1994 (5) TMI 266 - SC - Indian Laws

Summary

Issues Involved:
1. Nature of employment and entitlement to regularization.
2. Application of the Contract Labour (Regulation and Abolition) Act, 1970.
3. Rights of contract labourers to be absorbed by the principal employer.
4. Interim orders and their implications.
5. Final directions for absorption and conditions thereof.

Issue-wise Detailed Analysis:

1. Nature of Employment and Entitlement to Regularization:
The petitioners alleged that they were employed through various contractors at the respondent's Rourkela Plant, performing jobs that were perennial in nature and identical to those done by regular employees. They contended that they were entitled to the same pay and treatment as regular employees. The Court noted that the petitioners had been working for the respondent for 10 to 20 years under different contractors, with a term in the contracts ensuring continuity of employment for the workers of outgoing contractors. However, the Court emphasized that the mere inclusion of such a clause does not automatically grant the right to regularization.

2. Application of the Contract Labour (Regulation and Abolition) Act, 1970:
The Court elaborated on the provisions of the Contract Labour (Regulation and Abolition) Act, 1970, which aims to regulate and abolish contract labour in certain circumstances. The Act defines "contract labour," "contractor," and "principal employer," and imposes responsibilities on both contractors and principal employers to prevent exploitation. The Act allows for the prohibition of contract labour in specific processes or operations by the appropriate Government, considering factors such as the perennial nature of the work.

3. Rights of Contract Labourers to be Absorbed by the Principal Employer:
The Court observed a trend where contract labourers, after working for some years, claim absorption by the principal employer, especially when the employer is a government entity. However, the Court clarified that no right to absorption flows from the Act. Previous judgments, such as Gammon India Ltd. v. Union of India and B.H.E.L. Workers' Assn. v. Union of India, were cited to reinforce that the Act does not provide for automatic absorption of contract labourers by the principal employer.

4. Interim Orders and Their Implications:
The Court acknowledged various interim orders passed since 1986, which allowed the continuation of employment for the contract labourers despite the expiration of contracts. These orders included directions to new contractors to retain existing workers and to the respondent to prefer these workers if the respondent took over the contractors' jobs. The Court noted that these interim orders had resulted in the continued employment of many contract labourers, even in jobs where contract labour was still in use.

5. Final Directions for Absorption and Conditions Thereof:
Considering the long-term employment of the petitioners and the interim orders, the Court issued specific directions:
- Contract labourers continuously working for the last 10 years shall be absorbed as regular employees, subject to medical fitness and age criteria.
- Their seniority shall be determined based on continuous employment.
- They will not be entitled to back wages but will receive regular wages upon absorption.
- Post-absorption, they will be governed by the respondent's employment terms, and contractors cannot claim compensation for premature contract termination.
- The benefit of absorption does not extend to those who took voluntary retirement.
- The respondent may retrench absorbed workers in accordance with the law.
- Disputes regarding the identification of labourers for absorption will be resolved by the Chief Labour Commissioner (Central).
- The directions apply only to 142 jobs where contract labour continues, excluding the 104 jobs where it has been abolished.
- The order does not affect those already absorbed.
- Retrenched workers taken back as per Court directions are also entitled to these benefits.
- The respondent must comply with these directions within four months.

Conclusion:
The writ application was allowed with no order as to costs, directing the respondent to absorb eligible contract labourers under specified conditions and timelines.