General Manager, Bengal Nagpur Cotton Mills, Rajnandgaon vs. Bharat Lal and Ors
Bench: R.V. Raveendran and A.K. Patnaik, JJ.
Facts:
The Appellant entered into an agreement with the second respondent for its Mill’s premises governed by Contract Labour ( Regulation & Abolition) Act 1970. The first respondent was deployed for guard duties at the Mill premises appointed by second respondent. The security agreement terminated between the Appellant and the second Respondent. An application under Section 31(3) of the Madhya Pradesh Industrial Relations Act was filed by the first respondent contending his termination of service to be illegal. The first Respondent sought all the benefits which the employees of the Appellant received. Appellant challenged the claims contended by first Respondent in labour court and appealed before industrial court. The Industrial Court directed the Appellant to comply with Section 65(3) of the MPIR Act which required the employer to pay the employee the full wages last drawn by the Appellant. The Industrial Court held that after the CLRA Act came into force, it would not be possible to rely upon the definition of `employee' under Section 2(13) of MPIR Act to contend that a workman employed by the contractor was a workman of the principal employer. The Industrial Court also held that first Respondent was appointed by the second Respondent. However it held that the agreement between appellant and second Respondent was sham/nominal and the first Respondent should be treated as a direct employee of Appellant
Issue:
Whether contract laborers qualify as direct employees?
Findings:
In the present case two well-recognized tests were laid down by the Hon’ble Court to find out whether the contract laborers are the direct employees of the principal employer.
- Whether the principal employer pays the salary instead of the contractor.
- Whether the principal employer controls and supervises the work of the employee.
The Hon’ble Supreme Court held that the Industrial Court ought to have held that the first Respondent was not a direct employee of the Appellant, and rejected the application of the first Respondent.
