In the year 1981, the Phosphates Company Limited was incorporated as a joint venture between the Government of India and Rupublic of Nauru with the objective of manufacturing of Di-Ammonium Phosphates. Later on, in the y

CS Professional · Multidisciplinary Case Studies · PYQS · December 2021
In the year 1981, the Phosphates Company Limited was incorporated as a joint venture between the Government of India and Rupublic of Nauru with the objective of manufacturing of Di-Ammonium Phosphates. Later on, in the year 1993, the Republic of Nauru disinvested its entire equity stake to the Government of India and the company became a wholly-owned public sector undertaking of the Government of India having its corporate and registered office at Bhubaneswar. (Odisha) Due to deteriorating financial position of certain public sector units, the Government of India on 19.05.1998 decided to temporarily enhance the age of superannuation of all central public sector employees from 58 years to 60 years on the premise that the move may help industries to cut down their losses. Pursuant to the said order dated 19.05.1998, the Company implemented the said order vide order dated 19.11.1998 with retrospective effect from 27.05.1998. Inspite of the enhancement of age of superannuation, the financial performance of the company still did not improve. The Government of India issued an Office Memorandum dated 22.08.2001 to all central public undertakings including the said company intimating its decision to roll back the age of superannuation of all the employees of public sector undertakings from 60 years to 58 years. Before this Memorandum, the Government of India, on 08.06.2000, had also advised the company to review the decision on enhancement of age of superannuation but the company did not take any decision on the said advisory. In the meanwhile, the Government of India, on 28.02.2002, divested its 74% shareholding in the said company in favour of M/s Zuari Maroc Phosphates Ltd. ("Zuari"), thereby, keeping only 26% shareholding in its favour. As per the shareholding agreements, it was provided that all the decisions taken by the Board of directors of the company, prior to the date of the disinvestment, shall be binding on all concerned. In order to revive its financial health, the Board of directors of the Company decided to fill-up the vacancies of Security Guards by engaging an outsourcing agency. As many as 27 Security Guards were employed through outsourcing against vacant posts. In the month of April 2002, some robbers attacked in midnight with arms weapons. Five security guards who were on duty and safeguarding the property were injured. The robbers could not succeed in their nefarions designs. One security guard lost his hand during the firing and another security guard lost his eye. The Union of Security Guards moved an application for regularization of their jobs and also demanded the same pay scale as given to para-military forces under the principle of Equal Pay for Equal Work. The Union also demanded compensation to injured security guards. The Company rejected their claim on the plea that they were contractual labour. As a consequence, the Union filed a petition. Thereafter, on 17.07.2002, the Company, by office order, withdrew the earlier office order dated 19.11.1998 and restored the age of superannuation to 58 years in respect of all the employees in terms of Certified Standing Orders and Service Rules of the Company. Being aggrieved, the Trade Union raised dispute with regard to the above and the Odisha Government also made a reference under Section 12 read with Section 10 of the Industrial Disputes Act, 1947 to the Industrial Tribunal. Can the contractual workers demand compensation from the principal employer due to permanent disablement for an injury caused in the course of employment with the company? Give reasons in support of your answer.

Answer & Explanation:

The present case is similar to Executive Engineer, PWD & Ors vs. Commissioner, Workmen's Compensation. In this case of High Court of Jammu & Kashmir held that there is no substance in the submissions made on behalf of the appellant. Admittedly, Respondent No. 3 was working as a contractor with the appellant and was executing the work allotted to him by none other than the Appellant. It is also not in dispute that Respondent No. 2 was engaged as labourer by Respondent No. 3 for execution of the work of the appellant. From the evidence led by the parties before Respondent No. 1, it is further evident that the job of repairing the compressor rod was assigned to Respondent No. 2 by the Junior Engineer of the Appellant and not by Respondent No. 3. Viewed from any angle, the Appellant cannot avoid its liability to compensate the Respondent No. 2. The appellant being a principal employer was liable to pay the compensation to the Respondent No. 2 on account of permanent disablement suffered by him during and in the course of his employment with the appellant. Even on facts, the job of repairing the compressor rod was entrusted to Respondent No. 2 by the appellant That being the position, the plea of the appellant that there was no privity of contract between the Respondent No. 2 and the Appellant is misconceived and is noticed to be rejected only. Both the pleas raised by the appellant to challenge the award, therefore, fail. Hence, principal employer is liable to pay compensation in the given case too.

Topics: Industrial Law

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