VidhiSangh

Supreme Court of India · 05/12/2022

KIRLOSKAR BROTHERS LIMITED versus RAMCHARAN AND ORS

[2022] 18 S.C.R. 330 · 2022 INSC 1255

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Summary

Workers engaged through a licensed contractor at a Kirloskar Brothers plant in Madhya Pradesh lost their jobs when the labour contract ended in 1996. The Labour Court found that they were the contractor's employees. The Industrial Tribunal, applying the MP Industrial Relations Act, held that contract labour automatically become the principal employer's employees and ordered reinstatement, and the High Court upheld that. The Supreme Court restored the Labour Court's award. No notification under Section 10 of the Contract Labour Act prohibited contract labour, and no one alleged or found the contract to be a sham. Under Steel Authority and International Airport Authority, there is no automatic absorption in such a case. The principal employer's occasional payment of wages or PF on the contractor's default does not create an employment relationship.

Issues

  1. Whether contract labourers engaged through a licensed contractor become employees of the principal employer entitled to reinstatement, absent a Section 10 CLRA notification and any finding that the contract was a sham.

Provisions considered

Held

Result

Civil Appeal Nos. 8446-8447 of 2022 allowed; the Madhya Pradesh High Court (Indore Bench) judgments dated 09.03.2018 in W.P. (S) No. 1083 of 2004 and 12.11.2018 in W.A. No. 813 of 2018, and the Industrial Tribunal's order dated 05.02.2004, set aside, and the Labour Court's award dated 14.03.2002 restored; no costs.

Judgment PDF: Supreme Court of India, [2022] 18 S.C.R. 330.