Recently, the Delhi High Court set-aside 2005 order by an industrial tribunal that had regularized the employment of more than 20 workers at The Ashok Hotel in Delhi.
A Division Bench comprising Justices Yashwant Varma and Ravinder Dudeja also overturned a 2013 judgment by a single judge, which had upheld the tribunal's order.
The appeal contested the tribunal's award dated October 5, 2005, which mandated The Ashok Hotel to establish a policy for the regularization of certain workers. In thesaid case, the tribunal and the single judge had determined that the contractor’s employment of these workers was a means to avoid the obligations that would arise if The Ashok Hotel were recognized as the principal employer.
The workers claimed they had been continuously employed since 1995, despite changes in contractors, and argued that their roles were integral to the Hotel’s operations. They contended that having worked over 240 days each year, they were entitled to permanent status under the law.
The case eventually reached the industrial tribunal, which determined that the workers had continued to work under successive contractors without formal contracts, suggesting a continuous employer-employee relationship with The Ashok Hotel.
The Delhi High Court upheld this finding in 2013.
During the hearing, the counsel for The Ashok Hotel argued that the workers had not claimed before the tribunal that the contract was a sham.
The Division Bench, however, ruled that...
"We at the outset note that a perusal of the Statement of Claim as submitted before the Tribunal leads us to the inescapable conclusion that the workmen had at no stage averred or alleged that the contract between the appellant and the contractor was merely a ruse designed to deprive them of legitimate benefits of continuity in service or for payment of wages at par with the regular employees of the appellant.”
The Court found that the tribunal had no basis to question the engagement of the contractor or to adjudicate on whether the contractor had been hired with mala fide intentions.
“It is these facts which fortifies our view that the Tribunal acted in excess of jurisdiction while framing issue no.1 for consideration. Once it is admitted that the reference stood confined to an issue of regularization, we fail to appreciate how the Tribunal could have legitimately framed issue no.1 as being one which the order of reference could be said to have contemplated,” the judgment said.
The second issue concerned the automatic absorption of contractual employees into the workforce of a principal employer following a notification under Section 10(1) of the Contract Labour (Regulation and Abolition) Act (CLRA). These notifications, issued by the government, prohibit the employment of contractual labor in specific establishments.
The Court thus set aside the orders passed by the single-judge and the tribunal.
The Ashok was represented by Senior Advocate Ravi Sikri and Advocate Arun Sanwal.
The respondents were represented by Advocates Barun Kumar Sinha, Pratibha Sinha and Sneh Vardhan.
Advocates AP Dhamija, JP Singh and Tanya Sharma appeared for the interveners.
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