ELECTRONICS CORPORATION OF INDIA LTD. versus ELECTRONICS CORPORATION OF INDIA SERVICE ENGINEERS UNION

Citation: [2006] SUPP. 4 S.C.R. 850 · Decided: 21-08-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
ELECTRONICS CORPORATION OF !NOIA LTD. 
11. 
ELECTRONICS CORPORATION OF !NOIA SERVICE ENGINEERS UNION 
AUGUST 21, 2006 
B 
[ARIJITPASAYAT ANDLOKESHWARSJNGHPANTA,JJ.) 
labour laws: 
Regularisation--Retainer on individual contract with TV Company--
C Claimed permanent absorption and pay scales applicable to regular 
employees--Entitlement-Held: Not entitled as they were merely contractors--
There existed no relationship of master and servant between them and the 
Company and their nature of duties and work conditions were different from 
those of regular employees 
D 
The appellant-Company is engaged in the business of manufacturing, 
selling and servicing of Televisions. Between the years 1972 and 1978, the 
Company engaged 30 persons (claimants) represented by respondent-Union, 
as Technicians on a contract basis. They raised a demand for permanent 
absorption in employment and for all other service conditions, which were 
E applicable to other employees. As the Company did not grant this, the Union 
raised industrial dispute. The Industrial Tribunal rejected reference as not 
maintainable on the ground that there was no master and servant relationship 
between the company and the claimants and they were merely contractors. 
The respondent-Union successfully filed Writ Petition before the High Court. 
Hence the present appeal. 
F 
G 
H 
Allowing the appeal, the Court 
HELD: t. The Tribunal was right in its view that no employer employee 
relationship existed. Observations of the High Court to the contrary are clearly 
untenable because the findings and the reasons given by the Tribunal have 
not been discussed. No reason has been given by the High Court as to how 
these conclusions were erroneous and perverse. 1859-E-F] 
2.1. A very important conclusion of the Tribunal was that there are no 
regular posts like Service Engineers or Licencees or retainer in the company 
850 
.. 
ELECT. CORPN. OF INDIA LTD. 1·. ELECT. CORPN. OF INDIA SERVICE ENG. UNION 
851 
and such contracts are entered into by the Company to attend to additional A 
work as and when required. It was further noted that there is a definite 
procedure for appointment of personnel of the appellant-Company and the 
question of designating the claimants as Tradesmen or Technical Officer on 
permanent basis in the Company does not arise as they have neither requisite 
qualifications for holding any of the above posts nor were they employees of 
the Company and they have not been employed after following the procedure B 
required for appointment of the personnel of the Company. Further, the 
technical officers cannot claim to be workmen under the Act as they did mainly 
supervisory duties and drew wages exceeding Rs.1600/-p.m. The Company was 
entering into individual contracts with its retainers and there was no 
compulsion whatsoever to enter into the contract year after year. As a matter C 
of fact, some of the workmen of the Corporation had opted for working in 
terms of those individual contracts as they found the same to be more lucrative 
and paying rather than being regular employees. (858-B-E) 
2.2. With reference to the evidence of the witness examined by the 
claimants it is clear that the service engineers and the licencees were D 
independent contractors. He accepted that no appointment letter was ever given 
by the company. They have not enrolled their names with the Employment 
Exchange. One significant admission was that complaints ofT.V. sets were 
made by the customers to the appellant company. The retainers used to visit 
the company for collecting complaints, collecting components, for receiving E 
payments and for repairing the calledback sets. Except for these reasons, they 
were not required to go to the company. A further significant admission was 
that there were several types of employees working in the company whose 
work cannot be compared with that of the retainers. Whenever the retainers 
went on leave they used to provide a substitute to the company. The Tribunal 
also noted that the witness has admitted that the scheme was for retainership F 
and there was no question of his asking for absorption as regular employees. 
Till 1989-90 they were getting more income than the regular employees and, 
therefore, had not sought for regularization. But since 1989-90 they found 
the regular employees were getting more salary than their income, and, 
therefore, they clai!'ed regularization. (858-E-F; 859-A-C] 
G 
3. The claimants were re

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