In a recent three-judge bench decision (Balwat Rai Saluja & Anr. v. Air India
Ltd. & Ors.; Civil
Appeals No. 10264-10266 of 2013), the Supreme Court of India
(“Supreme Court”) has dealt with an important question under Labour Law
jurisprudence – “whether the workmen engaged in statutory canteens, through a
contractor, could be treated as employees of the principal establishment”? The
question was with respect to the obligation of the occupier of a factory, under
§ 46 of the Factories
Act, 1948 (“Factories Act”), to provide a canteen in case more than
250 workmen are ordinarily employed.
In the appeal, Hotel Corporation
of India (“HCI or Respondent No. 2”), a wholly owned subsidiary of Air
India (“Respondent No.1”) to establish refreshment rooms, canteen etc., had
employed appellants-workmen on a ‘causal or temporary basis’ for rendering canteen
services on Air India’s premises. Both HCI and Air India are companies
registered under Companies Act, 1956 (“Companies Act”). In 1996, the Central
Government referred an industrial dispute between Air India and the appellants-workmen
(“Appellants”) to the Central Government Industrial Tribunal (“CGIT”). It was
Appellants’ contention that by virtue of them being employed in a statutory
canteen established on the premises of Air India, they are its ‘deemed
employees’. The contention was sought to be substantiated by reference to the
applicability of Rules 65-70 of Delhi
Factory Rules, 1950 (“Delhi Rules”) to Air India’s Ground Services
Department. CIGT accepted the plea of the workmen and held that they are Air
India’s employees. However, on appeal, a single-judge bench of the High Court
of Delhi (“High Court”) reversed the CGIT’s order and held that workmen could
not be treated as Air India’s deemed employees. It was held that the responsibility
to run canteen was that of HCI, and its relationship with Air India was
contractual. On second appeal, judgment of the single-judge bench was affirmed by
a division bench of the High Court.
