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Steel Authority of India Ltd. & Anr. v. Jaggu & Ors. Etc.

Civil Appeal · 2019 INSC 727Decided 5 Jul 2019
Civil Appeal No. 8094 of 2011
Justice A.M. Khanwilkar · Justice Ajay Rastogi

Background

Contract labourers working at Steel Authority of India's (SAIL) Kuteshwar Limestone Mines continued working after a 1993 government notification prohibiting contract labour in that establishment, until their services were terminated by the contractor in 1996 following a strike. In 1998, about 2,040 such workers filed claims under the Minimum Wages Act, 1948, seeking wages on par with SAIL's regular employees under a wage agreement (the NJCS Memorandum) applicable to direct employees. The prescribed authority and later the High Court ruled in the workers' favour, prompting SAIL to appeal to the Supreme Court, while the workers filed a cross-appeal.

Decision Breakdown

The Supreme Court held that merely continuing to work after the prohibition notification did not automatically entitle the contract workers to the higher wages fixed for SAIL's direct/regular employees under the NJCS agreement, since minimum wage fixation involves distinct statutory considerations for different employee categories. Relying on a related industrial tribunal (CGIT) finding, which the Court had upheld in independent proceedings, that the contract labourers were not established to be SAIL's own employees and were not covered by the regular-employee wage agreement, the Court found the prescribed authority's and High Court's orders unsustainable. It accordingly set aside those orders, allowed SAIL's appeal (Civil Appeal No. 8094 of 2011), and dismissed the workers' appeal (Civil Appeal No. 8334 of 2011), with no order as to costs.

Lesson Learnt

Contract workers cannot automatically claim wage parity with an establishment's regular employees simply by continuing to work after a statutory prohibition on contract labour: their status as "employees" of the principal employer, and entitlement under any specific wage agreement, must be independently established through the proper statutory process.

Official source (sci.gov.in)View Judgment (PDF)

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