Supreme Court of India
TAMIL NADU MEDICAL SERVICES CORPORATION LIMITEDversusTAMIL NADU MEDICAL SERVICES CORPORATION EMPLOYEES WELFARE UNION & ANR.
- Citation
- 2024 INSC 446
- Decided
- 17 May 2024
- Bench
- SANJAY KAROL
Holding
The 1981 Act applies to TNMSC as an industrial establishment, and the Inspector of Labour’s order granting permanent status to the workers must be complied with.
Summary
The Tamil Nadu Medical Services Corporation (TNMSC), a government‑owned company, employed a number of workers who sought regularisation under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. An Inspector of Labour found that 53 workers had completed the requisite 480 days of continuous service and ordered that they be granted permanent status, a decision later affirmed by the High Court. The corporation challenged the applicability of the 1981 Act, arguing that it was a commercial establishment engaged in construction and therefore exempt, and also contended that the High Court should have allowed the workers to file an industrial dispute despite the Inspector’s order. The Supreme Court held that TNMSC qualifies as an industrial establishment under the Shops and Establishments Act, 1947, and that the construction activity does not exempt it from the 1981 Act; consequently the Inspector’s order must be complied with. The Court further ruled that the High Court could not set aside the Inspector’s order and should have simply enforced it. As a result, the corporation’s appeal was dismissed and the union’s appeal was allowed, confirming the workers’ entitlement to permanent employment.
Issues considered
- Whether the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 applies to Tamil Nadu Medical Services Corporation.
- Whether the corporation qualifies as an industrial establishment under the Tamil Nadu Shops and Establishments Act, 1947.
- Whether the workers are ‘workmen’ eligible for permanent status under section 3 of the 1981 Act.
- Whether the High Court could disregard the Inspector of Labour’s order and direct the workers to institute an Industrial Disputes Claim.
Legislation cited
Subjects
Industrial Disputes ClaimInspector of LabourIndustrial establishmentMembers of the UnionWorkmenPermanent status to workmenRegularisationCommercial elementConstruction workNon-governmental bodiesScope of remand
Judgment
[2024] 5 S.C.R. 596 : 2024 INSC 446
Tamil Nadu Medical Services Corporation Limited
v.
Tamil Nadu Medical Services Corporation Employees
Welfare Union & Anr.
(Civil Appeal No. 6511 of 2024)
17 May 2024
[Sanjay Karol* and Prasanna Bhalachandra Varale, JJ.]
Issue for Consideration
Whether the Tamil Nadu Industrial Establishments (Conferment
of Permanent Status to Workmen) Act, 1981 would apply to the
parties; whether the Corporation can be termed as an industrial
establishment as per the provisions of the Tamil Nadu Shops
and Establishments Act, 1947; and whether the members of the
Union would qualify as workmen and thus, would be eligible for
permanent status u/s. 3 of the Act; and whether the suggestion to
institute an ‘Industrial Disputes Claim’ questioning non-employment
was sustainable, given that the Inspector of Labour had already
passed orders in that regard.
Headnotes†
Tamil Nadu Industrial Establishments (Conferment of
Permanent Status to Workmen) Act, 1981 – s. 2(3), 7 –
Tamil Nadu Shops and Establishments Act, 1947 – ss.
2(3), 2(6) – Employees of Government Corporation sought
regularisation – Inspector of labour conferred permanent
status to the workmen – High Court upheld the same and
directed to provide employment to the employees – Cross
appeals – Issue as regards, applicability of the 1981 Act to
the parties – Corporation, if could be termed as an industrial
establishment as per the 1947 Act – Members of the Union,
if would qualify as workmen and thus, would be eligible for
permanent status u/s. 3 of the Act – High Court on remand,
if could have ignored the order of the Inspector of Labour
and suggested to institute an ‘Industrial Disputes Claim’
questioning non-employment:
Held: Activities conducted by the Corporation fall under those
mentioned u/s. 2(3) of the 1947 Act – Construction work, which
* Author
[2024] 5 S.C.R. 597
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
the Corporation, by its own admission, carries out, is also for non-
governmental bodies such as firms, companies, and individuals –
Language of s. 7 of the 1981 Act implies that this Act shall not
apply to those workmen who are engaged in the construction of
buildings and the like or other construction work be it structural,
mechanical, or electrical and thus, the establishments and its
workmen engaged exclusively in the work of construction, shall
be exempted – However, this would not allow the Corporation to
wash its hands off the responsibilities or obligations under the
Act, since the construction to be undertaken by the Corporation,
is only one of the many activities to be undertaken by it – To take
all the workers out of the purview of the Act, especially, when
the said workers were not the ones undertaking construction,
unwarranted – Employee having uninterruptedly continued in
service for 480 days or more for 24 months, having been met,
the Act would apply to the parties – Furthermore, the scope of
remand was limited – Since the High Court concluded that the
Act would apply, no reason for it to disturb the finding of the
Inspector of Labour – It ought to have simply ordered that the
order of Labour Inspector which concluded that members of
Union be given permanent employment, be complied with. [Paras
21-25, 27, 28]
Case Law Cited
State of Karnataka v. Uma Devi [2006] 3 SCR 953 : (2006)
4 SCC 1; Maharashtra State Road Transport Corporation v.
Casteribe Rajya Parivahan Karmachari Sanghathana [2009] 13
SCR 937 : (2009) 8 SCC 556; U.P. Power Corporation Limited
& Anr. v. Bijli Mazdoor Sangh & Ors. [2007] 5 SCR 256 : (2007)
5 SCC 755; ONGC Limited v. Petroleum Coal Labour Union &
Ors. [2015] 5 SCR 474 : (2015) 6 SCC 494; Ajay Pal Singh v.
Haryana Warehousing Corporation (2015) 6 SCC 321; Ranbir
Singh v. S.K. Roy, Chairman, Life Insurance Corporation of
India & Anr. [2022] 10 SCR 986 : (2022) SCC OnLine SC
521 – referred to.
List of Acts
Tamil Nadu Industrial Establishments (Conferment of Permanent
Status to Workmen) Act, 1981; Companies Act, 1956; Tamil
Nadu Shops and Establishments Act, 1947; Industrial Disputes
Act, 1947.
598 [2024] 5 S.C.R.
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List of Keywords
Industrial Disputes Claim; Inspector of Labour; Industrial
establishment; Members of the Union; Workmen; Permanent status
to workmen; Regularisation; Commercial element; Construction
work; Non-governmental bodies; Scope of remand.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6511 of 2024
From the Judgment and Order dated 09.08.2019 of the High Court
of Judicature at Madras in WP No.17133 of 2001
With
Civil Appeal No. 6512 of 2024
Appearances for Parties
S. Nandakumar, Basant R, Sr. Advs., Ms. Deepika Nandakumar,
Naresh Kumar, K. K. Mani, V.M. Shivakumar, Ms. T. Archana,
Raunak Arora, Rajeev Gupta, S. Janardanan, D. Kumanan, Ms. G.
Indira, Ashwini Kumar, P. Gandepan, Ms. D. Poornima, Advs. for
the appearing parties.
Judgment / Order of the Supreme Court
Judgment
Sanjay Karol, J.
1. Leave to appeal by special leave granted.
THE APPEALS
2. The cross appeals, one by the Tamil Nadu Medical Services
Corporation Limited1 and the other by the Tamil Nadu Medical Services
Corporation Employees Welfare Union2, question the judgment and
order dated 9th August, 2019, passed by the High Court of Judicature
at Madras in W.P.Nos.17133 of 2001 and 15241 of 2009 respectively.
The position of the parties is in accordance with SLP(C)No.30005
of 2019.
1 Hereinafter ‘the Corporation’.
2 Hereinafter ‘the Union’.
[2024] 5 S.C.R. 599
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
3. The impugned judgment came to be passed in Writ Petition
No.17133/2001 which was directed against order dated 31st March,
2001 of the Inspector of Labour, Circle-III, Chennai3, by which the claim
of 53 workmen to be conferred permanent status in the Corporation
was accepted, while the claim of 42 others was rejected.
4. W.P. No.15241 of 2009 was filed by 22 out of the said 53 workmen
seeking a writ of mandamus to be granted employment in the
Corporation as per the order of the Inspector of Labour.
QUESTIONS BEFORE THIS COURT
5. The questions that this Court is to consider are –
(i) Whether the Tamil Nadu Industrial Establishments
(Conferment of Permanent Status to Workmen) Act,
1981 would apply to the parties?
(ii) Whether by way of the impugned judgment, the
suggestion to institute an ‘Industrial Disputes Claim’
questioning non-employment was sustainable, given
that the Inspector of Labour had already passed
orders in that regard?
FACTS IN BRIEF
6. The Corporation was incorporated under the Indian Companies Act,
1956 on 1st July, 1994. Its management is under the State of Tamil
Nadu. It has employed various workmen in different capacities,
including the appellants in the appeal arising out of SLP(C)No.2649
of 2020. Such employees had sought regularization under the
provisions of Tamil Nadu Industrial Establishments (Conferment of
Permanent Status to Workmen) Act, 19814. Such representations
being unsuccessful, two Writ Petitions bearing Nos.17263 and
17147 of 1998 were preferred before the learned Single Judge of
the High Court.
7. The learned Single Judge5, vide judgment and order dated 21st July,
2000 passed the following directions:
3 Hereinafter ‘Inspector of Labour’.
4 Hereinafter ‘the Act’.
5 Annexure P1, pg 61.
600 [2024] 5 S.C.R.
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“19….
1. The Tamil Nadu Industrial Establishments (Conferment
of Permanent Status to Workmen) Act, 1981 (Tamil
Nadu Act 46 of 1981) is applicable to the second
respondent corporation.
2. The ‘Inspector’ having jurisdiction over the second
respondent is directed to inspect and verify the
records of the second respondent corporation and
pass appropriated orders under Sec.3 of the said
Act with regard to the claim made by the members
of the petitioner Union;
3. The ‘Inspector’ is also directed to consider the claim
made by the petitioner Union regarding employment
on Saturdays to the members of the petitioner Union;
4. The ‘Inspector’ is further directed to determine the
above referred questions within three months from
the date of a copy of this order after affording an
opportunity of being heard to both parties; and
5. Till an order is passed by the ‘Inspector’ as stated
above, status quo as on date shall be maintained by
both parties. Writ petitions are allowed to the extent
mentioned above. No costs. All the miscellaneous
petitions are closed.”
8. Pursuant to the above order, the Inspector of Labour passed order
dated 31st March, 20016, wherein the following issues were framed :
“ISSUES
(a) Whether the act pertaining to conferment of permanent
status of Workmen could be made applicable to the
respondent Establishment?
(b) Whether the authorized office under the aforesaid
act being Labour Inspector has got the authority to
try this case?
6 Annexure P3, pg.98.
[2024] 5 S.C.R. 601
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
(c) If, the respondent’s Management is covered by the
Jurisdiction of the aforesaid Act what is the nature
of relief that could be awarded to the petitioners?”
9. The Inspector of Labour concluded that G. Sumathi and 52 other
workmen were in the service of the Corporation continuously for
480 days over a period of 24 months and accordingly they could be
granted permanent status.
10. It is against this order that the judgment and order impugned before
us, eventually came to be passed. An appeal assailing the order dated
21st July, 2000 and, an independent writ petition was filed against the
order dated 31st March, 2001 of the Inspector of Labour, and Division
Bench vide order dated 10th December 20097 in such proceedings,
confirmed both these orders and the Corporation was directed to
provide employment to the Respondents, such as those who were
before the Court as petitioners (original writ petitioners) in those
proceedings. Against such confirmation of the order of the Inspector
of Labour, Civil Appeal Nos. 6567 and 6568 of 2012 were preferred.
11. Hence, this Court on 29th March 2010 while issuing notice, stayed the
operation of the impugned judgment. Subsequently, on 10th March,
2016, while allowing the appeal, this Court remanded the matter to
the High Court, thus-
“3. It has been submitted that while deciding the writ
petitions and the connected matters, the High Court did not
consider the fact whether the aforesaid Act is applicable
to the members of the respondent-Union and the said
submission appears to be correct.
4. In the afore-stated circumstances, the impugned
judgment is set aside and the matters are remanded
to the High Court for considering the same afresh in
accordance with law. We are sure that the High Court
will hear the matters afresh and decide the same in
accordance with law.
5. Interim order dated 29th March, 2010 granted by this
Court shall continue till the High Court modifies the same
after hearing the concerned parties…”
7 page 205 of paper book.
602 [2024] 5 S.C.R.
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THE IMPUGNED JUDGMENT
At this juncture, it is worth clarifying that the dismissal of the
Writ Appeal Nos.1430 & 1431 of 2000 was not challenged
before this Court and what was challenged was the dismissal of
W.P.No.17133/2001 and the directions in W.P.No.15241/2009,
which took on Civil Appeal Nos.6567 and 6568 of 2012, wherein
the Court remanded the matter.
12. Pursuant to the above order of remand, The High Court in its
judgment, recorded its agreement with the judgment of the learned
Single Judge, reproduced supra. It was observed that the learned
Single Judge had extensively examined the constitution of the
management of the Corporation, the nature of activities conducted
by it, et cetera and then concluded that the Act would apply on the
ground that it was an industrial establishment under Section 2(3)
(e) of the Act, and that they (the learned Division Bench) concur
with the same.
13. It was further observed that since no appeal stood preferred after
the writ appeals against the order of the learned Single Judge, were
dismissed, the order of the Inspector of Labour had become final.
On independent analysis with respect to the application of the act
on the Corporation, it was observed as under:
“50. However on independent analysis of the facts, we
categorically hold that the provisions of Tamil Nadu Act,
46 of 1981 are applicable to TNMSC Management, in
view of the fact that, TNMSC Management is an industrial
establishment as defined under section 2(3)(e) of the Act
and that it is an establishment as defined under section 2
(6) of Tamil Nadu Act, 36 of 1947. By the above reasoning
be conclusively hold that TNMSC Management is an
industrial establishment and is covered under the provisions
of Tamil Nadu Act, 46 of 1981.”
SUBMISSIONS OF THE PARTIES
14. We have heard the learned counsel for the parties and perused
the written submission. On behalf of the appellant, it has been
submitted :-
a) That the order dated 10th March, 2016 of this Court was not
complied with. The specific plea of the appellant that the Act
[2024] 5 S.C.R. 603
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
as also the Tamil Nadu Shops and Establishments Act, 19478
would not be applicable to the appellant. However, the same
was not considered by the High Court. The only manner in
which the said Act could be applicable was that the Corporation
would fall under the definition of ‘commercial establishment’
under Section 2(3) of the 1947 Act.
b) That the impugned judgment did not analyze whether any of
the activities of the Corporation fell under Section 2(3) of the
1947 Act. Section 7 of the Act exempts such of those industrial
establishments, that are engaged in construction activities
and since some of the activities of the Corporation, include
construction, the Corporation would be exempt.
c) That most of the 53 employees who are appellants in Appeal
arising out of SLP(C)No.2649 of 2020, who were directed to
be given permanent status by the Inspector of Labour, have
obtained other profitable employment and the Corporation
cannot be forced to grant permanent status.
15. The respondent-Union has submitted –
(a) That the Corporation is attempting to distinguish the status of the
respondents by applying the ratio of State of Karnataka v. Uma
Devi9 after having exploited them for years together as temporary
employees. Reliance has been placed on Maharashtra State
Road Transport Corporation v. Casteribe Rajya Parivahan
Karmachari Sanghathana10 and particularly, paragraphs 32
to 36 thereof.
(b) Relying on U.P. Power Corporation Limited & Anr. v. Bijli
Mazdoor Sangh & Ors.11, it is submitted that the industrial
adjudicator, although can vary terms of employment, but
cannot do anything violative of Article 14 and if the case at
hand is covered by the concept of regularization, the same
Rule applies.
8 Hereinafter 1947 Act.
9 [2006] 3 SCR 953 : (2006) 4 SCC 1
10 [2009] 13 SCR 937 : (2009) 8 SCC 556
11 [2007] 5 SCR 256 : (2007) 5 SCC 755
604 [2024] 5 S.C.R.
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(c) Relying on ONGC Limited v. Petroleum Coal Labour Union
& Ors. 12 and Ajay Pal Singh v. Haryana Warehousing
Corporation13, it is urged that the powers of Industrial and
Labour Courts were not in consideration in Uma Devi (supra).
(d) A tabular chart has been provided in respect of the 12 appellants
in the Appeal arising out of SLP(C)No.2649 of 2020 and it is
submitted that since the Inspector of Labour vide its order has
declared the eligibility of the said workmen for grant of permanent
status, there falls no requirement to raise an industrial dispute
questioning the non-employment. Such of those respondents
who have reached the age of superannuation would be entitled
to compensation in lieu of regularization as recognized in Ranbir
Singh v. S.K. Roy, Chairman, Life Insurance Corporation
of India & Anr.14.
ANALYSIS AND CONSIDERATION
16. The relevant provisions for the adjudication of the present dispute
are reproduced below for ease of reference :-
2. Definitions. - In this Act, unless the context otherwise
requires,-
x x x x x
(3) “industrial establishment” means-
(a) …….; or
(b) …….; or
(c) ……..; or
(d) ……..; or
(e) an establishment as defined in clause (6)
of section of the Tamil Nadu Shops and
Establishments Act, 1947 (Tamil Nadu Act
XXXVI of 1947); or
(f) ………; or
12 [2015] 5 SCR 474 : (2015) 6 SCC 494
13 (2015) 6 SCC 321
14 [2022] 10 SCR 986 : 2022 SCC OnLine SC 521
[2024] 5 S.C.R. 605
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
(g) any other establishment which the
Government may, by notification, declare
to be an industrial establishment for the
purpose of this Act.
(4) “workman’, means any person employed in any
industrial establishment to do any skilled or unskilled,
manual supervisory, technical or clerical work for hire or
reward, whether the terms of employment be express
or implied [and includes a badli workman, but does not
include any such person,-
(a) who is employed in the police service or as an
officer or, other employee of a prison; or
(b) who is employed mainly in a managerial or
administrative capacity; or
(c) who, being employed in a supervisory capacity,
[draws wages exceeding three thousand and
five hundred rupees per mensem] or exercises
either by the nature of the duties attached to
the office or by reason of the powers vested in
him, functions mainly of a managerial nature.
x x x x x
3. Conferment of permanent status to workmen. - (1)
Notwithstanding anything contained in any law for the
time being in force every workman who is in continuous
service for a period of four hundred and eighty days in
a period of twenty-four calendar months in an industrial
establishment shall be made permanent.
(2) A workman shall be said to be in continuous service
for a period if he is, for that period, in uninterrupted
service, including service which may be interrupted
on account of sickness or authorised leave or an
accident or a strike, which is not illegal, or a lock-out
[xxx], or a cessation of work which is not due to any
fault on the part of the workman.
[Explanation [I]. - [For the purposes of computing the
continuous service referred to in sub-sections (1) and (2),
606 [2024] 5 S.C.R.
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a workman shall be deemed to be in continuous service
during the days on which] -
(i) he has been laid-off under an agreement or
as permitted by standing orders made under the
Industrial Employment (Standing Orders) Act, 1946
(Central Act XX of 1946) or under any other law
applicable to the industrial establishment;
(ii) he has been on leave with full wages, earned in
the course of this employment; and
(iv) in the case of a female, she has been on
maternity leave; so however, that the total period of
such maternity leave does not exceed twelve weeks.
[Explanation II. - For the purpose of this section, Law’
includes any award, agreement, settlement, instrument
or contract of service whether made before or after the
commencement of this Act.]”
(Emphasis supplied)
17. The core issue here is the application of the Act to the Corporation
qua the employees and their Union. In order to examine the same,
what is to be considered is as to whether the Corporation can
be termed as an industrial establishment as per the provisions
reproduced supra and whether the members of the Union would
qualify as workmen and therefore would be eligible for permanent
status under Section 3 of the Act.
18. The High Court considered this question in line with Section 2(3)
(e), as above, i.e., the definition of ‘establishment’ provided under
section 2(6) of the 1947 Act. It reads thus –
“2. Definitions- In this Act, unless there is anything
repugnant in the subject or context-
x x x x
(6) ‘establishment’ means a shop. commercial establishment,
restaurant, eating-house, residential hotel, theatre or any
place of public amusement or entertainment and includes
such establishment as the 1 [State] Government may by
[2024] 5 S.C.R. 607
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
notification declare to be an establishment for the purposes
of this Act;”
19. For an establishment to be covered under the definition thereof
under the 1947 Act, unless it is one of those specifically mentioned,
it must satisfy being a commercial establishment which is defined
under Section 2(3) which is as under -
“(3) ‘commercial establishment´ means an establishment
which is not a shop but which carries on the business of
advertising, commission, forwarding or commercial agency,
or which is a clerical department of a factory or industrial
undertaking or which is an insurance company, joint stock
company, bank, broker’s office or exchange and includes
such other establishments as the State Government may
by notification declare to be a commercial establishment
for the purposes of this Act.”
20. The affidavit dated 16th September, 2009 filed by the Corporation
before the High Court records that the actual turnover for the year
2007-2008 is Rs.27.5 crores, vis-à-vis, the value of drugs distributed
being at Rs.186.60 crores. The order of the Inspector of Labour
records as under -
“Further the respondent advanced the arguments that
the Tamil Nadu Medical Services Corporation is not
functioning with any profit motive, that quality argues are
being obtained from quality manufacturing and supplied
the same to the consumers without obtaining any service
charges and therefore, the respondent’s establishment is
not attending to any commercial duty and while perusing all
the aforesaid factors and also the audited balance sheets
of the respondents filed on behalf of the petitioner i.e. for
the years 1994-95, 1995-96 and 1996-97 it is seen that
for the year 1994-95 the profit to the tune of Rs.6.96 lakhs
and for 1995-96 Rs.8.44 lakhs and for 1996-97 Rs.1.84
lakhs had been obtained. Therefore it is clearly seen that
the respondent’s establishment has no profit intention as
mentioned by the respondent is not at all true.”
21. For any establishment to be commercial, it has to be established
that the activities undertaken by it are for making some monetary
608 [2024] 5 S.C.R.
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gain. Commercial in the most rudimentary sense means buying or
selling of goods in exchange of money. As the above reproduced,
uncontroverted paragraph (also recorded by the High Court)
establishes, the commercial element was not absent.
22. Further, it was submitted that the activities conducted by the
Corporation did not fall under those mentioned under Section 2(3)
of the 1947 Act. This submission too, is difficult to accept. The
construction work, which the Corporation, by its own admission,
carries out, is also for non-governmental bodies such as firms,
companies, and individuals. It would be apposite to refer to the
observations of the High Court in this regard, in particular, paragraphs
37 and 38 of the impugned decision, which, for ease of reference
are reproduced below :
“37. TNMSC Management is a company registered under
the Indian Companies Act, 1956 which is wholly owned
by the Government of Tamil Nadu. The objects of the
company as seen from the memorandum of articles of
association are as follows :
“(1) To buy or otherwise acquire all kinds and varieties
of generic and patent medicines, drugs, mixtures,
formulations, tablets, pills, powders, pharmaceutical
and medical products, needles, syringes, injectables,
vaccinesr sera, immunogens, phylacogens, chemicals
and surgical dressings, kits and instruments and to
sell or supply to various hospitals and other health
centres.
(ii) To purchase, distribute, assemble, install, maintain
or otherwise deal in all types of capital equipments
and instruments required in hospitals.
(iii)To undertake designing and construction of
Hospitals and or other buildings for Government,
or for any other person including local authorities,
corporations, societies, trusts, companies, firms and
individuals.
(iv)To establish modern warehouses and Engineering
workshops to manufacture, assemble, repair or
otherwise maintain various medical equipments,
[2024] 5 S.C.R. 609
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
surgical instruments, diagnostic equipments, fire-
fighting equipments, furniture and – fittings including,
hospital furniture and also to undertake civil and other
general maintenance of hospitals.
(v)To establish research and development centres and
institutes for medical and para-medical personnel for
imparting training in various Techno-Managerial fields.”
(Emphasis supplied)
38. It is also seen that TNMSC Management has
warehouses in channel and in all the District Headquarters.
These warehouses are used for storing of medicines
and drugs. It has been specifically held as a fact by the
Inspector of Labour in the order dated 31.03.2001, that
TNMSC Management had earned profit of Rs.6.95 lakhs
in the year 1994-95, Rs.8.44 lakhs in the year 1995-96
and Rs.1.84 lakhs in the year 1996-97. Consequently,
any contention raised that it is run on a “no profit basis”
has to be rejected.”
23. It was argued that the Corporation’s activities included construction
and therefore it would be exempt from the application of the Act.
Section 7 reads thus-
“7. Act not to apply to workmen employed in certain
industrial establishment. – Nothing contained in this
Act shall apply to workmen employed in an industrial
establishment engaged in the construction of buildings,
bridges, roads, canals, dams or other construction work
whether structural, mechanical or electrical.”
The language of the provision is clear. It implies that this act shall
not apply to those workmen who are engaged in the construction
of buildings and the like or other construction work be it structural,
mechanical, or electrical. Therefore, those establishments and their
workmen shall be exempt, who are engaged exclusively, in the work
of construction. The objectives of the Corporation, which have been
reproduced15 in the affidavit of the Union before the High Court, state:-
15 Page 137 of the paperbook in SLP (c) 2649 of 2020
610 [2024] 5 S.C.R.
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“
x x
x
iii) To undertake the designing and construction of hospitals
and other buildings for the Government, or any other person
including local authorities, corporations, societies, trusts,
companies firms and individuals.
…”
24. This, however, in our view would not allow the Corporation to wash
its hands off the responsibilities or obligations under the Act, since
the construction to be undertaken by the Corporation, is only one of
the many activities to be undertaken by it. To take all the workers out
of the purview of the Act, especially, when the said workers, like the
members of the respondent union, were not the ones undertaking
construction is unwarranted.
25. It was further argued that many of the persons directed to be granted
permanent employment by the order of the Inspector of Labour have
found profitable employment elsewhere, and as such the SLP on
their behalf should be dismissed. We cannot accept this submission.
Simply because some of the persons involved in the employment
dispute have allegedly found other employment, that does not
justify a dismissal of others’ claims. Per the written submissions of
the appellants in the appeal arising out of SLP(C)No.2649 of 2020,
twelve appellants have approached this court. And therefore, it must
be seen to its logical conclusion.
26. It was argued before the Courts below that the respondents had
not continued in service after a certain point in time, however, the
said argument was not accepted and we find no reason to take a
different view on fact which since the year 1997 remains proven and
recognized by the Courts.
27. As such, both requirements, of the establishment being covered
under the definition of industrial establishment as provided and
that of the employee having uninterruptedly continued in service
for 480 days or more for 24 months, having been met we have no
hesitation in holding that the Act would apply to the parties to the
present dispute.
[2024] 5 S.C.R. 611
Tamil Nadu Medical Services Corporation Limited v. Tamil Nadu
Medical Services Corporation Employees Welfare Union & Anr.
28. The next question to be considered is whether the High Court on
remand, could have ignored the order of the Inspector of Labour and
suggested that the employees raise an industrial dispute questioning
their non-employment. The reason for remand, as is seen from the
judgment dated 10th March, 2016, was that the High Court had not
considered that the Act would be applicable to the parties, which
were the very same as the parties before us. In other words, the
scope of remand was limited. The order of the Inspector of Labour
was passed under the Act. Since the High Court concluded that the
Act would apply, there was no reason for it to disturb the finding
of the Inspector of Labour and, therefore, it ought to have simply
ordered that the order of Inspector of Labour which concluded that the
members of the respondent-Union be given permanent employment,
be complied with. When an issue stands already decided and such
decision does not suffer from any vice of authority or jurisdiction
then, putting those who enjoy an order in their favour through the
wringer once more of having to re-establish their claim, this time
before the authority under the Industrial Disputes Act, 1947, would
be unjustified.
29. The appeal filed by the Corporation (Appeal arising out of SLP(C)
No.30005 of 2019) is, in terms of the above, dismissed and the appeal
filed by the respondent-Union through its President, G. Sumathi
(Appeal arising out of SLP(C)No.2649 of 2020) is accordingly allowed
with all consequences in favour of the respondent-employees, under
the law, to follow.
Pending application(s), if any, shall stand disposed of.
Result of the case: Appeal filed by the Corporation dismissed.
Appeal filed by the Union allowed.
†
Headnotes prepared by: Nidhi Jain
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