The Supreme Court recently reiterated that “there is no provision under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 that the workers/employees employed  by the contractor automatically become the employees of the appellant and/or the employees of the contractor shall be entitled for automatic absorption and/or they become the employees of the principal employer.”

While noting the fact that the appellant who is the principal employer of the respondent labors was not in the direct control and supervision of the contesting respondents and they were always with the contractor. The court noted the fact that there is no evidence on record that any of the respondents were given any benefits, uniform, or punching cards by the appellant, in an appeal filed by Kirloskar Brothers Limited, the Division Bench of Supreme Court comprising of Justices MR Shah and Hima Kohli held that “merely because sometimes the payment of salary was made and/or PF contribution was paid by the appellant, which was due to non-payment of the same by the contractor, the contesting respondents shall not automatically become the employees of the principal employer – appellant herein.”

While noting the submissions of Sr. Advocate Anupam Lal Das and Advocate Ravi Bhardwaj appearing for the Appellant, that neither Section 10 of the CLRA Act, nor any other provision in the Act, whether expressly or by necessary implication, provides for absorption of contract labour in the absence of a notification by an appropriate Government, and placing reliance on the judgments passed by the Supreme Court in the case of Steel Authority of India Ltd. and Ors. Vs. National Union Waterfront Workers and Ors., (2001) 7 SCC 1 and International Airport Authority of India Vs. International Air Cargo Workers’ Union and Anr. (2009) 13 SCC 374, the Supreme Court set aside the judgment of the High Court and the Industrial Dispute Tribunal. 

Labor Court held that the respondents were employees of the contractor and not of the appellant which was reversed by the Industrial Tribunal and ordered reinstatement and held that a contract labourer automatically becomes an employee of the principal employer which got confirmed by the High Court of Madhya Pradesh in a writ petition being filed by the appellant.

The respondent labours were not represented before the court despite being served.

Case Details:-

CIVIL APPEAL NOS. 8446-8447 OF 2022
Kirloskar Brothers Limited …Appellant(s)
Versus
Ramcharan and Ors. …Respondent(s)

Read the complete judgment on the following link:-

https://main.sci.gov.in/supremecourt/2019/9628/9628_2019_5_1501_40289_Judgement_05-Dec-2022.pdf