1. The petitioner is the Madurai District Co-operative Milk Producer's Union Limited represented by the General Manager. In this writ petition they have come forward to challenge an order passed by the Inspector of Factories, II Circle, Madurai, dated 30.08.2004.
2. By the impugned order, the first respondent had directed the petitioner to confer the permanent status on the respondents 3 to 24 from the date on which they have completed 480 days of service within 24 calendar months.
3. The writ petition was admitted on 24.04.2006. Pending the writ petition, this Court granted an interim stay of the impugned order. On notice from this Court, the contesting respondents 3 to 24 have been served.
4. It is seen from the records that the second respondent inspected the factory premises of the petitioner's management at Madurai. After conducting enquiry with the management, he found that number of workers were not made permanent and he gave a notice to the management. They gave a reply letter. The documents filed were examined in the factory premises on 27.07.2004. After being satisfied with the number of days put in by the respondents 3 to 24 and on the finding that they have completed 480 days of service within 24 calendar months, he directed the management to grant permanent status in their favour by the impugned order.
5. The ground raised by the management was that the evaluation of the number of workers required by the management was fixed by them and there were surplus workers. In respect of the sanctioned posts permanent workers were employed. It was only during exigencies in the factory and during the flouring period, in the place of permanent workers temporary workers including the respondents 3 to 24 were employed.
6. Already, similar writ petitions were pending before the Principal Bench. Since it is a Government establishment and there was a ban on recruitment and to avoid incurring extra expenditure due to regular staff recruitment, these workmen were employed. The management will not come within the purview of the Tamil Nadu Act 46 of 1981. The Authority rejected these contentions and held that the petitioner factory is an industrial establishment coming within the definition of Section 2(3) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (Act 46 of 1981). He also stated that there was no distinction between Government owned establishment and private employer in the matter of coverage under the Act.
7. Challenging the said order, the petitioner raised the following grounds;
i) If an employment is irregular, it cannot be regularised. For this purpose reliance was placed upon the judgment of the Supreme Court reported in 2004 AIR SCW 4462 (A.Umarani v. Registrar Co-operative Society); ii) The workmen, respondents 3 to 24 are daily wage casual labourers and they are not entitled for any permanent status and mere completion of 480 days of service will not make employees permanent under the Tamil Nadu Act 46 of 1981;
iii)Since the employees were not appointed through any regular mode of recruitment and they were engaged only as and when demand arose during the flush period, they can not get permanent status especially when they were not engaged throughout the year.
iv) The Act will apply only to the industrial establishments covered under Section 2(3) of the Act and the petitioner establishment is not one such establishment;
v) Since there is a ban on filling up of posts by the State Government vide G.O.Ms.No.27 (Finance (BPE) Department, dated 21.01.2004, the workmen cannot claim any permanent status; and
vi) Any appointment made without the prescribed qualifications and beyond the sanctioned strength and the Tamil Nadu Act 46 of 1981 will not be granted on them.
8. The contentions raised by the petitioner management cannot be countenanced by this Court for more than one reason. Even on factual basis, the petitioner is a factory comes within the purview of the Tamil Nadu Act 46 of 1981. it is squarely covered under Section 2(3) of the Tamil Nadu Act 46 of 1981. Even though the Act was initially applied to any industrial establishment having more than 50 workers. Subsequently, by a notification dated 24.09.1982, was made applicable for establishment engaging not less than 20 workers.
9. In the present case, the petitioner Milk Society has more than 100 workers and there is no doubt regarding the application of the Act. Under section 1(3) of the Act only an establishment of seasonal character alone is exempted. Even as to whether an establishment is of a seasonal character, it must be defined by an order of the Government in case of dispute. If once there is no dispute regarding the application of the Act and no such contention raised in the affidavit, then the only question has to be decided is whether the workmen were entitled for grant of permanent status, notwithstanding their casual nature of the employment or that they have not worked throughout the year and were engaged only as and when permanent workers were not available.
10. Section 2(4) of the Tamil Nadu Act 46 of 1981 defines the term workman and it includes any person employed in any industrial establishment to do any skilled or unskilled, manual, supervisory, technical or clerical work for hire, or reward, whether the terms of employment be express or implied and includes a badli workman (i.e. Substitute workman).
11. The Act did not exclude any temporary casual employee. On the other hand, after the term Badli workman was inserted in to Section 2(4) of the Tamil Nadu Act 46 of 1981 (by amending Tamil Nadu Act 48 of 2000 with effect from 01.02.2001), even Badli workmen are covered under the Act. Section 3(1) of the of the Tamil Nadu Act 46 of 1981, begins with a non-obstante clause by which every workman, who are in continuous service for a period of 480 days in a period of 24 calendar months in an industrial establishment shall be deemed to be permanent.
12. The word 'continuous service' has been defined under explanation I to 3(1) of the Tamil Nadu Act 46 of 1981. It includes even discontinuance service. The contingency is that he should have actually worked for 480 days in a period of 24 calendar months.
13. In the present case, the second respondent is an authority in terms of Rule 6 of the Tamil Nadu Establishments (conferment of permanent status to Workmen), Rules, 1981. As he is an 'Inspector' notified under the provisions of the Factories Act, 1948 as per Section 5 (a) of the of the Tamil Nadu Act 46 of 1981, he is entitled to enter at all reasonable times and with such assistants, in to any establishment for making enquiries and also to call for any registers, records and notices and take on the spot or elsewhere the evidence of such person as he may deem necessary, for carrying out the purposes of this Act. Unlike the other enactments his functions are not a mere quasi judicial in nature, but being an Inspector, his role is bound to be proactive in nature. He can enter into any establishment to conduct enquiry and after scrutiny of records, if it is found that if any workman despite rendering 480 days' of service within 24 calendar months have not made permanent, he can give directions as required under law.
14. In the present case, there is no dispute about the visit of the Inspector or scrutiny of records. He rendered a finding of fact that 480 days of service within 24 calendar months were rendered by the workmen (R3 to R24) covered by his order. In fact, there is no factual dispute regarding the finding of fact rendered by the second respondent. The contentions put forth are purely on legal issues with reference to the applicability of the Act alone.
15. The questions raised by the petitioner is no longer res integra. They were covered by more than one judgment rendered by the Supreme Court as well as by this Court. The Supreme Court vide judgment in Maharashtra SRTC V. Casteribe Rajya Parivahan Karmchari Sanghatana reported in 2009 8 SCC 556 while dealt with the scope of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, regarding the power of an Industrial Court to grant relief. It also examined the application of of the case in State of Karnataka Vs. Umadevi reported in (2006) 4 SCC 1 and considered that the application of uma Devi's case (cited supra) in matters which are specifically covered by the State enactments cannot be made mechanically. It held that the Maharastra Act vested power on the industrial Courts to go into the question of unfair labour practices. It was held on factual foundation, the industrial court can also give directions to make permanency of any temporary employees, if the action of the employer in not granting permanent status and keep up the workers as temporary workers for years together would amount to unfair labour practice. The principles of Uma Devi's case (cited supra) will have no application in such cases. It was also held that the MRTU & ULP Act is a State enactment and matters regarding the same were never considered in Uma Devi's case (cited supra). In this context it is necessary to refer paragraph 33 of the judgment, which is as follows:
33. The provisions of the MRTU and PULP Act and the powers of the Industrial and Labour Courts provided therein were not at all under consideration in Umadevi (3)1. As a matter of fact, the issue like the present one pertaining to unfair labour practice was not at all referred to, considered or decided in Umadevi (3)1. Unfair labour practice on the part of the employer in engaging employees as badlis, casuals or temporaries and to continue them as such for years with the object of depriving them of the status and privileges of permanent employees as provided in Item 6 of Schedule IV and the power of the Industrial and Labour Courts under Section 30 of the Act did not fall for adjudication or consideration before the Constitution Bench. (Emphasis added)
16. Similarly, the Supreme Court in Hindustan Aeronautics Ltd v. Dan Bahadur Singhreported in 2007(6) SCC 207 held that the daily rated employee in a Government establishment claiming for a permanent status has to be judged from different angle and it would have a different meaning. In the same judgment, Uma Devi's case (cited supra) also analysed. In this context it is observed in paragraph 16 as follows:
16. An employee working in an industrial establishment enjoys a limited kind of protection. He may lose his employment in various contingencies which are provided under the Industrial Disputes Act such as lay-off as provided in Section 25-C, retrenchment as provided in Section 25-F, transfer of industrial establishment or management of an undertaking as provided in Section 25-FF, closure of undertaking as provided in Section 25-FFF. He may be entitled to notice or wages in lieu of notice and monetary compensation depending upon the length of service put in by him. But the type of tenure of service normally enjoyed by a permanent employee in government service, namely, to continue in service till the age of superannuation, may not be available to an employee or workman working in an industrial establishment on account of various provisions in the Industrial Disputes Act where his tenure may be cut short not on account of any disciplinary action taken against him, but on account of a unilateral act of the employer. Therefore, the claim for permanency in an industrial establishment has to be judged from a different angle and would have different meaning. (Emphasis added)
17. Under the very same enactment in relation to claim made by Workmen engaged by the TNEB, a batch of writ petitions came to be heard by a Division Bench headed by P.K.Misra,J. (as he then was) in the case relating to S.E. Nagapattinam Electricity Distribution Circle V. Inspector of Labour reported in (2009) 4 MLJ 472. Contentions similar to the petitioner's contentions were rejected by the Division Bench in paragraph number 22. The effect of uma Devi's case (cited supra) also was considered and it was held that in paragraph 21 as follows;
21. The oft-quoted decision of the Suprme Court in Secretary, State of Karnataka v. Uma Devi (supra), has within even a brief period of time, met with several instances of exceptions. The Judgment itself contains in paragraphs 53 of the judgment, a permission to the Union of India and State Government and its instrumentalities to take steps to regularize as one time measure the service of irregularly appointed persons who had worked for ten years or more in duly sanctioned posts but not under cover of orders of Courts or of Tribunals and should further ensure that recruitments were undertaken to fill those vacant sanctioned posts that required to be filled up in cases where the temporary employees or daily wagers were now being employed. The judgment also sought to clarify that regularization, if any that had already been made and not sub- judice did not need to be re-opened. This judgment was set in the context of expounding the law might exist granting permanent status to classes of persons depending wholly on the length of service. It was in situation of this type where the Supreme Court had itself held in U.P.State Electricity Board v. Pooran Chandra Pandey and Others (2007) AIR SCW 6904:2008-1-LLJ-1021 that sough to distinguish Secretary of State of Karnataka v. Uma Devi (supra), while upholding the claims of regularization of certain workmen employed by the erstwhile UP Cooperative Electricity Supply Society that had been taken over by the UP State Electricity Board, employed before a particular date and who were discriminated against claims of similarly placed persons who were in employment of the State electricity board before the merger of the society with the board.
18. Once again the issue came to be considered by this Court in Hindustan Petroleum Corporation Ltd., V. The Presiding Officer, Central Government Labour Court cum Industrial Tribunal reported in 2008 (4) CTC 819. This Court held that since the Constitutional validity of the Tamil Nadu Act 46 of 1981 was upheld by the Supreme Court in the judgment relating to State of Tamil Nadu v. Nellai Cotton Mills Ltd., reported in 1990 (2) SCC 518 and also that once there is a valid State enactment providing for relief to such of those workmen deemed to be made permanent if they had completed 480 days of service within 24 calendar months, then such workmen getting permanent status cannot be questioned by any management. Such conferment cannot be labelled as violation of Articles 14 and 16 of the Constitution of India. The effect of a local enactment conferring permanent status to workmen was never considered by any Court so far. In this context it is necessary to refer paragraphs 37 and 38:- 37. Further, it must also be that the constitutional validity of the Tamil Nadu Act 46 of 1981 was upheld by the Supreme Court vide its judgment in State of Tamil Nadu v. Nellai Cotton Mills Ltd. and Others, 1990 (2) SCC 518.
38. Once there is a valid State enactment providing for relief to such of those workmen deemed permanency to those who had completed 480 days of service within a period of two calendar years then, such workmen getting permanent status cannot be questioned by any Management. Such conferment of permanent status to be workmen cannot be labelled as violation of Articles 14 and 16 of the Constitution. The effect of a local enactment conferring permanent status to workmen was never considered by any Court so far.
19. If these legal precedents are taken into account, then the petitioner even if it was a cooperative society cannot wriggle out of its legal obligations under the Tamil Nadu Act 46 of 1981.
20. The other contention that the workmen were not engaged throughout the year is irrelevant. For the purpose of calculating 480 days', the Act only talks of 480 days' within 24 calendar months. The contract need not spread over to full two calendar years. It will be suffice if the workman completes 480 actual days' within 24 calendars, even if it was discontinuance. The Explanation-1 appended to Section 3(1) of the Act 46 of 1981 makes the position very clear.
21. When a similar question came up for consideration in the context of calculating 'continuance service' 25-B of the ID Act, the Supreme Court vide its judgment in Surendra Kumar Verma and others v. Central Government Industrial Tribunal-cum-Labour Court, New Delhi and another (57 FJR. 67) has held that the employment need not be spread throughout an year. The definition under Section 25-B also includes discontinuance service and hence the employment need not be spread over a full year. It was suffice if he actually put in 240 days' of work to come within the term one year continuous service. Further the amendment made to Section 2(4) of the Act 46 of 1981 including the badli worker into the definition of workmen would make it clear that a badli worker will not work throughout the year, but nevertheless, if he was able to show he was engaged for 480 days' with 24 calendar months, he was eligible for permanent status.
22. Under such circumstances, as there can be no valid factual attack on the findings rendered by the authority, the writ petition is dismissed with costs of Rs.5,000/- (Rupees five thousand only) legal costs payable by the petitioner to the counsel appearing for the contesting respondents. Due to the litigation the petitioner had halted the grant of permanent status and the attendant benefits arising out of the same of the respondents 3 to 24 over a period of 5 years. Consequently, the connected miscellaneous petition is closed.