Workmen of Firestone Tyre and Rubber Co. of India v. Firestone Tyre and Rubber Company
- 2022-02-17
Authority-
Citation: AIR 2001 SC 3527
Bench: B.N. Kirpal, Syed Shah Mohammed Quadri, M.B. Shah, Ruma Pal, K. G. Balakrishnan
FACTS:
The Steel Authority of India is a central government company involved in the manufacturing of iron and steel material in various parts of India. The workmen of the company were hired as contract labourers working for the company.
The Government of West Bengal issued a notification on the 15th of July, 1989, under the Contract Labour (Regulation & Abolition) Act, prohibiting the employment of contract labourers in four specific stockyards of the company. The union of the workers demanded that the contract labourers should be absorbed into the company as regular employees. The company filed a writ petition in the Calcutta High Court and challenged the prohibition notification. A division bench of the High Court dismissed the writ and was of the opinion that the State Government was the appropriate Government in this case.
However, at this time the Supreme Court had delivered a Judgment in the Air India Statutory Corporation vs. United Labour Union Case that in the case of central government companies, the appropriate government is the central government and upheld the validity of a notification dated the 9th of December, 1976 issued by the central government under the CLRA Act which prohibited the employment of contract labour in all establishments of Central Government Companies.
ISSUES:
The SAIL case had now come before the Supreme Court which identified three points to determine in the case:
What is the true and correct meaning of the expression ‘appropriate government’ defined in the CLRA Act?
Whether the notification dated the 9th of December issued by the central government is valid and applies to all central government companies?
Whether the contract labour working in an establishment would be automatically absorbed as regular employees upon the issuance of a valid notification under the CLRA Act?
JUDGMENT:
The Supreme Court reiterated that in view of the new definition of appropriate government under the Industrial Disputes Act, for any company or undertaking that is carried on or by the authority of the Central Government, the appropriate government would be the central government.
The Supreme Court was of the opinion that as the CLRA Act is a beneficial legislation, it needs to be construed liberally in favour of the class for whose benefit it is intended ie. The contract labourers.
The Court found that Section 10, under which the notifications had been passed, did not refer to or imply that the contract labourers would be automatically absorbed. However, it found that when the employment of contract labourers is a mere camouflage and in reality, the labourers were the employees of the principal employer, they would be absorbed.
