The ambit of labour contracts

Out Of Court

 In several cases, the court has told the employers that the status of such workers depended on the terms of the agreement between the contractor and the principal employer, the nature and length of service and other factors.

 Therefore, the court had sent most of the cases for examination of the facts and circumstances in each case by the labour court in the respective places.

 On Monday, the Supreme Court decided a case, Bharat Heavy Electricals Ltd (BHEL) vs State of UP, in which the gardeners, sweepers and cleaners won their case against the public sector giant.

 These workers were employed to work in the factory premises and residential complexes of the company through agents. Their services were abruptly terminated by the company. The workers raised an industrial dispute before the labour court. The company took up the plea that it had never employed these workers and it was not liable to reinstate them or pay compensation.

 However, the labour court ordered it to re-employ them and pay Rs 15,000 as compensation to each of them, apart from payment of cost of Rs 500 for the litigation. The company moved the Allahabad High Court, without success.

 The High Court held that the workers were under the direct employment, supervision and control of the company. It observed that some employers, with a view to getting over the stringent provisions of the labour law, resorted to engaging workers through some intermediary and such arrangements were artificial and a veil.

 BHEL put forward a new argument that the work done by the labourers were not an integral part of the industry concerned as they were gardeners and cleaners.

 The Supreme Court, however, stated that even if they were not engaged in the primary functions of the unit, they could still be employees. It reiterated the view expressed in earlier judgements that one of the tests was whether the employer has economic control over the workers