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PETITIONER: B.H.E.L. WORKERS’ ASSOCIATION HARDWAR & ORS., ETC. ETC.

       Vs.

RESPONDENT: UNION OF INDIA & ORS., ETC. ETC

DATE OF JUDGMENT18/01/1985

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) KHALID, V. (J)

CITATION:  1985 AIR  409            1985 SCR  (2) 611  1985 SCC  (1) 630        1985 SCALE  (1)58

ACT:       Contract  Labour (Regulation  and Abolition) Act 1970, Section 10  an i  Contract Labour (Regulation and Abolition) Central Rules 1971, Rule 25.       Public Sector Undertaking-’Contract labour’ engagement of by contractors -Claim of ’contract labour’ of performance of same  work as  workers directly  employed’ by undertaking but receiving  lesser Wages- Whether court entitled to issue declaration abolishing ’contract labour’ system.       Constitution of India 1950, Article 32.        Employment  of  contract  labour’  in  public  sector undertaking-Competency of court to enquire into question and issue declaration abolishing ’contract labour’ system.

HEADNOTE:       The  petitioner-union contended  in the writ petitions to this Court that out of the 16,000 and odd workers working within the premises of the respondent undertaking as many as a thousand  workers were  treated as  ’contract labour’  and placed under the control and at the mercy of contractors and that though  they did  the same work as the workers directly employed by  the undertaking,  they were  not paid  the same wages nor  were their conditions of service the same. It was further alleged  that the management pays to the contractors and in  turn the  contractors pay  them their  salary  after deducting  substantial   commissions  and   that  the  wages received by  them bear  no comparison with the wages paid to those directly employed by the undertaking. In view of these circumstances it  was  alleged  that  the  rights  of  these workers were infringed under Articles 14 and 19(1) (f) and a declaration was  sought from  the Court,  that the system of contract labour  prevalent in the respondent-undertaking was illegal, that  the ’contract  labour’ employees  were direct employees of  the  respondent-undertaking  and  entitled  to equal pay as the workmen directly employed, 612              The  respondent-undertaking  opposed  the  writ petitions and  contended that  if the  petitioners  had  any genuine grievance  they could have availed themselves of the rights secured to them under the Contract Labour (Regulation and Abolition)  Act, 1970  Minimum Wages  Act,  1948.  Equal Remuneration Act 1976 etc., for ventilation their grievances

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and seeking  appropriate relief, instead of invoking Article 32. It  was further  contended,  that  certain  jobs  though required to  be done  within the  plant area  could be  more conveniently and  efficiently done  on a job-con tract basis by  contractors   and  this   Was  actually   due   to   the incorporation of  new technology for expansion of production programme with  foreign collaboration.  The jobs  themselves were entrusted  to contractors and it was not appropriate to say that  the contractors  merely supplied  the labour, they were required  to do  the total  job and payment was made on the basis  of the  quantum of  work involved  and not on the basis of the workers employed by the contractor.       Dismissing the writ petitions, ^        HELD:   1.  The   Contract  Labour   (Regulation  and Abolition)  Act,   1970  does  not  provide  for  the  total abolition of  contract labour, but only for its abolition in certain  circumstances,   and  for  the  regulation  of  the employment of con tract labour in certain establishments The Act  is   not  confined   to  private  employers  only.  The definitions of  ’establishment’ section 2(e), and ’principal employer’ section  2(g), expressly include the Government or any of its departments. [616F, 617]       2.  No  invidious  distinction  can  be  made  against Contract labour.  Contract labour  is entitled  to the  same wages, holidays, hours of work, and conditions of service as are applicable to workmen directly employed by the principal employer of the establishment on the same or similar kind of work. They  are entitled  to recover  their wages  and their conditions of service in the same manner as workers employed by the  principal employer  under the appropriate Industrial and Labour  Laws. If there is any dispute with regard to the type of  work, the  dispute has  to be  decided by the Chief Labour Commissioner (Central). [620A-C]       3.  Parliament has  not abolished  contract labour but has provided  for its abolition by the Central Government in appropriate cases  under sec.  10  of  the  Contract  Labour (Regulation and  Abolition) Act,  1970. It  is not  for  the court to enquire into the question and to decide whether the employment of  contract labour  in any process, operation or other work  in any establishment should be abolished or not. This is  a matter  for the  decision of the Government after considering the matters required to be considered under sec. 10 of the Act. [620C-D]       4. Whether the work done by the Contract Labour is the same or  similar work  as that  done by the workmen directly employed by the principal employer of any establishment is a matter to  be decided by the Chief Labour Commissioner under the proviso  to Rule  25(ii) (v)  (a) of the Contract Labour (Regulation and Abolition) Central Rules, 1971. [620D-E] 31       In the instant case, from the allegations and counter- allegations made  in the writ petition it is not possible in an application  under Art.  32 to  embark  into  an  enquiry whether the  thousand and  odd workmen  working  in  various capacities and  engaged in  multifarious activities  do work identical with work done-by 613 the workmen  directly employed  by the  BHEL and whether for that reason  they should  be treated  not as contract labour but as direct employees of the undertakings. There are other forums created  under statutes  designed for  deciding  such question.      5. A direction would issue to the Central Government to consider whether  the employment  of Contract  Labour should not be  prohibited under  sec. 10 of the Act in any process,

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operation or other work of the public undertaking. [620E] 6. There  will   also  be  a  direction  to  the  Chief  Labour Commissioner to  enquire into  the question whether the work done by  the workmen employed by the contractors is the same type of  work as  that done by the workmen directly employed by the principal employer in the undertaking. [620E-F]

JUDGMENT:       ORIGINAL  JURISDICTION :  Writ Petition  ( Civil) Nos. 7982, 9874 and 9249 of 1983       (Under article 32 of the Constitution of India)       R.K. Garg, D.K Garg and A.K. Goel for the Petitioners.       G.L.  Sanghi, Kapil  Sibal, V.C.  Mahajan. Miss  Meera Mathur. S.  Sukumaran    O.C.  Mathur,  D.N.  Mishra,  Ashok Grover, C.K.  Mahajan, l.S. Goel, R.N. Poddar and C.V. Subba Rao for the Respondents.       The Judgment of the Court was delivered by       CHINNAPPA  REDDY, J.  These three  Writ Petitions Art. under 32  of the  Constitution of  India appear  to us to be entirely misconceived. In Writ Petition No. 7982 of 1983 and Writ Petition  No. 9874  of 1983, the respective petitioners are the  BHEL Workers  Association, Hardwar  and others  and Bharat Heavy Electricals Karamchari Sangh, Ranipur, Hardwar. They allege  that out  of the 16,000 and odd workers working within the  premises of the BHEL factory at Hardwar, as many as a  thousand workers  are treated as ’contract labour’ and placed under  the control  and at  the mercy of contractors. Though they  do  the  same  work  as  the  workers  directly employed by  the BHEL,  they are not paid the same wages nor are their  conditions of  service the same. They allege that the management  pays their  salary to the contractors and in turn the  contractors pay  them their salary after deducting substantial commission.  The wages  received by them bear no comparison with the wages paid to those directly employed by the BHEL. They say that they work within the premises of the BHEL in  different departments  under the direct supervision and control  of the  Chargemen, Foremen and Engineers of the BHEL. Their 614 working hours  are as  stipulated by  the BHEL. They work on the machines  of the  BHEL and  they are essentially part of the organisation  involved  ht  the  production  process  of manufacture carried  on by the BHEL. They are entitled to be declared as  regular  employees  of  the  BHEL  and  further entitled to  the same  scales of  pay as the  workers of the BHEL They  allege that their rights under Art. 14 and 19 (i) (f) are  infringed. It  is claimed that whenever a demand is made by them, they are thrown out of employment. They want a declaration from  this Court  that the  system  of  contract labour is  illegal, that  they are  direct employees  of the BHEL and  that they are entitled to equal pay as the workmen of the BHEL.       An  affidavit has  been filed on behalf of the BHEL by Shri P.C. Rao, Deputy General Manager, who while denying the allegations made  in the  petition, has  pointed out that if the petitioners  had any genuine grievance, they should have availed themselves of the rights  secured  to them  under the Contract Labour (Regulation and Abolition) Act,  Minimum Wages  Act, Equal Remuneration Act, etc,  for   ventilating   their   grievances   and   seeking appropriate relief  instead of  rushing to  this Court under Act. 32  of the  Constitution. It  is  pointed  out  in  the counter-affidavit that  certain jobs  though required  to be

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done within  the plant  area can  be more  conveniently  and efficiently  done  on a  job contract  basis  by  contractors.  This  is particularly so  in  regard  to  the  incorporation  of  new technology for  expansion of production programme called the LSTG  programme   with  foreign   collaboration.  The   jobs themselves are  entrusted to  the contractors  and it is not true to  say that the contractors merely supply labour. They are required  to do the total job and payment is made on the basis of  the quantum  of the  work involved  and not on the basis of  the number  of workers employed by the contractor. It is  further pointed out that contract labour on the basis of job  contracts is  usually employed  in  connection  with construction, erection  and commissioning  activities  which are purely  of a  temporary nature, transportation including loading  and   unloading  from   wagons,  trucks,  trailers, tractors  etc.   as  well   as  internal  transport,  jungle clearance, weed  removal and  other horticultural activities Work in  connection with  cleaning and  upkeep  of  approach roads and plant areas and work relating to modernisation and rationalisation, such as shifting of equipment, etc. is also done on  a job  contract  basis.  These  activities  require varying number  of workers  at different  times  and  it  is considered, as a matter of policy, that the works are better done by job contractors than by the BHEL itself which has to concern itself  primarily with  the manufacture of turbines, etc. 615        It   is  clear  from  the  allegations  and  counter- allegations that  it is  not possible  for this  Court in an application under  Art 32 of the Constitution to embark into an enquiry whether these thousand and odd workmen working in various capacities and engaged in multifarious activities do work identical  with  work  done  by  the  workmen  directly employed by  the BHEL  and whether  for that  reason they  B should be  treated not  as contract  labour  but  as  direct employees of the BHEL ? There are other forums created under other statutes designed for deciding such and like questions Perhaps realising  and futility  of asking us to compare the nature of  the work  done by  those directly employed by the BHEL and  those employed by contractors, the learned counsel chose to  advance the  extreme argument  that the court must declare a  total ban on the employment of contract labour by public  sector   undertakings.  It   was  argued   that  the employment of  contract labour  has  been  frowned  upon  by various  committees   appointed  by   the   Government   and Parliament itself  thought that  the employment  of contract labour was  undesirable and  therefore, enacted the Contract Labour (Regulation and Abolition) Act 1970. It was submitted that in  order to give effect the intention of Parliament as well as  the Directive Principles of State Policy, the court should declare  illegal the employment of contract labour by the State  or by any public sector undertaking which for the purposes of  Art. 12  of the  Constitution is  the State. In other words,  the counsel  wants this  Court by  its writ to abolish the  employment of  contract labour by the State and by all  public sector undertakings. We are afraid that would be nothing  but the  exercise of  legislative activity  with which  function   the  Court   is  not   entrusted  by   the Constitution.       It is true that for a long time, the maleficent nature of the system of contract labour and the destructive results which flow  from it  had been  noticed by various committees appointed  by   the  Government   including   the   Planning Commission and  that as  a result  of the  reports  and  the

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discussions  etc   that  took  place,  the  Contract  Labour (Regulation and  Abolition) Act,  1970 was passed. According to the Statement of Objects and Reasons:-            "The  system of  employment  of  contract  labour      lends itself  to various  abuses. The  question of  its      abolition  has   been  under   the   consideration   of      Government for  a long  time In  the  second-five  year      plan,   the    Planning   Commission    made    certain      recommendations,  namely,  undertaking  of  studies  to      ascertain the extent of the problem of Contract 616      labour, progressive abolition of system and improvement      of service,  conditions of  contract labour  where  the      abolition was not possible. The matter was discussed at      various meetings  of Tripartite Committees at which the      State Governments  were also  represented  and  general      consensus of  opinion was  that the  system  should  be      abolished wherever  possible or practicable and that in      cases  where   this  system   could  not  be  abolished      altogether, the  working conditions  of contract labour      should be  regulated so  as to  ensure payment of wages      and provision of essential amenities.      2. The  proposed Bill  aims at  abolition  of  contract      labour in respect of such categories as may be notified      by appropriate  Government  in  the  light  OF  certain      criteria that  have been  laid down,  and at regulating      the  service   conditions  of   contract  labour  where      abolition is  not possible.  The Bill  provides for the      setting  up   of  Advisory   Boards  of   a  tripartite      character, representing  various interests,  to  advise      Central and  State  Governments  in  administering  the      legislation  and  registration  of  establishments  and      contractors.  Under   the  Scheme   of  the  Bill,  the      provision and  maintenance  of  certain  basic  welfare      amenities for  contract labour, like drinking water and      first-aid facilities,  and in  certain cases rest-rooms      and canteens,  have been  made  obligatory.  Provisions      have also  been made  to guard  against details  in the      matter of wage payment".       The  long title  of the Act describes it as "an Act to regulate  the  employment  of  contract  labour  in  certain establishment and  to provide  for its  abolition in certain circumstances and  for matters  connected therewith." As the long title  itself indicates  the Act  does not’ provide for the total  abolition of  contract labour,  but only  for its abolition in  certain circumstances,  and for the regulation of  the   employment   of   contract   labour   in   certain establishments. Section  1 (4) applies to all establishments in which 20 or more workmen are employed or were employed on any day of the preceding 12 months  as  contract labour  and to every contractor who employs or has employed  on any  way of  the preceding  12 months 20 or more workmen.  The Act  does not  apply to establishments in which work  of an  intermittent or  casual nature  alone  is performed.  Section   2  (e)  defines  an  establishment  as meaning: (i)  any office or department of the  Government or local authority  ; or  (ii) any  place where  any  industry, trade, business,  manufacture or  occupation is  carried on. Section 2 (g) defines "principal employer" as meaning: 617      "(i) in relation  to any  office or  department of  the           Government or  a local authority, the head of that           office or  department or such other officer as the           Government or the local authority, as the case may           be, may specify in this behalf,

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    (ii) in a factory, the owner or occupier of the factory           and where  a person  has been named as the manager           of the  factory under the Factories Act, 1948, the           person so named,      (iii)     in a mine, the owner or agent of the mine and           where a  person has  been named  as the manager of           the mine, the person so named,      (iv) in any other establishment, any person responsible           for  the   supervision-   and   control   of   the           establishment.’’       The  definitions  of  ’establishment’  and  ’principal employer’ clearly  do not  exclude but  on  the  other  hand expressly include  the Government  or any of its departments and the  Act applied to them too. The Act is not confined to private employers  only. Section 2 (c) defines a contractor, in relation  to an  establishment, as  meaning ’a person who undertakes to  produce a  given result for the establishment other than a mere supply of goods or articles of manufacture to  such  establishment,  through  contract  labour  or  who supplied contract  labour for  any work of the establishment and includes  a sub contractor. Sections 3 and 4 provide for the constitution  of  Central  and  State  Advisory  Boards. Section 7 provides for the registration of an establishment. Section 8  provides for  the revocation  of registration and sec. 9  provides for the effect of non-registration. Section 10  which   is  important   provides  for  and  enables  the prohibition of  F  employment  of  contract  labour  in  any processes,  operations  or  other  work  employment  in  any establishment. Section 10 may be usefully extracted:              "(I) Notwithstanding anything contained in this      Act, the appropriate Government may, after consultation      with the  Central Board or, as the case may be, a State      Board,  prohibit,   by  notification  in  the  Official      Gazette, employment  of contract labour in any process,      operation or other work in any establishment. 618               (2) Before issuing any notification under sub-      section  (I)  in  relation  to  an  establishment,  the      appropriate  Government   shall  have   regard  to  the      conditions  of  work  and  benefits  provided  for  the      contract  labour   in  that   establishment  and  other      relevant factors, such as-                  (a) whether the process, operation or other      work is  incidental to,  or necessary for the industry,      trade, business,  manufacture  or  occupation  that  is      carried on in the establishment:               (b) whether it is of perennial nature, that is      to say,  it is  or sufficient duration having regard to      the nature of industry, trade, business, manufacture or      occupation carried on in that establishment;                  (c) whether  it is  done ordinarily through      regular   workmen   in   that   establishment   or   an      establishment similar thereto;                  (d) whether  it  is  sufficient  to  employ      considerable number of whole-time workmen,"               Section  12  provides  for  the  licensing  of contractors. Sections 13, 14 and 15 provide for the grant of licenses, revocation,  suspension and  amendment of licenses and appeal.  Sections 16  to 21  make detailed provision for the welfare  and health  of contract  labour. Section  20 in particular provides  that if  any  amenity  required  to  be provided for  the benefit of the contract labour employed in an establishment  is not  provided by  the contractor within the prescribed  time such   amenity shall be provided by the principal  employer.   Section  21   makes  the   contractor

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responsible for  payment of wages to each worker employed by him as  contract labour  but  further  prescribes  that  the principal employer  shall  nominate  a  representative  duly authorised by  him to be present at the time of disbursement of wages  by the  contractor. Sections  22 to 27 provide for penalities  and  procedure.  Section  28  provides  for  the appointment of  inspecting staff.  Section    30  makes  the provisions of  the Act  effective  notwithstanding  anything inconsistent therewith  contained in any other law or in the terms of  any  agreement  or  contract  of  service  or  any standing  orders   applicable  to   the  establishment.  It, however,  saves   to  the  contract  labour  any  favourable benefits that  the contract  labour may be entitled to under the agreement,  contract  of  service  or  standing  orders. Section 35 619 invests the  appropriate Government with power to make rules for A carrying out the purposes of the Act Rules made by the Central Government are required to be laid before each House of Parliament  for a total period of 30 days. In exercise of the powers  conferred by  section 35  of the Contract Labour (Regulation and Abolition) Act, 1970, the Central Government has made  the Contract  Labour  (Regulation  and  Abolition) Central Rules,  1971. Chapter  11 of  the rules  relates  to matters pertaining  to the  Central Advisory Contract Labour Board while Chapter Ill of the Rules deals with registration of establishments  and licensing  of  contractors.  Rule  25 prescribes the  forms terms  and conditions of licence. Rule 25 (ii)  (iv) prescribes  that it  shall be the condition of every licence that the rates of wages shall not be less than the rates  prescribed under  the Minimum Wages Act, 1948 for such employment  where applicable,  and where the rates have been fixed  by agreement, settlement or award, not less than the rates  so fixed. Rule 25 (ii) (v) (a) prescribes that it shall be the condition of every licence that-            "(v)  (a) in  cases where the workmen employed by      the contractor perform the same or similar kind of work      as the  workmen  directly  employed  by  the  principal      employer  of   the  establishment,   the  wage   rates,      holidays, hours of work and other conditions of service      of the  workmen of the con tractor shall be the same as      applicable to  the workmen  directly  employed  by  the      principal employer  of the establishment on the same or      similar kind of work:            Provided  that in  the case  of any  disagreement      with regard  to the  type of  work the  same  shall  be      decided by  the  Chief  Labour  Commissioner  (Central)      whose decision shall be final "            Similarly  Rule 25 (ii) ’ v) (b) provides that in      other cases the wage rates, holidays, hours of work and      conditions of  service of the workmen of the contractor      shall be such as may be specified in this behalf by the      Chief Labour  Commissioner (Central). While determining      the wage  rates, holidays,  hours  of  work  and  other      conditions of  service under  Rule 25  (ii) (v) (b) the      Chief Labour Commissioner is required to have regard to      the wage  rates, holidays,  hours  of  work  and  other      conditions of service obtaining in similar employments.      There is no dispute before us that the Payment of Wages      Act applies  as much  to contract  labour as  to labour      directly employed  by the  principal  employer  of  the      establishment. 620             Thus we see that no invidious distinction can be made against contract labour. Contract labour is entitled to

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the same  wages, holidays,  hours of  work and conditions of service as  are applicable  to workmen  directly employed by the principal  employer of  the establishment on the same or similar kind  of work.  They are  entitled to  recover their wages and  their conditions of service in the same manner as workers  employed   by  the  principal  employer  under  the appropriate Industrial  and labour  Laws. If  there  is  any dispute with  regard to the type of work, the dispute has to be decided by the Chief Labour Commissioner (Central). It is clear that  Parliament has not  abolished contract labour as such but  has provided  for its  abolition  by  the  Central Government  in  appropriate  cases  under  sec.  10  of  the contract Labour  (Regulation and Abolition) Act, 1970. It is not for the court to enquire into the question and to decide whether the  employment of  contract labour  in any process, operation or  other   work in  any establishment  should  be abolished or  not. This  is a matter for the decision of the Government after  considering the  matters  required  to  be considered under  sec. 10 of the Act. Similarly the question whether the  work done  by Contract  labour is  the same  or similar work  as that  done by the workmen directly employed by the  principal employer  of any establishment is a matter to be  decided by  the Chief  Labour Commissioner  under the proviso to  Rule 25 (ii) (v) (a). In these circumstances, we have no  option but  to dismiss  both the writ petitions but with a  direction to  the  Central  Government  to  consider whether the  employment of  contract labour  should  not  be prohibited under  sec.  10.  of  the  Act  in  any  process, operation or  other work  of the  BHEL, Hardwar.  There will also be  a direction  to the  Chief Labour  Commissioner  to enquire into  the question  whether the  work  done  by  the workmen employed by the contractors is the same type of work as that  done  by  the  workmen  directly  employed  by  the principal employer in the BHEL, Hardwar.       In Writ Petition No. 9249 of 1983. the petitioners are the employees  of Lal  Jhanda  National  Fertilizer  Limited Mazdoor Union Panipat. They pray for similar reliefs against the National  Fertilizer   Limited, Panipat  as in  the BHEL case. This  writ  petition  is  also  dismissed  subject  to similar  directions   to  the   State  of  Haryana  and  the appropriate authority  in the  State  of  Haryana  as  those issued in the BHEL case. N.V.K.                                  Petitions dismissed. 621