The DG Delhi Doordarshan Kendra v. Mohd. Shahbaz Khan

16. Per Contra, the learned counsel appearing on behalf of the respondent-workmen vehemently opposed the submissions made by the learned counsel for petitioner and submitted that the petitioner is patently wrong in claiming that the workmen were engaged by the petitioner through the contractor M/s Navnidh Carriers as they were directly employed by the petitioner as a casual labour and the respondents worked with the petitioner under the direct control and supervision, and the petitioner has paid the wages from 2nd August, 1998 till 1st February,

2001.

17. It is submitted that no documentary evidence has been adduced by the petitioner to show that the workmen had been hired through any contractor as the petitioner has failed to attest any document which would prove that the contract for work was given to M/s Navinidh Carriers. Therefore, the ground that the respondent was working under the contract of said contractor does not stand in the eye of law.

18. It is submitted that as per the record filed by the petitioner in the writ petition it is mentioned that the nature of work performed by M/s Navnidh Carriers is for transporters, loading and unloading contraction services on a commission basis for all over India. Hence, it is clear that M/s Navinidh Carrier specialises in a different area of service. Thus, they could not have possibly supplied the respondent-workmen to the petitioner under any contract, as they had no experience in the said field.

19. It is submitted that the respondent workmen have been employed by the petitioner for a period of more than five years without any break in the services and without any complaints. They were therefore entitled to be regularised in service with all the consequential benefits. It is submitted that when the workmen demanded regularisation, the petitioner terminated their services arbitrarily on 1st February, 2001.

20. It is submitted that it was already admitted by the witness of the petitioner during the cross examination before the learned Tribunal that the document pertains to the experience certificate issued by the official of the petitioner. Hence, after admitting the validity of the said document, the petitioner cannot take the plea regarding the contract labour. It is submitted that the petitioner has not filed any document regarding the contract labour as mandated by the Act and neither has obtained the license which is required under the Act to provide laborers to an entity.

21. It is submitted that the petitioner had neither given any show cause notice followed by charge sheet, nor conducted any domestic enquiry against the respondent-workmen, as required under the principles of natural justice.

22. Hence, in view of the forgoing submissions, it is submitted on behalf of the respondent that the present petition is devoid of any merits and is therefore liable to be dismissed.

ANALYSIS & FINDINGS

23. Heard the learned counsel for the parties and perused the record. This Court has given its thoughtful consideration to the submissions made by the parties. Since the grievance of the petitioner arise out of a common impugned order dated 15th October, 2007 as passed by the learned Tribunal. By way of this judgement, this Court shall adjudicate all the connected matters.

24. The petitioner has filed the present petition against the impugned common award passed by the learned Tribunal directing the petitioner to reinstate the respondents with 25% back wages. Therefore, this Court needs to adjudicate the present petition to decide whether the learned Tribunal adjudicated the dispute in accordance with the law or not.

25. For proper adjudication of this writ, this Court deems it necessary to look into two issues, firstly the question of non-adherence to the provisions of the Act, which provides for mandatory registration of the Contractor, and secondly whether there are other factors which would lead to the establishment of employer employee relationship between the petitioner and respondent-workmen.

26. Before delving into the first issue at hand, it is important for this Court to discuss the relevance of the Act and the intent of the legislature for such an enactment.

27. As mentioned earlier, the Act was established with an aim to fulfill two-fold objectives, i.e. the regulation of employment of contract laborers and the abolition of contract labour under certain circumstances. The legislation was enacted with the aim of preventing the misuse of contract labour and improving working conditions. It addresses the regulation and elimination of contract labour, with a primary objective to eliminate it whenever feasible. In cases where complete abolition is not possible, the Act emphasises the need to regulate working conditions to ensure fair wages and the provision of essential amenities for contract labour.

28. The above said objectives have also been affirmed by the Hon’ble Supreme Court in various cases related to the rights of the wage earners. Therefore, it is fair to say that the enactment of the Act aimed to oversee the supply of the workforce and to safeguard laborers from exploitation, which includes provisions to protect the rights of a contract labour, assigning responsibility to both the labour contractor and the principal employer.

29. Now coming to the relevant provisions of the Act, Sections 7 and 12 provides for the registration of organisations and licensing of contractors respectively. The said provisions read as under:

30. As evident, Section 7 provides for registration of the establishment with the Appropriate Government and imposes a duty on the principal employer to obtain the certificate for the said registration. Section 12 of the Act, provides for licensing of the contractors as notified by the Appropriate Government.

31. The perusal of both the provisions clarifies that the conditions as provided therein are of a mandatory nature, failing which the contractor and the principal employer shall be held liable.

32. In the pleadings, the petitioner has submitted that the learned Tribunal has solely relied upon the violation of the said provision and has therefore, concluded the establishment of an employer-employee relationship between the parties on the basis of the said violation. The petitioner has contended that the said reasoning is unsound in law and violation of the same does not anyhow establish a direct employeremployee relationship between the parties. Therefore, this Court needs to look into the settled principle regarding the said situation.

33. In Dena Nath v. National Fertilisers Ltd., (1992) 1 SCC 695, the Hon’ble Supreme Court clarified the position regarding the said issue and held as under:

18. The High Court of Kerala in the case of P. Karunakaran v. Chief Commercial Superintendent [1988 Lab IC 1346: (1988) 72 FJR 248: (1988) 1 Ker LJ 570] took the same view as was taken by the Punjab and Haryana High Court in the judgment under appeal. A similar view was expressed by the Delhi High Court in the case of New Delhi General Mazdoor Union v. Standing Conference of Public Enterprises (SCOPE) [(1991) 2 Delhi Lawyer 189]

19. The reference to the Labour Court/Industrial Tribunal could be as to whether it is necessary for the management to employ contract labour directly or indirectly; a question can as well be referred whether the engagement of contract labour was bona fide or it was a camouflage. In appropriate cases in industrial adjudication appropriate directions can be given to the principal employer in this behalf. This has been the subjectmatter of decisions by the Tribunals/Labour Courts and by this Court also. The case of Standard Vacuum Refining Co. of India Ltd. v. Workmen [(1960) 2 LLJ 233: AIR 1960 SC 948: (1960) 3 SCR 466] is a case on this point. It was a case where the workmen employed by an oil refinery demanded that the contract system of labour adopted by the company for cleaning maintenance of the refinery belonging to the company should be abolished and the said demand was referred for adjudication. It was found that the work for which the contract was given is incidental to the manufacturing process and is necessary for it and of a perennial nature which must be done everyday and in these circumstances the Industrial Tribunal directed the company to abolish the contract system of labour with effect from a particular date and to have the said work done through workmen engaged by itself. This direction was given in view of the fact that the work was of a permanent nature and the labour employed through contractor was receiving much less wages than the unskilled workmen of the company and they were not having any other benefits and amenities like provident fund, gratuity, bonus, privilege leave etc. On the award of the Industrial Tribunal the Supreme Court gave the finding that it was an industrial dispute as defined under Section 2(k) of the Industrial Disputes Act. In dealing with the question whether the Tribunal was justified in giving the directions for abolishing the contract system the Supreme Court noted that industrial adjudication generally does not encourage employment of contract labour in modern times and it would be necessary to examine the merits of the dispute apart from general consideration that contract labour should not be encouraged; and that in any case the decision should rest not merely on theoretical or abstract objections to contract labour but also on the terms and conditions of the contract labour and the grievance made by the workmen thereof. On facts the Supreme Court observed: (SCR p. 475) “It may be accepted that the contractor in the present case is an independent person and the system is genuine and there is no question of the company carrying on this work itself and camouflaging it as if it was done through contractors in order to pay less to the workmen. But the fact that the contract in this case is a bona fide contract would not necessarily mean that it should not be touched by the industrial tribunals. If the contract had been mala fide and a cloak for suppressing the fact that the workmen were really the workmen of the company, the tribunal would have been justified in ordering the company to take over the entire body of workmen and treat it as its own workmen. But because the contract in this case was bona fide, the tribunal has not ordered the company to take over the entire body of workmen. It has left to it to decide for itself how many workmen it should employ and on what terms and has merely directed that when selection is being made preference should be given to the workmen employed by the present contractor.” The Supreme Court also noticed that the industrial dispute was confined to the cleaning maintenance of the plant; the work was incidental to manufacturing process and the work is necessary for it and was of a perennial nature which must be done every day and such work is generally done by workmen in the regular employment of the employer and there would be no difficulty in having regular workmen for this kind of work. It noted that the matter would be different if the work done was of an intermittent or temporary nature or was so little that it would not be possible to employ full-time workmen for the purpose.

20. It would be noticed that after the aforesaid observations of the Supreme Court in the case of Standard Vacuum Refining Company [(1960) 2 LLJ 233: AIR 1960 SC 948: (1960) 3 SCR 466] the Parliament while giving power to the appropriate government to prohibit employment of contract labour in any process or operation or other work in any establishment gave the guidelines in clauses (a), (b), (c) and (d) of sub-section (2) of Section 10, as noticed earlier, and guidelines are practically based on the guidelines given to the Tribunals in the aforesaid case of Standard Vacuum Refining Company [(1960) 2 LLJ 233: AIR 1960 SC 948: (1960) 3 SCR 466] by this Court. The Act as can be seen from the scheme of the Act merely regulates the employment of contract labour in certain establishments and provides for its abolition in certain circumstances. The Act does not provide for total abolition of contract labour but it provides for abolition by the appropriate government in appropriate cases under Section 10 of the Act.”

34. Upon perusal of the aforesaid judicial dictum, it is evident that the non-adherence to the mandate of Section 7 and 12 of the Act does not directly establish an employer-employee relationship between the parties; rather the same can only attract the consequences as provided under Section 14 and 23 of the Act.

35. The aforesaid judgment had overruled the contrary position taken by the various High Courts and settled the law regarding the interpretation of both the provisions.

36. Therefore, this Court is of the view that the mere violation of the said provisions by the petitioner does not amount to the establishment of the employer-employee relationship between the parties and mere violation of the said provision cannot directly convert the relationship to that of an employer-employee.

37. Having dealt with the first aspect, it is imperative for this Court to now analyze whether there are other factors which establish an employeremployee relationship between the parties.

38. The employer-employee relationship is a sine qua non for the workers to avail the benefits under the ID Act, and therefore holds an important place for the workers to prove such a relationship.

39. In similar cases, the Hon’ble Supreme Court and various High Courts have dealt with the said issue and prescribed the metric to be met for the establishment of such a relationship between the parties. First among such matrices is the control test as applied by the Hon’ble Supreme Court for the first time in Shivnandan Sharma v. Punjab National Bank Ltd., 1955 SCC OnLine SC 1, whereby the Hon’ble Court referred to the principles enunciated in the common law jurisdiction and applied the same to the issues before it. The relevant paragraphs of the said judgment are reproduced herein:

12. It was contended on behalf of the respondent Bank that its agreement with the Treasurers shows that the latter had the fullest responsibility for the appointment and dismissal and payment of salary of the employees in charge of the Cash Department of the Bank and that therefore the Treasurers could not but be independent contractors. It has already been noticed that the appointment of such assistants as are entrusted with the work of the Cash Department is not under the absolute power of the Treasurers. The appointment has to be approved by the Bank and the Treasurers cannot continue to employ those workmen in whose fidelity and efficiency the Bank has no confidence. Hence both in the matter of appointment and dismissal of the employees the Bank reserves to itself the power to give direction to the Treasurers. Similarly in the matter of the payment of salary the money comes out of the coffers of the Bank, though it may be paid by the hand of the Treasurers. In this connection it was contended on behalf of the appellant that payment of salary of the employees in the Cash Department is made through the Bank itself but we have no tangible evidence in this case beyond the bare assertion at the Bar. But, in our opinion, the situation in respect of the appointment, dismissal and payment of salary of the employees of the Cash Department is analogous to that of the employees of a particular department of the Government, in which appointment and dismissal of ministerial staff may rest with an authority so empowered by the head of the department. Payment of salary may also be made by the appointing authority but the money comes out of the Government treasury. In those circumstances, can it be rightly asserted that those employees are not the servants of Government? The analogy may not be perfect, because, in the present case, the appointment and dismissal of the employees of the Cash Department is the joint responsibility of the Bank and its Treasurers. It has got to be so because the Treasurers are the guarantors of the fidelity and efficiency of the employees and the Bank has to exercise complete control over the day to day discharge of their functions because it is the Bank which is vitally and immediately concerned with the efficient and honest discharge of the duties of the assistants in the Cash Department, the efficient running of which is the most important of a bank's functions.

13. It will further be noticed with reference to the terms of the agreement set out above that whereas the Treasurers and their nominees have to take their orders from the Bank Manager or other such functionary, there is no specific provision that those nominees shall discharge their day to day functions under the direct control of the Treasurers or that they will be subject to the immediate control of the Treasurers in the discharge of their daily duties and in the matter of the grant of leave of absence. There could not be such a provision, as a dual control of that kind in the daily work of the employees would lead to a great deal of confusion and lack of discipline amongst the ministerial staff. The employees of the Cash Department have of necessity to be under the direct control of the Bank Manager or of some other functionary appointed by the Bank. It is the Bank which has undertaken the responsibility in the matter of their pay and prospects in the service and naturally therefore, such employees, even as other employees of the Bank, have to take their orders from the Bank. It must therefore be held that the Treasurers are the servants of the Bank and that their nominees must equally be so.

14. The Appellate Tribunal held that on a reading as a whole of the clauses of the agreement aforesaid the appellant was an employee of the Treasurers and not of the Bank, It did not address itself pointedly to the question as to what was the exact relation between the Bank and the Treasurers. It did not also consider the question as to what would be the position of the employees of the Cash Department vis-a-vis the Bank if it were held that the Treasurers themselves were the servants of the Bank and not independent contractors. Before the Appellate Tribunal both parties appear to have concentrated their attention on the question as to whether the employees of the Cash Department were servants of the Bank or of the Treasurers. In our opinion, that was not a correct approach to the determination of the controversy between the parties. If the Treasurers' relation to the Bank was that of servants to a master, simply because the servants were authorized to appoint and dismiss the ministerial staff of the Cash Department would not make the employees in the Cash Department independent of the Bank. In that situation the ultimate employer would be the Bank through the agency of the Treasurers. It was argued on behalf of the respondent that even if it were held that the Treasurers were the servants of the Bank and not independent contractors, the legal position of the employees of the Cash Department vis-a-vis the Bank would be the same, namely, that they will be in law the servants of the Treasurers. In our opinion, there is no substance in that contention. If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration, the employees thus appointed by the servant would be equally with the employer, servants of the master. It is not always correct to say that persons appointed and liable to be dismissed by an independent contractor can in no circumstances be the employees of the third party. This would be clear from the following observations of Lord Esher, M.R., in the case of Donovan v. Laing, Wharton & Down Construction Syndicate [(1893) 1 QBD 629 at 632]: “It is true that the defendants selected the man and paid his wages, and these are circumstances which, if nothing else intervened, would be strong to show that he was the servant of the defendants. So, indeed, he was as to a great many things but as to the working of the crane he was no longer their servant, but bound to work under the orders of Jones & Co., and, if they saw the man misconducting himself in working the crane or disobeying their orders, they would have a right to discharge him from that employment.” Those observations have been approved in the latest decision of the House of Lords in the case of Mersey Docks & Harbour Board v. Coggins & Griffith (Liverpool) Ltd. [1947 AC 1] The House of Lords distinguished that ruling on facts but did not depart from the general rule laid down in the earlier decision that the determinative factor is as to which party had control over the workers as to how they would do their job from day to day. Lord Macmillan in his speech at p. 14 has observed as follows: “Many reported cases were cited to Your Lordships but where, as all agree, the question in each case turns on its own circumstances, decisions in other cases are rather illustrative than determinative. So far as attempts have been made to formulate a criterion of general application, it cannot be said that these attempts have been very successful.”

15. It would thus appear that the question as to whose employee a particular person was has to be determined with reference to the facts and circumstances of each individual case. Lord Porter in the course of his speech in the reported case (supra) at p. 17 has observed as follows: “Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject-matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged.”

16. As indicated above, in the present case the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank through its Manager or other superior officer. We have therefore no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in holding that the appellant was an employee of the Bank. That being so, the Tribunal had the jurisdiction to make the directions it did in respect of the appellant. The respondent did not at any stage of the proceedings challenge the orders of the Tribunal on its merits. That conclusion being reached, there is no difficulty in upholding the orders of the Tribunal in respect of the appellant. It is therefore not necessary to pronounce upon the other points raised by the parties. The appeal is accordingly allowed with costs throughout.”

40. In Sushilaben Indravadan Gandhi v. New India Assurance Co. Ltd., (2021) 7 SCC 151, the Hon’ble Supreme Court reiterated the settled position and also traced the changes in the terms of acceptability of the control test by the Courts. While doing so, the Hon’ble Court referred to a number of judgments to understand the chronological evolution of the said test and held as under:

15. Ultimately, the Court in Dharangadhra [Dharangadhra Chemical Works Ltd. v. State of Saurashtra, 1957 SCR 152: AIR 1957 SC 264] held that it would be a question of fact to be decided by all the circumstances of the case. It was further held that the mere fact that the agarias did piece-rated labour, the work being seasonal, and the fact that they can engage others to do the work for them, would not detract from the fact that they are professional labourers who have been hired by the employer. Finally, the Court refused to exercise its discretion to interfere with the Industrial Tribunal's finding that on the facts of the case these agarias would have to be considered as workmen under the Industrial Disputes Act.

16. In Chintaman Rao v. State of M.P. [Chintaman Rao v. State of M.P., 1958 SCR 1340: AIR 1958 SC 388: 1958 Cri LJ 803], this Court held that Sattedars and their coolies were not workers within the meaning of Section 2(1) of the Factories Act. In so holding, the Court referred to the judgment of Dharangadhra [Dharangadhra Chemical Works Ltd. v. State of Saurashtra, 1957 SCR 152: AIR 1957 SC 264] and held that the fact that bidi rolling was done outside the factory premises, and that such rolling can be done at any time that the Sattedar chooses clinched the issue in favour of the fact that Sattedars and their coolies were independent contractors. The Court then hedged its decision by stating that it was not intended to lay down that under no circumstances can a Sattedar be considered to be a worker within the meaning of the Factories Act. Ultimately, everything depends on the terms of the contract entered into between such person and the employer.

17. In Birdhichand Sharma v. Civil Judge [Birdhichand Sharma v. Civil Judge, (1961) 3 SCR 161: AIR 1961 SC 644], this Court found on facts that the persons employed in a bidi factory, who could work at the time they chose, on a piece-rated basis, the caveat being that if they came after mid-day they were not allowed to work, even though the factory closed at 7 p.m., that such persons were workers under the Factories Act. The earlier two judgments [Dharangadhra Chemical Works Ltd. v. State of Saurashtra, 1957 SCR 152: AIR 1957 SC 264], [Chintaman Rao v. State of M.P., 1958 SCR 1340: AIR 1958 SC 388: 1958 Cri LJ 803] of this Court were discussed and emphasis was laid on the fact that the persons who were employed had to work within the factory premises and had to report to work before mid-day. Further, the “right of control” was extended to mean that so long as there is some amount of supervision by the management, inasmuch as the management has the right to reject the bidis prepared if they do not come up to the proper standard, would indicate that such persons would be workers.

18. In Shankar Balaji Waje v. State of Maharashtra [Shankar Balaji Waje v. State of Maharashtra, 1962 Supp (1) SCR 249: AIR 1962 SC 517: (1962) 1 Cri LJ 497], this Court set out the established facts between one Pandurang, who was employed by the owner of a factory manufacturing bidis, and the employer, as follows: (SCR pp. 253-54: AIR pp. 519-20, para

8)

19. On these facts, the judgment in Birdhichand [Birdhichand Sharma v. Civil Judge, (1961) 3 SCR 161: AIR 1961 SC 644] was distinguished and that of Chintaman Rao [Chintaman Rao v. State of M.P., 1958 SCR 1340: AIR 1958 SC 388: 1958 Cri LJ 803] applied. The Court held: (Shankar Balaji Waje case [Shankar Balaji Waje v. State of Maharashtra, 1962 Supp (1) SCR 249: AIR 1962 SC 517: (1962) 1 Cri LJ 497], SCR pp. 257 & 259-60: AIR pp. 521-22, paras 15 & 18-19)

19. We may say that this opinion further finds support from what we hold on the second contention. If Pandurang was a worker, the provisions about leave and leave wages should apply to him. We are of opinion that they do not and what we say in that connection reinforces our view that Pandurang was not a worker as the three criteria and conditions laid down in Chintaman Rao case [Chintaman Rao v. State of M.P., 1958 SCR 1340: AIR 1958 SC 388: 1958 Cri LJ 803] for constituting him as such are not fulfilled in the present case.”

20. In D.C. Dewan Mohideen Sahib & Sons v. United Beedi Workers' Union [D.C. Dewan Mohideen Sahib & Sons v. United Beedi Workers' Union, (1964) 7 SCR 646: AIR 1966 SC 370], the Court set out a sample agreement which disclosed the facts of the case before it, as follows: (AIR p. 373, para 4)

21. The earlier judgments of this Court were referred to in Dewan Mohideen Sahib [D.C. Dewan Mohideen Sahib & Sons v. United Beedi Workers' Union, (1964) 7 SCR 646: AIR 1966 SC 370]. After applying the tests laid down in the said judgments, this Court found: (AIR p. 375, para 12)

22. The next case in chronological order is of seminal importance in deciding which side of the line a particular set of facts would lead to a conclusion that a contract is one for service or of service. Thus, in Silver Jubilee Tailoring House v. Chief Inspector of Shops & Establishments [Silver Jubilee Tailoring House v. Chief Inspector of Shops & Establishments, (1974) 3 SCC 498: 1974 SCC (L&S) 31], this Court had to determine whether there is a relationship of employer and an employee between a tailoring shop and persons employed by the owner of the shop for stitching purposes under Section 2(14) of the Andhra Pradesh (Telangana Area) Shops and Establishments Act, 1951. Section 2(14) of the said Act defined a “person employed” as meaning, in the case of a shop, a person wholly or principally employed therein in connection with the business of the shop. The facts were set out in para 7 of the said judgment as follows: (SCC p. 501)

23. After referring to several judgments of this Court, the Court in Silver Jubilee Tailoring House [Silver Jubilee Tailoring House v. Chief Inspector of Shops & Establishments, (1974) 3 SCC 498: 1974 SCC (L&S) 31] then referred to judgments of the English and American courts as follows: (SCC pp. 505- 508, paras 19-23 & 25-29)

25. In Market Investigations Ltd. v. Minister of Social Security [Market Investigations Ltd. v. Minister of Social Security, (1969) 2 QB 173: (1969) 2 WLR 1] the Court said: (QB p.

183) „I think it is fair to say that there was at one time a school of thought according to which the extent and degree of the control which B was entitled to exercise over A in the performance of the work would be a decisive factor. However, it has for long been apparent that an analysis of the extent and degree of such control is not in itself decisive.‟

26. It is in its application to skilled and particularly professional work that control test in its traditional form has really broken down. It has been said that in interpreting “control” as meaning the power to direct how the servant should do his work, the Court has been applying a concept suited to a past age. „This distinction (viz. between telling a servant what to do and telling him how to do it) was based upon the social conditions of an earlier age; it assumed that the employer of labour was able to direct and instruct the labourer as to the technical methods he should use in performing his work. In a mainly agricultural society and even in the earlier stages of the Industrial Revolution the master could be expected to be superior to the servant in the knowledge, skill and experience which had to be brought to bear upon the choice and handling of the tools. The control test was well suited to govern relationships like those between a farmer and an agricultural labourer (prior to agricultural mechanisation) a craftsman and a journeyman, a householder and a domestic servant, and even a factory owner and an unskilled “hand”. It reflects a state of society in which the ownership of the means of production coincided with the profession of technical knowledge and skill in which that knowledge and skill was largely acquired by being handed down from one generation to the next by oral tradition and not by being systematically imparted in institutions of learning from universities down to technical schools. The control test postulates a combination of managerial and technical functions in the person of the employer i.e. what to modern eyes appears as an imperfect division of labour [See Prof. Kahn-Freund in (1951) 14 Modern Law Review at p. 505.].‟

27. It is, therefore, not surprising that in recent years the control test as traditionally formulated has not been treated as an exclusive test.

28. It is exceedingly doubtful today whether the search for a formula in the nature of a single test to tell a contract of service from a contract for service will serve any useful purpose. The most that profitably can be done is to examine all the factors that have been referred to in the cases on the topic. Clearly, not all of these factors would be relevant in all these cases or have the same weight in all cases. It is equally clear that no magic formula can be propounded, which factors should in any case be treated as determining ones. The plain fact is that in a large number of cases, the Court can only perform a balancing operation weighing up the factors which point in one direction and balancing them against those pointing in the opposite direction [See Atiyah, PS, “Vicarious Liability in the Law of Torts”, pp. 37-38.].

29. During the last two decades the emphasis in the field has shifted and no longer rests so strongly upon the question of control. Control is obviously an important factor and in many cases it may still be the decisive factor. But it is wrong to say that in every case it is decisive. It is now no more than a factor, although an important one [ See Argent v. Minister of Social Security, (1968) 1 WLR 1749 at p. 1759.].”

24. Ultimately, the Court in Silver Jubilee Tailoring House [Silver Jubilee Tailoring House v. Chief Inspector of Shops & Establishments, (1974) 3 SCC 498: 1974 SCC (L&S) 31] found that two important considerations clinched the issue in favour of deciding that the persons employed were employed wholly or principally in connection with the business of the shop. First and foremost, machines on which sewing took place were supplied by the proprietor of the shop. And, secondly, supervision and control in tailoring business terms would include the right to reject sub-standard work. These factors were held to outweigh the fact that such persons did not have to work exclusively for the owner of the shop as also that they are not obliged to work for the full day.

25. In Hussainbhai v. Alath Factory Thezhilali Union [Hussainbhai v. Alath Factory Thezhilali Union, (1978) 4 SCC 257: 1978 SCC (L&S) 506], this Court was confronted with persons who are engaged to make ropes from within a factory which manufactured ropes. What was argued before the Court was that the workmen were not the employer's workmen but only the contractor's workmen. The question that came up for consideration was whether they are “workmen” within the meaning of Section 2(s) of the Industrial Disputes Act. The test applied by this judgment to find out whether such persons are “workmen” was as follows: (SCC p. 259, para 5) “5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of the Constitution. The court must be astute to avoid the mischief and achieve the purpose of the law and not be misled by the maya of legal appearances.” Applying this test, the economic reality of control of the employer over the workman's subsistence, skill and continued employment pointed to such persons being direct employees of the owner.”

41. Therefore, the perusal of the above-cited cases clearly establishes the conditions mandatory for applicability of the control test where the control of the employer is tested on the basis of various factors.

42. The aforesaid judicial dictum establishes the ingredients of the test necessary for establishment of the employee-employer relationship between the parties. The cited judgments also summarized the conditions under which a workman can be termed as a direct employee of the employer. The said conditions can be categorized in two manner, firstly being the control over the nature of work performed and secondly, the manner in which the work is done.

43. The above-cited judgments also expounded certain other factors such as payment of salary, control over the work done, appointment of the workers etc. Therefore, the said factors also become important for the Courts to determine the relationship between the parties and this Court needs to analyse the present case on the touchstone of both the tests.

44. Before delving into the same, it is also imperative for this Court to reiterate that the Writ Courts cannot act as a fact-finding agency, rather can merely rely upon the material on record, i.e. the impugned order, and the documents attached by the petitioner and the respondents.

45. The nature and scope of powers conferred upon the Writ Courts has been explained by the Hon’ble Supreme Court and this Court time and again and therefore, the position of law as reiterated in the preceding paragraph is clear. Hence, the only limited question left before this Court is whether there is employer-employee relationship between the parties or not and if the impugned order passed by the learned Tribunal suffers from any illegality.

46. The relevant part of the impugned order reads as under: “ISSUE NO.1. It was submitted from the side of the workmen that they have been working as casual labours since 1996, 1997 & 1998 with management no.1. They worked under the sole control of the management. Their work was satisfactory. They were not paid minimum wages. The termination of their services is illegal & arbitrary. It was submitted from the side of the management that the workmen may have worked as ex-casual labours of the respondent. They were employed by M/s. Navnidh Carriers. The services of the workmen were terminated by the contractor. The contractor has not been made a party. It was further submitted that the workmen had earlier filed OA No.2367 of 1999 in the CAT, New Delhi raising all the points & CAT rejected their claim as there was no employer-employee relationship, It transpires from perusal of the documents that the workmen have been issued gate passes. The workmen Sh. Manohar, Sh. Dhanvir & Sh. Hans Raj have been issued gate passes from 1996 to 1997. All the workmen have been issued gate passes least from the year 1998. Paper No. B 31 is a photocopy document. It has been marked as exhibit WW1/1. This document indicates that the Caretaker has mentioned these workmen as casual labour. Paper No.WW1/3 is also a photocopy. It contains seal of the Asstt. STN Director. Paper No. B-45 is also a photocopy document, it has been admitted by the management & the workmen have been shown as daily wages casual workers. The management has issued a certificate to Sh. Shahbaz that he was casual worker. It was submitted from the side of the management that all these workmen are contractor's workmen. They have been engaged by M/s. Navnidh Carriers. Navnidh Carriers is not a contractor. From perusal of the documents of M/s. Navnidh Carriers it transpires that he has been given work order for supply of casual labours from 31.07.1998 & this work order has been extended to 31.01.2000. The gate passes issued to the workmen have been issued as visitors and not as workmen of M/s. Navnidh Carriers. For engagement of contract labour, the management has to follow the procedure laid down in CLRA Act, 1970. It is admitted to the management that these. workmen have worked in their organization as workers of M/s. Navnidh Carriers. M/s. Navnidh Carriers have not got thernselves registered under CLRA Act, 1970. for supply of casual labours. They have no licence for supply of a particular workman, so there appears to be no substance in the argument that the workmen are contractor's men. There is no contract agreement. M/s. Navnidh. Carriers has undertaken to supply workmen on work order pasis from 31.07.1998 whereas the workmen Sh. Manohar- & Sh.. Dhanvir, have been working from 1996 &1997 as is evident from the gate passes. It appears that the workmen were engaged directly by the management but later on they were placed under M/s. Navnidh Carriers & the work order was given to M/s. Navnidh Carriers for supply of workmen. There is no provision for supply of workmen on the basis of work order. The work order. under the circumstances is sham & ruse. The so- called contractor is only name lender. There is no contract or agreement infact. It was further submitted that the case of these. workmen have been decided in OA by order dated 01.07.2001. The CAT has not found employer- employee relationship between the management & the workmen. The management is obviously an industry. The CAT has no jurisdiction to decide the case of industrial workmen. However, it becomes quite evident from perusal of the judgment of the CAT that none was present from the side of the workmen. The order is ex- parte & ex-parte order does not have force of resjudicata. It also transpires from perusal of the documents that the management has given work order to M/s. Surabhi Transport Agency & thereafter M/s. Fleet Owner & Transport Carriers. The work is discharged on the basis of work order given to M/s. Surabhi Transport Agency & thereafter M/s. Fleet Owner & Transport Carriers. These Transport Carriers have no licence for supply of workers. They are transport agencies. In the circumstances the management has introduced their names to conceal the engagement of the workmen as daily wagers. In case contract becomes sham & ruse there is the employer employee relationship between management and the workmen. The workmen have been issued gate passes by the management directly. The workman Sh. Manohar has worked from 27.03.1996 till 01.02.2001. The workmen Sh. Dhanvir has worked from 06.11.1996 to 2001, Sh. Tej Pal has worked from 02.08.1998 to 2001 & Sh. Shahbaz has worked from 01.12.1998 to 02.01.2001. All these workmen have discharged more than 240 days work during the tenure of their engagement. They are direct casual daily wagers of the management and they are entitled to retrenchment compensation in view of section 25 F of the ID Act, 1947 and the documents of the aforesaid three carriers have been created to conceal the real fact of their engagement as casual labours. The management has issued letters treating them as casual labours. Thus, it is established by cogent documentary evidence as well as oral evidence that Sh. Manohar worked from 27.03.1996 till the date of his retrenchment, Sh. Dhanvir worked from 06.11.1996 till his retrenchment, Sh. Hans Raj worked from 1997 & Sh. Shahbaz & Tej Pal worked from 1998. All these workmen have worked continuously and they have completed 240 days in every year. It has been held in 2005 IX AD (S.C) 261 AS UNDER: - Daily waged earners are not regular employees. They are not given letters of appointments. They are not given letters of termination. They are not given any written documents which they could produce as proof of receipt of wages. Their muster rolls are maintained. in loose sheets. Even in cases, where registers are maintained by the government departments, the officers/clerks making entries do not put their signatures. Even where signatures of clerks appear, the entries are not countersigned or certified by the appointing authorities. In case of daily wagers, the management takes every effort. to conceal the documents regarding the engagement. The workmen are constrained to file photocopies which they have obtained somehow or the other. In the instant case the workmen have filed photocopies gate passes which have not been denied by the management. These gate passes relate to 1996, 1997 & 1999. The workmen can at best file photocopies of gate passes as the management takes gate passes. while issuing the other gate passes. There is no explanation as to how the gate passes have been issued to these workmen in 1996 & 1997 whereas M/s Navnidh Carriers was given work order from 31.07.1998. Ex. WW1/24, Paper No. B- 52 is a document of the management, it has been signed by Asstt. Station Director. The workmen have been shown as casual daily wagers. The workmen have been issued Identity Cards signed by Security Officer. These documents are no doubt photocopies but the originals cannot be said to be in the possession of the workmen & the management will always say that the originals are not available. The gate passes bear numbers & the photocopies have not been denied. These photocopies under the circumstances are admissible in evidence. The workmen have been working as daily wagers prior to their engagement through M/s. Navnidh Carriers. The management has not been able to explain as to why gate passes have been issued to these workmen in 1996 1997 & prior to 31.07.1998. It appears that M/s. Navnidh Carriers was introduced to conceal the engagement of these daily wagers. Engagement of the workmen through Carriers is also illegal, so in the facts & circumstances of the case there is employer - employee relationship between the management & the workmen. The management has engaged the other carriers just as M/s. Surabhi Transport Agency & thereafter M/s. Fleet Owner & Transport Carriers for supply of workmen on work order basis after removal of these workmen. The work is still going on. The work is of continuous and regular nature. In the circumstances it was necessary for the management to maintain muster roll register of daily wages employees. The workmen are the daily wagers of the management and they have performed more than 240 days work during the years of their engagement.”

47. upon perusal of the relevant parts, it is made out that the learned Tribunal had appreciated the material evidence on record and therefore, held that the respondents were directly employed by the petitioner and not through the services rendered by the Contractor i.e. M/s Navnidh Carriers Ltd.

48. The impugned order clearly shows that the workers had photocopies of the gate passes issued to them prior to the engagement of the Contractor. Furthermore, the appreciation letter as issued to some of the workers also suggest that the respondent workers were in direct control of the petitioner itself and not the contractor and that the work done by the said workers was therefore appreciated by the officials of the petitioner.

49. In their pleadings, the petitioner has contended that the learned Tribunal solely relied upon the violation of Sections 7 and 12 of the Act and therefore concluded the establishment of an employer-employee relationship, however, the perusal of the said order clearly depicts a contrary position with regards to the same.

50. The first few paragraphs of the above said order nowhere suggests that the learned Tribunal erred in doing so, rather it has merely referred to the said provisions to establish that there existed no contract for supply of the said laborers as the petitioner and the contractor failed to get themselves registered under the relevant provisions of the Act, a condition mandatory for the supply of labour.

51. As per the material on record, the employment of the respondent workers started at different times, but even before the petitioner entered into a contract with M/s Navnidh Carriers i.e. the year 1998, hence, this Court is satisfied that there existed a relationship between the parties even before M/s Navnidh Carriers entered into the scenario.

52. Furthermore, the issuance of gate passes might not always result in establishment of employee-employer relationship, however, the other material evidence such as the appreciation letter issued directly by the petitioner is a compelling piece of evidence regarding existence of such a relationship.

53. In any case, the termination of the respondent workmen directly by the petitioner establishes that the petitioner had direct control over the respondent-workmen, thereby, meeting the conditions enshrined to satisfy the ingredients of the control test.

54. Therefore, it cannot be said that the learned Tribunal has termed the relationship between the parties that of an employee-employer solely on the basis of non-adherence to the relevant provisions of the Act, rather the said decision has been supplemented by other material evidence such as the issuance of gate passes from 1996 onwards, whereas the contract for service was first entered into only in July, 1998.

55. At last, the petitioner has vehemently contended that the onus of proving the employee-employer relationship was on the respondent workmen, which they failed to do this. The said contention needs to be outrightly rejected mainly for two reasons, firstly, the workmen belonging to the poor strata of society are uneducated and cannot be expected to maintain all the records of their employment, and secondly, the settled position of law clearly states that the referral of a dispute to an Industrial Tribunal would directly lead to the assumption of the existence of employee-employer relationship.

56. The said assumption is an exception to the general rule where the onus is said to be on the employee to prove the existence of such a relationship, however, the relevant provision of the ID Act, i.e. Section 10 provides for the said exception. The said provision is reproduced herein:

57. The abovesaid provision of the ID Act clarifies that the disputes referred to the Industrial Tribunal would be considered as Industrial Dispute. Consequently, for a dispute to be referred to the Tribunal, the presence of an employer-employee relationship is assumed and the onus is on the employer to demonstrate the absence of such a relationship. Unless the employer provides substantial evidence refuting the fulfilment of the same, the presumption of an employee-employer relationship remains in place.

58. In the present case, the engagement of the respondent workmen prior to the year of engagement of the contractor, issuance of gate passes to the workmen by the petitioner and issuance of the appreciation letter are relevant for determining the existence of an employee-employer relationship between the parties. Therefore, this Court does not find any infirmity with the findings of the learned Tribunal as the circumstantial evidence is sufficient to establish the direct relationship of an employeeemployer between the parties.

59. In light of the foregoing discussions, this Court is of the view that the petitioner has failed to highlight any infirmity and illegality with the findings of the learned Tribunal. The factual matrix and the circumstantial evidence, as relied upon by the learned Tribunal do establish a relationship of such a nature where the petitioner was solely in control of the functioning of the respondent workmen and thereby directly terminated their employment.

CONCLUSION

60. It is a well established fact that the labour force in our country mainly consists of the marginalised and economically backward people. Oftentimes, there is huge disparity in the bargaining power of the said labor force and the principal employers and therefore, the workers are forced to live at the whims and fancies of their employers.

61. The present case satisfies the ingredients of an industrial dispute, where the workers had completed the minimum threshold of number of days and therefore, it was a fit case for the learned Tribunal to rule in favour of the workers. The settled position of law empowers the adjudicating bodies to direct the principal employers to compensate for the illegalities committed by them.

62. Therefore, this Court is of the view that the impugned order as passed by the learned Industrial Tribunal is legally sound and does not suffer from any illegality.

63. In light of the same, the impugned common order dated 15th October, 2007 passed by the learned Tribunal is upheld and accordingly, the present petitions, being devoid of any merit are dismissed.

64. Pending applications, if any, also stand dismissed

65. The order be uploaded on the website forthwith.

(CHANDRA DHARI SINGH) JUDGE December 12, 2023 SV/AV