Shrirang Ashtaputre & Manasi Gokhale
INTRODUCTION:
Jawaharlal Nehru, the 1st prime minister of India, had rightly declared dams and industries to be the backbone of India’s economy and undertook diverse measures for rapid industrialization. And for manifesting the visions of the founding fathers, the country witnessed an increased dependency on manual labour, both skilled and unskilled. It came as no surprise the former enjoyed more security and good pay in comparison to the latter, whose expertise was relied upon only occasionally – these workers were catered through middlemen to the principal employer, namely the contractor. This was a comfortable arrangement since industries did not have to employ them full time and be paid accordingly and were sought as a convenient way for escaping the whole part of investing monies in catering the interests of these temporary contract laborers. Naturally, they were vulnerable to exploitation and for preventing the same the legislature enacted the Contract Labour (Regulation and Abolition) Act, 1970, which sought to eradicate the notion of temporary contract labor wherever possible. Specifically, this enactment obliges both the principal employer and the contractors to ensure the welfare and timely payment to these laborers respectively. Interestingly, the Contract Labour (Regulation and Abolition) Central Rules, 1971 mandates equal pay to contract laborers in instances where they performed tasks which ideally fell within the ambit of the functions of workman therein[i]. This implies the enforcement of “equal pay for equal work” for all employees, only when this condition is satisfied[ii]. Amidst this distinction, it appears that the apex court, on 17th January 2020, has deemed eligible, the contract labourers of Pawan Hans Ltd. for securing benefits of provident funds, just like any permanent worker of its industry.
PAWAN HANS LTD. V. AVIATION KARMACHARI SANGHATANA[iii] – AN INSIGHT:
In India, the idea of provident fund was devised for ensuring that the industrial worker has some financial support after his retirement or for his dependents after his death. This is precisely why the term employee under Section 2(f) of Employees’ Provident Funds And Miscellaneous Provisions Act, 1952[iv], so understood as any person engaged directly or indirectly in the industry and receives wages, has been interpreted to include even short-term and home workers[v]. Realizing that the said Act fails to make any distinction in types of employees with regards to reaping the fruits of provident fund, it comes as no surprise that the apex court, in Pawan Hans Ltd. V. Aviation Karmachari Sanghatana, interpreted the definition of employee to include contract labourers, thereby unifying both permanent and temporary workers in terms of seeking humanitarian benefits. In doing so, it reiterated the twin test, which if satisfied, assures exemption to the industry from extending this necessity under Section 16(1) of this enactment. Specifically, it lays down the following conditions:
1. The establishment must be owned by the Government
2. The employees of the said establishment are availing contributory provident fund as per the schemes/rules framed by the Central/State Government.
While the appellant company was a public sector undertaking since the government had 51% shares), the fact that its scheme allowed the extension of facility of provident fund only to the regular employees implied an absence of such provision to the 270 contract laborers – this confirmed its failure of to satisfy the aforesaid twin test. Consequently, the apex court is justified in extending the benefit of provident fund even to the contract labourers, also because herein, the appellant company had complete control over the actions over the contractual labour[vi]. Therefore, this verdict conflicts with the position of the same Court in Haldia Refinery Canteen Employees Union & Others V. Indian Oil Corporation Limited whereby the contractor and not the principal employer was vested with the task of making provident fund contributions. Instead, it confirms to the judgment of the Punjab And Haryana High Court in Calcutta Constructions Company V. Regional Provident Fund Commissioner and Ors. which had deemed the establishment responsible for making the contributions to the said fund. In practice, it is the principal employer who is expected to make the payment of contributions to the employee by him directly or indirectly specifically when the code number has not been allotted[vii]. When the same is allotted, then, it is the duty of the contractor to ensure that the sums received from the principal employer for the said purpose are dispersed accordingly[viii].
CONCLUSION:
The apex court in the present case, declared the seeking of provident funds as an essential facility, even for the contract employees, which positively aligned with the averments of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 which prescribes for curbing contract labour in certain circumstances and where the same is not possible, to ensure that essentialities such as same wages, holidays, hours of work and even conditions of services as enjoyed by an ordinary workman therein[ix]. That is to say, that the court, after asserting the importance of contract laborers for the said entity, directed it to ensure equal treatment with that regard, thereby eliminating the socio-economic differences between these two distinct types of employees, an ultimate object sought by the Contract Labour (Regulation and Abolition) Act, 1970. Moreover, this transformative approach of the court very rightly upheld the welfare characteristic of the Employees’ Provident Funds And Miscellaneous Provisions Act, 1952, particularly that of ensuring the health and other benefits to all its employees. It has always been an enigmatic situation for all the contractual employees as the terms of their contracts are left in a conundrum. With the aforesaid judgment of the Honorable Supreme Court, the temporary workers have full rights to claim the benefits and thereby be at par with the regular employees. With this being said social security is a fundamental right laid out in the Constitution of India and each employee is entitled to claim so, without discrimination which truly conveys the meaning of Section 2(f) of the Act, i.e., all employees, as far as they are affirm to the master-servant relationship towards their principal employers are entitled for this benefit. Indeed, this approach of the court is praiseworthy as by enabling these temporary contract laborers to avail the said facility hereafter, truly protects their right to social security, an inseparable facet of Article 21 of the Constitution of India, 1950. To ensure the welfare of the workers when unemployed or old is ideally, the responsibility of the state which is sufficiently in consonance with the goal of the state to eradicate poverty by uplifting the poor and assuring them all forms of support. This verdict has not only enforced this constitutional obligation of ensuring the socio-economic welfare of employees but also protected their dignity and well-being.
[i] Contract Labour (Regulation and Abolition) Central Rules 1971 Rule 25(v)(a).
[ii] State Of Punjab And Ors. V. Jagjit Singh And Ors.[(2017) 1 SCC 148].
[iii] Civil Appeal No. 353 of 2020 (Arising out of SLP (C) No. 381 of 2019).
[iv] Employees’ Provident Funds And Miscellaneous Provisions Act, 1952 Section 2(f)- Definition of Employee
[v] M/s P.M. Patel & Sons and Ors. V. Union of India and Ors. [(1986) 1 SCC 32].; SubRegional Provident Fund Office V. Godavari Garments Ltd. [(2019) 8 SCC 149].
[vi] Group 4 Securitas Guarding Ltd V Employees Provident Fund Appellate Tribunal And Ors. [2012LLR22].
[vii] Id.
[viii] Circular No. C-I/2(19)2016/Clarifications/ECR/7357 Dated 21.07.2017.
[ix] Steel Authority of India Ltd. & Others V. National Union of Waterfront Workers [2001 7 SCC 1].
Shrirang Ashtaputre, ILS Law College, Pune; fourth year student & Manasi Gokhale, Modern Law College, Pune; fourth year student
Picture Credits: India Today
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