# INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL AIR CARGO WORKERS' UNION & ANR

- **Citation:** [2009] 8 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2009-04-13
- **Case number:** Civil Appeal No. 2244 of 2002
- **Bench:** R.V. Raveendran, Lokeshwar ~ Singh Panta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/international-airport-authority-of-india-v-international-air-cargo-workers-26037
- **Pages:** 38

## Headnote

Contract Labour Regulation and Abolition Act, 1970 - s.
10 - Cargo handling work - Granted to a private company by c
the Airport Authority- On cancellation of licence of the private
company, employees thereof on ad hoc basis employed as
casual workers with the Authority - Employees thereafter
forming a Co-operative Society - Society entering into a
-·
contract bf contract labour with the Authority - On termination D
of the contract, employees seeking their absorption with the
Authority - Reference of industrial dispute as to whether the
Authority was right in not absorbing the workers - Tribunal
holding that the contract labour agreement between the
Society and the Authority was a sham, nominal and E
camouflage and there was violation of s. 9A of Industrial
Disputes Act, 1947 -Award set aside by Single Judge - On
appeal, the order of Single Judge set aside and the award of
Tribunal upheld by Division Bench of High Court - On appeal
held: The contract labour agreement was not a sham or F
camouflage - There was no violation of s. 9A of Industrial
Disputes Act - In absence of notification u/s. 10 prohibiting
contract labour in operation of cargo handling work,
employees not entitled to absorption - Industrial Disputes Act,
1947 - s. 9A.
G
Constitution of India, 1950 - Article 226 - Writ jurisdiction
- Interference with award of Industrial tribunal - Scope of -
Held: The award not to be interfered with in writ jurisdiction
merely on the ground that material relied on by the tribunal
1
H
2
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A was insufficient or not credible - However, when tribunal's
finding is based on no evidence or irrelevant evidence,
interference with the award is warranted - Jurisdiction - Writ
jurisdiction.
8
Appellant-Authority established a cargo complex at
Madras. Under an agreement, it granted a licence to a
private company as its ground handling agent in respect
of export, import and trans-shipment of cargo
consignments. Appellant had no privity of contract,
C obligation or responsibility towards the workers of the
private company.
When the appellant terminated the cargo handling
contract of the private company with the intention of
inviting fresh tenders, the workers of the private company
D made an appeal to the appellant-Authority to provide
them employment. They also filed a writ petition.
Appellant-Authority unilaterally came forward with a
scheme to mitigate the hardship of the workers and filed
a memo stating to accommodate the workers except by
E way of regular absorption, till such time regular
arrangements made on contract basis through a Cooperative Society. In view of the memo, the writ petition
was dismissed. Consequently the workers formed a cooperative society. Pending finalization of the contract
F with the Society, appellant-Authority in terms of the memo
started engaging some of the workers as casual labour
on day to day basis depending upon actual requirements.
Further, workers Union filed writ petition seeking ground
handling work to the Society or to absorb the workers on
G the permanent roll of the appellant-Authority. During
pendency of the petition, an agreement was entered into
between the Society and the appellant-Authority whereby
Society agreed to provide 70 loaders/packers on a
consolidated monthly payment. The petition was
dismissed as withdrawn in view of the agreement. By a
H
..
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
3
AIR CARGO WORKERS' UNION & ANR.
further agreement, it was agreed that apart from the A
regular workers, additional workers would be provided
for other miscellaneous porterage jobs. The agreement
interalia provided that members of the Society would have
no direct relationship with appellant-Authority; and that
the Society would comply with the requirements of B
Contract Labour (Regulation and Abolition) Act. The
agreement was for a period upto 1.9.1987. A further fresh
agreement was entered into for a further period of two
years. Wh£m the term of the

## Text

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[2009] 8 S.C.R. 1
INTERNATIONAL AIRPORT AUTHORITY OF INDIA
A
v.
INTERNATIONAL A!R CARGO WORKERS' UNION & ANR.
(Civil Appeal No. 2244 of 2002)
APRIL 13, 2009
D
u
[R.V. RAVEENDRAN AND LOKESHWAR
~
SINGH PANTA, JJ.]
Contract Labour Regulation and Abolition Act, 1970 - s.
10 - Cargo handling work - Granted to a private company by c
the Airport Authority- On cancellation of licence of the private
company, employees thereof on ad hoc basis employed as
casual workers with the Authority - Employees thereafter
forming a Co-operative Society - Society entering into a
-·
contract bf contract labour with the Authority - On termination D
of the contract, employees seeking their absorption with the
Authority - Reference of industrial dispute as to whether the
Authority was right in not absorbing the workers - Tribunal
holding that the contract labour agreement between the
Society and the Authority was a sham, nominal and E
camouflage and there was violation of s. 9A of Industrial
Disputes Act, 1947 -Award set aside by Single Judge - On
appeal, the order of Single Judge set aside and the award of
Tribunal upheld by Division Bench of High Court - On appeal
held: The contract labour agreement was not a sham or F
camouflage - There was no violation of s. 9A of Industrial
Disputes Act - In absence of notification u/s. 10 prohibiting
contract labour in operation of cargo handling work,
employees not entitled to absorption - Industrial Disputes Act,
1947 - s. 9A.
G
Constitution of India, 1950 - Article 226 - Writ jurisdiction
- Interference with award of Industrial tribunal - Scope of -
Held: The award not to be interfered with in writ jurisdiction
merely on the ground that material relied on by the tribunal
1
H
2
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A was insufficient or not credible - However, when tribunal's
finding is based on no evidence or irrelevant evidence,
interference with the award is warranted - Jurisdiction - Writ
jurisdiction.
8
Appellant-Authority established a cargo complex at
Madras. Under an agreement, it granted a licence to a
private company as its ground handling agent in respect
of export, import and trans-shipment of cargo
consignments. Appellant had no privity of contract,
C obligation or responsibility towards the workers of the
private company.
When the appellant terminated the cargo handling
contract of the private company with the intention of
inviting fresh tenders, the workers of the private company
D made an appeal to the appellant-Authority to provide
them employment. They also filed a writ petition.
Appellant-Authority unilaterally came forward with a
scheme to mitigate the hardship of the workers and filed
a memo stating to accommodate the workers except by
E way of regular absorption, till such time regular
arrangements made on contract basis through a Cooperative Society. In view of the memo, the writ petition
was dismissed. Consequently the workers formed a cooperative society. Pending finalization of the contract
F with the Society, appellant-Authority in terms of the memo
started engaging some of the workers as casual labour
on day to day basis depending upon actual requirements.
Further, workers Union filed writ petition seeking ground
handling work to the Society or to absorb the workers on
G the permanent roll of the appellant-Authority. During
pendency of the petition, an agreement was entered into
between the Society and the appellant-Authority whereby
Society agreed to provide 70 loaders/packers on a
consolidated monthly payment. The petition was
dismissed as withdrawn in view of the agreement. By a
H
..
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
3
AIR CARGO WORKERS' UNION & ANR.
further agreement, it was agreed that apart from the A
regular workers, additional workers would be provided
for other miscellaneous porterage jobs. The agreement
interalia provided that members of the Society would have
no direct relationship with appellant-Authority; and that
the Society would comply with the requirements of B
Contract Labour (Regulation and Abolition) Act. The
agreement was for a period upto 1.9.1987. A further fresh
agreement was entered into for a further period of two
years. Wh£m the term of the agreement was coming to an
end, respondent-Union and the Society filed writ petition c
seeking service security to their 89 workers by treating
them at par with regular employees of the Authority. The
petition was dismissed with liberty to raise an industrial
dispute as the workers had already raised an industrial
dispute demanding direct employment and the 0
conciliation had ended in failure. Initially the Central
government refused to refer the dispute for adjudication,
but on direction from High Court, the same was referred
for adjudication to labour court.
In the meantime tender notice was issued by E
appellant-Authority inviting tenders for cargo handling
work. The tender notice was challenged in a writ petition
on the ground that in absence of valid registration u/s. 7
of CLRA Act, the contract labour were to be treated as
direct employees of the appellant-Authority. The petition
F
was dismissed holding that in absence of Notification u/
s. 10 of CLRA Act prohibiting employment of contract
labour in respect of cargo handling work and in absence
of any material to show that the workmen were workers
of appellant-Authority, the appropriate remedy was to G
agitate the labour authority. The writ appeal against the
order was dismissed by Division Bench of High Court.
Appellant-Authority again invited fresh tender and the
same was challenged in writ petition which was H
4
SUPREME COURT REPORTS
(2009] 8 S.C.R.
A dismissed on the-ground that issue was pending with the
Industrial tribunal and that the writ petitions for similar
relief had been rejected earlier. Writ appeal against the
order was also dismissed.
B
Industrial tribunal directed the appellant-Authority to
absorb the workers. Writ petition was filed challenging the
award. Single Judge of High court set aside the award
of the tribunal. However, it issued directions viz: (1)
,.
Central Government and Advisory Board to consider
/
c
whether deployment of contract labour with regard to
packing loading and unloading in the Cargo Complex in
question, should be abolished; (2) If Central Government
issued Notification u/s. 10 of CLRA Act, all those who had
worked as contract labour under the contract between
D
the Society and the appellant-Authority shall be absorbed.
In writ appeal, Division Bench of High Court restored the
award of the Tribunal. Hence the present appeal.
Allowing the appeal, the Court
E
HELD: 1.The contract labour agreement between
appellant-Authority and the society was not sham,
nominal or a camouflage and the contract labour were
not the direct employees of appellant-Authority. There
'
was no violation of Section 9A of Industrial Disputes Act.
In the absence of a notification u/s. 10 of Contract Labour
F Regulation and Abolition Act prohibiting the employment
of contract labour in the operation of cargo handling
work, the workmen employed as contract labour are not
entitled to claim absorption. [Para 29 (i), (ii) & (iii)] [36-EG]
G
r
2.1 It is true that in exercising the writ jurisdiction, the
High Court cannot sit in appeal over the findings and
award of the Industrial Tribunal and therefore, cannot reappreciate evidence. The findings of fact recorded by a
H
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
5
AIR CARGO WORKERS' UNION & ANR.
fact finding authority should ordinarily be considered as
A
final. The findings of the Tribunal should not be interfered
in writ jurisdiction merely on the ground that the material
on which the tribunal had acted was insufficient or not
credible. It is also true that as long as the findings of fact
are based on some materials which are relevant, findings
B
may not be interfered with merely because another view
is also possible. But where the Tribunal records findings
on no evidence or irrelevant evidence, it is certainly open
to the High Court to interfere with the award of the
Industrial Tribunal. [Para 24] [26-E-G]
c
Indian Overseas Bank vs. /OB Staff Canteen Workers'
Union 2000 (4) SCC 245 and R. K. Panda vs. Steel Authority
of India 1994 (5) SCC 204, referred to.
2.2. In the present case, the grounds on which the D
union sought relief of absorption and the grounds on
which the Tribunal ultimately granted relief are completely
different. Having regard to the several decisions in the
earlier rounds of litigation, which had attained finality, it
is doubtful whether the Tribunal could have considered
E
these issues at all. Even assuming that the tribunal could
have considered the said grounds as having risen for
decision, there was no basis or material for its finding and
assumptions. [Para 24] [26-H; 27-A, B]
2.3. All the three grounds mentioned by the Tribunal
and which have found favour with the Division Bench as
indicators of direct employment by the appellant and the
contract labour agreement with the society being a
camouflage, are wholly baseless. [Para 28.3] [36-D]
2.4. This is not a case of the workers giving up any
right or interest, but a case of a benefit or concession
being voluntarily extended by appellant-Authority as a
responsible organization, to mitigate hardship. In the
F
G
H
6
SUPREME COURT REPORTS
[2009] 8 S.C.R.
lA absence of any pleadings or evidence about any such
pressure or undue influence, the Tribunal chose to refer
to the said memorandum filed in the writ proceedings as
a settlement reached by compulsion and pressure,
ignoring the fact that it was filed unilaterally in a writ
B petition and accepted by the workers and the High Court.
Having regard to the factual background and having
regard to the fact that the memorandum filed by appellantAuth<'pity before the court was not a settlement between
the parties, but was only an unilateral proposal by
c appellant-Authority in a pending writ petition, and in view
of the fact that the union was agreeable for such a course
and did not press the relief of absorption or direct
employment under appellant-Authority it is not possible
to hold that the terms of the memorandum were terms
D of a settlement arrived at by appellant-Authority from a
dominant position, by applying pressure on the workers.
[Paras 25.4} {29-F-G; 29-C-D]
2.5. The contracts with the society were genuine,
beneficial voluntary bilateral contracts and there was
E nothing sham or nominal about it. At no point of time, the
workers or their union pleaded that the agreement
between appellant-Authority and the society was sham
or nominal. A careful l'eading of the claim statement filed
...
before the tribunal and the evidence given by WW-1
F shows that not even an allegation or claim to that effect
was made in that behalf. In these circumstances, the
Tribunal could not have held that the agreement was
sham and nominal. [Para 27.1] [32-G-H; 33-A]
G
2.6. The Tribunal goes to the extent of referring to the
l-'
memo filed by the appellant-Authority before the High
"
Court offering to give the cargo handling contract to the
society formed by the workers of the private company
as a compromise or settlement which is opposed to
H
INTERNATIONAL AIRPORT AUTHORITY OF !NOIA v. INTERNATIONAL
7
AIR CARGO WORKERS' UNION & ANR.
public policy, principl.es of natural justice and an unfair
A
labour practice. It further describes it as a settlement
which the workers were constrained to enter. No such
pressure was applied and in fact the memo was not an
agreement signed by parties, and there was no obligation
on the part of appellant-Authority to make the said offer
B
as per the memo. [Para 27.2] [33-B-C]
2. 7. The direct casual employment given to the
workers was purely an interim or ad hoc measure as a
part of the package proposal made by appellant-Authority
in its memorandum filed before the High Court, and
C
accepted by the workers. On formation of the society and
on the society entering into a contract with appellantAuthority for providing contract labour, there was no need
to employ these workers as casual labourers. Nor did the
workers had any right to claim continuation as casual
D
labourers. In fact they did not claim any such right. They
worked for less than 240 days as casual labourers under
appellant-Authority and were not entitled to claim the
benefit of either Section 25F nor regularization on the
basis of such short casual service as daily rated
E
employees. Therefore, it follows that on the basis of the
service as casual employees between November, 1985
and July, 1986, the workers are not entitled to any relief.
[Para 26.1] [30-E-G]
F
2.8.The action of appellant-Authority in entering into
a contract with the society was something that was
proposed when the workers were the employees of the
ground handing agent (Private Company). Further, the
effect of the contract with the society was not to change
the conditions of service, but to put an end to the direct G
casual daily wage employment of the said workers. The
workers were specifically put on notice that their casual
employment was purely ad hoc and as a humanitarian
H
8
SUPREME COURT REPORTS
(2009) 8 S.C.R.
A measure, to be continued only till a contract labour
contract was negotiated and finalized with the society.
This was recorded by the court while dismissing the writ
petition filed by the workers' union. The workers are not
entitled to put forth a conten.ion contrary to the proposal/
B scheme of appellant-Authority recorded by the High
Court. Therefore, the question of violation of section 9A
of ID Act does not arise. [Para 26.2] [31-D-G]
L. Robert D'Souza v. Executive Engineer, Southern
Raifwc,ys 1982 (1) sec 645 and Workmen of Sur Iron and
C Steel Co. Pvt. Ltd. v. Sur Iron and Steel Company Pvt. Ltd.
1970 (3) sec 618, referred to
3. The order of single Judge is restored. However,
the direction given by the Single Judge that in the event
o of the Central Government issuing a notification u/s. 10
of CLRA Act, all those who had worked as contract
labour under the contract between appellant-Authority
and society should be absorbed in the same manner as
was directed by this Court in Air India is a direction which
E is bad in law, as subsequent to the said decision of the
Single Judge, this Court in SAIL, reversed the decision
in Air India. Appellant-Authority did not challenge the said
direction. SAIL case has overruled Air-India case
prospectively and it was clarified that any declaration or
F direction issued by industrial adjudicator or High Court
for absorption of contract labour following the judgment
in Air India shall hold good and shall not be set aside,
altered or modified on the basis of the decision in SAIL.
Therefore, the said direction of the Single Judge which
G has attained finality, as appellant-Authority did not
challenge the same, is not disturbed. [Para 30] [37-A-D]
H
Steel Authority of India Ltd. vs. National Union Waterfront
Workers 2001 (7) sec 1, relied on.
•
INTERNATIONAL AIRPORT AUTHORITY OF !NOIA v. INTERNATIONAL
9
AIR CARGO WORKERS' UNION & ANR.
Gujarat Electricity Board vs. Hind Mazdoor Sabha 1995
A
(5) SCC 27 and Air India Satutory Corporation vs. United
Labour Union 1997 (9) SCC 377, referred to.
Case Law Reference:
referred to
referred to
referred to
Para 16
Para 24
Para 24
B
1995 (5) sec 21
2000 (4) sec 245
1994 (5) sec 204
1982 (1) sec 645
1910 (3) sec 618
1997 (9) sec 377
2001 (7) sec 1
referred to
referred to
referred to
relied on
Para 26.2
C
Para 26.2
Para 30
Para .10
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2244 of 2002.
D
From the Judgment & Order dated 12.11.2001 of the
Division Bench of Madras High Court in Writ Appeal No. 544
of 1998.
E
Rachna Joshi lssar, Neha Sharma, Niria Gupta and Bina
Gupta for the Appellant.
S. Guru Krishna Kumar, N.G.R. Prasad, C.K.
Chandersekharan and S.R. Setia for the Respondents.
The Judgment of the Court was delivered by
R.V. RAVEENDRAN, J. 1. This appeal by special leave
F
'-!
is- filed against the judgment and order dated 12.11.2001
G
passed by the High Court of Madras in Writ Appeal No.544/
1998 reversing the order dated 15.12.1997 passed by a
learned Single Judge in Writ Petition No. 6126 of 1995 and
restoring the award dated 23.12.1994 passed by the Industrial
Tribunal, Madras in ID No.65 of 1991. The case has a
H
10
SUPREME COURT REPORTS
(2009] 8 S.C.R.
A chequered historf and has come up after several rounds of
litigations.
2. The International Airport Authority of India (IAAI for short),
the appellant herein, was established under the International
8 Airports Authority Act, 1971. It established a cargo complex at
Madras in the year 1978. Under an agreement dated 30.1.1978,
it granted a licence to a private campany known as M/s.
Airfreight Private Ltd. (referred to as 'Airfreight') to be its ground
handling agent in respect of export, import and transshipment
' cargo consignments. Under the said agreement, Airfreight was
C to receive payment from the owners of the cargo for the work
done, had to engage the services of required number of
workers for handling the cargo and be responsible for payment
of wages to the workers. It was also required to pay a licence
fee to IAAI, linked to the total revenue realized by it. (minimum
D being Rs.12 lacs, maximum being Rs.43.50 lacs plus an agreed
percentage of the revenue over and above 60 lacs). IAAI had
no privity of contract, obligation or responsibility towards the
workers employed by the Airfreight.
E
3. In the year 1985 IAAI decided to take over the ground
handling work and entrust it to a new licencee by inviting
competitive tenders. Therefore, by letter dated 19.9.1985 IAAI
informed Airfreight that the ground handling agency operations
should be handed over to its officers on 31.10.1985. Thus from
F
1.11.1985, Airfreight ceased to be the ground handling agent
of IAAI at Madras Airport. The termination of the handling
contract of Airfreight did not require IAAI or the new licencee
of IAAI to take over the workers employed by Airfreight. In the
circumstances, the workers (loaders and packers) employed by
G Airfreight in connection with the ground handling work, who were
likely to be retrenched/discharged, made an appeal to IAAI to
provide them employment.
First Round
H
4. The Airfreight Workers Union also filed Writ Petition
I
~·
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
11
AIR CARGO WORKERS' UNION & ANR. [R.V. RAVEENDRAN, J.)
No.11683/1985 in the Madras High Court, seeking a direction
A
to IAAI to employ all those workers who had been employed
by Airfreight in connection with the ground handling work at the
Madras Airport cargo complex and not to recruit anyone from
outside. IAAI and Airfreight were impleaded as respondents 1
and 2 in the said writ petition. In view of the appeal made by
B
the said workers, IAAI unilaterally came forward with a scheme
to mitigate their hardship, and filed the following memo before
.\,
the High Court :
"The authority (IAAI) will consider mitigating the hardship c
of the ex-loaders and packers of Mis Air Freight claimed
to be caused on account of its take over of cargo handling
'
function by accommodating them as far as possible except
.
by way of regular absorption in the services of IAAI till such
time the authority has made its own regular arrangements,
t'
on contract basis through a Co-operative Society formed
D
on specified terms and conditions and period as per the
policy of IAAI framed from time to time".
The High Court recorded the memo filed by IAAI and
dismissed the writ petition on 12.12.1985, in view of the
E
agreement expressed by the learned counsel for Airfreight
Workers Union.
5. The workers of Airfreight took steps to form a cooperative society which was registered under the name and
F
style of 'Airport Industrial Co-operative Service Society Ltd.',
('society' for short) on 28.11.1985. Pending finalization of a
contract with the said society, in terms of the memo filed in WP
No.11683/1985, IAAI started engaging some of the workers of
Airfreight as casual labour on day to day basis depending on
G
the actual requirements.
-I
Second Round
6. The Airfreight Workers Union and the society filed Writ
Petition No.5164 of 1986 seeking a direction to IAAI to hand
H
12
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A over the ground handling work at the Madras Airport Cargo
Complex to the society, on terms to be mutually agreed or in
the alternative absorb the ex-employees of Airfreight on its
permanent rolls and till then maintain status quo. During the
pendency of the said writ petition, an agreement was entered
B on 1. 7.1986 under which the society agreed to provide 70
loaders cum packers at the Madras Air Cargo Complex on a
consolidated monthly payment of Rs.45,870. It was further
agreed as follows : (i) that the said arrangement would be in
force for a period of six months; (ii) that if any additional loadersc cum-packers were required by IAAI, the society will provide
them at the rate of Rs.15 per manshift; (iii) that IAAI would
sympathetically consider the society's request for increasing the
monthly payment to Rs.50,000; (iv) that the agreement would
be implemented within 10 days; and (v) that W.P. No.5164 of
D 1986 would be withdrawn voluntarily. The agreement confirmed
that the settlement had been arrived at without any pressure
"
from either side, in mutual interest, for the smooth operation of
the cargo complex. In view of it, when W.P. No.5164 of 1986
came up on 2.7.1986, the learned counsel submitted that the
E matter was settled out of court and accordingly the petition was
dismissed as withdrawn.
Third Round
7. IAAI agreed to the request of the society to increase the
F monthly payment to Rs.50,000 and a more detailed agreement
was executed on 14.7.1986 between IAAI and society under
which the society agreed to provide manpower (loaders-cumpackers) for unloading, shifting, stacking, marking unpacking,
packing, stitching, strapping, counting of cargo and other
G miscellaneous porterage jobs at Madras Airport, round the
clock, in three shifts. The agreement reiterated that the total
\-
number of loaders-cum-packers to be made available by the
society on regular basis will be 70; that the additional loaders
cum packers will be made available on a further payment of
H
Rs.15 per manshift; and that the agreement would be in force
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL 13
AIR CARGO WORKERS' UNION & ANR. [R.V. RAVEENDRAN, J.]
between 10.7.1986 to 19.1.1987. The said agreement
A
specifically provided as follows : (a} that the workers (members
of the society) would have no direct relationship whatsoever
with IAAI, except on matters of execution of work and all
dealings and remuneration to them would be through the society
(vide clause 35); (b) that the society should make good any
B
damage caused to the cargo consignments or to the property
of IMI, by the loaders-cum-packers, either due to negligence
or willful acts (vide cl. 21); (c) that the society shall comply with
the requirement of Contract Labour (Regulation and Abolition)
Act, 1970 ('CLRA Act' for short) and other labour laws, in
C
particular, the statutory provisions regarding minimum wages;
(d) that to ensure that wages were paid by the society to its
employees whose services were made available to IMI as
contract labour, IMI will have the right to demand that the
wages be disbursed by the society to its employees, in the
0
presence of !Mi's representative (vide clause 7); (d) that IMI
wil! not be responsible either for any injury sustained by the
employees of the society during the performance of their duties
or for payment of any damages or compensation due to any
dispute between the society and its workers (vide cl. 8); (e) that
in case it was noticed by IMI that the work carried out by the
E
society was not upto the required standard, and the society
failed to improve, inspite of two days written notice about the
bad state of work and demand for improvement, IMI could
impose fines and deduct the amount of fines from the society's
bills; and if fines had no effect, IMI would have the right to
F
terminate the contract by giving a month's notice and forfeit the
security deposit (vide clause 9); (f) that the society would carry
out the jobs as per the specifications of IAAI and to its
satisfaction, and in case of any complaints by IMI either as
regards the nature of service or as regards the personnel doing
G
-1
the same, the society would attend to the complaints promptly
(vide clause 12); and (g) that the society, apart from being in
constant touch with the officers of IMI, through an authorized
representative, would also have a supervisor employed on
round-the-clock basis at the cargo complex to supervise, control
H
14
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A and ensure proper execution of the work assigned to the
loaders-cum-packers and to co-ordinate with IAAI (vide clause
17).
8. The society entered into a fresh agreement dated
8
11.12.1987 agreeing to provide loaders-cum-packers at the
Madras airport complex, for a period of two years from
1.9.1987. The lump sum payment by IAAI was revised as
Rs.60,000 per month for providing 70 loaders and three
.j_
supervisors. It was agreed that the said amount had been
c
determined by assuming the minimum wage as Rs.20 per day
and if there was any statutory increase beyond Rs.20/-, such
excess should be borne by IAAI.
9. When the said term was corning to an end, the
International Air Cargo Workers Union (first respondent) and
D the society filed Writ Petition No.9110 of 1989 seeking service
security to the 89 workers and treat them on par with regular
employees of IAAI by giving them wages/benefits/ privileges of
regular workmen. The said petition was dismissed on
18.12.1989 reserving liberty to raise the issues and demands
E
in the proceedings under the Industrial Disputes Act, 1947 ('ID
Act' for short}, as the workers had already raised an industrial
dispute demanding direct employment and the conciliation had
ended in a failure on 26.9.1989.
•
Fourth Round
F
10. The conciliation officer submitted a Failure Report
dated 3.10.1989, in regard to the conciliation Government of
India however refused to refer the dispute for adjudication on
the ground that workmen in .dispute were employed by the
G society and not by IAAI. The order of refusal also stated :
''Therefore the dispute is not maintainable against the IAAI
tmanagement under the ID Act indirectly. The Union has
demanded abolition of contract labour system in the
loading/unloading operations etc. The question of abolition
/
H
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
15
AIR CARGO WORKERS' UNION & ANR. [R.V. RAVEENDRAN, J.]
..;'
of contract labour system is dealt with under CLRA Act
A
which lays down the criteria and the procedure for abolition
of this system. The Union could, therefore, avail of the
remedy available under the said Act. ... "
The said communication dated 7.12.1989 was challenged in
B
W.P. No.10719of1990. The said writ petition was allowed by
order dated 26.3.1991 on the ground that the central
-~
government could not pre-judge the issue and while considering
whether a dispute should be referred under section 10 of ID
Act, the government is not supposed to delve into merits of the c
case and indulge in any adjudicatory process. The High Court,
therefore, directed the government to reconsider the matter and
take a fresh decision in regard to the request for reference. In
pursuance of it, the government reconsidered the matter and
referred the following dispute to the Industrial Tribunal, Madras,
.(
by order dated 14.10.1991 :
D
"Whether the action of the Management of International
Airport Authority of India, Madras is justified in not
absorbing the workers/members of Airport International
Cooperative Service Society, their Contractor. If not, to
E
what relief the concerned workmen are entitled ?"
Fifth Round
'
11. In the meanwhile IAAI issued a tender notice dated
19.11.1990 inviting tenders for the cargo handling work at the
F
Air Cargo Complex. The said tender notice was challenged by
the first respondent Union in W.P. No.18560 of 1990. In that
petition, the first respondent Union inter alia contended that the
IAAI had no valid registration of its establishment under section
7 of the CLRA Act and therefore the contract labour namely the
G
-t
workers employed by the society should be treated directly
employed by IAAI. The said writ petition was dismissed by the
High Court by order dated 6.12.1990 holding that in the
absence of a notification under section 1 O of the CLRA Act,
prohibiting employment of contract labour in regard to the
H
16
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A process of cargo handling, and in the absence of any material
...
to show that the workers were deemed to be workmen of IMI,
the appropriate remedy was to agitate the matter before the
concerned labour authority instead of filing a writ petition. The
said order of the learned Single Judge was challenged by the
B union by filing a writ appeal (WA No.1265/1990) which was
dismissed by judgment dated 3.1.1991. The Division Bench
noted that IMI had registered its establishment under section
7 of the CLRA Act on 23.3.1990 and the tender notice was
;.
issued only thereafter on 19.11.1990. The Division Bench also
c held that the Union having consciously resorted to the remedy
available under industrial law, and not having demurred against
the dismissal of WP No.9110/1989 cannot re-agitate the same
question in a writ petition challenging the tender notice.
Sixth Round
D
"
12. Again when IAAI invited fresh tenders, the first
respondent Union filed W.P. No.273 of 1994 seeking a
direction to IMI not to invite tenders for loading/unloading
operations or take any other action which will have the effect
E of discharging the workers engaged in the loading and
unloading operations. The said writ petition was dismissed by
order dated 22.6.1994 on the ground that the issue was
pending adjudication by Industrial Tribunal and writ petitions for
similar relief had been rejected earlier. The learned single
F Judge observed :
"Having regard to the memorandum issued by IAAI
wherein IAAI specifically stated that the workmen
concerned would be accommodated as far as possible
except by way of equal absorption in the services of IMI
G
(Underlining is mine), which was noticed and recorded by
S.Mohan J., as he then was, with the consent of Mr. K.S.
jJanakiraman, then counsel for workmen, and the
subsequent agreement entered into on 1.7.1986,
14.7.1986 and 21.5.1992, it would not in my opinion, be
H
possible for the workmen to claim that the Authority should
•
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL 17
AIR CARGO WORKERS' UNION & ANR. [RV RAVEENDRAN, J.]
be directed not to disengage the workmen."
A
The writ appeal (WA No.800 of 1994) challenging the said
order was also dismissed on 27.6.1994.
Seventh (current) Round
B
13. The reference made by the central government which
was registered as ID No.65 of 1991 was decided by the
-\
Industrial Tribunal, Madras, in favour of', the workers by award
dated 23.12.1994. The Tribunal direct~d IMI to absorb the
members of the society whose names were stated in the c
'
annexures to the claim statement, (excluding only those who
died or left service), with effect from the date of the award. In
the said award the tribunal recorded the following findings :
(a) The memo filed by IMI in W.P. No.11683 of 1985
D
(which was agreed to by the workers union), resulting in
dismissal of W. P. No.11683/1985 filed by the workers'
union, amounted to a settlement which was not valid, as
IMI was in a dominant position to dictate terms and
compel the workers union to enter into the settlement to
E
circumvent the provisions of law and deprive the legitimate
right of the workmen to permanent status.
~·
(b) The said memo of IMI requiring the workers to form a
society was a ploy adopted by IMI to defeat the legitimate
claim of the workers to permanent status to which they were
F
entitled as they had worked for 5 to 14 years previously
under Airfreight and thereafter under the IMI who was the
principal employer and after the termination of the handling
agency of Airfreight, their workers became the direct
employees of IMI.
G
(c) After the termination of the handling agency in favour
of Airfreight, its employees were directly engaged by IMI
and received salary from IMI. Thus they became the direct
employees of IAAI from November 1985. Once the
H
workers became its employees, IMI could not change
A
B
c
D
E
F
G
H
18
SUPREME COURT REPORTS
[2009] 8 S.C.R.
their status from direct workers to indirect workers.
(d) Even when the workmen were working as contract
labour through the society, IAAI was exercising direct
supervision and control over them, directly paying wages
to them and taking disciplinary action against them and all
these showed that they were considered and dealt with as
direct employees of IAAI and the agreement between IAAI
and the society was sham and nominal.
(e) Any attempt by IAAI to appoint the workmen as contract
labour is illegal and would amount to an unfair labour
practice.
14. The said award was challenged by IAAI in W.P.
No.6126/1995. A learned Single Judge of Madras High Court
allowed the said writ petition by order dated 15.12.1997 and
set aside the award of the Tribunal. Nevertheless having regard
to the facts of the case, in particular IAAI being a public sector
undertaking was required to be a model employer, issued the
following directions :
(i) The Central Government and the Advisory Board
constituted under the CLRA Act should consider whether
deployment of contract labour in regard to packing,
loading and unloading in IAAl's Madras Cargo Complex
should be abolished and take appropriate decision
thereon.
(ii) Till such a decision was taken, the workers concerned
shall be continued notwithstanding the interruption in their
employment as contract labourers from 1994 to the date
of that order (15.12.1997), as contract labour on the terms
and conditions that were in force between IAAI and the
society prior to 1994 subject to the condition that the
wages payable to such workers shall not be less than what
was paid to contract labour who were engaged between
1994 and 1997; and the said workers shall be engaged
-!-
.
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL
19
.
AIR CARGO WORKERS' UNION & ANR. [R.V. RAVEENDRAN, J.]
r;
from January, 1998, their engagement being subject to
A
good behaviour, conduct, discipline and efficient
performance.
(iii) If the Central Government issues a notification under
section 10 under the CLRA Act, prohibiting contract labour
B
in regard to loading, unloading and packing in the cargo
complex all those who had worked as contract labour
·\·
under the contract between the society and the IAAI up to
the numbers specified in the contract shall be absorbed
in the IAAI as was directed by this Court in the case of Air c
India Statutory Corporation v. United Labour Union [1997
(9) sec 377].
15. The first respondent Union challenged the said order
of learned Single Judge before a Division Bench in Writ
Appeal No.544/1998. A Division Bench of the Madras High
D
Court by its judgment dated 12.11.2001 allowed the appeal and
set aside the order of the learned Single Judge and restored
the award of the Tribunal. The Division Bench was of the view
that when the Tribunal had recorded a finding of fact that the
contract labour were under the direct supervision and control
of IAAI, that they were paid salary directly by IAAI, that they were
E
subjected to suspension and other disciplinary control by IAAI,
that the contract between IAAI and the society was sham and
f
nominal, the consequential finding that they were the direct
employees of IAAI ought not to have been disturbed by the
F
learned Single Judge. The Division Bench was of the view that
the findings recorded by the tribunal were unexceptionable. The
said decision is under challenge in this appeal.
The legal background and guestions for decision
G
16. When the learned Single Judge considered the matter,
the legal position was governed by the decision in Gujarat
Electricity Board vs. Hind Mazdoor Sabha - 1995 (5) SCC
27, partly modified by Air India Satutory Corporation vs. United
Labour Union - 1997 (9) SCC 377. By the time the Division
H
20
SUPREME COURT REPORTS
[2009] 8 S.C.R.
A Bench decided the writ appeal, the decision of the Constitution
Bench in Steel Authority of India Ltd., vs. National Union
Waterfront Workers - 2001 (7) SCC 1 (for short 'SAIL) had
been rendered, but on account of the short gap between the
two dates, the Division Bench did not notice the decision in
B SAIL
c
D
E
F
G
H
17. In Gujarat Electricity Board, this Court held :
" ..... the exclusive authority to decide whether the contract
labour should be abolished or not is that of the appropriate
Government under the said provision. It is further not
disputed before us that the decision of the Government is
final subject, of course, to the judicial review on the usual
grounds. However, as stated earlier, the exclusive
jurisdiction of the appropriate Government under Section
10 of the Act arises only where the labour contract is
genuine and the question whether the contract is genuine,
or not can be examined and adjudicated upon by the court
or the industrial adjudicator, as the case may be. Hence
in such cases, the workmen can make a grievance that
there is no genuine contract and that they are in fact the
employees of the principal employer.
If the contract is sham or not genuine, the workmen of the
so called contractor can raise an industrial dispute for
declaring that they were always the employees of the
principal employer and for claiming the appropriate service
conditions. When such dispute is raised, it is not a dispute
for abolition of the labour contract and hence the provisions
of Section 10 of the Act will not bar either the raising or
the adjudication of the dispute. When such dispute is
raised, the industrial adjudicator has to decide whether the
contract is sham or genuine. It is only if the adjudicator
comes to the conclusion that the contract is sham, that he
will have jurisdiction to adjudicate the dispute. If, however,
he comes to the conclusion that the contract is genuine,
INTERNATIONAL AIRPORT AUTHORITY OF INDIA v. INTERNATIONAL 21
AIR CARGO WORKERS' UNION & ANR. [R.V. RAVEENDRAN, J.]
~
he may refer the workmen to the appropriate Government
A
for abolition of the contract labour under Section 10 of the
Act and keep the dispute pending. However, he can do
so if the dispute is espoused by the direct workmen of the
principal employer. If the workmen of the principal
employer have not espoused the dispute, the adjudicator,
B
after coming to the conclusion that the contract is genuine,
has to reject the reference, the dispute being not an
+
industrial dispute within the meaning of Section 2(k) of the
ID Act. He will not be competent to give any relief to the
workmen of the erstwhile contractor even if the labour c
contract is abolished by the appropriate Government under
Section 10 of the Act."
In view of the provisions of section 10 of the Act, it is only the
appropriate government which has the authority to abolish
genuine labour contract in accordance with the provisions of
D
the said section. No court including industrial adjudicator has
jurisdiction to do so.
18.