Kiran Raj

The Calcutta High Court has dismissed a writ petition challenging the legality of an industrial dispute reference concerning the alleged retrenchment of contractual workers engaged in the mess facilities at the Indian Institute of Management Calcutta (IIMC). The court ruled that the reference made by the Central Government to the Industrial Tribunal was lawful and did not warrant interference.

The dispute originated from the disengagement of a mess contractor, M/s Sanchari Caterers, which was selected by the Students Council to provide food services to IIMC hostels. A conflict arose when the contractor and its staff were removed following allegations of supplying contaminated food to students. In response, the contractor’s workers, supported by a trade union, raised a claim of unfair termination.

On October 18, 2023, the Regional Labour Commissioner issued a reference under the Industrial Disputes Act, 1947, posing the following questions to the Industrial Tribunal:

“Whether the stand of the management of the Indian Institute of Management Calcutta (IIMC) that they do not have any employer-employee relationship with the contractual workers working for the contractor M/s Sanchari Caterers, Kolkata in the premises of IIMC, is legal and justified in the eye of law or not? If not, what relief the workers are entitled to for their retrenchment?”

IIMC challenged this reference before the High Court, arguing that there was no employer-employee relationship between the institute and the contractual workers, and thus no valid industrial dispute existed.

The petitioner, IIMC, contended that it is a statutory body under the Indian Institutes of Management Act, 2017, and does not directly employ the workers in question. The Students Council, an independent and unincorporated entity, engaged contractors to manage mess services, and the institute had no direct control over the employment terms of the contractor’s workers.

The respondents, including the Union of India and the trade union representing the workers, maintained that the dispute fell squarely within the purview of the Industrial Disputes Act, 1947. They argued that the manner in which the workers were disengaged indicated a potential unfair labor practice, necessitating adjudication by the Industrial Tribunal.

IIMC further relied on precedent, including National Engineering Industries Ltd. v. State of Rajasthan, (2000) 1 SCC 371, to argue that an industrial dispute reference can only be made when a prima facie employer-employee relationship exists. Additionally, the institute cited Organon India Ltd. vs. State of West Bengal, 2003 (4) L.L.N. 999, contending that the tribunal cannot exceed the scope of the reference.

The High Court examined the factual matrix and noted that the Conciliation Officer had earlier recorded that IIMC was not the principal employer. However, it also observed that the contract workers had consistently provided services within IIMC premises, and the Industrial Tribunal was the appropriate forum to determine the nature of their employment.

Relying on the Supreme Court's ruling in Cipla Ltd. v. Maharashtra General Kamgar Union, AIR 2001 SC 1165, the court noted: “Even in cases where employer-employee relationship is undisputed or indisputably referring to the history of relationship between the parties, dispute can be settled and not in a case of the present nature where it is clear that the workmen are working under a contract. But it is only a veil and that will have to be lifted to establish the relationship between the parties. That exercise, we are afraid, can also be done by the industrial tribunal.”

Further, the court referenced Vividh Kamgar Sabha v. Kalyani Steels Ltd., AIR 2001 SC 1534, where the Supreme Court held: “If there is a dispute as to whether the employees are employees of the company then that dispute must first be got resolved by raising a dispute before the appropriate forum.”

Applying these principles, the High Court concluded that the industrial dispute reference was legally sustainable and did not warrant judicial interference.

The court further examined the submissions and noted that under the Industrial Disputes Act, an employer-employee relationship does not necessarily have to be direct. The existence of indirect control, supervisory powers, or other indicia of employment can warrant a detailed examination by the Industrial Tribunal. The court held that the tribunal had the jurisdiction to evaluate whether the workers in question were under the de facto control of IIMC and whether the contractor was merely a conduit.

Additionally, the court observed that the intervention of state authorities in the dispute signified a broader labour unrest issue. Given that labour relations form a crucial aspect of industrial peace and stability, a reference made to the Industrial Tribunal under the statutory framework should not be lightly interfered with by the writ court.

The court dismissed the writ petition, affirming that the reference made by the Central Government to the Industrial Tribunal was in accordance with the law. The order explicitly stated: “This is clearly an industrial dispute and has to be decided by the appropriate forum under the Industrial Disputes Act... and as such the ‘reference’ being in accordance with law requires no interference by this Court.”

Accordingly, WPA 28424 of 2024 was dismissed, with all interim orders vacated. The court also directed that any pending connected applications be disposed of accordingly.

Case Title: Indian Institute of Management Calcutta v. Union of India & Ors.
Case Number: WPA 28424 of 2024
Bench: Justice Shampa Dutt (Paul)

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