MADRAS ALUMINIUM CO Vs. REGIONAL LABOUR COMMISSIONER

JUDGEMENT

(1.) THIS writ petition is filed seeking for the issue of a writ of certiorai calling for the records of the first respondent in Gratuity Appeal No. 6 of 1987 and quash the order of the first respondent dated March 13, 1989.

(2.) THE case of the petitioner Company is that it is engaged in the manufacture of Aluminium and Aluminium products. The petitioner Company has taken up on lease Bauxite Mines at Yercaud, The petitioner Company has got itself registered as principal employer under the provisions of the Contract Labour (Regulation and Abolition) Act. (herein after referred to as the 'act'), The contractors were engaging their own men for attending to work in connection with the execution of the contract and they had also taken out licences under the Act. It is also the case of the petitioner that the third respondent was employed by a contractor R. Raghupathy who was supplying labour to the petitioner mines at Yercaud. The third respondent served under the contractor R. Raghupathy upto December 31, 1977. The third respondent was taken in the direct employment of the petitioner with effect from January 1, 1978. He retired from the services of the petitioner on March 29, 1985. In view of his retirement, he submitted an application for gratuity in Form-I to the petitioner claiming a sum of Rs. 9746. 10 which was calculated taking into account his service under the contractor R. Raghupathy. The petitioner declined to entertain his claim with regard to the amount of gratuity for the period of service not rendered to the petitioner. The third respondent preferred an application to the second respondent in P. G. Case No. 2/86 claiming gratuity of Rs. 9746. 10. The petitioner filed its counter statement before the second respondent. However, the second respondent by order dated January 28, 1987 held that the contract between the petitioner and the contractor Raghupathy would not be a legal bar for the claim of the third respondent, that the contractor R. Raghupathy was merely a middleman, that without any written contract of service, it could be only understood and taken for granted that the petitioner would be liable to pay dues of the past services of the third respondent. By the said order, the petitioner was directed to pay a sum of Rs. 9,172. 80 as the gratuity amount due to the third respondent. Against the order of the second respondent dated June 28, 1987 the petitioner preferred an appeal under Section 7 (7) of the Payment of Gratuity Act before the first respondent. The first respondent by his order dated March 13, 1989 confirmed the order of the second respondent holding that under Section 25-FF of the Industrial Disputes Act, the petitioner is liable to pay the third respondent all service benefits without any discrimination including the benefits pertaining to the period of service rendered under the contractor. In the present writ petition, the orders passed by the first respondent confirming the orders of the second respondent are questioned.

(3.) THE learned counsel appearing on behalf of the petitioner has contended that the third respondent was employed under the contractor during the period August 19, 1968 to December 31, 1977, thereafter he was given a fresh employment effective from January 1, 1978 and he retired on March 29, 1985. He has also further contended that the services rendered by third respondent from August 19, 1968 to December 31, 1977 should not have been taken into consideration for payment of the gratuity by both the authorities as the petitioner Company has given a fresh appointment with effect from January 1, 1978, and the third respondent is entitled to receive the gratuity only for that period. It is also contended that the appellate authority should not have confirmed the orders passed by the second respondent applying the provisions of Section 25-FF of the Industrial Disputes Act. He has also further contended that the provisions of Section 25-FF will not apply as there is no transfer of ownership or management of an undertaking with regard to the petitioner Company and that the third respondent cannot claim it as a matter of right to pay the gratuity for the services rendered under the contractor. He has also further contended that the contractor is neither a management nor an undertaking and hence the provisions of Section 25-FF will not apply in the particular circumstances of the case. It is also further contended that there is no notification as specified under Section 10 (1) of the Act so far as the petitioner Company is concerned. Even assuming that there is notification, the third respondent is entitled for the payment of the gratuity only from the date of his appointment in the petitioner Company afresh i. e. from January 1, 1978 to March 29, 1985 and thereby, he is entitled only to a sum of Rs. 3,589. 95 towards the gratuity. Learned counsel for the petitioner has also relied upon the decision in Air India Statutory Corporation and Ors. v. United Labour Onion and Ors. , (1997-I-LLJ-1113) (SC ). Based on the above judgment, learned counsel for the petitioner has submitted that the workman becomes an employee of the Company only from the date he has been given an appointment in the Company and not from the date from which he was working under the contractor. If he is removed by the contractor and taken by the Company, he becomes an employee of the Company only from the date of abolition of contract labour system. In this connection, the learned counsel for the petitioner has argued that as there is no notification under Section 10 (1) of the Act, the provisions will not apply and the workman was given a fresh appointment from January 1, 1978 and he has to be treated as an employee of the Company only from January 1, 1978 and not from August 19, 1968.