the power of Inspector of Factories-cum-Competent Authority under the Act can be defeated after it was properly invoked during the subsistence of the employer-employee relationship, namely by a subsequent dismissal/non-employment.
16. All the judgments relied on by the learned Single Judge are to the effect that the workman for claiming permanent status under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981, should have approached the Competent Authority under Section 3 of the Act during the subsistence of employer-employee relationship and before his termination. In none of the said judgments, it has been stated that the workman, who filed an application under Section 3 of the Act, would be deprived of the benefit under the Act by his subsequent dismissal by the employer. On a search being made, we are unable to lay our hands in any judgment supporting the above said view expressed by the learned Single Judge in his order impugned in this appeal. As such, we are unable to agree with the learned Single Judge that an application filed under Section of the Act shall become infructuous by the subsequent dismissal of the applicant employee by the employer / management.
17. Disapproving the said view expressed by the learned single Judge, we do hereby lay down the preposition that the jurisdiction of the competent authority validly invoked by filing an application under Section 3 of the Act during the subsistence of the employer-employee relationship shall not be taken away by the subsequent termination of such employee by the employer. However, the power conferred on the competent authority to direct rectification of the registers to be kept under the Act and also to issue a direction to the management to confer permanent status shall not include a power to adjudicate the question of justifiability or otherwise of the non- employment subsequent to the date of acquisition of permanent status or to direct reinstatement holding such termination to be unfair legal practice. The said power can be exercised only by the Labour Court/Industrial Court under the Industrial Disputes Act or by any other competent authority under any other statute conferring such power.
18. It is the contention of the appellants that though appointment orders were issued to them stating that they were taken as trainees, no training was imparted to them and on the other hand, from the date of their induction, they were engaged as workmen in the Industrial Establishment. In fact the claim of the appellants was made on the basis that the first respondent/management adopted the method of recruiting employees for doing regular work in the Industrial Establishment, but with a designation "Trainees" in order to avoid compliance with the labour statutes enacted to protect the interest of the workmen. In support of their contention, they not only relied on the fact that in an Industrial Establishment wherein several 100 persons were working, only 25 persons were shown to be permanent workmen and others were shown either as contract workers supplied by others or as trainees/apprentices/probationers, but also the absence of list of trainers and the failure on the part of the management to show what kind of training was imparted. They also strongly relied on the pay slips in which entries for deduction of employees'' contribution towards the Employees Provident Fund and also the deduction of employees'' contribution towards payment to employees State Insurance Corporation. According to the appellants, such deductions would not be made from the stipend of the trainees and the very fact that such deductions were made would show that they were inducted as workmen, but with a view to avoid conferring benefits under the labour statutes, they were designated as Trainees.
19. On the other hand, it was the contention of the first respondent/management that the appellants, who figured as witnesses on their side before the competent authority, had categorically admitted that they were taken by the first respondent management as Trainees on stipend and that such an admission, which shall form the best piece of evidence, was not at all considered by the second respondent /competent authority and the same was the reason why the second respondent came to the conclusion that the appellants were working as workmen even though they were designated as trainees. In fact, the learned single Judge, making a reference to the admissions made by the applicants during the enquiry before the second respondent /competent authority, has chosen to arrive at a conclusion that the finding of the second respondent in this regard was perverse. The said approach of the learned single Judge reveals his conviction that the admission was conclusive of the proof of the fact admitted. The same was the reason why the learned single Judge omitted to refer to the other evidence to arrive at a finding as to whether the finding rendered by the second respondent could be termed perverse?
20. In this regard, as rightly pointed out by the learned counsel for the first respondent, the second respondent / competent authority committed an error in holding that no Standing Orders applicable to the first respondent industrial concern was in force when the appellants entered the service of the first respondent Industrial Establishment for the simple reason that the Standing Orders of the first respondent industrial concern came to be certified only on 28.01.2010, whereas under law until the Standing Orders of the company are certified, the Model Standings Orders shall be applicable. Many aspects including the implication of deducting Provident Fund contribution and ESI contribution were also not adverted to either by the learned single Judge or by the second respondent / Competent Authority. Under such circumstances, we deem it appropriate to set aside the order of the learned single Judge dated 01.02.2012 and also the order of the second respondent dated 26.09.2011 and remit the matter back to the second respondent for fresh disposal on merits considering the entire evidence adduced on both sides.
21. In the result, the writ appeal is dismissed as not pressed so far as appellants 4, 5 and 6 are concerned. In respect of others, the writ appeal is allowed in part. The order of the learned single Judge dated 01.02.2012 made in W.P.No. 24208 of 2011 and the order the second respondent dated 26.09.2011 are set aside and the matter is remitted back to the second respondent for fresh disposal, in accordance with law within a period of four months from the date of receipt of a copy of this order. No costs.
