Delhi High Court upholds Government notification Banning Employment of Contract Labor in Mathura Refinery

Delhi High Court upholds Government notification Banning Employment of Contract Labor in Mathura Refinery

It was done on grounds of poor working conditions and lack of job security

The Delhi High Court has rejected the challenge of the Indian Oil Corporation Limited (IOC) to a notification issued by the Government of India banning employment of contract labor in various departments at Mathura refinery and marketing division.

The Court upheld the impugned notification and dismissed the petition, noting that the government conducted extensive studies over 10 years before issuing the notification to ensure fair treatment of workmen. The reports of committees and the Central Advisory Contract Labour Board (CACLB) recommended banning contract labor based on poor working conditions and lack of job security.

The single Judge Bench of Justice Najmi Waziri observed that the government's decision under Section 10 of the Contract Labour (Regulation & Abolition) Act, 1970, was an administrative resolve and not conditional legislation. It did not require the respondent to necessarily hear the petitioner before issuing the impugned notification. The Act required consultation with CACLB on relevant factors, including working conditions and benefits.

The Court observed that the petitioner had the opportunity to present its objections during the decision-making process. Also, there was no demonstrated prejudice caused by not being heard by the respondent.

It stated, “There can be compliance of the requirements of natural justice of hearing when a right to represent is given and the decision is made on a consideration.”

The Bench added, “The reports and recommendations that the respondent No. 1 considered deal with (a) the views of the Central Board, i.e., the CACLB (b) facts and views on conditions of work and benefits and other relevant factors as set out in Section 10 of the Act. A view leading to the decision was drawn up, after the petitioner was heard at every juncture, despite there being no such requirement under the Act.”

The petitioner was issued a notification without considering the socio-economic background leading to the employment of contract workers. IOC raised objections that many workers hired during the construction phase of the refinery were landless unskilled individuals. It said that their functioning as contract workers was their only source of livelihood, which would inevitably be lost if the impugned notification was sustained.

It averred that it would further result in large-scale retrenchment of workmen, who were being treated fairly and provided benefits. The workers in the 15 departments did not perform the jobs of perennial nature. They continued not owing to requirement, but to status quo orders in various litigations.

The Ministry of Petroleum and Natural Gas raised similar concerns in a letter to the respondent.

The petitioner argued that the principle of natural justice should be applied in the government's decision-making process and that the decision should be relevant to the conditions and criteria set out in the statute. It added that the decision should consider the objections raised by stakeholders and should be based on materials that satisfy the criteria prescribed by the statute.

IOC maintained that the conditions for attracting the jurisdiction under Section 10 of Act, specifically the exploitation of contract labor by exploitative conditions of service and wages, were not met. Referring to the Tripartite Committee report, it stated that most contract laborers in the refinery were well-paid and looked after.

However, the Bench noted that the intent of the impugned notification and fair treatment of workmen was to ensure a sense of security to the workmen.

It ruled, “There can be no greater sense of disempowerment and disquiet for a workman than to be under the continuous fear of uncertainty of his job. The contract worker gets a job at the mercy and at the fancy of the principal employer. This uncertainty affects not only the individual concerned but his entire family. It is at this stage that the State steps in to ensure that there should be some certainty in this regard. After all, a workman who has been rendering his services to the corporation or any entity, from 5 to 7 years, should know whether he would be given regular employment. The mere fact that they have worked there for all these years shows that they were required on a permanent basis in various departments.”

The Bench stated that the Act required the government to consider factors including working conditions and benefits provided to the contract labor. It held, “The Court cannot, in exercise of its jurisdiction under Article 226 of the Constitution of India, enter upon a merit review of the decision of Respondent No. 1.”

It further averred, “The view of the Tripartite Committee, as well as the CACLB, and even the Joint Chief Labour Commissioner (Central) was unanimous in that the system of contract labor in the Mathura refinery must be abolished. The material placed before Respondent No. 1, were accepted, and resulted in the issuance of the impugned notification. Prior to the issuance of the notification, ground reality was assessed, the parties were heard. There was application of mind and the order banning the contract labor was supported with reasons.”

Justice Waziri said that it could not be stated that the requirements of Section 10 of the Act were not complied with by Respondent No. 1 before issuing the impugned notification.

“No material has been produced before this Court to discredit the findings, which, the Court will not engage in assessing, when exercising jurisdiction under Article 226. To the contrary, the silence of IOC on the aspect of job security for workmen makes it more than apparent that the findings of the Committee were rightly relied on by Respondent No. 1,” he said.

The Bench had noted that IOC's objections were considered at various stages before issuing the notification, which aimed to provide a sense of security to workers. Additionally, it would implement Articles 42 and 43 of the Constitution of India regarding fair wages.