In W.P.(MD)No.9623 of 2012-MADR HC- Inspector of Factories not empowered to deal with matters when Contract Labour (Regulation & Abolition) Act is involved to determine rights of parties & case pertains to complicated questions of law & facts, holds Madras HC while allowing BPCL’s petition 
Justice S. Srimathy [02-06-2023]

Read Order: Bharat Petroleum Corporation Ltd v. The Deputy Chief Inspector of Factories And Ors 

Tulip Kanth

Madurai, June 6, 2023: While observing that the Inspector of Labour/ Factories is not having the jurisdiction to consider if there are complicated questions of law and if other Acts are involved, the Madurai Bench of the Madras High Court has allowed the petition filed by Bharat Petroleum Corporation Ltd. challenging the order of the Deputy Chief Inspector Of Factories.

“More so this Court has held that the Inspector of Labour (in the present case Inspector of Factories) is not having jurisdiction to consider if there is complicated questions of law and if there are other Acts are involved, because the Inspector of Labour (Inspector of Factories) is not having the power to adjudicate. Hence the petition filed before the Inspector of Labour (Inspector of Factories) cannot be entertain since he is not appropriate authority”, Justice S. Srimathy said.

The facts of this case were such that the LPG plant was commissioned in 1988. The petitioner corporation has been following a consistent policy by fixing permanent workmen for attending regular operations and the contract labours for attending sundry works. The LPG plant, registered as a “Principal Employer”, under the Contract Labour (Regulation and Abolition) Act has also been engaging Contractors who were deploying 20 workmen to be employed as “contract workmen” and the said Contractors have also taken out license under the provisions of the said Act. 

The respondents are the “Licensed Contractors” and “Contract Labourers”. The second respondent- Union had taken up the cause of the respondents and few other Contract Labourers to be absorbed in the regular employment of the petitioner’s corporation and moved the Authority under the said Act seeking abolition of contract labour and for their absorption by issue of notification under Section 10(1). The issue was considered by the Advisory Board and a report was submitted that the specific jobs attended to by the contractors need not be abolished. 

The Union had raised Industrial Dispute on the ground that the contract was sham and nominal and the same was under the consideration of the government whether to refer the case for adjudication. Moreover, the matter has been the subject matter of writ appeal. Even then another attempt was made by the Union to seek permanency under the Tamil Nadu Industrial Establishment (Conferment of Permanent Status of Workmen) Act 1981 but as the respondents came  under the category of “contract labourers”, they couldnot claim permanency.

At the outset, the Bench rejected the contention of the petitioner that it ought to be treated as Government concern and the Act was not applicable to the Government Departments and stated, “The said contention cannot be entertained, since Bharat Petroleum is registered under the Companies Act. Even though, it is coming under the direct control of the Ministry of Petroleum and Natural Gas, it is Government undertaking, but it cannot be treated as a Government Department.”

On the issue of granting regularization, absorption against unsanctioned post, the Bench referred to the judgment of the Top Court in Union of India & others Vs Ilmo Devi and another wherein it was held that the High Court has no power to direct the employer to grant regularization and absorption, if there is no sanctioned post. Placing reliance upon this precedent, the Bench held that  the respondents couldn’t seek permanency if there was no sanctioned post.

Considering the fact that  complicated questions of law and complicated questions of facts are involved, especially, when the Contract Labour (Regulation and Abolition) Act is involved to determine the rights of the parties, the Bench held that the Inspector of Labour was not empowered to deal with the case and was without any authority.

It was opined by the Bench that once the management is registered under the Contract Labour (Regulation and Abolition) Act and the Contractors have also taken license, then the submission of the respondents that the contract is sham and nominal couldn’t be entertained.

 The provisions of the Contract Labour (Regulation and Abolition) Act are only regulating such contract workers and while regulating the said contract workers, the Contract Labour (Regulation and Abolition) Act, states that the principal employer should register himself and he should declare the name of the Contractors and the principal employer should ensure that all the statutory benefits are being paid to the contract employees, by the Contractors. When such statutory liability is discharged then there is no ground to treat the contract as sham and nominal, the Bench stated while noting that the petitioner Corporation was in an advantageous position.

Observing that the petition filed before the Inspector of Labour (Inspector of Factories) cannot be entertained since he is not an appropriate authority, the Bench held that the respondents would be at liberty to agitate the issue which was already pending in writ appeal and before the authorities prescribed under Contract Labour (Regulation & Abolition) Act, 1970.Thus, allowing the Writ Petition, the Bench quashed the impugned Order passed by the  Deputy Chief Inspector Of Factories.