UNIVERSITY OF PETROLEUM & ENERGY STUDIES

COLLEGE OF LEGAL STUDIES

BA.,LLB(HONS.)
SEMESTER VIII
ACADEMIC YEAR: 2013-2014 SESSION: JANUARY-MAY
ASSIGNMENT FOR
Labour Law
Under the Supervision of: Ms. Priya Mishra
NAME: RAVIKANT DESHMUKH
SAP NO: 500011936
ROLL NO R450210096



This is a reference from a two judge bench of the Supreme Court which noticed that there was a conflict
of judicial opinion, between various High Courts and different benches of the Supreme Court regarding
the interpretation of the phrase appropriate government in the Contract Labour and Industrial
Disputes Acts, and of the question of absorption of contract labor.
The Government of West Bengal issued a notification under the Contract Labour act prohibiting the
employment of contract labour in certain specified stockyards of SAIL that were located in West Bengal.
On a request by SAIL, the Government of West Bengal kept in abeyance this notification initially for a
period of six months by notification dated August 28, 1989 and thereafter extended that period from
time to time. It appears that the State Government did not, however, extend the period beyond August
31, 1994. The Union representing the contract labourers filed Writ Petition in the Calcutta High Court
seeking a direction to the appellants to absorb the contract labour in their regular establishment in view
of the prohibition notification of the State Government dated July 15, 1989 and further praying that the
notification dated August 28, 1989, keeping the prohibition notification in abeyance, be quashed. A
learned Single Judge of the High Court allowed the writ petition, set aside the notification dated August
28, 1989 and all subsequent notifications extending the period and directed that the contract labour be
absorbed and regularized from the date of prohibition notification - July 15, 1989 - within six months
from the date of the judgment i.e., April 25, 1994.
SAIL appealed this decision to a division bench and filed a writ seeking the quashing of the initial
notification prohibiting contract labour.
While these cases were pending before the High Court, the Supreme Court delivered judgment in Air
India v. United Labour Union holding, that in case of Central Government Companies the appropriate
Government is the Central Government and thus upheld the validity of the notification dated December
9, 1976 issued by the Central Government under Section 10(1) of the CLRA Act prohibiting employment
of contract labour in all establishments of the Central Government Companies.
Judgement
The Court starts off with making general observations about the exploitation of labour, the role of the
constitution and labour legislation
It stated that the history of civilisation was marked by the exploitation of labour. The enactment of the
Industrial Disputes Act was a step in attaining fair treatment to the labour and industrial peace which
are the sine qua non for sustained economic growth of any country After the advent of the
Constitution, the state is under an obligation to improve the lot of the work force. It goes on to cite
various provisions of the Constitution stating that the government is under an obligation to improve the
conditions of work, ensuring a decent standard of life, and to secure the participation of workers in
management of companies.
It states the preamble to the constitution is the lodestar and guides those who find themselves in a
grey area while dealing with its provisions. It is now well settled that in interpreting a beneficial
legislation enacted to give effect to directive principles of state policy which is otherwise constitutionally
valid, the consideration of the court cannot be divorced from those objectives. In case of ambiguity in
the language of a beneficial labour legislation, the courts have to resolve their quandary in favour of
conferment of, rather than denial of, a benefit on the labour by legislature but without rewriting and/or
doing violence to the provisions of the enactment.
The Court held that in this case, with regard to SAIL, the appropriate government was the Central
Government, and hence the State of West Bengal lacked the authority to issue a prohibition notification
under the Contract labour act.
The Central Government had also issued a notification under the contract labour act, but the court held
that it was an omnibus notification, and showed that there was a non-application of mind was hence set
aside.