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Judgment
R. Banumathi, J.—The Petitioner seeks Writ of Certiorari calling for the records of the 1st Respondent dated 17.04.2006 made in P.G.A.
Nos. 79 to 87 of 2005 and 98&99 of 2005.
Writ petition in W.P. No. 22924 of 2006 relates to 17 workmen who were employed in the Co-operative Canteen alleged to have been
maintained by the Petitioner Sugar mills in accordance to the statutory compliance of Section 46 of the Factories Act.
Canteen was originally started in the year 1971 by the Mill and was later converted as a Co-operative canteen during the year 1976-77. The
actual control of the affairs of the canteen was said to be with the mill. Case of the Petitioner is that they were the employees of statutory canteen
when the Petitioner Sugar Mills was laid off all the workmen were asked to retire under the Voluntary retirement scheme and thus relieved from
service. Consequentially the canteen was closed and all the workmen have been sent away without any monetary benefits. Grievance of the
Petitioner is that closure compensation and Gratuity was not paid to them. Workmen moved independent applications for payment of Gratuity
before the 2nd Respondent, which was taken on file as P.G.Nos.252 of 2003 to 266 of 2003 and P.G. Nos. 132 and 135 of 2003.
Holding that claimants were not the employees of the sugar mill and only daily wages employees, the Assistant Commissioner had dismissed the
application for payment of gratuity.
Aggrieved by the order, the workmen preferred an Appeal before the 1st Respondent which was taken on file as P.G.A.Nos.73 - 87 of 2005
and 98 and 99 of 2005. The 1st Respondent has gone through the evidence adduced before the Trial Authority and on perusing all relevant
records placed before him and the order of Controlling Authority has come to a definite finding that all these facts were true and the canteen was
under control of the sugar Mill. Based on this finding the 1st Respondent has allowed the Appeal and reversed the order of the 2nd Respondent.
Challenging the impugned order the learned counsel for the Petitioner has contended that the canteen was an independent and a registered
society and was managed and controlled by the Special Officer independently. The Controlling Authority/Assistant Labour Commissioner has
rightly rejected the claim made by the Respondents. Learned counsel for the Petitioner further contended that when the Respondents have come
forward with specific plea that they were employees coming under the control of Petitioner Management they ought to have proved their case that
they have worked their for 240 days.
Learned counsel for the Respondents placed reliance upon (2001) 1 SCC 298, VST Industries vs. VST Industries Workers Union. Learned
counsel for the Respondent contended that Management was subsidising the canteen and that Management had control over running of the canteen
and therefore 1st Respondent has rightly allowed the appeal directing the Management to pay the gratuity.
Whether the 2nd Respondent workmen are the employers of the principal employer - Maduranthagam Co-op Sugar Mills is the main point
falling for consideration. In AIR 1995 SC 1666 Parimal Chandra Raha v. Life Insurance Corporation of India. Hon''ble Supreme Court has
evolved four principles to consider whether they were employees of different canteens in different offices of the Life Insurance Corporation
whether were employees of the Corporation itself. The Court evolved four principles which are quoted as under:
i) Canteens maintained under obligatory provisions of the Factories Act for the use of the employees become a part of the establishment and the
workers employed in such canteens are employees of the management.
(ii) Even if there is a non-statutory obligation to provide a canteen, the position is the same as in the case of statutory canteens. However, if there is
a mere obligation to provide facilities to run a canteen, the canteen does not become part of the establishment.
(iii) The obligation to provide canteen may be explicit or implicit. Whether the provision for canteen services has become a part of the service
conditions or not, is a question of fact to be determined on the facts and circumstances in each case.
(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among
others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment,
whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees
employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously
available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing,
maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the
service available etc.
In (2001) 1 SCC 298, VST Industries Ltd v. VST Industries Workers Union and Anr. the Hon''ble Supreme Court has listed out various test
applied by it in previous cases and has reiterated them as a valid test for determining the liability of the principle employer. For the said decision in
Paragraph 9 the Hon,ble Supreme Court has held as follows:
This Court in Indian Petrochemicals Corpn. Ltd. and Another Vs. Shramik Sena and Others, ]referred to the decisions in B.D. Jadhavar Vs.
K.D. Bhagwan and Others, Employers in relation to the Management of Reserve Bank of India Vs. Their Workmen, and M.M.R. Khan and
others etc. Vs. Union of India and others, etc., and held that the workmen of a statutory canteen, as in the present case, would be workmen of an
establishment for the purposes of the Act only and not for other purposes. Thereafter, this Court further examined whether the material on record
would show that the workmen are employees of the management for all purposes and adopted some of the tests as follows: (SCC p. 450, para
25).
The canteen has been there since the inception of the appellant''s factory.
The workmen have been employed for long years and despite a change of contractors the workers have continued to be employed in the
canteen.
The premises, furniture, fixture, fuel, electricity, utensils etc. have been provided for by the appellant.
4.The wages of the canteen workers have to be reimbursed by the appellant.
The supervision and control on the canteen is exercised by the appellant through its authorised officer, as can be seen from the various clauses of
the contract between the appellant and the contractor.
The contractor is nothing but an agent or a manager of the appellant, who works completely under the supervision, control and directions of the
appellant.
The workmen have the protection of continuous employment in the establishment.
In National Thermal Power Corporation Ltd. Vs. Karri Pothuraju and Others, Hon''ble Supreme Court has referred to its earlier judgments in
VST Industries case (2001) 1 SCC 298, G.B. Pant University of Agriculture and Technology, Pantnagar, Nainital Vs. State of Uttar Pradesh and
Others, , The Saraspur Mills Co. Ltd. Vs. Ramanlal Chimanlal and Others, and M.Aslam case (2001) 1 SCC 720 and has held that even the
contract labourers working in the canteen are treated as workers of the principal employer.
11.The learned counsel for the writ Petitioner Management Mrs. G. Thilakavathi contended that canteen was run as beneficial measure to cater to
the needs of workmen in the unit and that contractors used to engage periodically and that the Management has got nothing to do with the total
strength of workers engaged by such contractors and while so Appellate Authority erred that the Management is liable to pay gratuity to the 17
workmen.
As per the provisions of the Factories Act, where 250 and more workmen are employed, a statutory obligation is cast upon the management
to run the canteen for the benefit of the workmen. Admittedly writ petitioner Maduranthagam Co-op Sugar Mills Ltd is a factory and was under
the statutory obligation to provide for canteen either by itself or through contractor.
It is seen from the materials that canteen was originally started in the year 1971 by the mill and was later converted as a co-operative canteen
during the year 1979-77. the actual control of the affairs of the canteen was with the mill. The mill gave subsidies to the canteen, it fixed the
quantum of provisions to be acuqired and utilized. The mill provided all the utensils used for cooking and serving and it had absolute control of the
stocks in the Canteen. The canteen was periodically checked and monitored by the mill. The salary increments and allowance paid to these
workmen have been decided in consultation with the management of the mill.
As pointed out by the Appellate Authority writ petitioner Sugar mills was subsidising the canteen and was also having the control over the
canteen to decide what are the items to be prepared in the canteen and the quantity. The Appellate Authority has pointed out that only to avoid the
statutory obligation of the payment of gratuity and other benefits to the workmen and other benefits to the workmen the canteen was run through
contractor.
On the above findings the Appellate Authority has set aside the order of the Controlling Authority and held that Management is liable to pay
gratuity to the workmen. Having regard to the material on record and applying the ratio of decisions of the Supreme Court, in my considered view
the impugned order does not warrant any interference.
In the result writ petition is dismissed.
Writ Petitioner Management shall deposit remaining 50% of the gratuity amount within three months from the date of receipt of copy of this order.
Already by the impugned order the 2nd Respondent workmen were permitted to withdraw 50% of the gratuity amount deposited.
On such deposit Workmen are permitted to withdraw the remaining 50% of the gratuity amount deposited with the ACL on undertaking. The
workmen shall file necessary affidavit of undertaking before the ACL.
In case the Petitioner Management do not deposit the amount it is open to the 2nd Respondent workmen to take steps for recovery of the same in
accordance with law.