# VEGOILS PRIVATE LIMITED v. THE WORKMEN

- **Citation:** [1972] 1 S.C.R. 673
- **Court:** Supreme Court of India
- **Decided:** 1971-09-10
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vegoils-private-limited-v-the-workmen-5426
- **Pages:** 22

## Headnote

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VEGOILS PRIVATE LIMITED
v.
THE WORKMEN
September 10, 1971
673
re. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.J
Industrial Dispute-Abolition of Contract Labour-Principles to he
followed-Effect of the Contract Labour (Regulation and Abolition) Act
(Central Act 37 of 1970) and the Maharashtra Mathadi, Hamal and other
Mannual Workers (Regulation of Employment and Welfare) Act 30 of
1969.
The appellant-a private limited company--;;arried on the business of
manufacturing edible oils, soaps and certain by-products. In connection·
with its business the appellant employed about 700 permanent workmen.
fJowever for loading and unloading seed and oil cake bag! and 'for feeding
the hoppers in the solvent extraction plant the appellant employed labour
through a contractor. The workmen in an industrial dispute claimed inter
alia that the work of loading and unloading seed bags as well as that of feeding the hopper~ was of a perennial nature and therefore in respect of these.
contract labour should be abolished. The Industrial Tribunal on considering the evidence before it held that the work of feeding the hoppers could
not be said to intermittent and sporadic as claimed by the appellont; it was
on the other hand closely connected with the principal activity of the appellant.
In similar plants in the region the work of feeding the hoppers was
carried on by permanent workmen. On the basis of these factors the Tribunal held that the appellant also shoold carry· out this work through perma-·
nent workmen.
In the matter cf loading and unloading of seed and cake
bags the Tribunal held that these activities were also cl06ely connected with
the main industry and the work was df a permanent character. The Tribunar
noted that the comparable units in the same region carried on the work of
loading and unloading through contract labour, but nevertheless, on the
view that contract labour must be discouraged, theTribunal held that in this
respect also the appellant must employ only permanent workmen. -The·
Tribunal referred to the Contract Labour (Regulation and Abolition) Act
1970, (Central Act 37 of 1970) and the Maharashtra Mathadi Hamal and'
Other Manual Worker> (Regulation of Employment and Welfare) Act 30
of 1969 and observed that these two enactments also supported its view. In
appeal by special leave before this Court the appellant apart from questioning the Tribunal's decision on merits challenged the jurisdiction of the
Tribunal to consider the question of abolition of contract labour in view of
the provisions of the aforesaid two Acts.
HELD : (i) The Industrial Tribunal acquired jurisdiction to entertain
the .dispute in view of. the reference made by the State Government on
Apnl 17, 1967. Admittedly on that date neitfier Central Act 37 of 1970·
nor !'faharashtra Act. 30 of 1969 had been passed.
Even during the pwceed.mgs before the Tnbunal the appellant raised no objection after the
J'.'.OSSmg of . the two enactments that the Tribunal had no longer jurisdict10n to adjudicate upon the dispute.
Under
these
circumstances
the
Tribunal ~a~ to adj.udicate upon the point referred to it having due regard·
to the pnnc1ples laid down by the Courts, particularly this Court govern·
ing the abolition of contract labour. [689 E-GJ
(ii) Central Act 37 of 1970 had received the President's assent before the passing of the Tribunal's award but it came into force after the'
9-LJSupC.l./72
674
SUPREME COURT REPORTS
[1972] l S.C.R.
said a ward.
The State Act had come into force before the passing of
the award. Though the contention that the Tribunal lost jurisdiction to
consider the question of contract labour in view of these enactments
could not be accepted this Court would be justified when dealing with this
appeal to give effect particularly to the provisions of the Central Act
having due regard to the clearly expressed intention of the legislature in
the said Act regarding the circumstances under which contract labour can
be abolished. [689 C-D; 69

## Text

_Characters 0–39,865 of 62,868. This is a partial read: ask again with offset=39865 for what follows._

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VEGOILS PRIVATE LIMITED
v.
THE WORKMEN
September 10, 1971
673
re. A. VAIDIALINGAM AND P. JAGANMOHAN REDDY, JJ.J
Industrial Dispute-Abolition of Contract Labour-Principles to he
followed-Effect of the Contract Labour (Regulation and Abolition) Act
(Central Act 37 of 1970) and the Maharashtra Mathadi, Hamal and other
Mannual Workers (Regulation of Employment and Welfare) Act 30 of
1969.
The appellant-a private limited company--;;arried on the business of
manufacturing edible oils, soaps and certain by-products. In connection·
with its business the appellant employed about 700 permanent workmen.
fJowever for loading and unloading seed and oil cake bag! and 'for feeding
the hoppers in the solvent extraction plant the appellant employed labour
through a contractor. The workmen in an industrial dispute claimed inter
alia that the work of loading and unloading seed bags as well as that of feeding the hopper~ was of a perennial nature and therefore in respect of these.
contract labour should be abolished. The Industrial Tribunal on considering the evidence before it held that the work of feeding the hoppers could
not be said to intermittent and sporadic as claimed by the appellont; it was
on the other hand closely connected with the principal activity of the appellant.
In similar plants in the region the work of feeding the hoppers was
carried on by permanent workmen. On the basis of these factors the Tribunal held that the appellant also shoold carry· out this work through perma-·
nent workmen.
In the matter cf loading and unloading of seed and cake
bags the Tribunal held that these activities were also cl06ely connected with
the main industry and the work was df a permanent character. The Tribunar
noted that the comparable units in the same region carried on the work of
loading and unloading through contract labour, but nevertheless, on the
view that contract labour must be discouraged, theTribunal held that in this
respect also the appellant must employ only permanent workmen. -The·
Tribunal referred to the Contract Labour (Regulation and Abolition) Act
1970, (Central Act 37 of 1970) and the Maharashtra Mathadi Hamal and'
Other Manual Worker> (Regulation of Employment and Welfare) Act 30
of 1969 and observed that these two enactments also supported its view. In
appeal by special leave before this Court the appellant apart from questioning the Tribunal's decision on merits challenged the jurisdiction of the
Tribunal to consider the question of abolition of contract labour in view of
the provisions of the aforesaid two Acts.
HELD : (i) The Industrial Tribunal acquired jurisdiction to entertain
the .dispute in view of. the reference made by the State Government on
Apnl 17, 1967. Admittedly on that date neitfier Central Act 37 of 1970·
nor !'faharashtra Act. 30 of 1969 had been passed.
Even during the pwceed.mgs before the Tnbunal the appellant raised no objection after the
J'.'.OSSmg of . the two enactments that the Tribunal had no longer jurisdict10n to adjudicate upon the dispute.
Under
these
circumstances
the
Tribunal ~a~ to adj.udicate upon the point referred to it having due regard·
to the pnnc1ples laid down by the Courts, particularly this Court govern·
ing the abolition of contract labour. [689 E-GJ
(ii) Central Act 37 of 1970 had received the President's assent before the passing of the Tribunal's award but it came into force after the'
9-LJSupC.l./72
674
SUPREME COURT REPORTS
[1972] l S.C.R.
said a ward.
The State Act had come into force before the passing of
the award. Though the contention that the Tribunal lost jurisdiction to
consider the question of contract labour in view of these enactments
could not be accepted this Court would be justified when dealing with this
appeal to give effect particularly to the provisions of the Central Act
having due regard to the clearly expressed intention of the legislature in
the said Act regarding the circumstances under which contract labour can
be abolished. [689 C-D; 690 BJ
(iii) Even accnrding to the evidence of the appellant's witnesses
it
was clear that the feeding of hoppers in the solvent extraction plant was
an activity closely and intimately connected with the main activity of the
appellant, namely, crushing oil cakes and oil seeds for extraction of oil
and other chemical production. Excepting for a few days this work had
to go on continuously throughout the year. It could not also be said
that by employing contract labnur for this purpose the appellant would be
enabled to keep down the costs on the ground that there would not be
sufficient work for all the workmen if permanent labour was employed.
There was no wrong approach by the Tribunal in this regard. Further
the award of the Tribunal abolishing the contract labour in respect
df
feeding the hoppers was fully justified because it was in accordance with
the principles laid down by this Court and substantially incorpnrated in
Cls. (a) to (d) of s. 10(2) of the Central Act. The Tribunal's direction
in this regard must therefore be upheld. [680 C-F; 681 A-B; 694 C-D]
(iv) However the Tribunal's direction to the appellant not to engage
any labour through a contractor for the work of loading and unloading
after May 1, 1971 must be set aside. The Central Act had come into
force on February 10, 1971. Under s. 10 of the said Act the jurisdiction
to decide matters connected with prohibition of contract labour is vested
in the appropriate Government. Therefore with effect from February 10,
1971 it is only the appropriate Government that can prohibit contract
labour by following the procedure and in accordance with the pmvisions
of the Central Act. The Industrial Tribunal in the circumstances had no
jurisdiction, though its award was dated November 20, 1970, to give a
direction in that respect which becomes en'forceable after the date of the
coming into force of the Central Act.
In any event, such a direction contained in the award could not be enforced from a date when abolition of
contract labour can only be done
by the appropriate Government in
accbrdance with the provisions of the Central Act. [692 A-D]
Further under cl. (c) of s. 1()(2) of the Central Act one of the rele-·
vant factors to be taken into account is to consider, when contract labour
regarding any particular type of work is proposed to
be
abolished,
whether that type of work is done ordinarily through regular workmen in
the establishment, or an establishment simila:r thereto.
In the present
case similaj establishments, as noted by the Tribunal, employed contract
labour for loading and unloading. The
evidence also showed that the
work of loading and unloading required varying
nwnbers
of workmen
from day to day justi'fying the employment of contract labour under the
principles laid down by this Court. [693 El
The Standard-Vacuum Refining Co. of India Ltd. v. Its Workmen &
Ors., [1960] 3 S.C.R. 466, Shibu Metal Works v. Their Workmen, [1966J
J L.L.J. 717 and National Iron and Steel Co. Ltd. and Ors. v. The State of
West Bengal and Anr., [1967] 2 S.C.R. 391 referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 620 o;f
1971.
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VEGOILS LTD. v. WORKMEN (Vaidialingam, J.)
675
Appeal by special leave from the Award dated 20th November
I 970, of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T.) No. 110 of 1967.
G. B. Pai, P. N. Tiwari and 0. C. Mathur, for the appellant
The respondent did not appear.
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The Judgment of the Court was delivered by
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Vaidialingam, J.
This appeal, by special leave. is directed
against the award (Part-1) dated November 20, 1970 of the Industrial Tribunal, Maharashtra, Bombay in Reference (I.T. No. 110
of 1967).
The refer~nce was made by notification dated April 17, 1967
and three questions were referred for adjudication. We are not
concerned in these proceedings with the subject matter of dispute
rehrting to demand Nos. 2 and 3. Part 1 of the award, against
which this appeal is preferred, related to demand No. 1, which
was as follows :
"Demand No. I-Abolition of contract system :
The Company shall abolish the contract system in
whatever form and in any department of the company
existing at present and the workmen employed by the
contractors shall be treated as the Company's regular
employees and all 1he knefits of service conditions and
wages available to the company's employees will be extended to them."
It will be seen that the above demand consisted really of two
parts: (a) that the contract system should be abolished, and (b)
that the workmen employed by the contractor should be treated as
the appellant's regular employe-~"s with all the benefits of service
conditions that are available to the regular employees of the
Company.
The original parties 1o the reference were the Swastik Oil Mills
l:td., Wadala, Bombay and the workmen employed therein as represented by the Dyes and Chemical Workers Union. Prior to its
incorporation in 1968, the appellant Company was carrying on
business of manufacturing edible oils, soaps and its by products
such as glycerine and deoiled cake meal in the name of Karamchand Premchand Private Limited. In or about March, 1970 the
latter firm was 1taken over by the appellant Company. The said
business was originally carried on by Swastik Oil Mills Limited,
which by the orders of the High Courts of Bombay and Gujarat
was amalgamated with Karamchand Premchand Private Limited
on April 18, 1967. Since the taking over of the said Karamchand
676
SUPREME COURT REPORTS
(1972] l S.C.i..
Premchand Private Limited by the Vegoils Private Limited,
namely, the appellant, the latter has been carrying on the said
business.
In connection with its !Jiusiness, the appellant employs about
700 permanent workmen at its factory in Wadala, Bombay.
According to the appellant, it has been employing for more than
30 years a contractor for loading, unloading, weighing and stacking
materials and bags and feeding the hoppers. It may be mentioned
at .this srtage that the workmen had raised a dispute under demand
No. I regarding the abolition of the contract system of employing
labour in the two departments of the appellant, namely, ( i) in the
canteen section, and (ii) in 1the seeds godown and the solvent extraction plants section. But before the Industrial Tribunal the
Union did not press their demand for abolition of contract labour
in ;respect of the canteen sec.lion. As a consequence the Industrial
Tribunal in the award has rejected the claim of the Union for
abolition of the contract system in the canteen section. Therefore, we will make no further reference to the stand taken by the
parties regarding this section, in our judgment.
We .wijl.now refer to the stand taken by the appellant and ithe
Union regarding the abolition of contract labour in respect of
seeds godown and the solvent extraction plants.
The stand taken
by the Union in its statement of claim dated May 30, 1967 was
briefly as follows :
The Company had work in this section which was of a regular
and continuous nature. The work in that section was not intermittent or accidental type. The work required to be performed is
of loading and unloading seed bags and also to feed the hoppers
for the requirements of solvent extraction plants. The product
left after ithe process of solvent extraction also is to be filled in
gunny bags. All these items of work are of a permanent nature
and was being regularly carried out by the contractor's workmen
by employing on an average more than 200 workmen. The work
being of a continuous nature is being carried out throughout the
}'ear. Further, this type of work is an essential part of The solvent
extraction unit. As the jobs were essentially connected with the
day to day work of the Company, and as they were continuous, the
employment of a contractor for getting these types of work done,
is nothing but an unfair labour practice adopted by the appellant.
The employment of contract labour has been disapproved by the
various Committees and Cornrnil)Sions. This Court has also discussed and laid down principles regarding 1the employment of contr,tct hil:io!!r. Tul'l Jal:)qμr(l~ W<lfJsi!lg Hlk<ler ~ f=PlltraFtor wl'lri: at
lii~ me;rcy and were not getting the bi:nefits which the permanent
employr,es of the appellant Company are normally entitl~d to. To
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VEGOILS LTD. v. WORKMEN (Vaidiallngam, I.)
677
avoid givin~ ·the benefit to such workmen, the Company has adopted the device of. ~aving the work done by contract labour. The
demand for aboht1on of contract labour is fair and reasonable and
as such the demand has to be acceded t-0.
In the written statement dated July 22, 1967, which was originally filed. by 1the Swastik Oil Mills Limited, the Company took up
the follmymg contentions :
Wherever the work was of a perennial nature, the Company
has been having that work done only by its permanent employees.
But where certain items of work were of intermittent and sporadic
na'lure and irregular in its working, to ensure efficiency, economy
and proper working, the appellant had to engage contract labour.
In respect of the seeds godown and solvent extraction plants, the
appellant classified the type of work into four parts ( ( i) unloading
of seeds and cake bags from railway wagons a11d mator trucks and
stacking the same in the godown for easy identification in separate
lots, (ii) loading of deoiled cake meal bags into motor lorries and
wagons whenever they had to ,be despatched from the factory,
(iii) feeding of cake in the hopper which in turn feed the solvent
extraction plants through a system of long screw conveyors and
other necessary equipment; and (iv) filling, weighing and stacking
of small bags.
The full particulars regarding the type of work involved in the
above four items were given. All these i•tems of work were of an
intermittent and irregular nature. The loading and unloading in
wagons and trucks was not a regular affair but dependent on the
availability of railway wagons and trucks. The feeding of cakes
into hoppers and filling up deoiled cakes were also of an irregular
and intermittent nature. In view of these circumstances, it was
not possible to employ permanent workmen to carry out the said
items of work.
Further, legislation rega@ing the regulation and
abolition of contract labour was being contemplated by the Central Government and the State of Maharashtra.
Various charts
relating to the approximate number of workmen employed, their
hours of work as well as the days on which they were employed
for •these items of work by the contractor, were also given.
In
view of the peculiar type of these items of work, the demand of the
Union for abolition of contract labour was not justified.
The Industrial Tribunal considered the demand under two
heads : (i) the abolition of contraC't labour, and (ii) treating the
workmen employed by the contractor as regular employees of the
Company and ·giving them all the benefits of service conditions
which the permanent employees were entitled to.
678
SUPREME COURT REPORTS
[1972] l S.C.R.
So far as the second part of the above demand is concerned,
the Industrial.Tribunal rejected the Union's claim. According to
the Industrial Tribunal the Union has not placed any material nor
made out any case justifying this part of the claim.
In this connection the Industrial Tribunal relied upon the ·~vidence of the
contractor Shri Giri, as well as the documents filed by him, and
has ·come to the conclusion that the persons working under the
contractor were not his permanent employees and that, on the
other hand, they were free to go and work on any day under anybody else.
In view of this circumstance, the Industrial Tribunal
held that there was no relationship of permanent employees between the contractor and the labour force engaged by him for the
daily work which he had to get done under 'the contract. Hence
this palt of the claim to treat the contractor's workmeri as regular
employees of the Company was rejected.
Regarding the first part of the demand, namely, abolition of
contract labour, the appellant adduced volume of evidence, oral
as well as documentary. The documentary evidence consisted of
various charts prepared not only by the appellant but also by the
contractor, Sb;[ Giri, giving particula~s about the numberl of
workmen employed, the hours of work done by them, as well as
the days on which there was no work at all to be done. Some of
the officers of the appellant Company as well as the contractor
gave evidence regarding the manner in which the work was done
in the seeds godown and the solvent eictraction plants. In particular, the appellant led evidence to show that the work of loading
and unloading in wagons and lorries was not of a continuous
nature. The arrival of wagons on any particular day was uncertain.
Nevertheless, the controtor has to be ready to clear the wagons as
and when it arrives within the time allowed by the railway authorities, otherwise heavy demurrage had to be paid. While on certain days no wagon at all will arrive, on certain other days suddenly
a large number of wagons will arrive necessita'ting the clearance
of the goods promptly and immediately for which purpose the contractor was always having workmen ready to meet the situation.
This type. of work, according to the appellant company, could be
done efficiently and promptly only by a contractor.
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The Union, on the other hand, placed reliance upon the charts
furnished by the appellant and the contractor and pleaded that
the work was of a continuous and perennial nature, which could
be very efficiently discharged by the permanent employees of the
a~p~lla11:t Comp.any. The Unioll: also referred to the practice obtammg m certam other compames doing similar business in the
area and pointed out that the type of work tha't was being done by
the appellant through a contractor was being done in those concerns by their permanent workmen.
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VEGOILS LTD. v. WORKMEN ( Vaidialingam, J.)
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The Industrial Tribunal considered the affidavit filed by
Vallabhdas A. Parikh, who was at the material time the Production Director of the Swastik Oil Mills, But he was not available
for giving evidence, hence the Company relied on the aflidavits
filed by Anirudhha R. Shah, the Head Time-keeper and Ramanlal
M. Desai, who was incharge as ithe Head of the Department of the
solvent section, crushing section, refinery and refined filling sections of the appellant. Further the business Manager of the appellant Sri Rajnikant C. Nanavati had also filed an affidavit. The
contractor Giri also gave evidence on behalf of the appelant. Such
of ithose witnesses who had given affidavits supporting the claim
of the appellant were cross-examined by the Union. The Industrial Tribunal placed reliance on the evidence of Ramanlal M.
Desai, who was the Head of the Department of the Solvent section.
This witness gave particulars regarding the approximate number
of days that the solvent extraction plant worked in the years 1967,
1968 and 1969. From his evidence it was clear that out bf 36S
days in 1967, the plant did not work for 65 days because of nonavailability of raw materials and it had to be closed for general
cl.earring and repairs for about 23 days. Similarly it remained close
for 6 days due to holidays and for 8 days due to power failure.
During all the other days the plant was working. The position in
1968 and 1969 was more or less substantially similar. Even in
cross-examination Ramanlal M. Desai admitted that the solvent
extraction plant was working for about 300 days out of 365 days.
in the year and that the solvent extraction plant was working in
three shifts.
The contractor Giri also gave evidence regarding
the number of workmen engaged by him regarding the solvent .extraction plant. The Industrial Tribunal is of the view that the work
of filling the hoppers, in view of the evidence referred to above,
cannot be said to be intermittent or sporadic. On the other hand,
feeding of hoppers in the solvent extraction plant is intimately and
closely connected with the principal activity of the appellant,
namely, that of crushing oil cakes and oil seeds for extraction of
oil and other chemical productions. In this view, the Industrial
Tribunal held that the work of feeding the hoppers- and other allied
process connected with the filling of bags with deoiled cakes must
be c.onsidered to be a necessary and integral part of the industry
earned on by the appellant.
The Industrial Tribunal is alw of
the view that the work of feeding the hoppers and other activities
connected with the same are of a permanent nature.
In consequence, the Industrial Tribunal held that there was no justification
for the aPJ::ellant to employ contract labour for this purpose.
Mr. G. B. Pai, learned counsel, for the appellant, no doubt,
attacked this finding of the Industrial Tribunal. According to the
learn~ counsel the evidence in this regard has not been properly
apprecmted and the Industrial Tribunal committed an error in
'680
SUPREME COURT REPORTS
[1972] 1 S.C.R.
:holding f!!~t. the work conne.cted with feeding of the hoppers and
other acuv1t1es connected wPth the same are of a permanent and
,perennial nature.
The Union, though served, has not chosen to appear in this
appeal. But Mr. Pai has drawn our attention to all the relevant
materials on record.
We are not inclined to accept the contention of Mr. Pai that
the direction given by the Industrial Tribunal abolishing the contract labour regarding the work of feeding the hoppers and other
.allied activities incidental and connected therewith is in any
manner erroneous.
The direction given in 1t!Jis regard, in our
·Opinion, is fully justified. Even according to the evidence of the
appellant's witnesses, referred to above, it is clear that the feeding
of hoppers in the solvent extraction plant is an activity closely and
intimately connected with the main activity of the appellant,
namely, crushing oil cakes and oil seeds for extraction of oil and
other chemical production. Excepting a few days,
as
already
referred to above, this work has to go on continuously almost
throughout the year. From this it follows that this item of work is
incidental to •the nature of the industry carried on by the appellant,
which must be done almost every day and there should be no ,difficulty in having regular workmen in the employment of the appellant to do this type of work.
It is not as if that :the work is of an
intermittent or temporary nature or so little that it would not be
possible for th•2 appellant to employ full time workmen for this
purpose. Further, it cannot also be said that by employing contract labour for this purpose, the appellant could be enabled to
:keep down the costs on the ground that there would not be sufficient work for all the workmen if permanent labour was employed.
There is also on record •the staP~ment Ex. C, filed on behalf
.of the appellant. That statement gives the items of work got done
by the contract labour by three other concerns, namely, M/s
<Jodrej Soap Works, Mis Tata Oil Mills and Mis.
Hindustan
Lever. From !He said statement it is seen that feeding of cakes in
the hoppers is done by contract labour in the appellant Company
and M/s Godrej Soap Works. That work is done by the departmental workmen in M/s. Tata Oil Mills, M/s. Hindustan Lever does
not have any solvent extraction plant, but the work of feeding the
seeds in the hoppers, filling of cakes in the bags and stitching cake
bags and stacking those bags are done by departmental workmen.
Therefore, from this it follows that the feeding of hoppers is an
essential part of the industry carried on by the appellant and that
it could very well Ix: done by the departmental workmen as is being done by Ml s Tata Oil Mills and M/ s Hindustan Lever. In
view of all these circumstances pointed out above, the direction of
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VEGOILS LTD. V. WORKMEN (Vaidialingam, J.)
681
the Industrial Tribunal regarding this aspect is not erroneous. In
faot Mr. Pai himself felt considerable difficulty in satisfying us
th~t thern has. been any wrong approach made by the Industrial
T~1bun~l m this re~ar~. Further, tho~ direction given by the Industrial Tnbunal abohshmg the contract labour in respect of feeding
the hoppers is quite in accordance wrth the principles laid down
by this Court in various decisions.
Those principles will be
refer:ed to. by us whe~ ~onsidering the direction given by the Industnal Tribunal abohshmg the contract labour regarding loading
and unloading of seeds bags in wagons and trucks.
The Industrial Tribunal considered the evidence of the appellant's witnesses regarding loading and unloading of seeds and ~ake
bags from railway wagons and motor trucks and s1acking the same
in the godowns as well as the loading of deoiled cake meal bags
in the motor lorries and wagons whenever required to be dispatched from the factory. Here again the Industrial Tribunal is of
the view that these activities are also closely connected with the
main industry carried on by the appellant and that the said work
is also of a permanent character.
This item of work fonns an
integral part of the process of the industry itself.
On ithis reasoning, the Industrial Tribunal held that those activities also could
be carri·~d on by the appellant by its permanenl workmen.
The
Industrial Tribunal no doubt, noted that from Ex. C it is clear
that the work of loading and unloading of seed bags, cake bags
from wagons and lorries is being done in all the firms,
namely,
Ml s Godrej Soap Works, M/s Tata Oil Mills and M/s Hindustan
Lever, situated in the same area including th·~ appellant, were got
done by contract labour. But, nevertheless, the Industrial Tribunal is of the view that the contract labour will have •to be discouraged.
The Industrial Tribunal also referred to a statement
filed by the appellant Ex. C9. The said exhibit is as follows :
"'EMPLOYMENT POSITION-LOADING AND UNLOADING CONTRACTOR
----
Month
No. of Total
AverTotal
l\taxiMiniTotal
emploManage
workmum
mum
amount
yees on days
attening
emploemplopaid to
roll
dance
days
yed per yed per contractor
per day
day
day
----------------------·----------·-
March. 1967
67
1176
47
25
51
41
11,183 -05
April, 1967
64
1188
47
25
56
4)
11.300 ·02
May, 1967
63
61245
48
26
55
43
12,510 ·40
June, 1967
82
1669
64
26
76
46
11,358 -00
for the Swastik Oil Mills Ltd.,
Sd. V. A. Parikh_,
Production Director."
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SUPREME COURT REPORTS
[1972] l S.C.R.
From the above figures furnished by the appellant, 1the Industrial Tribunal is of the view that the average number of employees
on the roll were between 63 and 82 per month and that the total
man-days ranged between 1188 to 1669 per month.
The average
attendance per day again ranged between 46 to 47 per day. From
this statement the Industrial Tribunal drew an inference that the
total number of working days in every month was between 25 or
26 whil·~ the minimum and maximum persons employed per day
fluctuated between 41 and 46 at the minimum and between 51 to
76 at the maximum. The Union also placed very strong reliance
on this document.
Ex. C9 in support of rts contention that the
work of loading and unloading is of a permanent nature and that
it could be done by the permanent employees of the Company.
The Industrial Tribunal accepted this contention of the Union and
ultimately held that even in respect of this item of work, the contract labour should be abolished.
It must also be pointed out that the Industrial Tribunal has
referred to two enactments :
( 1 ) passed by the Parliament and
(2) by the Maharaslrtra State Legislature, to which we will refer
later. It is the view of the Industrial Tribunal that these two enactments also support its view that the contract labour should be
abolished as far as possible. Ultimately, the Industrial Tribunal
directed the appellant not to engage any labourer through a contrac'tor for the work of loading and unloading also with effect from
the date after the termination of the present contract between the
employer and the contractor, that is, after May 1, 1971.
Mr. G. B. Pai, has very strenuously attacked this finding of the
Industrial Tribunal.
Learned Counsel raised three contentions :
( 1) TI:e Tribunal had no jurisdiction to consider the question of
abolition of contract labour in view of the Contract Labour (Regulation & Abolition) Act, 1970, (Act 37 of 1970) (hereinafter to
be referred as the Central Act) and The Maharashtra Mathadi,
Hamal and Other Manual Workers (Regulation of Employment
and Welfare) Act, 1969, (Act 30 of 1969) (hereinafter to be
referred as the State Act); (2) even on 1the basis of the principles
laid down by this Court, the direction to abolish contract labour in
respect of loading and unloading is erroneous in law, and (3) the
finding that contract labour should be abolished in •this regard is
opposed to the evidence and the practice obtaining in other industries in the same area.
Before we deal with the contention regarding jurisdiction of
the Industrial Tribunal based upon the Central Act and Maharashtra Act, we will ·refer to the principles laid down by this Court
in considering the question of abolition of contr.ect labour which
is "te subject of the second contention of Mr. Pai. According to
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the Learned counsel, the principles laid down by this Court have
been ignored when the Industrial Tribunal directed abolition of
contract labour regarding loading and unloading. There has been
a consistent demand by rthe labour for abolishing the system o!
contract 12bour and that has given rise to certain industrial adjudications the correC'tness of which has com~ up for consideration
'
.
before this Court. In The Standard-Vacuum Refining Co. ot
India Ltd. v. Its Workmen and others('), two questions arose,
namely, (I) whether a dispute raised by the permanent workmen
regarding abolition of coll!tract labour is an industrial dispute under
s. 2(k) of fu~ Indu~trial Disputes Act, and (2) whether the directions given by the Industrial Tribunal abolishing the contract system was justified.
We are not concerned with the first aspect, referred to above,
in the case before us.
Regarding the second aspect, the Industrial
Tribunal had in that case abolished the contract system obtaining
in the particular establishment. This Court after reforing to the
recommendations of the Royal Commissions on Labour, as well as
the opinion expressed by several Labour Inquiry Committees appointed in different States, has expressed the opinion that in a
given case the Industrial Tribunal should rnst its decision not
merely on theoretical or abstract objections to contract labour
but also on the terms and conditions on which contract labour is
employed and the grievai~ce made by •the employees in respect
thereof. In that case this Court further held :fuat the contract
labour was doing an item of work which was incidental to rthe manufacturing process, which was carried on by •the company and that
type of work was necessary and also of a perennial nature which
had to be done every day.
It was also noted that such type of
work was generally done by the workmen in other industries in
the area by the regular employees of the employer. In view of all
these circumstances i·t was held by this Court that there should be
no difficulty in having the said type of work getting don·~ by regular workmen of the employer.
It was also emphasised that the
matter would be different if the work was of an intermittent or
temporary nature or was so little that it would not be possible to
employ full time workmen for the purpose. This Court approved
the decision of the Industrial Tribunal abolishing contract labour
in the above circumstance. The said principles laid down in the
above decision hav·~ been referred to wHh approval and adopted
in Shibu Metal Works v. Their Workmen(').
The abolition of
contract labour by the Industrial Tribunal was also approved in
this case. In National Tron and Steel Co. Ltd. and others v. The
State of West Bengal and another(') after quoting with approval
(I) [19601 3 S.C.R. 466
(2) J1966] t L.L.J. 717.
(3) [1967] 2 S.C.R. 391.
684
SUPREME COURT REPORTS
[1972] l S.C.R.
ithe principles laid down by this Court in The Standard-Vacuum
Refining Co. of India Ltd. v. Its Workmen and others('), this
Court afirmed the decision of the Industrial Tribunal abolishing
contract labour on the ground that the employment of contract
labour would not have served to keep down the costs of the employer on the ground that there would not be sufficient work for
all the workmen if permanent labour was employed.
From the principles laid down by this Court and referred to
.above, it is clear that if the work for which contract labour is employed is incidental to and closely connected with the main activity
of the industry and is of a perennial and permanent nature, the
aboli'tion of contract labour would be justified.
It is also open
to the Industrial Tribunal to have regard to the practice obtaining
in other industries in or about the same area.
It may be pointed
out tha't most of the principles laid down by this Court have been
given due regard in the Central Act, to which we will refer immediately.
In our opinion, Mr. Pai is justified in his contention
that the princip],~s laid down by this Court, though adve~ted to by
the Tribunal, have not been given due regard, when it gave a
direction regarding abolition of contract labour regarding loading
and unloading.
We will be discussing this aspect a lirt!e more
elaborately when we deal with the third contention of Mr. Pai on
merits.
Now coming to the first contention, it is necessary to refor to
the material provisions of the two enactments. The Central Act
received the assent of 'the President on September 5, 1970 and
came into force on February 10, 1970. Therefore, at the time
when the award was passed, the Act had received the assent of the
President, though it had not come in'to force, but the State Act
had been passed on June 13, 1969 and we are informed that it had
come into force even before the date of the award.
The Central Act, as its preamble shows, was to regulate the
employment of contract labour in certain establishments and to
provide for the abolition in certain circumstances and for matters
connected therewith. Under sub-s. ( 4) of s. 1, the Act applies to
·the establishments mentioned therein as well as to every contractor who employs the number of workers referred to in cl. (b).
'There is no controversy that the Act μpplies to the appellant establishment.
Section 2 defines the various expression. Expressions "appro·
-priate Government" "con'tract labour"
"contractor" "establishment" & "principal employer" are all defined in els. (a) (b) ( c)
(e) and (g) respectively of sub-s. (I) of s. 2. Chapter II deals
with the Advisory Board. Section 3 (I) provides for the Central
(1) [1960] 3 S.C.R. 466.
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Government constituting the Central Advisory Contract Labour
Board, to advise the Central Government with regard to matters
arising out of the Administration of the Act. Sub-s. ( 2) provides
for the composition of the said Board, and from cl. ( c) it is seen
that among other persons, the said Board is to consist of the representatives of the contractor, workmen and the industries concern·
ed. Under the proviso to sub-section ( 3) the nUII)ber of mem·
bers nominated to represent the workmen shall not be less than the
number of members nominated to represent the principal employers
and the contractors. Section 4 deals with the constitution of a
similar Advisory Board by the State Government. The said State
Advisory Board is also to consist among other persons, of the
representatives of the industry, the contractor and the workmen.
A proviso to sub-section 3 of s. 4 similar to the proviso to subsection ( 3) of s. 3 has also been enacted.
Chapter III deals with ithe registration of establishments em·
ploying contract Jabour.
Sections 6 to 15 are in this Chapter.
Section 6 deals with the appointment of registering officers by the
appropriate Government by natification in the Official Gazette.
Section 7 makes it compulsory on the part of every principal em·
ployer of an establishment to which the Act applies to make an
application to the registering officer within 1the time prescribed for
registration of the establishment. Section 8 deals with revocation
of registration in the circumstances merntioned therein.
Section
9 dealing with the effect of non-registration prohibits the principal
employer of an establishment to which the Act applies from employing contraot labour if the establishment has not been registered
under s. 7 within the time prescribed or in the case of an establishment in respect of which registration has been revoked under s. 8,
Section 10 which prohibits the employment of contract labour and
which, in our opinion, is an impbrtam provision is as follows :
Section 10: Prohibition of employment of contract labour.-
( 1) Notwithstanding anything contained in this Act,
the appropriate Government may, after consultation with
the Cenfral Board, or, as the case may be, a State
Board, prohibit, by notification in the Official Gazette,
employment of contract Jabour in any process, operation or other work in any establishment.
(2) Before issuing any notification under sub-section
( 1) 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,
686
SUPREME COURT REPORTS
(1972] l S.C.R.
business, manufacture or occupation that is carried on in
the establishments;
(b) whether it is of perennial nature, that is to say,
it is of sufficient duration having regard to the nature. of
industry, trade, business, manufacture or occupallon
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 wholetime workmen.
Explanation.-If a question arises whether any process or operation or other work is of perennial nature,
the decision of the appropriate Government thereon
shall be final."
The following points em,rge from s. 10 ( 1) the appropriate
Government has power to prohibrt the employment of contract
labour in any process, operation or other work in any establishment; (2) Before issuing a notification prohibiting contract
labour, the appropriate Government has to consult the Central or
State Board, as the case may be, which we have already pointed
out, comprises of the representatives of the workmen, contractor and itb,e industry; (3) Before issuing any notification under
sub-section ( 1), prohibiting the employment of contract labour,
the appropriate Government is bound to have regard not only to
the conditions of work and benefits provided for the contract
labour in a particular establishment, but also other relevant factors enumerated in els. (a) to ( d) of sub-section ( 2) ; and ( 4)
under the Explanation which really relates to cl. (b), the decision of the appropriate Govermnent, on the question whether any
process, operation or other work is of perennial nature, shall be
final.
Chapter IV deals with licensing of contractors. Two sections
in this Chapter have to be noted, namely, ss. 11 and 12. Section
11. deals with the appointment of licensing officers by the appropnate Govermnent for the purpose of Chapter IV. Sub-section
( 1) of s.