Holding

The contract labourers are not employees of the refinery; the Industrial Tribunal's award is the maximum relief available and cannot be improved.

Summary

The Mathura Refinery Mazdoor Sangh, representing about 900 casual labourers employed under the Contract Labour (Regulation and Abolition) Act, 1971, sought parity in wages and conditions with regular refinery employees. Some workers had contracts directly with the refinery through co‑operative societies, while others worked via contractors. A writ petition under Article 32 was referred to an Industrial Tribunal, which held that the labourers were employees of the contractors, not the refinery, but suggested measures such as minimum pay equal to regular staff, continuity for workers with five years’ service, preferential treatment, and a benevolent fund. The Union appealed to the Supreme Court, arguing that the Tribunal’s suggestions were insufficient. The Court dismissed the appeal, holding that the contract labourers are not employees of the refinery and that the Tribunal’s award represented the maximum relief permissible, which cannot be enhanced.

Issues considered

Whether the contract labourers are employees of Indian Oil Corporation, Mathura Refinery under the Contract Labour (Regulation and Abolition) Act, 1971.
Whether the termination of services of the 48 workmen was justified.
What relief, if any, is owed to the contract labourers, including possible absorption or regularisation.

Legislation cited

Constitution of Indias. Article 32
Contract Labour (Regulation and Abolition) Act, 1971

Subjects

contract labourregularisationabsorptionindustrial tribunalCLRA 1971employee statusindustrial harmonySupreme Courtappealcasual labour

Judgment

MATHURA REFINERY MAZDOOR SANGH THROUGH
A ITS SECRETARY ~
V.
INDIAN OIL CORPORATION LTD., MATHURA REFINERY
PROJECT, MATHURA AND ANR.

B FEBRUARY 15, 1991

[K.N. SAIKIA AND MADAN MOHAN PUNCHHL JJ.]
>-
Contract Labour (Reguiation and Abolition) Act, 1971: Mathura
Refinery-Casual Labourers-Some babourers forming Co-operative
.._,
·C
Societies and entering contracts with refinery wh~le others working
under contractors who have contracts with refinery-Claim for regulari-
sation and parity with employees of refinery-Casual labourers held not
employees of refinery and hence not entitled for absorption iiz refinery.
-
y
The appellant-Union, representing about 900 casual labourers fal-
D ling under the Contract Labour (Regulation and Abolition) Act, 1971
some of whom formed Co-operative societies and entered into contracts
with the respondent-ref"mery while others worked for contractors who
had contracts with the ref"mery, med a writ petition in this court claim-
ing parity in wages and service conditions with the regular workmen of
the respondent-ref"mery. This Court disposed the petition by directing
E the Central Government to refer to the Industrial Tribunal for adjudi-
cation the questions whether the petitioners and some of the workmen
whose services were terminated were employees of the refinery; whether
their termination was justified and to what relief they were entitled to.
The Government referred and the Tribunal decided the questions
against the appellant-union by holding that the labourers were emp-
F loyees of the contractors and not of the ref"mery and their termination
• gave certain directions by way of relief
was justified. But the Tribunal
--
(
r--
for consideration by the Advisory Board about the desirability of con-
tinuance of the contract system in the ref"mery, for providing minimun
pay of scale of regular employees to the contract labour and giving them
preference in the regular employment.
G
Against the award of the Industrial Tribunal, the Union med an
appeal in this Court praying for directions to the ref"mery to absorb and
regularise the casual labourers in a phased manner.

Dismissing the appeal, this Court, ·
H

468
MAZDOOR SINGH v. INDIAN OIL [PUNCHHI, J.] 469

HELD: The contract labourers are not, and have also not been found
to be, having a direct connection with the Refinery, even though it is a
State for the purpose of enforcement of fundamental rights. The direc-
tions given by the Tribunal was the only relief which was due to the
appellant-union and its members. Hence the Tribunal has given to the
appellant-Union the maximum which could be given in the facts and
circumstances of the case. Therefore, the impugned Award oft.he Tri- B
bunal cannot be improved upon. [472E-F]

BHEL Workers Association, Hardwar and Ors. etc. v. Union of
India and Ors., [1985] 1SCC630, referred to.

- Dharwad Distt. P. W.D. Literate Daily Wage Employees Associa- C
tion and Ors. v. State of Karnataka and Ors., [1990] 2 SCC 396,
distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1430
of 1990.
D
From the Judgment and Order dated 21.10.1989 of the Central
Government Industrial Tribunal, New Delhi in l.D. No. 40 of 1986.

N .B. Shetye and A.M. Khanwilkar for the Appellant.

Ashok H. Desai, R.P. Bhatt, P.H. Parekh and Mrs. Sumita E
Sharma for the Respondents.

The Judgment of the Court was delivered by

PUNCHHI, J. This appeal by special leave is directed against the
Award of the Central Government Industrial Tribunal, New Delhi, in F
I.D. No. 40 of 1986 published in the Gazette of India, New Delhi
dated 21.10.89.

The appellant is the Mathura Refinery Mazdoor Sangh (here-
after referred to as fl;ie 'Union'). The contesting respondent is the
Indian Oil Corporation Ltd., Ma~hura Refinery Project, Mathura, G
U.P. (hereafter referred to as the 'Refinery'). The Union represents
about 900 casual labourers working in the Refinery. These labourers
are contract labourers coming under the Contract Labour (Regulation
& Abolition) Act, 1971. The nature of their work has grouped them.
Some of the labourers have formed themselves into co-operative
societies and those societies have entered into labour contracts with H
\

470 SUPREME COURT REPORTS [1991] 1 S.C.R.

the Refinery. Other labourers are working under labour contractors
A
who have contracts with the Refinery. Theirs is not a constant'relation-
ship with one contractor and these labourers keep shifting from one ·
contractor to another. However it is claimed that these casual labou-
rers have been working in the Refinery for so many years in the
past ranging between ten to fifteen years but they are denied wages
B and other benefits as also other beneficial service conditions enjoyed
by workmen who are regular employees of the Refinery. Claiming that
they had a right to be treated at par with regular employees, the Union
filed Writ Petition No. 2876 of 1985 under Article 32 of the Constitution
of India in this Court which was disposed of on January 16, 1986 by
directing the Central Government to refer to the Industrial Tribunal
for adjudication the following questions:
c
"l. Whether, in law, the petitioners and the 48 workmen
whose services have been terminated are employees of y
the Indian Oil Corporation, Mathura Refinery Project,
Mathura? -
D
2. Whether the termination of the services of 48 workmen
was justified? and

3. To what relief are the workmen entitled?"

E Status quo was ordered to be maintained and the services of the work-
men were ordered not to be terminated. At that time, the services of
48 workmen alone were involved but as is evident the adjudication of
the Tribunal would have affected others too.

Pursuant to the order of this· Court. the Central Government
F referred and the Industrial Tribunal decided the above referred
questions holding that the workmen were not employees of the Refi-
.nery and were rather the employees of the contractors. With regard to
the termination of the services of the workmen and to what relief they
were entitled, the Tribunal, after answering the questions against the
Union and in favour of the Refinery, suggested the following steps in
G the interest of Industrial harmony:

(i) Though the Union should have pressed their demand for
abolition of the contract labour system in the Refinery to the
Central Advisory Board constituted under the Act, and even
though it had been pursuing its remedies before this Court and
H the Tribunal, suggestions were made to the Refinery to approach
MAZDOOR SINGH v. INDIAN OIL [PUNCHHI, J.] 471

the-Advisory Board to make a study with regard to the desirabi- . A
lity of continuance of the contract labour system in the Refinery.

(ii) Till the Central Advisory Board makes its recommendations
and the action is taken, the management of the Refinery to
ensure that the contract labour is paid at least the minimum of the
pay scale of its regular employees performing the same or similar ' B
duties as the workmen of the contract labour and further that the
workmen among the contract labour who have put in 5 years or
more of work at the Mathura Refinery shall be continued to be
employed in the same -work even if there is a change in the
contractor and such workmen shall not be terminated except as a
punishment inflicted by way of disciplinary action for miscon- C
duct, etc., voluntary retirement or retirement on reaching the
age of superannuation (which may be taken as the superannua-
tion age for the 1.0.C. employees) or on ground of continuous
ill-health.

(iii) Refinery to give preference to those workmen in its employ- D
ment by waiving the requirement of age and other qualifications
wherever possible and it may also consider the creation of a
benevolent fund for the contract labour wherein it may make a
lumpsum contribution initially and then make equivalent or even
more contribution to match the contribution made by the work-
men of the contract labour. E

Having suggested these, the Tribunal has clarified that these
ameliorative steps, if taken by the Refinery, shall not be taken to mean
that the contract labour has become the direct employees of the
Refinery.
F
Learned counsel for the appellant says that though the above
suggestions, which have the colour of directions, are in accord with the
decision of this Court in RHEL Workers Association, Hardwar and
Others etc. v. Union of India and Others, [1985] 1 SCC 630 yet they fall
short of the expectancies of the Union and in particular to the wide
sweep of the principles laid down by this Court in Dharwad Distt. G
P. W.D. Literate Daily Wage Employees Association and Others v.
State of Karnataka and Others, [1990] 2 SCC 396 and prayed for direc-
tions such as those given to the State of Karnataka in the Dharwad's
case (supra).

The argument of the learned counsel has barely to be noted and H
472 SUPREME COURT REPORTS [1991) 1 S.C.R.·

A rejected. The Tribunal has given to the appellant-Union the maximum
which could be given in the facts and circumstances of the case. In
Dharwad's case (supra), the State of Karnataka had itself come out
with a scheme to absorb the casual workers in regular government
service in a phased manner and though it did not satisfy all concerned,
yet it was given a workable final shape. This Court observed as
B follows:

"Though the, scheme so finalised is not the ideal one but it
is the obligation of the court to individualise justice to suit a
given situation in a set of facts that are placed before it.
Under the scheme of the Constitution the purse remains in
c the hands of the executive. The legislature of the State
controls the Consolidated Fund out of which the expendi-
ture to be incurred, in gi~ing effect to the scheme, will have
to be met. The flow into the Consolidated Fund depends
upon the policy of taxation depending perhaps on the
capacity of the payer. Therefore, unduly burdening the
D State for implementing the constitutional obligation forth-
with would create problems which the State may not be
able to handle. Therefore, the directions have been made
with judicious restraint."

Those casual workers were under the employment of the State and the
E State came out with a scheme for phased absorption and a graded
financial responsibility. In the instant case before us, the contract
labourers are not, and have also not been found to be. having a direct
connection with the Refinery, even though it is a State for the purpose
of enforcement of fundamental rights. The suggestions/directions
given by the Tribunal, appear to us to be the only relief which was due
F to the appellant and its members in the given situation and circums-
tances. Therefore, the impugned Award of the Tribunal cannot be
improved upon.

Finding no merit in the appeal, we dismiss the same. No costs.

T.N.A. Appeal dismissed.