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TMI Blog1990 (2) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ns is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees. 2. For our purpose, these canteens have to be classified into three categories, viz. (i) Statutory Canteens--These are canteens required to be provided compulsorily in view of the provisions of Section 46 of the Factories Act, 1948 (hereinafter referred to as the Act) since the Act admittedly applies to the establishments concerned and the employees working in the said establishments exceed 250; (ii) Non- Statutory Recognised Canteens--These canteens are run in the establishments which may or may not be governed by the Act but which admittedly employ 250 or less than 250 employees, and hence, it is not obligatory on the railways to maintain them. However, they have been set up as a staff-welfare measure where the employees exceed 100 in number. These canteens are established with the prior approval and recognition of the Railway Board as per the procedure detailed in the Railway Establishment Manual; and (iii) Non-Statutory Non-Recognised Canteens--These canteens are run at establishments in category (ii) above but emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quipment of the canteen the foodstuffs to be served and the prices to be charged for them. In other words, the whole paraphernalia of the canteen has to conform to the statutory rules made in that behalf. As is pointed out on behalf of the Railways, it appears that there are 89 such statutory canteens functioning in the railway premises. 5. It appears that the workers working in the statutory canteen at Loco-Carriages and Electrical Workshops of the South Eastern Railways Workshop, Kharagpur had preferred a writ petition in the Calcutta High Court praying for a direction to the Union of India to recognise them as railway employees and grant them a11 service conditions available to the railway employees. A learned Single Judge by his decision dated 7.8. 1973 dismissed the said petition holding that the workers were not entitled to the reliefs claimed by them. Against the said decision, the workers preferred an appeal before the Division Bench of the said Court and the Division Bench by its decision of July 16, 1974, allowed the same and directed the respondent Union of India to recognise the workers as employees of the Railway Administration under the Factories Act, but rejected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Manual which had declared that in cases where the canteens were being run on cooperative basis either by the Co--operative Society or the managing committee of the staff, the canteen staff shall not be treated as railway servants because in that case master and servant relationship existed between the Co-operative Society (through its managing committee) and the concerned employees. The High Court had relied upon the fact that even in such cases the entire cost of the staff was reimbursed by the Railway Administration to the Co-operative Society managing committee and that over-all control over the canteen and the staff, vested in the Railway Administration. In fact, the direction under para 2832 of the Railway Establishment Manual was that where even a Co-operative Society was running the canteen, the bye-laws of the Society should be suitably amended to provide for such overall control by the Railway Administration since the legal responsibility for the proper management of the canteen vested not with the agent like the Co-operative Soceity but solely with the Railway Administration. 6. 1t is undoubtedly true, however, that this Court in its Order dated October 22, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was made clear that those who opt for the revised scales would not be eligible to other facilities/perquisites admissible to them in their existing pay scale such as free food, snacks, commission etc. A period of three months was given for exercising the option and it was stated that if no option was exercised it would be assumed that the employees conhttp:// cerned had elected to be governed by the revised pay scales w.e.f. October 22, 1980. The Schedule annexed to the letter mentioned, among other things, that the canteen employees will be entitled to the dearness allowance, house rent allowance and city compensatory allowance as per the instructions issued by the Railway Ministry; that the age of retirement of employees would be 58 years as in the case of other railway employees; and that the employees of the canteen would be entitled to the benefit of productivity linked bonus on the principles applicable to the stall of the office/establishment to which they were attached from the date of their being declared as railway servants. 8. In a decision of this Court reported in 1988 (4) SCC 478, this Court directed that for the purpose of calculating pensionary benefits, the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation on the Railway Administration to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons. The paragraph further mentions that Railway Administration should strictly abide by the rules which are framed by the respective State Governments under sub-section 2 of the Act regarding the constitution of the Managing Committees of such canteens. Paragraph 2832 then ordains that the staff served by the said canteens should be actively associated in their management, and for this purpose a Committee of management of the staff should be formed in accordance with the rules framed by the concerned State Government. The paragraph further states that although the Administration can employ as agent a Staff Committee or a Co-operative Society for management, the legal responsibility for proper management rests not with the agency but solely with the Railway Administration. In case the management is entrusted to a consumer co-operative society the bye-laws of the society are directed by the said paragraph to be amended suitably to provide for an overall control by the Railway Administration. Paragraph 2834 deals with the incidence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efence, P T and Railways, unless these three Ministries had previously decided to exempt any of their Canteens/Tiffin Rooms from the purview of the said Instructions due to specific reasons, and they had framed or they propose to frame a separate set of instructions for the exempted canteens. (para 1.4). The Instructions further state that the policy matters and coordination on canteen matters will be centrally done by the Deptt. of Personnel and Training (Director of Canteens) (para 1.14). To be entitled to subsidy all the departmental canteens have to get themselves registered centrally with the Director of Canteens and Training (Para 1.15). The canteens are entitled to subsidy on wages and gratuity payable to the workers employed in the canteens and for their uniforms as well as to capital and replacement grants for equipment including utensils, crockeries, cuttlery and furniture and also to interest-free loans. In addition to subsidy for equipment, the canteens are also entitled to other facilities such as accommodation on nominal rent of Rs. 1 electricity, water etc. The Instructions in terms state that since the canteens are run departmentally as a measure of staff welfare, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng committee should normally be the Welfare Officer or the Administrative Officer of the Department/ Office of the minimum rank of a Section Officer or a Major or equivalent in services, who shall be nominated by the Office/Establishment, and in the case of Co-operative Canteens may be elected as per the bye-laws of the Society. One of the officials who should be of the rank of Section Officer/Major or above is to be nominated on the managing Committee by the Chairman. Paragraph 6.11 defines the Legal Status of the Managing Committee. It says that the Committee functions in the Deptt./Office/establishment of the Government of India for the welfare of the Govt. employees, under the orders of the Government of India and its functions are connected with the affairs of the Union. The Committee, therefore does not enjoy an autonomous status. With respect to the contractual obligations, it functions "for and on behalf of the the President of India". The proceedings of the Committee will not be conducted or decided on resolutions or voting system, but the official decision will rest with the Chairman of the Managing Commitsee or the Head of the Department/Office. In the case of canteens r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned should not be given the status of the railway employees with all consequential benefits. On the other hand, the contention advanced on behalf of the Railways is that the documents in question show that the employees of the statutory canteens are to be deemed railway employees only for the purpose of the Factories Act and for no other purpose. In no case, they can be deemed as holders of civil posts either for Article 309 or for Article 311 or for any other purpose. 18. On behalf of the employees, a preliminary objection was raised, namely, that in view of the order of this Court dated October 22, 1980 in Civil Appeal No. 368 of 1978 and another, it is not open to the Railways to agitate the question whether the employees in the statutory canteens are railway employees or not, and further whether they are railway employees for the purposes of the Factories Act. We are not inclined to entertain this objection for it is clear from the said order that the Court had left open even the question as to whether the employees of the statutory canteens were railway employees for the purposes of the said Act. Hence, the question whether they are employees of the railways for all pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court in those matters was whether the employees either of the statutory or non-statutory canteens were the railway employees for the purposes of the Factories Act. The larger issue whether they were railway employees for all purposes was neither discussed nor even tentatively decided in those proceedings. We are, therefore, of the view that both the said issues are at large in the case of the employees of the statutory as well as of the non-statutory canteens. 19. Before us therefore two issues arise for consideration, viz. (a) whether the employees of the statutory canteens are railway employes for the purposes of the said Act? and (b) whether they are railway employees for all other purposes as well? 20. As regards the first contention, namely, whether the said employees are the employees of the Railway Administration for the purposes of the said Act, according to us the view taken by the Calcutta High Court in that behalf is correct. Section 2(1) of the Factories Act defines "worker" as follows: "Worker" means a person employed, directly or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory canteens, as railway servants irrespective of the type and management of the canteens, and to extend to them the conditions of service and emoluments of the railway servants as existed on October 21, 1980, w.e.f. 22nd October 1980. No doubt it was stated in this letter that the said decision would prevail till Government decided otherwise. Subsequently on March 11, 1982, the Board also prescribed the pay-scales, dearness allowance, house rent allowance, city compensatory allowance and productivity bonus, and fixed the age of their superannuation. As also pointed out earlier, this court in its decision reported in 1988 (4) SCC 478, subsequently directed that for the purpose of calculating pensionary benefits the service rendered by the said employees prior to October 22, 1980 would be computed. What is further, the Ministry of Railways by its letter of May 13, 1983 placed on record the fact that not only the employees of all the statutory canteens but the employees of eleven Delhi based non-statutory canteens had been treated as railway servants with effect from October 22, 1980. It must be remembered in this connection that neither the Railway Ministry nor the Railway Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective effect from October 1, 1979. Accordingly the service rules were framed under Article 309 as per the Notification No. GSR-54 issued by the Govt. of India, Deptt. of Personnel Training on December 23, 1980. These rules contained both the recruitment rules and conditions of service of the said employees including the procedure for disciplinary action to be taken against them. As stated earlier the Administrative Instructions are applicable to the canteens/tiffin rooms run by all the Ministries including the Railway Ministry unless they had previously decided to be exempt from them and had framed their own rules in that behalf. On behalf of the respondents, one Shri Sud, Joint Director of Establishment, Ministry of Railways has filed an affidavit contending that Section F of Chapter XXVIII of the Railway Establishment Manual (to the relevant paragraphs of which we have made a reference earlier) contains the necessary instructions for running the canteens and hence the Railway Administration should be deemed to have been exempted from the operation of the said Administrative Instructions. Although there is nothing expressly on record to show that the railway canteens are exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees of these other institutions numbering over 27,500 for a similar status. He also submitted that the Railways provide financial assistance to various non-Railway institutions such as non-Railway schools. But teachers and other employees working in these schools are the employees of the respective organisations and cannot be treated as railway servants. Since, according to him, the canteens are run for the benefit of the staff, the Government has only a general responsibility to see that the labour laws are properly followed and not infringed. He further submitted that an indentical responsibility also devolves on the Railways in regard to contractors who execute works for the Railways with their own labour. In addition, the Railways have nearly 2.3 lakh casual labourers who are normally employed on works which are of seasonal nature, intermitant or extending over short periods. These employees are engaged by the contractor to whom the execution of work is entrusted. In case the employees of the canteens are to be treated as Railway servants, similar demands will be made from such casual labourers. His next contention in this behalf was that the Railways have a primary objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nteens for staff on co-operative basis. This injunction is for provision of canteens in addition to the canteens as required by the Factories Act for which provision is made in paragraph 2829 of the said Manual. Paragraph 2831 lays down the principles governing the setting up of the canteens which apply also to the nonstatutory canteens provided for under paragraph 2830. It says, among others things, that a regular canteen should be provided where the strength of the staff is 100 or more and a scheme for provision of a new canteen should be submitted to the Railway Board for approval indicating financial implications duly vetted by the F.A.C.O. Paragraph 2833 contains provisions for the management of such nonstatutory canteens. Among other things, it states that such canteens can be run either by a Committee of Management to be formed for the purpose or by a Consumer-Cooperative Society. The Committee of Management should consist of the duly elected representatives of the staff and where it is run by a Cooperative Society, it should consist of the representatives of the share-holders of the Society. However, in either of the cases, a representative of the Railway Administration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arness allowance for employees working in the Metropolitan cities as well as for those working in cities other than Metropolitan cities with effect from 1-10-1979 (Railway Board s letter No. E-(W)/79- C.N. 1-12 dated 14-12-79). A. further revision of pay scales was elfcoted by the Board in May 1983 (Railway Board s letter No. E(W)/83/C.N. 1-8 dated 13-5-1983 to ensure compliance with the interim directions given by this Court on April 22, 1983. The direction of this Court was to the effect that the salary and allowances of the employees of the non-statutory canteens (recognised) should be at the same rate and on the same basis as applicable to the employees of the statutory canteens deemed as railway servants with effect from October 22, 1980. This direction was on the basis of the decision of this Court given on October 22, 1989 (supra). It is further an admitted fact that the Board has made applicable to these employees the scales of pay as recommended by the Fourth Pay Commission with effect from January 1, 1986. 26. The employees in these canteens are also entitled to free medical treatment as out-door patients in railway hospitals, to railway passes/PTO s, one increment as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment body. The said Committee functions as a separate entity independent of the Railway Administration and the control when exercised by the Railway Administration is only to ensure that the canteen is run in conformity with certain requirements. There is no relationship of master and servant between the Rly. Administration and the canteen employees. The letters of appointment issued to the employees make it expressly clear that the employment is non-Governmental and purely temporary and does not carry any pensionary or gratuity benefits. The employees recruited further are not subjected to rigorous standards as to age limit, educational qualifications, medical fitness, character verification etc. He further submitted that the order dated October 22, 1980 passed by this Court in the case of the employees of the eleven Delhi based non-statutory canteens is expressly subject to the liberty given to the Railway Administration to contend in a future appropriate case that they are not railway employees and hence it cannot act as a precedent. He also contended as he did in the case of the statutory canteen employees, that if the employees engaged in these canteens are treated as Railw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions applicable to the employees of the statutory and non-statutory canteens. Besides, while discussing the case of the employees in statutory canteens we have pointed out the relevant provisions of the Administrative Instructions on Departmental Canteens in Government Officers and Govt. Industrial Establishments. These Instructions are applicable to both statutory and nonstatutory recognised canteens. The Instructions do not make any difference be tween the two so far as their applicability is concerned. In fact these Instructions require that the canteens run by engaging solely part-time daily-wage workers may be converted to departmental canteens (para 1.3). Hence we donot see why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned. For this very reason, the two notifications of December 11, 1979 and December 23, 1980 (supra) should also be equally applicable to the employees of these canteens. If this is so, then these employees would also be entitled to be treated as railway servants. A classification made between the employees of the two types of canteens would be unreasonable and will have no rational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion having no control on their working neither is there a record of these canteens or of the contractors who run them who keep on changing, much less of the workers engaged in these canteens. In the circumstances we are of the view of that the workers engaged in these canteens are not entitled to claim the status of the railway servants. 31. The result, therefore, is that the workers engaged in the statutory canteens as well as those engaged in nonstatutory recognised canteens in the Railway Establishments are railway employees and they are entitled to be treated as such. The Railway Board has already treated the employees of all statutory and eleven Delhi based non-statutory recognised canteens as railway employees w.e.f. October 22, 1980. The employees of the other non-statutory recognised canteens will, however, be treated as railway employees w.e.f. April 1, 1990. They would, therefore, be entitled to all benefits as such railway employees with effect from the said date, according to the service conditions prescribed for them under the relevant rules/orders. The Writ Petitions and appeals of these employees are allowed to the above extent accordingly with no order as to cos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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