Holding

Workmen employed in a statutory canteen are employees of the establishment for the purpose of the Factories Act only, but on the facts they were in fact employees of the corporation and the management's appeal was dismissed.

Summary

The workmen employed in the statutory canteen of Indian Petrochemicals Corporation Ltd. filed a writ petition seeking declaration that they were regular employees of the corporation and were entitled to regularisation, pay scales and arrears. The Bombay High Court held that, relying on Parimal Chandra Raha v. LIC, the canteen workers became regular workmen of the management and ordered their absorption subject to certain conditions. The corporation appealed, arguing that the workers were employed by an independent contractor, that regularisation would breach reservation and recruitment policies, and that the High Court could not impose conditions. The Supreme Court examined the definition of "worker" under Section 2(1) of the Factories Act and held that such workers are employees of the establishment only for the purposes of the Act, not for all service benefits. However, on the facts—continuous employment, control and supervision by the corporation, and the Industrial Court’s order—the Court concluded that the canteen workers were in fact employees of the corporation and dismissed the management’s appeal, upholding the High Court’s regularisation with appropriate guidelines.

Issues considered

The scope of the term 'worker' under Section 2(1) of the Factories Act with respect to statutory canteen employees – whether it confers employee status for all purposes or only for the Act.
Whether the canteen workers, though engaged through a contractor, are in fact employees of the principal employer based on control, continuity and contractual facts.
Whether the High Court could impose conditions on the regularisation of the workers and whether such regularisation is permissible despite reservation and recruitment policies.

Legislation cited

Constitution of Indias. Article 14, s. Article 16
Factories Act, 1948s. 2(1), s. 46
Industrial Disputes Act, 1947

Subjects

statutory canteenFactories Actemployee statuscontract labourregularisationreservation policyunfair labour practiceservice continuity

Judgment

INDIAN PETROCHEMICALS CORPORATION LTD. AND ANR. A
v.

-
SHRAMIK SENA AND ORS.

AUGUST 4, 1999

[S.P. BHARUCHA, R.C. LAHOTI AND N. SANTOSH HEGDE, JJ.] B

-Y· Factories Act, 1948.

Sections 2 (1) and 46-Statutory Canteen established by Management
under Section 46-Workmen employed in such canteens-Status of-Held, c
workmen of a statutory canteen would be the workmen of the establishment
for the purpose of the Factories Act only and not for all other purposes.

Service Law.

Regularisation-Workmen employed in statutory canteen claiming D
I
,f

regularisation-Management contending that workmen are the employees of
Contractor-Status of Workmen-Held, under the facts and circumstances,
such workmen are the employees of the management and are entitled to
regularisation-Court imposing certain conditions while directing
regularisation-Imposition of conditions challenged by workmen-Held, it is E

- necessary that suitable guidelines or conditions be laid down at the time of
courts' issuing directions to regularise the services of the workmen depending
upon the facts of each case.

Words & Phrases- 'Workman '-Meaning of in the context of Factories
Act, 1948. F

Canteen employees filed a writ petition before the High Court for a
declaration that they were regular workmen of the management entitled to
regularisation and all consequential benefits including arrears of wages etc.
G
High Court allowed the writ petition on the ground that the workmen
working in all establishments where canteens are maintained as a requirement
of the statute (namely, Section 46 of the Factories Act) ipso facto became the
regular workmen of the management on the basis of the judgement in the
case of Parimal Chandra Raha & Ors. v. Life Insurance Corporation of India
47 H
48 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.

A & Ors., (1995) Supp. 2 SCC 611 and held that since the said workmen were
working in the statutory canteen of the management, they were entitled to
absorption and gave certain directions in regard to their absorption. Aggrieved
,_
by the judgment of the High Court, the management, and aggrieved by the •
conditions imposed by the High Court while directing their regularisation,
the workmen,' have both appealed to this court.
B
The Management contended that various reservation orders of the
State and its own recruitment policy would be violated, ifthe impugned order
is implemented; that the workmen were employed by a contractor who was
an independent employer; that there was no relationship of 'master' and
C 'servant' between the workmen and the management; that the supervision or
controlling power over the workmen wholly rested with the contractor; that
the employees working in statutory canteen could become employees of the .
management only for the limited purpose of the Factories Act and had no
automatic rights to be absorbed as regular workmen; that the continuity of
the employees, in spite of change of contractors, was due to an order made
D by the Industrial Court, Thane in this regard; and that the management was -
free to engage contractor to provide canteen services in its establishment as
there was no prohibition of contract labour.

The workmen contended that every workman of a statutory canteen
E would become the regular employee of the principal employer; and
alternatively, that induction of contractor is a facade put up by the management
to evade its responsibility; that once an employee is found to be an employee
of the management because of the Factories Act, he becomes its employee
for all purposes; and that once the High Court had come to the conclusion
that the workmen were the employees of the management, it should not ~ave·
F imposed conditions while directing their regularisation.

Dismissing the appeals, the Court

HELD: 1. It is clear from the definition of'worker' under Section 2(1)
G of th~ Factories Act, 1948 that a person em ployed either directly or by or
through any contractor in a place where manufacturing process is carried
on, is a 'workman' for the purpose of the Act: Section 46 of the Act empowers
the State Government to make rules requiring any specified factory wherein
more than 250 workers are ordinarily employed to provide and maintain a
canteen by the occupier for the use of the workers. It is not .in dispute,
H pursuant to this requirement of law, the management is providing canteen
INDIAN PETROCHEM. CORPN. LTD.'" SHRAMIK SENA 49
facilities wherein the employees are working. Hence, it is fairly conceded A
by the management that the respondent workmen by virtue of the definition··
of 'workman' under the Act, are the employees of the management for the
purposes of the Factories Act. [56-C-D]

2. The Factories Act does not govern the rights of employees with B
reference to recruitment, seniority, promotion, retirement benefits, etc. These
are governed by other statutes, rules, contracts or policies. Therefore, the
workmen's contentions that employees of a statutory canteen ipso facto
become the employees of the establishment for all purposes cannot be accepted.
The workmen of a statutory canteen would be the workmen of the
establishment for the purpose of the Factories Act only and not for all other C
purposes. [56-E-F)

M.M.R. Khan & Or~. v Union of India & Ors., [1990) Supp. SCC 191,
Management of Reserve Bank of India v. Workmen, (1996) 3 SCC 267,
followed.
D
Parimal Chandra Raha & Ors. v. Life Insurance Corporation of India
& Ors., [1995J Supp. 2 SCC 611, explained.

3.1. Though the canteen in the appellants's establishment is being
managed by engaging a contractor, it is also an admitted fact that all the E
employees who were initially employed and those inducted from time to time
in the canteen have continued to work in the said canteen uninterruptedly.
The employer has contended that this continuity of employment of the
employees, in spite of there being change of contractors, is not voluntary and
was due to an order made by the Industrial Court, Thane, wherein it held that
these workmen were entitled to continuity of service in the same canteen F
irrespective of the change in the contractor. A perusal of the said order of
the Industrial Court shows that these workmen had contended before the
said court that the management was indulging in an unfair labour practice,
and in fact they were employed by the Company. They specifically contended
therein that they are entitled to continue in the employment of the Company G
irrespective of the change in the contractor. The Industrial Court accepted
their contention as against the plea put forth by the management herein. The
employer did not think it appropriate to challenge this decision of the
Industrial Court which has become final. This clearly suggests that the
management accepted as a matter of fact that the workmen are permanent
employees of the management's canteen. This is a very significant fact to H
50 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.

A show the true nature of respondent's employment. (58-F-H; 59-A-D)
3.2. A perusal of the affidavits filed in this court and the contract
entered into between the management and the contractor clearly establishes
that the canteen has been there since. the inception of the factory; the
workmen have been employed for long years and despite change of contractoh
B the workers have continued to be employed in the canteen; the premises,
furniture, fixture, fuel, electricity, utensils, ·etc. have been provided by the
management; the wages of the canteen workers have to be reimbursed by the
management; the supervision and control on the canteen is exercised by the (

management through its authorised officer, as is evident from the various
C clauses of the contract between the management and the contractor ; the
contractor is nothing but an agent or a manager of the management, who
works completely under the supervision, control and directions of the
management; and the workmen have the protection of continuous employment
in the establishment. Considering these factors cumulatively, in addition to
the fact that the canteen in the establishment of the management is a
D statutory canteen, it is held that in the instant case, the workmen are in fact
the workmen of the management. (59-D-E-F-G-H; 60-A-B)

4. The initial appointments of these workmen are not in accordance
with the rules governing the appointments or the establishment policy of
recruitment of the management. The said recruitments could also be in
E contravention of the various statutory orders including the reservation policy.
Further the management is an instrumentality of the State and has an
obligation to conform to the requirements of Articles 14 and 16 of the
Constitution. In spite of the same the services of the workmen are being
regularised by the Court not as a matter of right of the workmen arising
F under any statute but with a view to eradicate unfair labour practices and in
equity to undo social injustice and as a measure of labour welfare. Therefore,
it is necessary that in this process suitable guidelines or conditions be laid
down at the time of courts issuing direction to regularise the services of the
workmen concerned depending upon the facts of each case.
(60-G-H; 61-A-B)
G CIVIL APPELLATE JURISDICTfG.~: Civil Appeal No. 1854 of 1998
Etc. . "
from the Judgment and Order dated 29.8.97 of the Bombay High Court -
H
in W.P. No. 2206 of 1997.

T.R. Andhyarujina, H.S. Parihar and Subrat Birla for the Appellants.
,_ '•
INDIAN PETROCHEM. CORPN. LTD.,. SHRAMIK SENA [SANTOSH.HEGDE, J.) 5J
K.K. Singhvi, S. Pakale, N.M. Shivkar, Farrukh Rashid and Ashok Kumar A
. Gupta for the Respondent in C.A. Nos. 1854-55/98.

Gaurav K. Banerjee, R.S. Raymond, R.N. Karanjawala, Mrs. Nandini G<;>re
and Mrs. M .. Karanjawala for the Respondents in C.A. No. 1099/99.

The Judgment of the Court was delivered by B
SANTOSH HEGDE, J. C.A. No. 1854/98 is an appeal preferred by
Mis. Indian Petrochemicals Corporation Limited and another (hereinafter referred
to as the management) against an order dated 29.8.1997 made by the High
Court of Judicature at Bombay in W.P. No. 2206/97 filed by the ShramikSena
and another (hereinafter referred to as
the workmen). c
C.A. No. 1855/98 is an appeal filed by the workmen against the above-
mentioned order of the High Court of Bombay. Both the appeals having been
clubbed together, are heard and disposed of by this common judgment.

The workmen referred to above, filed the above writ petition before the D
High Court of Bombay for a declaration that the workmen whose names are
shown in Ex. 'A' annexed to the said petition, are the regular workmen of the
management and are entitled to have the same pay-scales and service conditions
as are applicable to regular workmen of the management. It was further prayed
that a direction be given to the management to absorb the workmen listed in E·
the said Ex. 'A' with effect from the actual date of their entering into the
service of the canteen of the management and to pay them all consequential
benefits including arrears of wages etc.

According to the workmen, the workers listed in Ex. 'A' to the petition
are working in the canteen of the management in its factory at Nagothane, F
District Raigad in the State of Maharashtra, and the management was treating
them as persons employed on contract basis through a contractor named
M/s. Rashmi Caterers, who was impleaded in the writ petition as respondent
No. 5. It was contended on behalf of the above workmen that the factory of
the management where the workmen are employed, is governed by the G
provisions of the Factories Act, 1948 (for short 'the Factories Act') and the
canteen where the said workmen are employed is a statutory canteen
established by the management as required under the said provisions of the
Act. It is further contended that the said canteen is maintained for the benefit
of the workmen employed in the factory and the management had direct
control over the said workmen and that respondent No.5, though shown as H
52 SUPREME COURT REPORTS [1999) SUPP. I S.C.R.

A a contractor, has no control over the management, administration and
functioning of the said canteen. The canteen is a part of the establishment
of the management and the workers working in the canteen are the workmen
of the said management. The further contention of the workmen was that the
work carried on by them in the said canteen is perennial in nature and the
canteen is incidental to and is connected with the establishment of the
B management. Therefore, the said workmen are regular workmen of the said
management. The management is denying the said workmen the status of its
regular employees and was treating them as contract employees contrary to
the statutory provisions and judicial pronouncements of this Court.

C On behalf of the management, it was contended before the High Court
that it is a public sector undertaking and it cannot appoint any person in
contravention of the recruitment policy which requires the management to
follow a roster system. Therefore, apart from the fact that the workmen were
not in the regular employment of the said management, the absorption or
regularisation of the services of the said workmen would contravene Article
D 16(4) of the Constitution, and would also contravene the reservation policy ,,;
which is applicable for recruitment in ·the establishment managed by it.

A perusal of the pleadings before the High Court shows that the
petitioning workmen based their claim primarily on the ratio of the decision
E rendered by this Court in the case of Parimal Chandra Raha & Ors. v. Life
Insurance Corporation of India & Ors., [ 1995] Supp. 2 SCC 611 (hereinafter
referred to as Raha's case) with elaborately setting out the facts necessary
for the purpose of ascertaining the true nature of employment of the workmen.
The management also seems to have proceeded on the basis that the dictum
in Raha's case, did apply to the facts of the case and hence defended against
F the prayer for regularisation on the grounds of recruitment policy and
reservation orders without placing necessary factual matrix regarding the
nature of employment.

The High Court in its judgment impugned in these appeals also proceeded
G on the basis of Raha's case upholding the contention of the workmen that
in all establishments where canteens are maintained as a requirement of a
statute, (namely, Section 46 of the Factories Act) the workmen working in the
said canteen ipso facto became the regular workmen of the management. In
the said view of the matter, the High Court allowed the writ petition, holding
that since the workmen whose names were found in Annexure 'A' to the
H petition are working in the statutory canteen of the management, they are
INDIAN PETROCHEM. CORPN. LTD."· SHRAMIK SENA [SANTOSH HEGDE, J.] 53

- entitled to be· absorbed in the employment of the said management. A.
While so disposing of the writ petition, the High Court gave the following
directions in regard to absorption of the employees:

"Respondent No. I should absorb the employees listed in Exhibit
"A" to the petition, in its employment subject to their fulfilling the B
following conditions:-

(a) At the time of initial appointment the workmen should be
complying with the minimum and the maximum age limits
prescribed under the policy of the Corporation;
(b) They must be medically fit according to the standards prescribed C
by the Corporation;
(c) Those who were appointed prior to the filing of the writ petition
must have three years' minimum service to their credit on the
date of the present judgment;
D
(d) Those who were appointed during the pendency of the writ '
petition must have four years of minimum service to their credit
on the date of the present judgment;

(e) All those who are not absorbed in the service of the Corporation
for any of the reasons indicated above. their cases shall be E
considered in accordance with the provisions of the Industrial
Disputes. Act, 1947 when fresh recruitment to the canteen staff
is made by the Corporation;

All the workmen who are not absorbed for any of the conditions
enumerated above, shall be given retrenchment compensation in F
accordance with law".

Being aggrieved by the said judgment and order of the High Court, as
stated above, the management has J)referred C.A. No. 1854/98 and being
aggrieved by the conditions imposed while directing the absorption of the G
employees, on behalfofthe workmen C.A. No. 1855/98 is preferred before this
Court.

While these matters were being considered at the SLP stage for granting
leave, a Division Bench of this Court considered that the questions involved
in these appeals are of considerable importal!ce and it will be desirable if the H
54 SUPREME COURT REPORTS [1999] SUPP. I S.C.R.
....
A same is decided by a Ber.ch of three judges. Consequently, they are now
referred for hearing before this Bench.

When these matters were taken up for final hearing on 8.4.1999, on
behalf of the employees reliance was placed on an additional affidavit dated ......
19 .2 .1999 filed on behalf of the workmen to which no reply was filed by the
B management. In the said affidavit, certain relevant facts had been pleaded on
behalf of the workmen in addition to the facts placed before the High Court
which· facts had a material bearing on the case put forth by the workmen
before the High Court as well as before this Court. Therefore, we considered
it appropriate that an opportunity should be afforded to the management to
.
c file a reply to the said affidavit and the said opportunity being afforded to
the management, additional affidavit dated l Qth July, 1999 has since been filed
on behalf of the management.

Based on the above pleadings, it is contended before us on behalf of
the management by Mr. T.R. Andhyarujina, learned senior counsel, that apart /
D from the fact that the management being an instrumentality of State whose
recruitment is governed by various reservati.on orders and its own recruitment
policy which would be violated if the High Court's order is implemented, in
fact the workmen are not entitled to absorption as directed by the High Court
because these workmen are not in the employment of the management, being ....
the workmen of the contractor who had entered into an agreement with the
E
management for providing canteen services in the management's factory at
Nagothane. He contended that in view of the provisions of the Factories Act
it was obligatory for the management to provide canteen facilities in its
establishment. Consequently, it had entered into a contract with the third
party to provide the said facilities and the management only provided such
F infrastructure as was necessary under the Act and there was no relationship
of 'master' and 'servant' between the workmen and the management. He also
contended that the High Court erred in coming to the conclusion that in view
of the judgment of this Court in Raha' s case (supra) the employees herein had
an automatic right to be absorbed as regular workmen of the management. He
contended that in Raha's case this Court did not hold that every workman
G
of a statutory canteen automatically becomes a regular workman of the
management, and argued i(Raha's case did lay down such a proposition then
the same requires reconsideration in view of an earlier judgment of a larger
Bench of this Court in the case of MM R. Khan & Ors. v. Union of India &
Ors., [I 990] Suppl. SCC 191 (hereinafter referred to as Khan's case). He further
H contended that in the case of statutory canteens further evidence is required
... '
INDIAN PETROCHEM. CORPN. LTD. 1·. SHRAMIK SENA [SANTOSH HEGDE, J.] 55

to establish that in reality the contractor's workmen are workmen of the A
management but in the instant case there was no material to hold that'the
appellant-management had employed these persons for and on behalf of itself
to provide canteen services. He contended on the contrary, they were all
employees of the contractor who was an independent employer and there was
no obligation whatsoever on the part of the management towards the workmen.
He also contended that the management had no supervision or controlling B
power over the workmen which power according to him wholly rested with
the contractor. He also urged that so long as there was no prohibition of
contract-labour under the provisions of the Contract Labour (Regulation and
Abolition) Act the management was free to engage a contractor to provide
canteen services in its establishment. He also contended whatever facilities c
and infrastructure that were provided to the canteen workmen same were only
because the various statutes in the State of Maharashtra required the
management to so provide and same were not voluntary.

On behalf of the workmen, it was contended by Mr. K.K. Singh vi,
learned senior counsel, that the very fact that the management was required D
to statutorily provide canteen facilities to its factory staff under Section 46
of the Factories Act itself was sufficient to come to the conclusion that the
workmen so employed to provide canteen facilities would become the regular
employees of the principal employer. And the fact that these employees were
employed through a contractor would not make any difference. In other words E
every workman of a statutory canteen, even if he is employed through a
contract system would by itself suffice is an employee of the management in
view of Raha' s case and that there was no further need for any enquiry to
establish the factual matrix in regard to the relationship between the workmen
and the management. Alternatively he contended that there was sufficient
material on record to show that the respondent workmen were in fact employees F
of the appellant-management and induction of a contractor is only a facade
to evade the responsibility to pay the legitimate wages and other dues of the
workmen which amounts to unfair labour practice calling for a declaration
from the Court that these workmen are the employees of the management.
jlll

At the outset, it must be recorded that Shri Andhyarujina conceded the
G
fact that the Factories Act mandated the employer under Section 46 to provide
canteen facilities to its workers, hence, the canteen run in the establishment
of the management is what has now come to be termed as a statutory canteen
_..
and the workmen in these canteen do become the employees of the appellant-
management, but only for the purpose of the Factories Act. H
56 SUPREME COURT REPORTS [1999] SUPP. I S.C.R. ·

A Section 2(1) of the Factories Act defines a 'worker' as follows:

"worker" means a person (employed, directly or by or through
any agency (including a contractor) with or without the knowledge of
the principal employer, whether for remuneration or not) in any
manufacturing process or in cleaning any part of the machinery or
B premises used for a manufacturing process, or in any other kind of
work incidental to, or connected with, the manufacturing process, or
the subject of the manufacturing process (but does not include any
member of the armed forces of the Union);"

C It is clear from this definition that a person employed either directly or
by or through any contractor in a place where manufacturing process is
carried on, is a 'workman' for the purpose of this Act. Section 46 of the Act
empowers the State Government to make rules requiring any specified factory
wherein more than 250 workers are ordinarily employed to provide and maintain
a canteen by the occupier for the use of the workers. It is not in dispute,
D pursuant ~o this requirement of law, the management is providing canteen
facilities wherein the respondent employees are working. Hence, it is fairly
conceded by the learned counsel (or the management that the respondent
workmen by virtue of the definition of the 'workman' under the Act, are the /
employees of the appellant-management for purposes of the Act.

E
The question however is: does this status of a workman under the
Factories Act confine the relationship of the employer and the employees to
the requirements of the Factories Act alone or does this definition extend for
all other purposes which include continuity of service, seniority, pension and
otller benefits which a regular employee enjoys. The Factories Act does not
F govern the rights of employees with reference to recruitment, seniority,
promotion, retirement benefits etc. These are governed by other statutes,
rules, contracts or policies. Therefore, the workmen's contention that employees
of a statutory canteen ipso facto become the employees of the establishment
for all purpose cannot be accepted.
G
The above argument of Mr. Singhvi is obviously based on the conclusion
No.(i) noted in Raha's case (supra) wherein at para 25 of the judgment this
Court recorded thus:

"(i) Whereas under the provisions of the Factories Act, it is
H statutorily obligatory on.the employer to proviqe and maintain canteen
INDIAN PETROCHEM. CORPN. LTD. 1·. SHRAMIK SENA [SANTOSH HEGDE, J.) 57
for the use of his employees, the canteen becomes a part of the. A
establishment and, therefore, the workers employed in such canteen
.r· are the employees of the management." (emphasis supplied).

Based on the above Shri Singhvi contends that once an employee is
found by this Court to be an employee of the management because of the
Factories Act, he becomes the employee of the management for all purposes. B
Per contra on behalf of the management, it is contended that a reading of the
judgment in Raha's case in its totality shows that what this Court intended
to lay down as law was that the employees working in a statutory canteen
would become employees of the management not for all purposes but for the
limited purpose. of the Factories Act. It is to be noted that in Raha's case this C
Court did not specifically hold that the deemed employment of the workers
is for all purposes nor did it specifically hold that it is only for the purpose
of the Factories Act. However, a reading of the judgment in its entirety makes
it clear that the deemed employment is only for the purpose of the Factories
Act. This Court in Raha's case relied upon an earlier judgment of this Court
in MMR. Khan & Ors. v. Union of India & Ors., [1990) suppl. SCC 191. A D
three-Judge Bench of this Court considering the provisions of the Factories
Act held that by virtue of Section 46 of the said Act the factories covered
_ by the said Act are obligated to provide canteen services and termed such
canteens as statutory canteens. In para 6 of the said judgment while referring
to an earlier judgment of this Court in C.A. No. 368/78, this Court held thus:- E

"The Act referred to in the aforesaid order obviously means the
Factories Act. Therefore, what was confirmed by this Court was the
declaration given by the Calcutta High Court that the employees of
the statutory canteens were railway employees for the purposes of
the Factories Act..... " (emphasis supplied) F

Thereafter, in the said judgment (Khan's case) this Court at para 20
proceeded to consider the question as to whether staff employed in the
statutory canteen in the railway establishment, industrial or non-industrial are
railway employees or not. G •
And concluded thus at para 28:-

"Thus the relationship of employer and employee stands created
between the railway administration and the canteen employees from
the very inception. Hence, it cannot be gainsaid that/or the purposes H
58 SUPREME COURT REPORTS [1999) SUPP. I S.C.R.

A of the Factories Act the employees in the statutory canteens are the ..
employees of the railways. The decisions of the Calcutta and Madras
High Courts (supra) on the point, therefore, are both proper and
valid." (emphasis supplied)

Thereafter of course, in the said case this Court on facts came to the
B conclusion, the employees concerned therein were in fact employees of the
establishment.

If the argument of the workmen in regard to the interpretation of Raha's
case is to be accepted then the same would run counter to the law laid down
C by a larger Bench of this Court in Khan's case·(supra). On this point similar
is the view of another three-Judge Bench of this Court in the case of Employers
in relation to the Management of Reserve Bank of India v. Workmen, [ 1996]
3 SCC 267). Therefore, following the judgment of this Court in the cases of
Khan and R.B.I. (supra), we hold that the workmen of a statutory canteen
would be the workmen of the establishment for the purpose of the Factories
D Act only and not for all other purposes.

Having held that the workmen in these appeals are the respondent's
workmen for the purposes of the Factories Act, we will now deal with the next
question arising in this appeal as to whether from the material on record it
E could be held that the workmen are in fact, the employees of the management
for all purposes.

Before answering this question, we would like to observe that, normally,
this being a question of fact, this Court would have been reluctant to examine
this question which in the ordinary course should be first decided by a fact-
F finding tribunal. However, as stated above, in this case parties have filed
detailed affidavits and documents which in our opinion, are sufficient for us
to decide this question without the need for any oral evidence.

Though the canteen in the appellants establishment is being managed
G by engaging a contractor, it is also an admitted fact that the canteen has been
in existence from inception of the establishment. It is also an admitted fact
that all the employees who were initially employed and those inducted from
time to time in the canteen have continued to work in the said canteen
uninterruptedly. The employer contends that this continuity of employment
of the employees, in spite of there being change of contractors, was due to
H an order made by the Industrial Court, Thane, on I 0th of November 1994
INDIAN PETROCHEM. CORPN. LTD.''· SHRAMIK SENA [SANTOSH HEGDE, J.] 59

wherein the Industrial Court held that these workmen are entitled to continuity A
,,_.'-'
of service in the same canteen irrespective of the change in the contractor.
Consequently, a direction was issued to the management herein to incorporate
appropriate clauses in the contract that may be entered into with any outside
contractor to ensure the continuity of employment of these workmen. The
management, therefore, contends that the continuous employment of these
workmen is not voluntary. A perusal of the said order of the Industrial Court
B
shows that these workmen had contended before the said court that the
management was indulging in an unfair labour practice and in fact they were
employed by the Company. They specifically contended therein that they are
entitled to continue in the employment of the Company irrespective of the
change in the contractor. The Industrial Court accepted their contention as c
against the plea put forth by the management herein. The employer did not
think it appropriate to challenge this decision of the Industrial Court which
has become final. This clearly suggests that the management accepted as a
:
matter of fact the respondent-workmen are permanent employees of the
management's canteen. This is a very significant fact to show the true nature
of respondent's employment. That apart, a perusal of the affidavits filed in D
this Court and the contract entered into between the management and the
'
contractor clearly establishes:-
/

(a) The canteen has been there since the inception of the appellant's
factory. E
(b) The workmen have been employed for long years and despite
change of contractors the workers have continued to be
employed in the canteen.

(c) The premises, furniture, fixture, fuel, electricity, utensils etc, have F
been provided for by the appellant.

(d) The wages of the canteen workers have to be reimbursed by the
appellant.

G
(e) The supervision and control on the canteen is exercised by the
appellant through its authorised officer, as can be seen from the
various clauses of the contract between the appellant and the
contractor.

(t) The contractor is nothing but an agent or a manager of the H
60 SUPREME COURT REPORTS [1999] SUPP. 1 S.C.R.

A appellant, who works completely under the supervision, control
and directions of the appellant.
\

(g) The workmen have the protection of continuous employment in
the establishment.

B Considering these factors cumulatively in addition to the fact that the
canteen in the establishment of the management is a statutory canteen, we
are of the opinion that in the instant case, the respondent-workmen are in fact
the workmen of the appellant-management.

C At this stage, it is necessary to note another argument of Mr.
Andhyarujina that in view of the fact that there is no abolition of contract
labour in the canteen of the appellant's establishment, it is open to the
management to manage its canteen th.rough a contractor. Hence, he contends
that by virtue of the contract entered into by the management with the :
contractor, the respondent-workmen cannot be treated as the employees of
~,,,.····

D the management. This argument would have had some substance if in reality
the management had engaged a contractor who was wholly independent of
the management, but we have come to the conclusion on facts that the
contractor in the present case is engaged only for the purpose of record and /
for all purposes the workmen in this case are in fact the workmen of the
E management. In the background of this finding, the last argument of Mr.
Andhyarujina should also fail.

For the reasons stated above, this appeal of the management fails and
is hereby dismissed with costs.

F C.A. No. 185511998:

In this appeal, the workmen have questioned the conditions that have
been imposed by the High Court while directing regularisation of the workmen.
They contend that once the court comes to the conclusion that the workmen
G are in fact the employees of the management, there is no occasion to impose
these conditions. We are unable to agree with this argument. It should be
borne in mind that the initial appointments of these workmen are not in
accordance with the rules govemi"ng the appointments or the established
policy of recruitment of the management. The said recruitments could also be
in contravention of the various statutory orders including the reservation
H policy. Further the respondent is an instrumentality of the State and has an
INDIAN PETROCHEM. CORPN. LTD.'" SHRAMIK SENA [SANTOSH HEGDE, J.) 61
obligation to conform to the requirements of Articles 14 and 16 of the A
Constitution. In spite of the same the services of the workmen are being
regularised by the Court not as a matter of right of the workmen arising under
any statute but with a view to eradicate unfair labour practices and in equity
to undo social injustice and as a measure of labour welfare. Therefore, it is
necessary that in this process suitable guidelines or conditions be laid down B
at the time of Courts issuing directions to regularise the services of. the
workmen so concerned depending upon the facts of each case. This Court
has consistently followed this practice in the earlier cases of regularisation
and we do not find any reason to differ from the same. For the aforesaid
reasons, this appeal ~lso fails and the same is dismissed but with costs.
c
A.K.T. Appeals dismissed.

I