The Director, Cghs And Ors. vs. Shri Ram Chander And Ors.

Facts

The petitioners, Director of CGHS, National Informatics Centre, and NIC Services (Inc.), challenged an order dated August 23, 2019, passed by the Presiding Officer, CGIT-cum-Labour Court-1. The order favored respondents 1-3, representing 267 contract workers outsourced by agencies (respondents 4-5) to CGHS for its computerization project since 2006. The workers sought regularization, claiming continuous service for 5-7 years. The petitioners argued that the workers were employed by outsourcing agencies, not CGHS, and their services terminated with the contract. The Labour Court held the workers were employees of CGHS and entitled to regularization from 2006. The petitioners filed this writ petition seeking to quash the Labour Court's award.

Held

The Court held that the contract between the outsourcing agencies and the workers was sham and bogus, as petitioner no.1 (CGHS) exercised direct control over the workers. This control was evidenced by CGHS managing all aspects of their employment, including issuing memos and managing leave applications, despite changing contractors multiple times. The Court noted that CGHS had not obtained a license under Section 7 of the Contract Labour (Regulation and Abolition) Act, 1970. The Court found that the petitioners failed to prove that the workmen were not direct employees of CGHS. Citing precedents and the fact that the workmen had been working since 2006, were qualified, and performed perennial work, the Court upheld the Labour Tribunal's decision that the workers were entitled to regularization from their initial date of joining in 2006. The impugned award was found to be free from illegality and did not warrant interference. The writ petition was dismissed.

Key Issues

1. Whether the contract workers engaged for the CGHS computerization project were employees of the petitioners (CGHS and its associated entities) or the outsourcing agencies, and consequently, whether they are entitled to regularization? This issue turns on the interpretation of the employer-employee relationship in the context of contract labor and the genuineness of the outsourcing arrangements. Petitioner's Arguments: The petitioners contended that the contract workers were hired by outsourcing agencies (respondents 4-5) and paid by them, thus not making them employees of the petitioners. They argued that the petitioners did not control the services of these workers and that their role was limited to providing attendance reports for billing. The petitioners also submitted that the contract workers were hired for a specific project, and their services naturally ended with the project's completion, especially since no regular posts were created for them. Respondents' Arguments: The respondents (workmen) argued that they had been working continuously since 2006, were qualified for positions like Lower Division Clerks, and performed perennial nature of work. They contended that the contract with the outsourcing agencies was a sham and that the petitioners exercised direct control over their employment, supported by documentary evidence like ID cards and experience certificates issued by CGHS. They relied on principles of regularization for long-serving employees.