Air India Statutory Corporation Vs United Labour Union &

Others (06.12.1996)
Case 1
Case Fact

Air India Statutory Corporation authority under International Airport

Authority of India Act 1971

Later company registered under Companys Act.

Contract Laborers engaged in sweeping, cleaning dusting and watching of the

building owned and occupied principal employer.

Registration obtained from Labour Commissioner (Central) on 20 Sept 1971.

On 9 Dec 1976, Central Advisory Board issued a notification in consultation

with Central Advisory Board

The union filed a writ petition.

Writ Petition was allowed on 16 Nov 1989 by leaned single judge

Mohile Committee formed recommended not to abolish contract labour

system but was later overruled.

Three Judge bench of Supreme court specified legal parameters relating to

appropriate government and automatic absorption

The Act did not intend to denude the contract laborers of their source of
livelihood

According to Notification under Section 10(1): Contract Laborers would be

entitled to be absorbed when the work performed by them is of a perennial
nature.

Appropriate Government occurring in Section 2(1)(a) of CLRA Act should be

interpreted to ascertain: whether an establishment is an instrumentality or
agency of the State not merely with reference to its constitution, pervasive
control exercised by the State over it but with reference to the activities
complying with the basic law requirements.

Court Interpretation :

How the ACT came into Force

The Act regulates the conditions of laborers employed through the contractor
registered under the Act.

The work in the industry should not be perennial for contract laborers.

Principal employer is required to submit the number of workmen needed for

employment

Contractor, an intermediary, is a supplier

Principal employer is enjoined to compel the contractor to pay wages.

Incase of failure, the principal employer should pay and recover it from the
contractor.
Principal employer has pervasive control

Supreme Court Decision

The appropriate government is the Central Government.

Abolition of contract labour system ensures right for regularization as

employees based on Article 226 of Constitution.

According to Notification u/s 10 (1) of the Act, the principal employer obliged
to absorb the employees working as contract laborers even though there is
no express provision in the Act

Principal of last come, first go to be followed incase of retrenchment due to

excess staff subject to reappointment as and when vacancy arises

Case 2
National Federation Of Railway ... vs Union Of India And
Ors on 9 May, 1995
Case facts

Writ petitioners have been working as contract labour Railway Parcel Porters
continuously for a number of years.

The work of parcel handling is permanent and perennial in its nature and in
could keep at the petitioners - parcel porters continuously engaged.

In certain Railway Stations the Parcel handling work is done by Railway Parcel
Porters, regularly and permanently employed by Railways.

Contract labour for

parcel

handling

is

done

by labour supplied

to Railway through societies or private contractors

Decision on the case: Amendments

The Units of Railway Administration may absorb on permanent basis only

such,

of

those

Railway Parcel

Porters

(petitioners)

working

in

the

concerned Railway Stations on contract labour who have not completed the
superannuation age of 58 years.

The Units of Railway Administration are not required to absorb on permanent

basis such of the contract labour Railway Parcel Porters (Petitioners) who are
not found medically fit for such employment.

That the absorption of the petitioners in the writ petitions or a regular and
permanent basis by the Railway Administration as Railway Parcel Porters does
not disable the Railway Ad-ministration from utilizing their services for any
other manual work of the Railway depending upon its needs.

In the matter of absorption of Railway Parcel Porters on contract labour as

permanent and regular Railway Parcel Porters, the persons who have worked
for longer periods as contract labour shall be preferred to those are put in
shorter period of work.

The report dated August 31, 1993 of the Assistant Labour Commissioner
(Central) can be made the basis in deciding period of contract labour work
done by them in the Railway stations.

Further, as far as possible,

the Railway Stations where the writ petitioners are working should be the
places where they could be absorbed on permanent and regular basis and
the information available in this regard in the report dated August 31,1993 of
the Assistant Labor Commissioner, could be utilized for the purpose

References
https://indiankanoon.org/docfragment/1403160/?formInput=railway
%20contract%20labour