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    This case involved 29 workers at a rope manufacturing factory who were denied employment after being hired through independent contractors. The workers claimed they were direct employees of the factory owner. The High Court and Supreme Court both ruled in favor of the workers, finding that although hired through contractors, the workers were integral to the factory's operations and under the control and supervision of the owner. The Court established that genuine employment relationships cannot be denied just because of technical contractual relationships, and the true nature of the work and control must be considered to uphold labor rights and social justice principles in the Constitution.

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    This case involved 29 workers at a rope manufacturing factory who were denied employment after being hired through independent contractors. The workers claimed they were direct employees of the factory owner. The High Court and Supreme Court both ruled in favor of the workers, finding that although hired through contractors, the workers were integral to the factory's operations and under the control and supervision of the owner. The Court established that genuine employment relationships cannot be denied just because of technical contractual relationships, and the true nature of the work and control must be considered to uphold labor rights and social justice principles in the Constitution.

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    36 views5 pages

    Court Diary

    Uploaded by

    S.P San
    This case involved 29 workers at a rope manufacturing factory who were denied employment after being hired through independent contractors. The workers claimed they were direct employees of the factory owner. The High Court and Supreme Court both ruled in favor of the workers, finding that although hired through contractors, the workers were integral to the factory's operations and under the control and supervision of the owner. The Court established that genuine employment relationships cannot be denied just because of technical contractual relationships, and the true nature of the work and control must be considered to uphold labor rights and social justice principles in the Constitution.

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    of 5

    COURT DIARY

    IN PARTIAL FULFILMENT OF 5 YEARS B.A.LLB (INTEGRATED COURSE)

    ARMY INSTITUTE OF LAW

    NAME: Sahyaja M.S


    CLASS: 5th year, 10th semester
    ROLL NO.:1643
    SESSION:2020-21

    SUBMITTED TO: SUBMITTED BY:


    Dr. Kirandeep Kaur Sahyaja M.S
    1. HUSAINBHAI, CALICUT Vs. ALATH FACTORY THOZHILALI UNION
    KOZHIKODE AND OTHERS

    In the High Court of Kerala at Ernakulam


    1978 (4) SCC 257, 1978 AIR 1410
    Petitioner
    Hussainbhai, Calicut
    Respondent
    Alath Factory Thozhilali Union, Kozhikode & ors.
    Date of Judgement
    28th of July,1978
    Bench
    Justice V. R. Krishna Iyer; Justice D.A Desai; Justice O. Chinnapa Reddy

    Introduction:

    Indian labour laws seem to be highly protective of its unorganized sector with the large
    number of legislations that come as a result of it but the reality talks something different with
    labor being a subject of Concurrent List. Although laws like Industrial Disputes Act (1947),
    totally revolutionized labor reform in India but some aspects like the one dealt in the
    mentioned case still stand unresolved even after specific legislations like Contract Labour
    (Regulation and Abolition) Act,1970. The case establishes one of the prime principles of
    labor law concerning the regular employment of workers in the factory who were initially
    employed through an intermediary, here independent contractors; after the middlemen shy
    away from the responsibility of giving them employment.

    Facts:

    The petitioner is the owner of a manufacturing factory dealing in ropes. A number of


    workmen engaged in the same were hired by contractors, and contracts, as alleged, had been
    enacted between the contractors and the owner. Twenty-nine of these workmen were denied
    employment in the factory and it was contended that they weren’t factory’s workmen but the
    contractors. This conflict in the interests of management and labor was referred to as an
    industrial dispute by the Kerala state government.

    Procedural History:
    The matter was referred to the High Court where it was first brought before a Single Learned
    Judge and the above case was fought on the contention of whether the workmen were
    workmen of the owner or the contractor. The Single judge bench ruled in favor of the
    workmen and declared that the petitioner was the employer and respondent union was the
    employee. The matter was then presented before the division bench of High Court where the
    previous judgment was upheld. This judgment was an appeal before the Apex Court through
    the special leave petition.

    Issue:

    Whether ‘Workman’ under Section 2(s) of the Industrial Disputes Act 1947 also includes
    workmen hired by independent contractors to work in an employer’s factory?

    Judgment:

    Ratio Decidendi:

    The Court upheld the decisions of the previous court and refused the leave petition, hence,
    ruling in favor of the Respondent Union. The reasons behind the same given were:

     The fact that the workmen were denied employment, work is done by them
    contributed integrally to the industry, raw materials for the work were supplied by the
    management, factory premises and equipment and consequently, the finished product
    belonged to the management are irrefutable. The workmen were broadly under the
    control of the Management and defective articles were directed to be rectified by the
    Management. The string of all the circumstances is conclusive of the fact that there
    was the establishment of an employer-employee relationship.

     To be concise and clear it was stated again where a worker or group of workers labors
    to produce goods or services and these goods or services are for the business of
    another, that other is, in fact, the employer. He has economic control over the
    workers’ subsistence, skill, and continued employment. Just the absence of a direct
    relationship because of dubious intermediaries, the real-life bond between the
    employer and employee, cannot be ruled out. Many tools, covered up in layers of
    many authorities as demanded by the situation, the local conditions and so forth,
    might be turned to when labor legislation that necessitates welfare of the workmen on
    the employer, in light of Articles 38, 39, 42, 43 and 43-A of the Constitution. The
    Court must be sharp to maintain a distance from wickedness and accomplish the
    reason for the law.

    Obiter Dicta:

    The Court noted that the petitioner’s contention would be indisputable in a capitalist
    economy with fierce market competition and under the Contract Act drafted according to the
    English Common Law. But there has been more than a century’s gap between those strict
    doctrines and today’s social equity-driven industrial jurisprudence, upholding the essence of
    Preamble to the constitution. The Court stressed, that mere contracts cannot be held to take
    decisions finally but all the factors that revolve around are to deliberated upon. ‘All human
    beings are entitled to certain basic rights and while the advanced polities of the West may
    respect a far richer and deeper range of these than anywhere else, liberals have a duty to the
    rest of humanity to advance and promote minimal human rights everywhere and to strike
    down those who would deny them’.1 Indian justice runs the rule of law that supports the rule
    of life. The idea of classical contract laws and special branches tends to create confusions
    making it vulnerable to exploitative situations like these. In the words of the learned Judge
    Krishna Iyer,’Raw societal realities, not fine-spun legal niceties, not competitive market
    economics but complex protective principles, shape the law when the weaker, working-class
    sector needs succor for livelihood through labor.’

    Conclusion:

    This case acts as a great precedent where the question of absorbing contract labour as regular
    employees of the principal employer concerns and where the provisions of Contract Labour
    (Regulation and Abolition) Act,1970 are defeated and fail to apply. 2 There have been ample
    cases like Haryana State Electricity Board v. Suresh and others, 3 and Bharat Heavy
    Electricals v. the State of Uttar Pradesh,4 where the judgment was cited to defeat and go
    beyond the provisions of the existing laws so that social justice prevails reinforcing equality
    as enshrined in the constitution which promises a utopian society and as the result of which
    legislations like Contract Labour (Regulation and Abolition) Act,1970 were brought into
    place. But these pieces of legislation are more misused, especially in this new millennium and

    1
    Richard Tuck, The Rights of War and Peace: Political Thought and the International Order from Grotius to
    Kant Clarendon Press: Oxford 1999 ||PETER GOWAN.
    2
    Social Justice and Labour Jurisprudence: Justice V.R. Krishna Iyer’s Contributions; by SAGE Publications By
    Sharath Babu, Rashmi Shetty (Chapter 13).
    3
    Haryana State Electricity Board v. Suresh and others C.A. Nos. 11335-11359/95 etc.
    4
    Bharat Heavy Electricals v. the State of Uttar Pradesh Appeal (civil)  2459-2461 of 1999
    not interpreted keeping in mind keeping in mind its real purpose. Thus, cases like such keep
    the democratic polity surviving to maintain the socialist status as enshrined in the
    Constitution.5

    5
    Supra Note 3

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