HALDIA REFINERY CANTEEN EMPS. UNION AND ORS. versus M/S. INDIAN OIL CORPORATION LTD. AND ORS.

Citation: [2005] 3 S.C.R. 972 · Decided: 29-04-2005 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

Judgment (excerpt)

A 
HALDIA REFINERY CANTEEN EMPS. UNION AND ORS. 
v. 
M/S. INDIAN OIL CORPORATION LTD. AND ORS. 
APRIL 29, 2005 
B 
[ASHOK BHAN AND A.K. MATHUR, JJ.) 
Labour Laws : 
Employees working in statutory canteen run by respondent establishment, 
C . through contractor-Absorption of, in respondent establishment-Respondent 
exercising effective control over the Contractor on certain matters in regard 
to the running of the canteen, but such control was only to ensure efficient 
running of the canteen-Respondent not reserving right to appoint or dismiss 
or remove workers working in the canteen-Contractor paying provident fund 
D and wages to the workers which were not reimbursed by the respondent-
Worker 's claim for absorption and regularisation in the respondent 
establishment-Entitlement-Held: Not entitled, as they did not become the 
workers of the establishment for a purpose other than the Factories Act-
Jndustrial Disputes Act, I 947. 
E 
The appellants ltad been working in the statutory canteen run by 
the respondent through contractor in its factory at Haldia. Respondent 
was treating the appellants as the employees of the contractor. The 
appellants filed Writ petition before High Court for seeking issuance of 
mandamus to the respondent to absorb the appellants in its service and 
to regularise them on the ground that the factory of the respondent is 
F governed by Factories Act, 1948 and the canteen where the said workmen 
are employed is a statutory canteen e_stablished by the respondent as 
required under the provisions of the ~ct. 
Single Judge held that the appellants were being wrongly treated as 
G employees of the contractor and accordingly directed the respondents to 
absorb the appellants in its $ervice and regularise them. The Division 
Bench reversed the judgment of the Single Judge and dismissed the writ 
applications filed by the appellants. Hence the present appeal. 
. 
-
Dismissing the appeal, the Court 
H 
9U 
- -,, 
HALDIA REFINERY CANTEEN EMPS. UNION v. INDIAN OIL CORPN. LTD. 
973 
HELD : 1. The appellants did not become the workers of the A 
management for a purpose other than the Factories Act. 1983-GI 
2.1. The respondent management is exercising effective control over 
the contractor on certain matters in regard to the running of the canteen 
but such control is being exercised to ensure that the canteen is run in an 
efficient manner and to provide wholesome and healthy food to the B 
workmen of the establishment. This does not mean that the employees 
working in the canteen have become the employees of the management. 
(981-H; 982-A) 
2.2. The contractor is given a free hand with regard to the 
engagement of the employees working in the canteen. There is no C 
stipulation in the contract that the employees working in the canteen at 
the time of the commencement of the contract must be retained by the 
contractor. The management is not reimbursing the wages of the workmen 
engaged in the canteen. Rather the contractor has been made liable to pay 
provident fund contribution, leave salary, medical benefits to his employees D 
and to observe statutory working hours. The contractor has also been 
made responsible for the proper maintenance of registers, records and 
accounts so far as compliance of any statutory provisions/obligations are 
concerned. Contractor has been made liable to defend, indemnify and hold 
harmless the employer from any liability or penalty which may be imposed 
by the Central, State or local authorities by reason of any violation by E 
the contractor of such laws, regulations and also from all claims, suits or 
proceedings that may be brought against the management arising under 
or incidental to or by reason of the work provided/assigned under the 
contract brought by employees of the contractor, third party or by Central 
or State Government Authorities. (982-B-E) 
F 
2.3. The management has kept with it the right to test, interview or 
otherwise assess or determine the quality of the employees/workers with 
regard to their level of skills, knowledge, proficiency, capability etc. so as 
to ensure that the employees/workers are competent and qualified and 
suitable for efficient performance of the work covered under the contract. G 
This control has been kept by the management to keep a check over the 
-
quality of service provided to its employees. It has nott.ing to do with either 
the appointment or taking disciplinary action or dismissal or removal from 
service of th

Excerpt shown. Read the full judgment & AI analysis in Lexace.