Workers of statutory canteen are deemed employees only for the purpose of Factories Act, 1948

Supreme Court: The 3-judge bench of H.L. Dattu, R.K. Agrawal and Arun Mishra, JJ deliberated upon the question whether the workmen engaged in statutory canteens, through a contractor, could be treated as employees of the principal establishment which came up from a reference made by a 2-judge bench of this Court as contrasting opinions were made by said bench on the question. Elucidating the question, the Court held that the workers engaged by a contractor to work in the statutory canteen of a factory would be the workers of the said factory, but only for the purposes of the Factories Act, 1948 and not for other purposes, and further for the said workers, to be called the employees of the factory for all purposes, they would need to satisfy the test of employer-employee relationship and it must be shown that the employer exercises absolute and effective control over the said workers.

In the present case, the appellant represented by Jayant Bhushan, provided canteen services to the respondents represented by Praveen Jain and contended that they should be treated to be the deemed employees of the respondents as they work in the canteen established in the Air India Premises and that too for the benefit of the employees of the respondent. The 2-judge bench differed in their opinion on the said matter on the aspects of supervision and control exercised by the respondents over the appellants i.e. the issues surrounding the economic dependence of the subsidiary role in management and maintenance of the canteen premises, representation of workers, modes of appointment and termination as well as resolving disciplinary issues among workmen.

The Court, taking into account the facts of the case and various judgments of the Court, held that the appellants would be workmen of the Air India, but only for the purposes of the Factories Act and solely by virtue of this deemed status under the Factories Act, the said workers would not be able to claim regularisation in their employment from the Air India. Balwant Rai Saluja v. Air India Ltd., Civil Appeal Nos. 10264-10266 of 2013, decided on 25.08.2014

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