IRAC – VIVIDH KAMGARH SABHA V. KALYANI STEELS LTD.

, (2001) 2
SCC 381

Labour & Industrial Law – Internal Assessment 2

Issue
Whether the two complaints filed by Vividh Kamgarh Sabha (“Union”), an unrecognized Union
under “MRTU & PULP Act”, alleging unfair labour practice on the part of the employer under
Item No. 6 of Schedule IV are maintainable?
 Section 21 – Right to appear or act in proceedings relating to certain unfair labour
practices
(1) No employee in an undertaking to which the provisions of the Central Act for the time being
apply, shall be allowed to appear or act or allowed to be represented in any proceedings relating
to unfair labour practices specified in Items 2 and 6 of Schedule IV of this Act except through
the recognised union :

Provided that, where there is no recognised union to appear, the employee may himself appear or
act in any proceeding relating to any such unfair labour practices.

A landmark case pertaining to Recognised Union and Unfair Labour Practices is Maharashtra
State Road Transport Corporation & Anr vs Casteribe Rajya P. Karmchari on 28 August,
2009

Section 21 should be interpreted as follows: Where there is a recognised union, only that
recognised union may attend, act, or be represented on behalf of an employee in proceedings
relating to unfair labour practises mentioned in Items 2 and 6 of Schedule IV. In the absence of a
registered union, an employee may appear or participate in any case relating to an unfair labour
conduct. This does not preclude an unrecognised union from acting or appearing in an action
involving an unfair labour practise. It can symbolise an employee or, if desired, the employee
himself.

Facts
The Appellants claim to be a union representing the employees of the Respondents' Canteen. The
Appellant Union claimed that, despite the fact that the Appellants are workers of the
Respondents, the Respondents do not treat them equally with other employees and have
allegedly hired contractors to handle the canteen. As the Respondents refused to accept the
Appellants' claim that they were their employees, the Appellant filed a Complaint under Section
20(1) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour
Practices Act, 1971 (hereinafter referred to as the MRTU and PULP Act), alleging that the
Respondents had engaged in unfair labour practises under Item Nos. 1, 1(a), 1(b), 4, 4(a), 4, 4(a),
4, The challenged Order dated August 20, 1996, rejected this Complaint.

The provisions of the MRTU and the PULP Act can only be enforced by those who are legally
employed. If there is a disagreement as to whether the employees are employees of the
Company, that disagreement must first be settled by filing a complaint with the relevant forum.
Only after establishing one's position as a worker in an appropriate forum may one file a
complaint under the terms of the MRTU and PULP Act.
In this scenario, it was claimed that the Respondent Company had always considered the
members of the Appellant Union to be its own employees. It is argued that a formal refusal was
issued solely to defeat the claim. This submission lacks substance in our opinion. The members
of the Appellant Union were not employees of the Respondent Company, according to the
written statement. The issue has been raised before the Industrial Court. On the facts, the
Industrial Court determined that the members of the Appellant Court were not employees of the
Respondent Company. This is a disputed fact, and hence the lawsuit was not maintainable until
the Appellants or their members had the question decided in an appropriate forum.

Analysis
Contractual Employees are not employees of the principal employer.
In the decision of Supreme Court, Vividh Kamgar Sabha v. Kalyani Steel Ltd., (2001) 2 SCC
381, it was held that “the provisions of MRTU and PULP Act can only be enforced by persons
who admittedly are workmen. If there is dispute as to whether the employees are employees of
the Company, then that dispute must be first be gotten resolved by raising a dispute before the
appropriate forum. It is only after the status as a workmen is established in an appropriate
Forum that a complaint could be made under the provisions of MRTU and PULP Act”

In Central Labour Union (Red Flag) Bombay v. Ahemdabad Mfg. and Calico Printing Co.
Ltd., 1995 Supp (1) SCC 175, the Supreme Court held that “where the workmen have not been
accepted by the Company to be its employees, then no complaint would lie under the MRTU and
PULP Act.”
The High Court ruled that an admitted employer-employee connection is required for a case to
be maintainable under the MRTU and PULP Act. The provisions of the MRTP and PULP Act
can only be implemented if a workman's status has been proven before an authorised forum.

In the current situation, the contractual employees work for the contractor rather than the
petitioner. As a result, they are not permitted to initiate a complaint against the petitioner for
unfair labour practises.

As a result, the respondents'/contractual employees' complaint brought under the MRTU and
PULP Act is not maintainable.

The Labour Court and the Industrial Court have authority under the MIR Act, and they have the
competence to decide disputes on reference. A forum is available for enforcing the rights granted
under the MIR Act.
The bench held that a complaint under the MRTU and PULP Acts could not be lodged to enforce
the rights granted by the MIR Act.
Contractual employees are hired through contractors, and the terms of their service are
defined by the contracts between them. The appointment orders for contractual employees
are issued by the contractor rather than the principal employer. They only work with the
primary employer as a contractor throughout the contract duration. After the contract
period expires, their contractor may get into a contract with another establishment and
transfer them to that location. In that regard, they cannot be recognised as permanent
workers of the major employer, and hence cannot claim voting rights on par with
permanent employees.

Because contractual employees are governed by the contract between contractors, their service
conditions, remuneration, and so on are also governed by the contract; therefore, in the event of a
grievance, they should approach the contractor rather than the principal employer.

Conclusion
The Industrial Court had disregarded the recognised legal position that a charge of unfair labour
practise could be maintained only if the parties had an admitted employer-employee relationship.
The contractual employee, as an employee of the contractor rather than the principal employer, is
not permitted to register a complaint under the MRTU and PULP Act.
As a result, the ruling of the Industrial Court was untenable.
While granting the petition, the Court concluded that a complaint filed under the MRTU and
PULP Act by contractual employees seeking to exercise their rights under the MIR Act is not
maintainable and that the Industrial Court lacks jurisdiction to hear it.