Summary
Prohibition of contract labour did not automatically absorb the workers into SAIL’s service or convert a genuine contract into a sham arrangement. The Tribunal’s evidence-based findings concerning appointment, wages, discipline and ultimate control supported genuine contractor employment. The High Court exceeded its limited judicial-review role by reappreciating that evidence. Continued engagement contrary to the prohibition could attract statutory penal consequences, for which the union’s remedy remained open.
Issues
- Whether continuation after the prohibition notification automatically made the contract sham or entitled the workers to absorption.
- Whether the High Court could substitute its factual assessment for the Tribunal’s supported findings.
Held
- The Constitution Bench decision in SAIL excluded automatic absorption following a prohibition notification. A genuine contract and a camouflage arrangement attract different consequences, with the latter requiring factual determination by the industrial adjudicator. (¶ 32–35)
- The Tribunal found that contractors appointed, paid, transferred and disciplined the workers and retained ultimate control. Work directions and statutory welfare compliance by the principal employer did not by themselves establish direct employment or a sham contract. (¶ 37–46)
- The Tribunal’s suggestion that the notification itself rendered the continued arrangement sham was legally unsustainable. Continued engagement in breach of prohibition could entail the statutory penal consequences, rather than automatic absorption. (¶¶ 41, 48–49)
- Absent perversity or lack of evidence, the High Court could not act as an appellate fact-finder merely because another view was possible. (¶ 44–47)
Result
Appeals disposed of; High Court judgment dated 6 September 2010 directing reinstatement and consideration for regularisation set aside. Respondent left free to pursue remedies for alleged breaches of the Contract Labour (Regulation and Abolition) Act in accordance with law. No costs; pending applications disposed of.