BRIJ BASTI UDYOG Vs. STATE OF U P

JUDGEMENT

(1.) M/S Brij Basi Udyog (the Petitioner) is a firm registered with Registrar of Firms, Bombay. It manufactures Fire-fighting equipments at Mathura. There was another firm named M/s Brij Basi Engineers (the other firm for short), which was registered with Registrar of Firms U.P. Lucknow. The other firm functioned as a contractor for supply of the unfinished fabricated components for the petitioner. It had no other business except to act as a contractor for the petitioner. It was dissolved due to non-availability of work from the petitioner due to which its workmen were retrenched on 13.12.1981 Thirty - one workmen raised an industrial dispute about termination of their services, which was referred to the Labour Court by the State Government. The Labour court by its award dated 22.12.1984 has held that: the petitioner and other firm are one and the same - the other firm being a camouflage for the petitioner; One workman namely Gopi Nath was not employed by the other firm but was employed by the petitioner. He was rightly retrenched on 9.12.1981 (there is no dispute about him in this writ petition);

(2.) The remaining 30 workmen were not rightly retrenched and were entitled to be reinstated with full back wages; Two workmen who had received retrenchment compensation were also entitled to be reinstated. The retrenchment amount that they had received was to be deducted from the amount towards their backwages. It is against this award that the present writ petition has been filed. POINTS FOR DETERMINATION I have heard Sri Tarun Agrawal, counsel for petitioner and Sri A.S. Diwakar , counsel for the contesting respondents. The following points arise for determination in this case:

(3.) when can one be held to be an employer of persons employed by others? This has been discussed by the Supreme Court in Husaini Bhai vs. Alath Factory Tezhilali Union (Husaini Bhai's case). The Supreme Court has held that the true test (is) where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another that other is, in fact, the employer. He has economic control over the workers subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contract is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor,. The labour court has applied these principles to the facts of the case and has held that even though the petitioner and the other firm were different firms, had different partners, and began their business at two different places; Yet the petitioner was a real employer of the contesting respondents. This was in view of the facts that the other firm: