OIL AND NATURAL GAS CORPORATION LTD vs PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION

OIL AND NATURAL GAS CORPORATION LTD vs PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1033 OF 2022
(ARISING OUT OF PETITION FOR SPECIAL LEAVE TO
APPEAL (CIVIL) NO. 9456 OF 2020)
M/S. OIL AND NATURAL GAS
CORPORATION LTD. …..APPELLANT(S)
VERSUS
THE PRESIDENT, OIL FIELD
EMPLOYEES ASSOCIATION & ORS. ….RESPONDENT(S)
J U D G M E N T
ANIRUDDHA BOSE, J.
Leave granted.
2. The appellants before us are Oil and Natural Gas
Corporation Limited (in short “ONGC”), a public sector
undertaking engaged in the business of exploration and
production of oil and gas. In this appeal, they assail a judgment
of the Bombay High Court delivered on 30th January, 2020 in
Writ Petition No. 13015 of 2019 in which the claims of workmen
to be entitled to fixation of pay and other allowances as per an
2
award of the Central Government Industrial Tribunal No. II,
(“Tribunal”) Mumbai has been upheld with certain modification
in the implementation part of that award. The controversy
involved in this proceeding originates from a Direct Action notice
raised by a Union (Oil Field Employees Association represented
by their President-respondent no.1 in the present appeal) on
26th August, 2016. The workmen, whose cause the said Union
were espousing, were engaged by and getting their salaries paid
through different contractors appointed by the ONGC. ONGC’s
stand all along has been that these were contractors’
workmen – and not workmen of ONGC. In fact, ONGC’s case is
that another settlement has been reached with the Unions
representing majority of the contractors’ workmen (over 77%)
and that settlement arrived at on 19th September, 2016 is
binding on all similar workmen including those represented by
the respondent Unions. We shall address this issue later in this
judgment. Earlier, there were three memoranda of
understanding reached in the years 1992, 1995 and 2000
involving ONGC and different Unions representing the contract
workmen working with the ONGC. These memoranda covered
wages, allowances and other facilities to be provided by the
contractors to the “contract labour”. Copies of these memoranda
3
of understanding have been annexed at pages 93, 102 and 113
of the paperbook. The 2000 MoU had lapsed on 31st December,
2007.
3. There had been certain parallel developments on the
industrial front involving ONGC and Unions espousing the
cause of workmen engaged by their contractors, which cast a
shadow on the dispute giving rise to this appeal. Six Unions
representing workmen engaged by contractors had submitted a
charter of 28 demands against ONGC and 57 of their
contractors. This was admitted for conciliation. ONGC wanted
to introduce a Fair Wage Policy (“FWP”) to cover contract
employees. Negotiation in that regard had started among the
parties. A Memorandum of Settlement was signed on 19th
September, 2016 (to which we have already referred) under
which the FWP extended to contract labourers of Western
Offshore Unit, Mumbai was agreed to be implemented at all
work-centers of ONGC. This settlement, according to the
appellants, was in terms of Section 12(3) read with Section
18(3)(d) of the Industrial Disputes Act, 1947 (the Act) and
entailed upward revision of wages as also certain other
measures of social protection including job security. The
signatories to this settlement were contractors’ representatives
4
and representatives of six Unions “In the presence of and
representing principal employers” as also the Conciliation
Officer. The representatives of ONGC signed in the capacity of
representatives of the principal employer. The Tribunal and the
High Court, however, held that the aforesaid arrangement was
not settlement within the meaning of Section 18(3)(d) of the Act
and was not binding on the workmen involved in the subject
dispute. The Tribunal had also referred to certain order of status
quo passed by the High Court to sustain its finding on this
count. We shall however address this issue on merit, testing
the reasoning of the High Court given in the impugned
judgment.
4. The respondent-Oil Field Employees Association (the
actual party-respondent no. 1 is the President of the Oil Field
Employees Association) issued the Direct Action Notice on 26th
August, 2016 to the appellants. This Union was registered in
the year 2014 and claims to represent workmen engaged by
contractors of the ONGC. On 19th September, 2016 itself, one
P.D. Sunny, Conciliation Officer called the appellants and the
first respondent for conciliation of dispute arising out of the
notice for direct action of 26th August, 2016. On 26th September,
2016, a Charter of Demands was submitted before the
5
Conciliation Officer with a copy to the appellants. The main
demand of the respondent no.1 was that wages and service
conditions of the workmen engaged by the contractor should be
at par with the regular employees of ONGC.
5. Thereafter, in course of conciliation proceeding the FWP
was brought on record and the respondent no. 1 questioned the
legitimacy of the FWP. The conciliation records subsequently
were transferred from said P.D. Sunny to one Dr. S. Gunahari,
Conciliation Officer & Regional Labour Commissioner (C),
Mumbai. The latter recorded failure of conciliation and
forwarded the failure report to the Central Government. The
dispute then was referred by the Central Government to the
Tribunal and it was registered as Ref. CGIT No.2/40 of 2017.
The reference order was made by the Central Government on
18th September, 2017 in terms of Section 10(2A) (1) (d) of the
Act. The order of reference was in the following terms:-
“Whether the following demands of The President, Oil
Field Employees Association are legal and justified?
1. To have uniform policies for all the
workers irrespective of the contracts in
the establishment of ONGC.
2. To get the MOU renewed with pay
Revisions w.e.f. 1.1.2008.
3. To advise M/s. ONGC Management to
release an advance of Rs.50,000/- per
worker and to adjust it with the arrears
after implementation of the Pay Revisions.
6
If not, to what relief the workmen are
entitled to?”
6. ONGC questioned the legality of the order of reference in a
writ petition filed in the High Court of Bombay (registered as
Writ Petition No.5045 of 2018). This writ petition was not
entertained by a Division Bench of the High Court and was
rejected by an Order passed on 29th January, 2019. It was,
inter-alia, held in this order:-
“8) It is further to be noted that in pursuance to the
communication addressed by the Petitioner to the
Chief Labour Commissioner, a Conciliation Officer
vide his notice dated 15th September 2016 kept the
matter for conciliation on 19th September, 2016 at
12:30 hrs. Perusal of the minutes would reveal that
in the said meeting, the representative of the
Petitioner as well as the Respondent No.3 were
directed to do certain compliances. However, it
appears that on same day i.e. 19th September 2016
at 15:00 hrs., settlement was entered into by the
representatives of the certain Union and ONGC and
57 contractors of the ONGC. It is to be noted that
though the said settlement was to be arrived on
the same day,the Petitioner neither informed the
Conciliation Officer in the present proceedings
about such a settlement being arrived at. The
conduct of the Petitioner in not bringing to the
notice of the Conciliation Officer in the present
proceedings, the settlement which was to arrive
within hours with representative of certain Unions
before some other Conciliation Officer, in our
considered view is not a conduct befitting the
employer who is an organ of State and State
within the meaning of Article 12 of the
Constitutionof India.
9) It is further to be noted that though the
Respondent No.3 and the Petitioner have completed
their pleadings before the learned CGIT and though
there were rounds of litigations, which reached upto
this Court arising out of the interlocutory orders, the
7
Petitioner has chosen to move this Court for
ad-interim orders only after the matter was kept for
their evidence. We are of the considered view that
having consciously submitted to the jurisdiction of
the learned CGIT, it is not now open for the
Petitionerto complain at such a belated stage that
the reference was not warranted.
10) Apart from that the question as to whether the
settlement arrived at between some of the Unions
at one hand and the Petitioner's contractors on the
other hand is binding on the Respondent No.3 and
intervenors, can be very well looked into by the
learned Tribunal in the proceedings before it.
11) In that view of the matter, we are not inclined
to entertain the present Petition in its extraordinary
jurisdiction under Article 226 of the Constitution of
India. The Writ Petition is therefore rejected.”
7. In the reference, two other Unions participated and were
impleaded as parties therein on the basis of their applications.
These two Unions are Maharashtra Sanghatit Asanghatit
Kamgar Sabha (respondent no.2) and Maharashtra Employees
Union (respondent no.3).
8. The Tribunal by its Order passed on 17th July, 2019 in
substance allowed the claim of the workmen articulated through
the Unions and ordered:-
“1. The reference is allowed.
2. It is declared that the demands of the union
to have uniform policies for all the workers
irrespective of contracts in the
establishment of ONGC and to get the MOU
renewed with pay revision w.e.f. 1.1.2008
are legal & justified.
8
3. First party management is directed to enter
into MOU with second party unions with
pay revision w.e.f. 1.1.2008 and implement
the same within 2 months from the date of
order.
4. On renewal of MOU the first party
management is directed to pay arrears
arising out of implementation of MOUs
within 2 months from the date of order
failing which concerned workmen would be
entitled to interest @ 6% per annum on the
arrears and other benefits to which they are
entitled to on implementation of MOU.”
9. The High Court sustained the award in the writ petition
brought by ONGC on substantive issues but partly allowed the
petition challenging the legality thereof, inter-alia, holding:-
“20. Coming now to the reliefs formulated by it,
it is but apparent that the tribunal does not
appear to have applied its mind to individual
revisions that may have to be made. As we
have noted above, there is no infirmity in the
conclusion of the tribunal that wage revisions
had to be on the lines of MbPT settlement for
the relevant period, but then based on related
MbPT settlements, the court had to work out
individual wage revisions for different
categories of workmen, whose cause was
espoused by the second party unions in the
present case. The tribunal, firstly, had to work
out individual revised wage scales and
allowances for workmen at 12 Victoria Dock
and Nhava Supply Base; it, then, had to
formulate reasonable consolidated wages for
workmen other than those working in 12
Victoria Dock and Nhava Supply Base. This the
tribunal appears to have clearly failed to do. It
left it to the parties to work out the individual
revisions. That I am afraid is not possible. It is
one thing to say that the basis of wage revision
is available in a document and quite another to
apply that basis to the individual facts of the
case. For example, it is one thing to say that
workmen other than those working in 12VD
9
and Nhava Supply Base were to be paid wages,
that is, consolidated wages, worked out on the
basis of minimum basic wages of the concerned
categories of MbPT workers plus adjustments
towards allowances, and quite another to
actually provide for and stipulate such
consolidated wages so calculated and adjusted.
This was obviously for the tribunal to do and
not for the parties to work out. The tribunal
appears to have clearly missed this point. To
that extent, the matter must go back to CGIT
for determination of actual wage
scales/allowances of workmen working in
12VD and Nhava Supply Base (based on MbPT
scales/allowances) as well as other workmen
covered by the reference (for consolidated
wages based on MbPT scales and allowances).
21. The question then is of interim relief to be
granted to these workmen pending
consideration of the matter on remand by
CGIT. It is a matter of fact, and probably a sad
commentary on the times that we live in, that
the last wage revision of these workmen
occurred as far back as in 2000. That wage
revision was applicable only till 31 December
2007 and till date, there has been no further
revision in sight, though at least three revision
periods have gone by. On these facts, this court
is of a considered view that it would be in the
interest of justice to at least direct ONGC to pay
wages to the workmen concerned on the basis
of what was agreed in the settlement of 19
September 2016 minus its condition of
withdrawal of proceedings against ONGC.
These would indeed be minimum wages that
might in any case be payable to the concerned
workmen, that is to say, even if the unions were
wrong in the matter of calculation of wages in
accordance with the particulars submitted with
the statement of claim. If, on the other hand,
they were right that the workmen were entitled
to get wages in accordance with the particulars
submitted by them, these interim revised wages
could then be adjusted against such wages.
22. The writ petition is, accordingly, disposed
of by setting aside the operative order passed
by CGIT and remitting the reference, being
Reference No.CGIT-2/40 of 2017, to CGIT-2,
Mumbai for a fresh decision on (i) individual
10
wage scales and (ii) consolidated wages
payable, respectively, to the contract workmen
of ONGC working at (i) 12 Victoria Dock and
Nhava Supply Base and (ii) the other workmen
covered by the reference. It is made clear that
such determination must be in the light of what
has been observed above, in particular that the
wage revision/s of these workmen has/have to
be on the lines of the wage revision/s applicable
to workmen of MbPT, which are placed before
the court (i.e. MbPT settlements applicable for
the periods from 2007 to 2011 and from 2012
to 2016).
23. The tribunal is requested to accord top
priority to this determination and dispose of the
reference as expeditiously as possible and
preferably within a period of eight months from
the date this order is pointed out to the
tribunal. To that end, either party may appear
before the tribunal with notice to the other side
and produce an authenticated copy of this
order. The tribunal may thereupon fix the
schedule of hearings and decide the reference
accordingly.
24. Pending hearing and final disposal of the
reference on remand, interim wages shall be
paid to the concerned workmen by ONGC for
the whole of the period of revision in
accordance with MoS of 19 September 2016
and also prospectively from the month of March
2020.
25. Since the operative part of the award of
CGIT has been set aside, pending criminal
proceedings for non-implementation of the
award shall not be proceeded with.”
10. The workmen, whose cause the three Unions espouse were
those who were inducted by contractors and were getting their
salaries paid through the contractors only. The main claim of
the workmen was for having a uniform policy for all workmen,
irrespective of contracts under which they were engaged in the
11
matter of wages and allowances. Last of the memoranda of
understanding signed in the years 1992, 1995 and 2000 was
executed on 29th December, 2000. The wage revision provided
for in the last memorandum of December, 2000 was to operate
till 31st December, 2007. Primarily, signatories to these
memoranda are the appellants-employer and the Unions. The
respective contractors were not signatories to these
memoranda. One of the major characteristics of the terms
contained therein, though not specifically spelt out in the
memoranda themselves, is that the wages and allowances
agreed upon therein were linked to the lines of settlement
signed between Mumbai Port Trust (earlier Bombay Port
Trust) and their workmen. We shall henceforth refer to that
settlement as MbPT Settlement. These memoranda classified
contract employees in two categories, one set working for
Victoria Dock 12 and Nhava Supply base and the other set
working at various other locations including Mumbai and
Uran. There was variance in pay and allowance between these
two categories of workmen. This was in the case of 1992
settlement whereas the 1995 settlement followed similar line
of categorisation, but included workmen engaged in Panvel
12
to Mumbai and Uran. The same form of categorisation was
there in the “2000 Settlement.”
11. Appearing on behalf of the appellants Mr. Cama, learned
senior counsel, has primarily argued on two points. His first
submission has been that the reference itself was not
maintainable as none of the workmen the Unions were
representing or espousing the causes of were employed by the
appellants. He has pointed out the definition of workmen in
Section 2(s) of the Act in this behalf. The other point on which
submission was advanced by him was that the Settlement
arrived at on 19th September, 2016 covered all the employees
of contractors, considering the provisions of Section 18(3)(d).
The Unions have been represented by Mr. Pallav Shishodia,
learned senior counsel and Mr. Shaligram G. Mishra,
respondent no. 1 appearing in person. The stand of the
Unions on the other hand has been that the concerned
workmen were actually employees of the appellants and
before the Tribunal itself, it was their case that their
engagement by the contractor would not by itself make them
contractors’ employees. It is also their stand that the
settlement of 19th September, 2016 could not be treated to be
one under Section 18(3)(d) of the Act to bind the workmen
13
represented by the three Unions in this appeal. First, it has
been contended that the said settlement has not taken final
shape as certain procedural aspects for conclusion thereof is
yet to be taken. It has also been argued on their behalf that
the said settlement related to contractors’ workmen only
whereas the workmen involved in the present proceeding were
not employees of the contractors who had signed the said
settlement. On the other hand, the workers represented by
the Union are working in the establishment of the appellants
for a long period of time and they claimed to be entitled to the
service benefits directly from ONGC.
12. The Tribunal rejected the objection on jurisdictional
ground taken on the point that the concerned workmen were
not employees of the appellants and hence no dispute could
lie with ONGC. The Tribunal has also given the finding that
the FWP could not be treated as fair settlement as it entailed
withdrawal of the proceedings lodged by individual workmen
or Unions. It has been urged on behalf of the respondents that
many of these proceedings were for regularization or
absorption directly into the appellant company, a dispute
which has intricate link with the controversy involved in the
present proceeding. Mr. Cama has asserted that the finding
14
of the High Court on facts was perverse, and, on that count,
he invited interference by this Court in exercise of its
jurisdiction under Article 136 of the Constitution of India. He
has relied on the decisions of this Court in the cases of
Workmen of the Food Corporation of India vs. Food
Corporation of India [(1985) 2 SCC 136], Parimal Chandra
Raha & Ors. vs. Life Insurance Corporation of India and
Ors. [(1995) Supp (2) SCC 611], Indian Petrochemicals
Corporation Ltd. and Anr. vs. Shramik Sena & Ors. [(1996)
6 SCC 439] and Steel Authority of India Ltd. & Ors. vs.
National Union Waterfront Workers & Ors. [(2001) 7 SCC
1] in support of his submission that the workmen of the
contractor would not become the workmen of the principal
employer. He has also cited the case of Secretary, State of
Karnataka & Ors. vs. Uma Devi & Ors. [(2006) 4 SCC 1] to
contend that there could not be backdoor entry of contractors’
employees directly into the establishment of the principal
employer. This genre of cases has been cited mainly in
support of two propositions of law urged on behalf of the
appellants. First is that there must be a jural relationship
brought about by an agreement to establish employeremployee relationship between contractors’ employees and
15
that of the principal employer. Secondly, abolition of contract
labour in certain industries does not result in automatic
absorption of the workmen engaged by them in the concerned
establishment. In the case of Parimal Chandra Raha (supra),
however, it has been held that where there was statutory
requirement of maintaining of canteens and the canteens of
the respondent corporation had become part of the
establishment, the contractors engaged from time to time in
reality were agencies of the corporation and were only a veil
between the corporation and canteen workers. In the case of
Steel Authority of India Limited of 2001 (supra), it has been
held that abolition of contract labour in certain in any part of
an establishment by a notification under Section 10(1) of the
Contract Labour (Regularization and Abolition) Act, 1970
(1970 Act) automatically does not lead to absorption of
contract labour working in those parts directly in the
establishment concerned. The case of Indian
Petrochemicals (supra) mainly follows the ratio laid down in
the case of Parimal Chandra Raha (supra). The proposition
of law laid down in the case of Steel Authority of India
Limited vs. Union of India & Ors. reported in [(2006) 12 SCC
233] is that mutually destructive plea that the employees were
16
of contractor and the principal employer could not be taken.
The ratio of the decision of Uma Devi (supra) also would not
apply in the facts of the present case. Here, the issue is not
of backdoor entry into an establishment but finding out
subsisting status of a set of workmen on the question as to
who is their actual employer. For determination of the fate of
the dispute raised by Unions, adjudication of the former
question becomes inevitable.
13. Mr. Cama has emphasised on the ratio of the case of
Mukand Ltd. vs. Mukand Staff and Officers’
Association [(2004) 10 SCC 460]. In this judgment it has
been held:-
“23. We have already referred to the order of reference
dated 17-2-1993 in paragraph supra. The dispute
referred to by the order of reference is only in respect
of workmen employed by the appellant Company. It
is, therefore, clear that the Tribunal, being a creature
of the reference, cannot adjudicate matters not within
the purview of the dispute actually referred to it by
the order of reference. In the facts and circumstances
of the present case, the Tribunal could not have
adjudicated the issue of salaries of the employees who
are not workmen under the Act nor could it have
covered such employees by its award. Even assuming,
without admitting, that the reference covered the
non-workmen, the Tribunal, acting within its
jurisdiction under the Act, could not have adjudicated
the dispute insofar as it related to the “nonworkmen.”
17
14. As regards the lack of jurisdiction of the Tribunal to
determine or adjudicate the dispute between the appellants
and the workmen represented by the three Unions, perusal of
the award does not reveal that this point was pressed before
the Tribunal by the employer. We accept that the Tribunal
could not go beyond the disputes that were referred to it, as
held in the case of Mukand Ltd. (supra). But legality of the
order of reference was challenged by ONGC in Writ Petition(C)
No. 5045 of 2018. In the judgment of the Division Bench,
which we have already quoted, it was opined on the aspect of
jurisdiction of the Tribunal, that it was not open for the
petitioner to complain at such a belated stage that the
reference was not warranted. In the judgment of the High
Court under challenge before us, this question was dealt with
and it was held :-
“5. Apropos the first objection of Mr. Talsania, which,
according to him, goes to the root of the matter, it
must be noted at the very outset that the jurisdiction
of the tribunal in the present case to adjudicate the
reference was never questioned by ONGC on the
ground that the workmen represented by the second
party were not ‘workmen’ within the meaning of
section 2(s) of the Act, particularly, because they were
employees of contractors and not of ONGC. If this
issue was not part of the lis before the reference court,
there was no way it could be raised before the writ
court. The issue is, after all, a mixed issue of law and
facts; it would have to be adjudicated first before the
trial court upon foundational pleadings in that behalf
being led before it, before the writ court, in its scrutiny
18
of the order of the trial court, could be asked to go into
it.
6. Mr. Talsania, however, submits that the fact that
these workmen were employees of contractors is not
really in dispute; the reference itself termed them as
workmen engaged through contractors. The question
is not whether the workmen were engaged through
contractors. That may indeed be an apparent
position. The question is whether, by reason of
perennial nature of the work at the premises of the
principal employer, and having regard to the
circumstances bearing on their service and service
conditions, whether the workmen could be said to be
in reality employees of the principal employer despite
the apparent position that they were engaged through
contractors. Indeed, there was a clear statement on
the part of the workmen in the statement of claim of
the second party that they were in fact and in reality
workmen of ONGC and not of the contractors. No
doubt, in its written statement, ONGC contested this
position, and in their rejoinder second party No.2
union reiterated its statement that the contract/s
was/were sham and bogus. It is apparent from the
impugned award of the tribunal, however, that this
issue was not pressed by ONGC at the hearing. The
issue anyway reflected on the jurisdiction of CGIT to
adjudicate the reference and ONGC did not choose to
contest the jurisdiction on the issue. Had the issue
been pressed by ONGC before the reference court, the
second party would have led appropriate evidence in
support of its case in this behalf. It obviously chose
not to do so, because this question was not debated
by ONGC before the reference court. Could the second
party be then visited with the consequence of having
to deal with this issue merely on the basis of the
material available before this court at the stage of a
scrutiny under Articles 226 or 227 of the Constitution
of India. The answer would be an emphatic “no”. The
second party would most certainly be seriously
inconvenienced if it were now required to sustain its
plea in the statement of claim of the workmen being
in reality employees of ONGC, without having had an
opportunity to lead evidence in support of such case
before trial court. For whatever reasons, ONGC found
it worth its while not to contest the jurisdiction of the
tribunal in the reference and this court, sitting as a
writ court, must leave the matter at that and not
scrutinize it any further.”
19
15. On the question of raising issue of lack of jurisdiction
before the Tribunal, the cases of Rattan Lal Sharma vs.
Managing Committee, Dr. Hari Ram (Co-Education) Higher
Secondary School & Ors. [(1993) 4 SCC 10], Secretary to
Govt. of India and Others vs. Shivram Mahadu Gaikwad
[(1995) Supp (3) SCC 231] and Kalyani Sharp India Ltd. vs.
Labour Court No.1, Gwalior & Anr. [(2002) 9 SCC 655] were
relied upon by the appellants. We accept, as a proposition of
law, that if irregularity or illegality committed by a Tribunal
touches upon the jurisdiction to try and determine over a
subject dispute is altogether beyond its purview, that question
would go to the root of the matter and it would be within the
jurisdiction of the superior court to correct such error. In the
case of Kalyani Sharp India Ltd. (supra) raising a plea on
application of law was found permissible at the appellate stage
before this Court, but in that case no fresh investigation of
fact was required. But in the facts of the present case, it is
not the question of inherent lack of jurisdiction on the part of
the Tribunal. The question of jurisdiction, as held by the High
Court was a mixed question of fact and law. Both the cases
of Rattan Lal Sharma(supra) and Kalyani Sharp India Ltd.
(supra) arose out of admitted fact. In the case of Shivram
20
Mahadu Gaikwad (supra) it was the limitation question which
went to the root of the matter. This case arose out of a
proceeding before the Central Administrative Tribunal. Point
was taken before the Tribunal by the Union of India but was
not addressed to in the judgment of the Tribunal. So far as
the present proceeding is concerned, as reflected in the
judgment under appeal, there was a clear statement on the
part of the workmen in the statement of the second party
(Union) before the Tribunal that in fact and reality, the
concerned workmen were employees of ONGC and were not of
the contractors. This was denied by the ONGC but in their
rejoinder the said Union reiterated their stand that the
contracts were sham and bogus. In the award, certain other
reference orders were cited which involved adjudication of the
question as to whether contracts between ONGC’s contractors
and workmen engaged by them were sham and bogus. (Ref.
No. CGIT I 16, 17, 18 and 19/2005) or not and if the said
workmen in reality were ONGC’s workmen only. In the case
of Steel Authority of India of 2001 (supra), it has been laid
down that in cases where plea is raised that a contract is
found to be sham and nominal, a camouflage to suppress the
actual status of a workman vis-à-vis who his employer is, the
21
veil could be pierced to find out the such status. If to this
perspective is added the fact that earlier three MoUs were
entered into directly by ONGC with the Unions representing
contractors’ workmen, this question does not remain a
question of law alone, to be sustained with the aid of the ratio
of the cases of Rattan Lal Sharma (supra), Shivram Mahadu
Gaikwad (supra) and Kalyani Sharp India Ltd. (supra).
Signatories to the earlier MoUs were the appellants and the
Unions and Section 30(2) of the Contract Labour (Regulation
and Abolition) Act, 1970 permits contract labourers to enter
into agreements with principal employers. Thus, by
themselves, the aforesaid MoUs would not establish that the
contract workmen are workmen of the principal employer. But
the circumstances which we have narrated clearly point to the
relationship between the appellants and the workmen
represented by the respondent Unions in that direction. The
stand that the concerned workmen were employees of the
principal employer were not specifically outlined in the
reference, but was implicit therein. In the reference order the
dispute therein was between ONGC and the Union. The
Charter of Demand was also raised against ONGC. The
Tribunal examined the issue and returned its finding which
22
was upheld by the High Court. This was a finding of fact. In
the case of National Engineering Industries Limited vs.
State of Rajasthan & Ors. [(2000) 1 SCC 371] it has been
held that the Industrial Tribunal is the creation of statute and
it cannot go into the question on validity of the reference. That
issue ought to be considered by the High Court, according to
the appellants. So far as the present proceeding is concerned,
the High Court has considered that question and we do not
find any error in the approach of the High Court in deciding
the jurisdiction question against the appellants.
16. Next comes the issue as to whether the settlement of 19th
September, 2016 was binding on the Unions who are before
us as respondents, having regard to the provisions of Section
18(3) (d) of the Act. Section 18 of the Act stipulates:-
“18. Persons on whom settlements and
awards are binding.- (1) A settlement arrived
at by agreement between the employer and
workman otherwise than in the course of
conciliation proceeding shall be binding on
the parties to the agreement.
(2) Subject to the provisions of
sub-section (3), an arbitration award which
has become enforceable shall be binding on
the parties to the agreement who referred the
dispute to arbitration.
(3) A settlement arrived at in the course of
conciliation proceedings under this Act or an
arbitration award in a case where a
notification has been issued under subsection (3A) of section 10A or an award of a
Labour Court, Tribunal or National Tribunal
23
which has become enforceable shall be
binding on—
(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in
the proceedings as parties to the dispute,
unless the Board, arbitrator, Labour Court,
Tribunal or National Tribunal, as the case
may be, records the opinion that they were so
summoned without proper cause;
(c) where a party referred to in clause (a) or
clause (b) is an employer, his heirs,
successors or assigns in respect of the
establishment to which the dispute relates;
(d) where a party referred to in clause (a) or
clause (b) is composed of workmen, all
persons who were employed in the
establishment or part of the establishment,
as the case may be, to which the dispute
relates on the date of the dispute and all
persons who subsequently become employed
in that establishment or part.”
17. In the case of Ramnagar Cane and Sugar Company
Ltd. vs. Jatin Chakravorty & Ors. [(1960) 3 SCR, 968], the
binding nature of a settlement on all persons employed in an
establishment has been explained, having regard to Section
18(3)(d) of the Act. This principle was reaffirmed in the case of
General Manager, Security Paper Mill, Hoshangabad vs.
R.S. Sharma and Others [(1986) 2 SCC 151]. It has been laid
down in the case of Ramnagar Cane and Sugar Company
Ltd. (supra):-
“5. In appreciating the merits of the rival
contentions thus raised in this appeal it is
necessary to bear in mind the scheme of the
Act. It is now well settled that an industrial
dispute can be raised in regard to any matter
24
only when it is sponsored by a body of
workmen acting through a union or otherwise.
When an industrial dispute is thus raised and
is decided either by settlement or by an award
the scope and effect of its operation is
prescribed by Section 18 of the Act. Section
18(1) provides that a settlement arrived at by
agreement between the employer and the
workman otherwise than in the course of
conciliation proceeding shall be binding on the
parties to the agreement; whereas Section
18(3) provides that a settlement arrived at in
the course of conciliation proceedings which
has become enforceable shall be binding on all
the parties specified in clauses (a), (b), (c) and
(d) of sub-section (3). Section 18(3)(d) makes it
clear that, where a party referred to in clauses
(a) or (b) is composed of workmen, all persons
who were employed in the establishment or
part of the establishment, as the case may be,
to which the dispute relates on the date of the
dispute and all persons who subsequently
become employed in that establishment or
part, would be bound by the settlement. In
other words, there can be no doubt that the
settlement arrived at between the appellant
and the Employees' Union during the course
of conciliation proceedings on February 25,
1954, would bind not only the members of the
said Union but all workmen employed in the
establishment of the appellant at that date.
That inevitably means that the respondents
would be bound by the said settlement even
though they may belong to the rival Union. In
order to bind the workmen it is not necessary
to show that the said workmen belong to the
Union which was a party to the dispute before
the conciliator. The whole policy of Section 18
appears to be to give an extended operation to
the settlement arrived at in the course of
conciliation proceedings, and that is the object
with which the four categories of persons
bound by such settlement are specified in
Section 18, sub-section (3). In this connection
we may refer to two recent decisions of this
Court where similar questions under Section
19(6) and Section 33(1)(a) of the Act have been
25
considered. (Vide: Associated Cement
Companies Ltd., Porbandar v. Workmen [ Civil
Appeal No. 404 of 1958 decided on 3.3.1960]
and New India Motors (P.) Ltd. v. K.T. Morris.”
Same proposition of law was reiterated in the case of
Barauni Refinery Pragatisheel Shramik Parishad vs.
Indian Oil Corporation Ltd. [(1991) 1 SCC 4].
18. In the case of ANZ Grindlays Bank Ltd. vs. Union of
India & Ors. [(2005) 12 SCC 738], this Court, while testing a
reference found no subsisting industrial dispute and the
reference was set aside. This authority also does not assist the
appellants in the facts of the present case.
19. Now we shall test the appellants’ arguments on binding
effect of the settlement dated 19th September, 2016 on the
workmen whose cause the respondent Unions are espousing
before us. The High Court dealt with this question in the
following manner:-
“13. That brings us to the question as to whether the
MoS of 19 September 2016, even if it were to be
termed as a settlement in the course of a conciliation
proceeding, could be said to be a fair settlement so
as to bind workmen who were not party to it. The
tribunal, in the present case, has arrived at an
unequivocal finding that the settlement could not be
termed as fair. It, particularly, has taken into
account the fact that the MoS of 19 September 2016
required the workmen concerned to withdraw their
legitimate disputes and complaints on the issues of
regularization, etc. as a condition of settlement. It is
26
important to bear in mind in this behalf that when
the reference was made, there were about 1300
workmen, covered by the earlier MoU 29 December
2000, who were originally sought to be protected as
against about 2000 of total number of contract
employees with ONGC working in Mumbai, Panvel,
Uran and Nhava. The other employees were not
covered by the MoUs executed earlier by ONGC with
the unions. If these other workmen and their
union/s were to agree to a fair wage policy, which is
not on the basis of the earlier MoUs executed
between ONGC and the unions, such policy, on the
basis of such agreement, cannot be termed as a fair
policy for the workmen covered by the earlier MoUs
and whose references or complaints for their
legitimate demands were pending before various
industrial adjudicators. Anyway, on the facts
available before this court, the conclusion of the
Tribunal that the MoS of 19 September 2016 could
not be termed as a fair settlement, particularly, for
the workmen covered by the earlier MoUs, cannot be
termed as perverse. This court cannot bring itself to
hold that no reasonable person could have given any
such finding. The finding is clearly supported by
some evidence; it does take into account all relevant
and germane circumstances and materials; and it
does not consider any non-germane or irrelevant
circumstance or material. It must, in that case, pass
muster as a possible conclusion, which is not
amenable to judicial scrutiny either under Article
226 or 227 of the Constitution of India.”
20. The appellants’ case is that Unions representing above 77
percent of the workmen engaged by the contractors had agreed
to that settlement. In the case of Tata Engineering and
Locomotive Co. Ltd. vs. Their Workmen [(1981) 4 SCC 627],
this Court permitted a settlement to be binding which was
assailed by a set of workmen. In that case, one set of Unions
had entered into a settlement which had been assented to by
564 out of 635 daily-rated workmen. The finding of the Tribunal
27
was that the settlement was not just and fair. This Court,
however, allowed the appeal of the employer and set aside the
award. But this judgment is not an authority for the proposition
that a different set of workmen cannot raise an industrial
dispute claiming to be workmen directly under the principal
employer. Recognition of such right of minority workmen would
be apparent from paragraph 12 of the said report [(1981) 4 SCC
627], which reads:-
“12. There is no quarrel with the argument
addressed to us on behalf of the workers that mere
acquiescence in a settlement or its acceptance by a
worker would not make him a party to the
settlement for the purpose of Section 18 of the Act
[vide Jhagrakhan Collieries (P) Ltd. v. G.C. Agarwal,
Presiding Officer, Central Government Industrial
Tribunal-cum-Labour Court, Jabalpur [(1975) 3 SCC
613 : 1975 SCC (L&S) 63 : AIR 1975 SC 171 : (1975)
2 SCR 873] ]. It is further unquestionable that a
minority union of workers may raise an industrial
dispute even if another union which consists of the
majority of them enters into a settlement with the
employer (vide Tata Chemicals
Ltd. v. Workmen [(1978) 3 SCC 42 : 1978 SCC (L&S)
418 : AIR 1978 SC 828 : (1978) 3 SCR 535] ). But
then here the Company is not raising a plea that the
564 workers became parties to the settlement by
reason of their acquiescence in or acceptance of a
settlement already arrived at or a plea that the
reference is not maintainable because the Telco
Union represents only a minority of workers. On the
other hand the only two contentions raised by the
Company are:
“(i) that the settlement is binding on
all members of the Sanghatana
including the 564 mentioned above
because the Sanghatana was a party
to it, and
(ii) that the reference is liable to be
answered in accordance with the
28
settlement because the same is just
and fair.”
21. In the case of ITC Ltd. Workers’ Welfare Association &
Anr. vs. Management of ITC Ltd. & Anr. [(2002) 3 SSC 411],
it has been, inter-alia, held:-
“14. In answering the reference the industrial
adjudicator has to keep in the forefront of his mind the
settlement reached under Section 12(3) of the
Industrial Disputes Act. Once it is found that the terms
of the settlement operate in respect of the dispute
raised before it, it is not upon to the Industrial Tribunal
to ignore the settlement or even belittle its effect by
applying its mind independent of the settlement unless
the settlement is found to be contrary to the mandatory
provisions of the Act or unless it is found that there is
non-conformance to the norms by which the
settlement could be subjected to limited judicial
scrutiny….”
22. In the instant case we do not find the settlement of 19th
September, 2016 to be one which would be binding on the
minority Union. That was a settlement essentially between
the contractors and workmen engaged by the former. The
appellants were only consenting parties to the settlement.
This position of the appellants is apparent from the
description of the parties to the said settlement, which
records:-
“MEMORANDUM OF SETTLEMENT ARRIVED AT
UNDER SECTION 12(3) OF THE INDUSTRIAL
DISPUTES ACT, 1947 BEFORE SHRI B.B.
BHATNAGAR, CONCILIATION OFFICER & DY.
CLC(C), AS A RESULT OF AND IN THE COURSE OF
29
CONCILIATION PROCEEDINGS HELD ON
19.09.2016 AND SIGNED BY THE CONTRACTORS,
EMPLOYERS OF CONTRACT WORKERS DEPLOYED
FOR PERFORMANCE OF CONTRACTS IN ONGC
LIMITED, WESTERN OFFSHORE UNIT MUMBAI
INCLUDING PANVEL, URAN AND NHAVA, AND
CONTRACT WORKERS REPRESENTED THROUGH
TRANSPORT & DOCK WORKERS UNION-MUMBAI,
ONGC (BOP) KARMACHARI SANGHATANA
PETROLEUM EMPLOYEES UNION, GENERAL
EMPLOYEES ASSOCIATION, ONGC GENERAL
KAMGAR SANGHATANA AND NHAVA SHEVA PORT
& GENERAL WORKERS UNION, AS MENTIONED
BELOW OVER CHARTER OF DEMANDS,
INCLUDING REVISION OF WAGES AND OTHER
SERVICE CONDITIONS OF CONTRACT WORKERS
IN WESTERN OFFSHORE UNIT.”
23. The dispute out of which the present appeal arises
relates to the question as to whether the workmen engaged by
the contractors would be entitled to pay at par with other
workmen of the employer and demand to that effect was
raised with the appellants only. The respondent Unions
claimed to be, in reality, employees of ONGC and the demand
was raised upon the latter, and not on their contractors. The
nature of their demand was thus different particularly as
regards the status of the workmen, i.e., their claim to be
workmen of ONGC. Thus, the settlement of 19th September,
2016, in which the employers were the contractors cannot
bind the subject-dispute, where the appellants have been
found to be the employer on the basis of materials considered
30
by the High Court. Their engagement by the contractors
cannot be the sole basis for determining their status as
workmen of contractors.
24. For these reasons, we accept the High Court’s
affirmation of Tribunal’s finding that the settlement of 19th
September, 2016 did not bind the workmen whose cause the
respondent Unions are espousing. The finding of the Tribunal
that the settlement involving implementation of the FWP was
not just and fair, which finding has been sustained by the
High Court is essentially a finding on facts based on
appreciation of evidence. We are of the opinion that such
finding is not tainted by any element of perversity. The ratio
of the decision in the case of ITC Ltd. Workers’ Welfare
Association (supra) would not apply in the facts of the
present case.
25. Having held so, we would not like to interfere with the relief
directed to be given by the High Court. The scope of jurisdiction
of the Industrial Court is wide and in appropriate cases it has
the jurisdiction even to make a contract. In our opinion, the
directives issued by the Tribunal, as modified by the High Court
are reasonable and cannot be termed as perverse. In the case of
Steel Authority of India of 2006 (supra), referring to the
31
Contract Labour (Regulation & Abolition) Act, 1970 it was
opined:-
“20. The 1970 Act is a complete code by itself. It not
only provides for regulation of contract labour but
also abolition thereof. Relationship of employer and
employee is essentially a question of fact.
Determination of the said question would depend
upon a large number of factors. Ordinarily, a writ
court would not go into such a question.”
So far as the judgment under appeal is concerned, the High
Court has taken a similar approach and we do not intend to take
a different view. The principle of limited interference would
apply to a proceeding of this nature under the 1947 Act.
26. The appeal is accordingly dismissed and the impugned
judgment is sustained. Interim order, if any, shall stand
dissolved.
27. Other applications, if any, stand disposed of.
28. There shall be no order as to costs.
……........................J.
(L. NAGESWARA RAO)
……........................J.
(ANIRUDDHA BOSE)
NEW DELHI;
FEBRUARY 04, 2022

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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