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PETITIONER: MANAGER, M/S. PYARCHAND KESARIMAL PONWAL  BIDI FACTORY

       Vs.

RESPONDENT: OMKAR LAXMAN THANGE & ORS.

DATE OF JUDGMENT: 27/09/1968

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. BHARGAVA, VISHISHTHA

CITATION:  1970 AIR  823            1968 SCR  (2) 272

ACT:     Industrial  Dispute--Transfer  of  employment  from  one employer  to  another--Such  transfer must  be  preceded  by termination  of  employment with first employer  and  a  new contract--Establishment  to  whom services of  employee  are lent  by  employer  has no right to  dismiss  employee  from service.

HEADNOTE:     The  appellant-firm had a number of factories  including one  at  Kamptee  in Vidharba.  Its  head  office  was  also situated there,.  The factory at Kamptee and the head office were  treated as separate establishment. the  factory  being registered under the Factories Act and the Head Office under the  C.P.  and  Berar Shops and  Establishments  Act,  1947. Respondent  No. 1 was originally employed at  the  aforesaid factory  but  later  he was directed to  work  at  the  head office.  When the Head Office dismissed him from service  he challenged the order of dismissal by an application under s. 16  of the C.P. & Berar Industrial Disputes settlement  Act. The Assistant Commissioner dismissed the application holding that  Respondent  No.  1 at the material  time  was  not  an employee of the factory but was employed in the Head Office. The Industrial Court refused, in revision, to interfere with the Assistant Commissioner’s order.  Respondent No.. 1 filed a  writ  petition under Art. 226 of the  Constitution.   The High Court observed that unless it was established that  the employment  of Respondent No. 1 in the factory  was  legally terminated it could be assumed merely because he was  direct to work in the head office, that his employment was  changed and  the  head office was substituted as  his.  employer  in place  of  the said factory.,  As the order  passed  by  the Assistant  Commissioner was not clear on this  question  the High Court remanded the case for disposal according to  law. The firm appealed to this Court.     HELD:  (i)  A  contract  for  service  is  incapable  of transfer  unilaterally. Such a transfer of service from  one employer   to another  can only be effected by a  tripartite agreement  between the employer, the employee and the  third party,  the  effect  of  which would  be  to  terminate  the original contract of service by mutual consent and to.  make a new contract between the employee and the third party.  So

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long  as  the contract of service is not terminated,  a  new contract  is  not   made  as  aforesaid,  and  the  employee continues   to  be  in  the  employment  of  the   employer. Therefore,  when an employer orders him to: do certain  work for  another person the employee still continues to  be  i.n his employment.  The only thing that happens in such a  case is  that  he  carries out the orders  of  his  master.  The. employee has the right to claim his wages from the  employer and  not from the third party to whom his services are  lent or  hired.   It may be that such a third party may  pay  his wages  during the time  that he has hired his services,  but that  is  because of his agreement with the  employer.  that does not preclude the employee from claiming his wages  from the  employer.   the hirer may also.  exercise  control  and direction in the doing of the thing for which he is hired or even  the  manner  in which it is to be done.   But  if  the employee fails to. carry out his direction he cannot 273 dismiss  him  and can only complain to the  employee.    The ’right of dismissal vests with the employer. [279 &F]     Such being the position in law, in the present case  the High  Court  was right in- setting aside the  order  of  the Assistant  Commissioner  and  the Industrial  Court  on  the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory came to  an end and a fresh contract with the head  office   came into  being,  Respondent  No.  1  continued  to  be  in  the employment of the factory and the head office therefore  was not competent to dismiss him. [281 F]     Mersey  Docks  and Harbour Board v. Coggins  &  Griffith (Liverpool) Ltd. [1947] A.C. 1 at 17, Century Insurance  Co. Ltd.  v. Northern Ireland Road Transport Board, [1942]  A.C. 509,  Quarman  v. Burnett, (1840) 6 M. & W. 499’,  Jones  v. Scullard, [1898] 2 Q.B. 565, Nokes v. Doncaster  Amalgamated Collieries,  Ltd. [1940] 3 All England Law Reports  549  and Denham v. Midland Employees Mutual Assurance Ltd., [1955]  2 Q.B. 437, referred to.     Jestamani   Gulabrai  Dholkia  v.  The   Scindia   Steam Navigation Company [1961] 2 S.C.R. 811, distinguished.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION:  Civil Appeal No. 793  of 1966.     Appeal  by  special leave from the  judgment  and  order dated August 21, 1964 of the Bombay High Court, Nagpur Bench in Special Civil Application No. 353 of 1963.     M.N.  Phadke,  Naunit  Lal  and  B.P.  Singh,  for   the appellant.     D.D. Verma and Ganpat Rai, for respondent No. 1.     The Judgment of the Court was delivered by     Shelat,  J.  This appeal, by special leave, is  directed against the order of the High Court of Bombay (Nagpur Bench) which set aside the orders of the Assistant Commissioner  of Labour  and  the Industrial Court, Nagpur and  remanded  the case to the Assistant Commissioner.     The appellant-firm conducts a number of bidi   factories at various places in Vidharba including the one at  Kamptee. Its  head  office  is also situate there.   The  factory  at Kamptee  and  the head office have always  been  treated  as separate   entities   though  owned  by   the   same   firm. Consequently,  the  head  office was  registered  under  the Central Provinces & Berar Shops and Establishment Act,  1947 and  the  factory  at  Kamptee  was  registered  under   the

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Factories Act.  The factory has also its own standing orders certified  under  the Central Provinces &  Berar  Industrial Disputes Settlement Act, 1947.  Respondent 1 was  originally employed  in  the factory at Kamptee.  Two  or  three  years thereafter  he was directed to work at the head  office  and worked  therein  for about six years prior to  the  impugned order  of dismissal passed against him by the munim  of  the head office.  Aggrieved by the order he flied 274 an  application under s. 16 of the C.P. &  Berar  Industrial Disputes  Settlement  Act alleging that the said  order  was incompetent and illegal.  The appellant-firm contended  that at the material time Respondent 1 was employed as a clerk in the head office, that the head office was a separate entity, that  the  dismissal  order  had not  been  passed  ’by  the appellant-firm  as the owner of the said factory,  that  the firm,  as  such owner, was wrongly impleaded  and  that  the application was misconceived.     The  Assistant  Commissioner dismissed  the  application holding  that Respondent 1 at the material time was not  the employee in the factory, but was employed in the firm’s head office.  He relied on the fact that the head office and  the factory  had separate rules, that Respondent 1 used to  sign his  attendance in the register of the head office, that  he was  being paid his salary by the head office,  and  lastly, that his name was not on the muster roll of the factory.  He also  found  that whereas the staff of the head  office  was governed by the C.P. & Berar Shops & Establishments Act, the factory was governed by the C.P. & Berar Industrial Disputes Settlement Act.  Against the dismissal of his  ,application, Respondent  1  filed  a  revision  application  before   the Industrial Court, Nagpur.  The Industrial    dismissed   the application  holding  that  the only question raised  before it  was  whether Respondent 1 was the employee of  the  head office  and  that that being purely a question of  fact,  he could not interfere with the finding of fact arrived  at  by the Assistant Commissioner.  Respondent 1 thereafter filed a writ petition in the High Court challenging the said orders. The  High  Court  held that it was possible in  law  for  an employer  to  have various  establishments  where  different kinds  of work would be done, in which case an  employee  in one  establishment  would  be liable to  be  transferred  to another  establishment.   But the High Court  observed  that unless it was established that the employment of  Respondent 1  in  the factory was legally terminated it  could  not  be assumed, merely because he was directed to work in the  head office, that his employment was changed and the head  office was  substituted  as  his  employer in  place  of  the  said factory.  As the order passed by the Assistant  Commissioner was not clear on this question, the High Court remanded  the case for disposal according to law.      Mr.  Phadke  for the appellants, raised  the  following contentions  against  the High Court’s order: (1)  that  the High  Court  made out a new case for Respondent 1,  in  that Respondent 1 had never challenged the validity of the  order of  dismissal  on  the ground that there was  no  change  of employment,   and  that  therefore,  the  head  office   was incompetent  to order his dismissal, (2) that the  facts  of the  case  justified the conclusion that  Respondent  1  had ceased  to be the employee of the factory, and (3)  that  in any  event he must be held to have given an implied  consent to 275 his  being treated as the employee of the head  office.   In support  of these contentions he relied upon the  fact  that

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Respondent 1 had worked at the. head office for the last six years  without  any  protest,  that  his  name  was  on  the attendance register of the head office, that it was the head office which paid his salary, and lastly, that he worked  in the head office under the direction and control of the munim of that office.     As  to the first contention, it would not be correct  to say  that the High Court made out a new case for  the  first time  for Respondent 1 which was not pleaded by  him  before the Assistant Commissioner.  In para 1 of his application he had  expressly  averred  that about three  years  after  his employment in the factory he had been ordered to work in the head  office.   In reply to the application  the  appellants conceded that though Respondent 1 was first employed in  the factory  and had worked there for about three years, he  had thereafter  been transferred to and been working as a  clerk in the head office.  There was, however, no averment in that reply that the contract of service of Respondent 1 with  the said  factory was at any time put an end to or that when  he was directed to work in the head office a fresh contract  of service was entered into. between. him and  the head office. The  Assistant Commissioner in his said order held that  the head office and the factory were two separate establishments registered   under   two  different  Acts,  and,  therefore, subject to different provisions of law. He further held that since  Respondent 1 was not actually working in the  factory and his name did not figure in the factory’s muster roll and was  not paid his wages by the factory, the applicant  could not  be said to be an employee of the said factory.  In  his revision application before the Industrial Court, Respondent 1 made an express plea that when he was directed to work  in the head office, he had received no notice from the  factory that  his  services  were terminated there or  that  he  had henceforth  become the employee of the head office.   It  is clear  from these pleadings  that it was not for  the  first time in the High Court that Respondent 1 contended as to the incompetence of the head office to take disciplinary  action against  him and to pass the order of dismissal.  The  first contention of Mr. Phadke, therefore, cannot be accepted.     As  regards the second and the third contentions,  there is  no  dispute  that though the head office  and  the  said factory  belong  to the same proprietors, they  were  always treated   as  two  distinct entities  registered  under  two different  Acts, that  Respondent  1 was employed  first  in the  factory  where  he  worked for 2 or  3  years  and  was thereafter  ordered  to  work  at  the  head  office   where admittedly he worked for about six years before the impugned order  terminating his services was passed.  The   question, therefore,   which  the  Assistant  Commissioner   and   the Industrial Court had to decide, in view of the pleadings  of the parties, was whether 276 Respondent  1 had ceased to be the employee of  the  factory and  was  in the employment of the head office at  the  time when the impugned order was passed, or whether his  services were  simply  lent to the head office and he  continued  all along to be the employee of the factory ?     The general rule in respect of relationship  of   master and  servant is that a subsisting contract of  service  with one master is a bar to service with any other master  unless the  contract otherwise provides or the master consents.   A contract   of  employment  involving  personal  service   is incapable  of transfer.  Thus, where a businessman  joins  a partnership firm and takes his personal staff with him  into the  firm,  his staff cannot be made the staff of  the  firm

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without the consent of the other partners.  of. Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd.(1). In  certain cases, however, it is. possible to say  that  an employee has different .employers, as when the employer,  in pursuance of a contract between him and a third party, lends or  hires  out the services of his employee  to  that  third party  for a particular work. Such an arrangement,  however, does  not  effect  a transfer of  the  contract  of  service between the employer and his employee, but only amounts to a transfer  of  the benefit of  his   services.   of.  Century Insurance  Co.  Ltd.  v.  Northern  Ireland  Road  Transport Board(").  In such cases where a third party engages another person’s employee it is the general employer who is normally liable  for the tortuous acts committed by the employee  and his liability is not affected by the existence of a contract between him and the third party under which the services  of the employee are lent or hired out for a temporary period to such third party.  In order to absolve the employer from the liability  and to make the person who.  temporarily  engages the employee or hires his services it is necessary to  prove that the relationship of master and servant was  temporarily constituted  between such third party and the employee,  and that  it  existed  at the time when  the  tortuous  act  was committed   by  the  employee.   There  is,    however,    a presumption  against  there  being such  a  transfer  of  an employee as to make the hirer or the person on whose  behalf the employee is temporarily working and a heavy burden rests on  the party seeking to establish that the relationship  of master and servant has been constituted pro hac vice between the  temporary employer and the employee  of.  Mersey  Docks and  Harbour  Board  v.   Coggins  &  Griffith   (Liverpool) Ltd.(1).   In cases where an employer has hired out or  lent the services of his employee for a specific work and such an employee has caused damage to another person by his tortuous act,  the question often arises as to who of the  two,  i.e. the  employer or the person to whom such services are  hired out or lent, is [1947] A.C. 1 at 17.                     (2) [1942] A.C. 509. 277 vicariously   responsible  for  such  damage.    In    cases commonly  known  as  cranes and carriage  cases,  courts  in England  evolved the rule of the employee being  temporarily the   employee   of   such  third  party   to   impose   the responsibility  on  him if it was established  that  in  the matter of the act, in the performance of which the  tortuous act  was committed, such third party had  exercised  control and  direction over the performance of the act  in  question and the manner in which it was to be performed.  The classic case  commonly cited and in which this rule was  applied  is Quarman V. Burnett (1) of. also Jones v. Scullard(2)   where Lord  Russel  applied the test of the power to,  direct  and control the act in performance of which damage was caused to another  person.  The position in law is,  therefore,  clear that  except  in the case of a statutory  provision  to  the contrary,  a right to the service of an employee  cannot  be the  subject matter of a transfer by an employer to a  third party  without  the employee’s consent.  Thus, in  Nokes  v. Doncaster  Amalgamated Collieries, Ltd. (3) where  an  order was   made  under  s.  154  of  the  Companies   Act,   1929 transferring all the assets and liabilities of a company  to another company.  Viscount Simon held that such an order did not mean that contracts of service between the appellant and the   transferer-company   also  stood   transferred.    The principle  that  even  in cases where  the  services  of  an employee  are  lent  to  a third  party  temporarily  for  a

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particular work, the employee still remains the employee  of the  employer is illustrated in Denham v. Midland  Employees Mutual  Assurance Ltd.(4). There Eastwoods Ltd. employed  Le Grands  to  make test borings on their property.  Le  Grands provided two skilled drillers with plant and tackle to carry out the borings and Eastwoods Ltd. agreed to provide one  of the labourers, one Clegg to assist those skilled men free of charge to Le Grands.  While the said work .was being carried out,  Clegg was killed in circumstances in which  Le  Grands were liable to pay  damages to  his widow on the ground that his  death  was caused on account of the  negligence  of  Le Grands   or  their  servants.   Le  Grands  sought   to   be indemnified by their insurers against their said  liability. They  were  covered by two policies, one  with  the  Midland Employers   Mutual  Assurance  Ltd.  in  respect  of   their liability  to  the employees and the other  with  Lloyds  in respect  of their liability to the public in  general.   The policy issued by the Midland Employers Mutual Assurance Ltd. provided  that if any person "under a contract  of  service" with  the  insured were to sustain any  personal  injury  by accident  caused during the period of employment,   and   if the insured became liable to pay damages for such injury the association would indemnify the insured against all sums for which  he  would  be so liable.  The policy  issued  by  the Lloyds  indemnified  Le Grands for any sums for  which  they might become liable to (1) [1840] 6 M. & W. 499. (2) [1898] 2 Q.B. 565. (3) [1940] 3 All England Law Reports 549. (4) [1955] 2 Q.B.437. 278 pay  in  respect  of death or accidental  bodily  injury  to persons and loss or damage to. property arising in or out of the  business  of  borings carried out by  Le  Grands.   The question was whether at the time of his death Clegg was  the servant of Le Grands  and under "a contract of service" with them as provided in their policy with the Midland  Assurance Ltd.   Dealing with  that  question, Denning, L.J.  observed that  the difficulty which surrounded such a  subject  arose because of the concept that a servant of a general  employer may  be transferred to a temporary employer so as to  become for  the  time being his .servant.  Such a concept  was,  he said,  a  very  useful  device to  place  liability  on  the shoulders  of the one who should properly bear it,  but  did not affect the contract  of service itself.  No contract  of service  can  be transferred from one  employer  to  another without the servant’s consent and such consent is not to  be raised  by operation of law but only by the real consent  in fact of the man express or implied.  He further observed:                   "In  none of the transfer cases which  has               been  cited to us had the consent of  the  man               been sought or obtained.  The general employer               has  simply  told  him  to  go  and  do   some               particular work for the temporary employer and               he  has gone.  The supposed transfer, when  it               takes place, is nothing more than a device---a               very convenient and just device, mark  you--to               put  liability on to the  temporary  employer;               and even this device has in recent years  been               very  much  restricted in its  operation.   It               only  applies when the servant is  transferred               so completely that the temporary employer  has               the  right  to.  dictate, not  only  what  the               servant  is  to do, but also how he is  to  do               it."

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Applying  these  principles  to the  facts  before  him,  he observed  that  he had no doubt that if a third  person  had been injured by the negligence of Clegg in the course of his work,  Le Grands and not Eastwoods would be liable  to  such third  person.  So. also, when Clegg himself was killed,  Le Grands were  liable  to  his widow on the same footing  that they  were  his  masters and  not  merely  invitors.   These results  were achieved in law by holding that  Clegg  became the  temporary  servant of Le Grands.  He  further  observed that there was no harm in thus describing him so long as  it was  remembered  that  it  was a  device  designed  to  cast liability  on  the  temporary  employer.   However,  on  the question  whether  Clegg was "under a contract  of  service" with Le Grands, he held that he was not, for his contract of service  was with Eastwoods. They had selected him and  paid his  wages  and  they alone could suspend  or  dismiss  him. Clegg  was  never  asked to consent to  a  transfer  of  the contract of service and he never did so. If he was not  paid his wages or if he was wrongfully dismissed from 279 the work, he could sue Eastwoods for the breach of  contract and  no  one  else.   If he failed  to  turn  up  for  work, Eastwoods alone ’could sue him.  He could, therefore, see no trace  of  a contract of service with Le Grands  except  the artificial  transfer raised by law so as to make  Le  Grands liable  to others for his faults or liable to him for  their own faults and that the artificial transfer so raised cannot be  said to be a contract of service within the said  policy of  assurance.  Le Grands, therefore, were not  entitled  to ’be indemnified by the Midland Assurance Company  under  the employers’   liability  policy  but  were  entitled  to   be indemnified by Lloyds under their public liability policy.     A  contract of service being thus incapable of  transfer unilaterally,  such a transfer of service from one  employer to  another can only be affected by a  tripartite  agreement between the employer, the employee and the third party,  the effect of which would be to terminate the original  contract of  service  by mutual consent and to make  a  new  contract between the employee and the third party. Therefore, so long as the contract of service is not terminated, a new contract is not made as aforesaid and the employee continues to be in the  employment  of  the  employer.    Therefore,  when   an employer orders him to do a certain work for another  person the  employee still continues to be in his employment.   The only  thing that happens in such a case is that  he  carries out the orders of his master.  The employee has the right to claim  his  wages from the employer and not from  the  third party  to  whom his services are lent or hired.  It  may  be that such third party may pay his wages during the time that he  has  hired  his services, but that  is  because  of  his agreement  with  the employer.  That does not  preclude  the employee  from  claiming his wages from the  employer.   The hirer  may also exercise control and direction in the  doing of  the  thing for which he is hired or even the  manner  in which  it is to be done. But if the employee fails to  carry out  his  directions  he cannot dismiss  him  and  can  only complain  to the employer.  The right of dismissal vests  in the employer.     Such  being  the position in law, it is  of  the  utmost importance  in  the present case that the appellants  at  no time took the plea that the contract of employment with  the factory was ever terminated or that the respondent gave  his consent,  express  or implied, to his  contract  of  service being  transferred to the head office, or that there  was  a fresh  contract of employment so brought about  between  him

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and the head office.  Unless, therefore, it is held from the circumstances  relied  upon by Mr. Phadke that there  was  a transfer  of  the contract of service or that  Respondent  1 gave  his consent, express or implied, to such  a  transfer, Respondent   1  would  continue to be  the  servant  of  the factory.  Since the case has been remanded to the  Assistant Commissioner,  we  refrain from making any  observations  as regards the effect of the admissions 280 said to have been made by Respondent 1 and relied on by  the Assistant Commissioner.     Mr.  Phadke,  however,  relied  on  Jestamani   Gulabrai Dholkia  v.  The  Scindia  Steam  Navigation  Company(1)  in support  of his contention that there was a transfer of  the contract of  employment and that it was not a mere  transfer of  the  benefit of the services of Respondent 1.   In  that case  the appellants were originally in the service  of  the Scindia  Steam Navigation Company.  In 1937 Air Services  of India   Ltd.  was  incorporated.   In  1943,  the   Scindias purchased  the  ASI and by 1946 ASI  became  a  full-fledged subsidiary  of  the  Scindias.  Between  1946  to  1951  the Scindias  transferred several of their  employees  including the  appellants  to the ASI.  The Scindias had a  number  of such  subsidiary  companies  and it was usual  for  them  to transfer  their  employees  to such companies  and  also  to recall them whenever necessary.  In 1953, the Government  of India decided to nationalise the airlines operating in India with effect from June 1953.  On April 6, 1953 the appellants wrote to the Scindias to recall them to their original posts but  the  Scindias refused to do so as they were  not  in  a position  to  absorb them.  They pointed out  that  a  Bill, called  the Air Corporation Bill, 1953, was  pending  before Parliament,  that under cl. 20 thereof persons working  with ASI  on the appointed day would become the employees of  the Corporation,  that under that clause they had the option  to resign if they did not wish to join the Corporation and that if the appellants exercised that option. the Scindias  would treat  them as having resigned from their service.  The  Act was  passed  on May 28, 1953.  Sec. 20 of the  Act  provided that  every employee of an existing air company employed  by such  company  prior  to  July 1,  1952  and  still  in  its employment immediately before the appointed day,  shall,  in so  far as such employee is employed in connection with  the undertaking which has vested in the Corporation by virtue of the Act, become, as from the appointed date, the employee of the  Corporation  in which the undertaking has  vested.   On june  8,  1953  the appellants made a  demand  that  if  the Corporation  were  to retrench any persons  from  the  staff loaned  to  ASI within the first five  years,  the  Scindias should  take them back. The Scindias refused.  None  of  the appellants had exercised the option provided by s. 20 (1  ). On August 1, 1953 ASI became vested in the Corporation   and s.  20(  1  )  came  into force  as  from  that  date.   The appellants contended inter alia that the contract of service between  them and the Scindias was not  transferable.    The contention  was rejected on the ground that by reason of  s. 20(1)  the  contract  of service  of  the  appellants  stood transferred  to   the   Corporation   and  that  though  the appellants  were  not originally recruited by ASI  and  were transferred  by  the  Scindias  to  the  said  company, (1) [1961] 2 S.C.R. 811. 281 they   were    the   employees   of  ASI   and    were  such employees  on   the  appointed day  and since they  had  not exercised  the  option  under s. 20( 1  )  they  became  the

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employees of the Corporation by operation of that provision. The Scindias, therefore, were no longer concerned with them. It  is true that the appellants were transferred to  ASI  on condition   that  they would receive the  same  remuneration and other benefits as they were getting in the Scindias  and further  that   it  was  possible to contend  that  Scindias alone   could   dismiss  them.   But   the  learned   Judges explained  that these were special terms applicable  to  the appellants.  But in spite of them they still had become  the employees  of  the  ASI  and  were  such  employees  on  the appointed day.  It seems that this conclusion was reached on the   footing that since ASI was the subsidiary  company  of the Scindias like several other subsidiary companies, and it was.  usual  for  the  Scindias to  transfer  any  of  their employees  to such subsidiary companies, the  appellants  on their  transfer were deemed to have consented to become  the employees  of ASI in spite of the right of the  Scindias  to recall   them  whenever  necessary  and  further  that   the appellants continued to be and were the employees of the ASI on  the  appointed day and were, therefore, governed  by  s. 20(1  )  if the Act.  It is clear that this was  a  case  of employees  becoming  the  employees of  the  Corporation  by virtue  if  the  operation  of  a  statute.   The  decision, therefore,  is not an authority for the proposition that  an employer can transfer his employee to a third party  without the  consent  of such employee or’ without  terminating  the contract  of employment with him.  That being the  position, the  case  of Jestamani v. The Scindia  Steam  Navigation(x) cannot assist Mr. Phadke.     In  our view the High Court was, right in setting  aside the  order of the Assistant Commissioner and the  Industrial Court on the ground that unless a finding was reached on the facts of the case that the contract of service with the said factory  came to an end and a fresh contract with  the  head office  came into being Respondent 1 continued to be in  the employment  of the factory and the head  office,  therefore, was  not competent to dismiss him.  The  appeal,  therefore, fails and is dismissed with costs. G.C.                                       Appeal dismissed. (1) [1961] 2 S.C.R. 811. 282