http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: JAMSHEDPUR CONTRACTORS’ WORKERS’ UNION

       Vs.

RESPONDENT: STATE OF BIHAR AND ORS.

DATE OF JUDGMENT22/08/1990

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH PUNCHHI, M.M. RAMASWAMY, K.

CITATION:  1990 SCR  (3) 977        1991 SCC  Supl.  (1) 158  JT 1990 (3)   650        1990 SCALE  (2)402

ACT:     Industrial  Disputes  Act, 1947: S.  10/Contract  Labour (Regulation & Abolition) Act, 1970: S. 10--Contract  workers engaged by Tata Iron and Steel Company Ltd. in permanent and regular  nature of work--Whether entitled to  permanent  em- ployment under the principal employer.

HEADNOTE:     The  contract workers engaged by the management  of  the Tata  Iron and Steel Company Ltd., Jamshedpur in the  perma- nent and regular nature of work before February 11, 1981  in (1)  transportation of materials within the plant which  was not  dependent  on outside supply, (2)  processes  connected with  manufacturing  process, (3) removal  and  handling  of waste  products, and (4) sweeping and cleaning  of  machines etc.,  sought permanent employment under the  principal  em- ployer.  The  dispute was referred by the  State  Government under s. 10 of the Industrial Disputes Act to the Industrial Tribunal.     The  Tribunal  held  that the  workmen  constituted  the contract labour and, therefore, the reference was not  main- tainable.  It  further held that action, if any, had  to  be taken  under  s. 10 of the Contract Labour  (Regulation  and Abolition)  Act, 1970, power to take steps for which  vested in  the State Government and not in the Tribunal.  The  writ petition  challenging  the award was dismissed by  the  High Court in limine.     In  the  appeal by special leave it was brought  to  the notice  of the Court on behalf of the management  that  con- tract labour was now confined to item 3 only. Disposing of the appeal, the Court ordered:     1. The reference to the Tribunal shall now read: "Wheth- er  the  contract workers engaged by the management  of  the Tata  Iron and Steel Company Ltd., Jamshedpur in the  perma- nent  and regular nature of work before 11.2.1981 are  enti- tled to permanent employment in 978 regard  to items 1, 2 and 4 under the  principal  employer". [980B-C]     2. The State Government to take its own decision  within three  months  under the provisions of the  Contract  Labour

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

(Regulation and Abolition) Act, 1970 in regard to item No. 3 as  to  whether  the contract labour  employment  should  be terminated. [980D] 3. The Tribunal to dispose of the dispute within six months. [980F]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 4380  of 1990.     From  the Judgment and Order dated 4th October, 1985  of the Patna High Court in C.W.J.C. No. 4065 of 1985. R.K. Garg and A. Sharan for the Appellant.     K.K.  Venugopal,  P.  Chidambaram,  S.  Sukumaran,  K.K. Lahiri,  D.  Partha Sarthy and S.N. Jha (N.P.) for  the  Re- spondents. The following Order of the Court was delivered: Special leave granted.     We have heard Mr. Garg for the appellant, Mr.  Chidamba- ram  for  the Principal Employer and Mr. Venugopal  for  the respondent Union.   A  reference  was made by the State  Government  of  Bihar under  section  10  of the Industrial Disputes  Act  to  the Industrial  Tribunal,  Ranchi, on 9.7.81  referring  to  the following disputes for adjudication: (1)  Whether the contract workers engaged by the  management of  the Tata Iron and Steel Company Ltd., Jamshedpur in  the following permanent and regular nature of work before  11.2. 198 1 are entitled for permanent employment? (2)  Transportation of materials within the plant  which  is not dependent on outside supply; (3) All processes connected with the manufacturing process; 979 (4) Removal and handling of waste product; and (5) Sweeping and cleaning the machines, conveyors, shops and offices. The  Tribunal by its Award dated 18.12.1984-, came  to  hold that the workmen constituted the contract labour and, there- fore,  the reference was not maintainable. If  further  held that  action, if any, had to be taken only under section  10 of the Contract Labour (Regulation and Abolition) Act,  1970 and  the power to take steps under that statutory  provision vested in the State Government and not in the Tribunal.     It may be pointed out that prior to the reference  being made  to the Tribunal, the matter had been taken before  the Patna  High  Court and by judgment dated 4.9.1981  the  writ petition  was disposed of holding that a reference  had  al- ready been made to the Industrial Tribunal and the Award was awaited  and  it was open to the State  Government  to  take steps under section 10(1) of the Contract Labour (Regulation and  Abolition)  Act, 1970. The High Court in  its  ultimate conclusion indicated: "When the Award was finally made by the Industrial Tribunal, to  the  State Government, as the learned  Advocate  General assures  us, shall determine the matter in  accordance  with law. If after such an Award is made and no decision is taken by the State Government within a reasonable time, the  peti- tioners  shall be at liberty to move this Court again   .... " The  subsequent events have exposed the fallacy of the  con- clusion of the High Court. In fact if the provisions of  the Contract  Labour  (Regulation and Abolition) Act,  1970  had been  properly  kept in view; no reliance  could  have  been placed on the fact that the Award was awaited.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

   When the Award was made challenge was raised before  the High  Court but it refused to entertain the  writ  petition. The  appeal by special leave is against the in  limine  dis- missal of the writ petition.     We  have heard learned counsel for the parties  at  some length and it has been brought to our notice by Mr.  Chidam- baram  that  in regard to Items 1, 2 and 4 of the  heads  of dispute  as indicated in the reference, the contract  labour system is no more vogue and contract labour is now 980 confined  to Item 3 only. In view of the  changed  situation and taking into consideration the background of the  dispute as  also the fact that the litigation has been  pending  for almost a decade now, we do not think it would be appropriate to  take a technical view of the situation and  endorse  the decision  of  the Tribunal. We are, therefore,  inclined  to substitute  the  terms of the reference to the  Tribunal  by indicating that the reference shall now read thus: "Whether  the contract workers engaged by the Management  of the  Tata  Iron and Steel Company Ltd.,  Jamshedpur  in  the permanent and regular nature of work before 11.2. 198 1  are entitled to permanent employment in regard to Items 1, 2 and 4 under the Principal Employer."     In  regard to Item No. 3 it shall be for the State  Gov- ernment to take its own decision under the provisions of the Contract  Labour (Regulation and Abolition) Act, 1970 as  to whether the contract labour employment should be terminated, and since the State Government had already been  considering this matter for some time, we direct the State Government to take its decision in terms of the assurances held out by its learned  Advocate  General to the Patna High  Court  several years back within three months from now.     To  regulate the matter in a more effective  way  before the Tribunal and keeping in view the submissions made by Mr. Venugopal  we  direct  that ’the  Tribunal  shall  initially devote attention to identify the workmen who are desirous of being permanently absorbed under the Principal Employer  and after  such  identification is made, the  matter  should  be proceeded with in accordance with law. All parties should be given  full opportunity to raise their contentions and  sub- stantiate  the same with such evidence as they like to  lead but  the Tribunal shall ensure that the dispute is  disposed of  within six months from today. If necessary, full  atten- tion  should be given to this case so as to comply with  the direction  regarding disposal within the time limit  set  by us. There would be no order for costs. P.S.S.                                 Appeal disposed of. 981