Premium Transmission Private Limited v. Kishan Subhash Rathod  2026 INSC 122 - S.10 Industrial Disputes Act - CLRA

Industrial Disputes Act - Section 2 -Contract Labour (Regulation & Abolition) Act, 1970 - Section 2 - Though the definition of “workman” under Section 2(1)(i) of the CLRA is textually derived from Section 2(s) of the ID Act, 1947, the two differ fundamentally in their juridical scope and the structural basis of the employment between employer and employee. The definition under ID Act is broad, which includes persons dismissed, discharged, or retrenched in connection with an industrial dispute to ensure they retain locus standi for adjudication. The CLRA, being regulatory in nature, contains no such “extended meaning” for terminated employees. Furthermore, the CLRA introduces a specific statutory exclusion for “out-workers” whereas the ID Act does not have this specific statutory exclusion. Under the ID Act, the status of such workers is determined by the “Control and Supervision Test”. If the employer controls how the work is done, they may still be workmen under ID Act, even if working off-site. Under CLRA, they are statutorily barred from the definition. Finally, the ID Act presupposes a direct privity of contract (masterservant relationship) between the management and the worker, whereas the CLRA definition strictly operates through the medium of a contractor, covering workers hired “by or through” a third party for the establishment’s work. (Para 9)

Industrial Disputes Act - Section 10 - If a case falls within the second limb or Section 10(1) of the ID Act, the appropriate Government is within its jurisdiction to refer an apprehended dispute to the Labour Court. By applying the same rule of interpretation, it can be construed that the appropriate Government may refer an Industrial Dispute apprehended to the Board, Labour Court and Tribunal. (Para 34) Even if an unfair labour practice is alleged, the applicable statute is the ID Act and the forum, the labour court. In the case of sham and nominal contracts, adjudicatory reliefs of the status of workman vis-à-vis the principal employer are a sine qua non for any other relief. (Para 36) Remedies Available if Notification Under Section 10(1) is Issued for Abolition of Contract Labour: (1)The issuance of a Section 10 notification does not lead to the automatic absorption of contract workers as regular employees of the principal employer. (2) The immediate legal effect of such abolition is that the contract labour working in that specific process must cease to function in that capacity. The principal employer is prohibited from employing contract labour for that job thereafter. (3) The workers do not become unemployed immediately; they remain employees of the contractor. The contractor can utilize their services in any other establishment where contract labour is not prohibited-Remedies Available if the Contract is Continued as a “Camouflage” (Sham Contract): (1) If it is proved that the contract was a mere ruse or camouflage to hide the real employer-employee relationship and that the principal employer retained full control and supervision over the workers the contract is disregarded as a legal fiction (2) In such cases, workmen “will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour”. Unlike the Section 10 scenario, here the workers become direct employees of the company. They are entitled to back wages and benefits as if they were regular employees from the start (or a date determined by the Tribunal).(3) Determining whether a contract is “sham” or “genuine” involves disputed questions of fact (e.g., Who supervised the work? Who paid the wages? Who supplied the tools?). Therefore, only the Industrial Tribunal/Court can adjudicate the dispute. Writ Courts generally do not decide these disputed questions under Article 226 of the Constitution of India. (Para 10.2.3) Modes and Methods of re-employment if discontinuation of the contract is valid : If the principal employer intends to employ regular workmen for the work previously done by contract labour, they must give preference to the erstwhile contract labourers. (2) The principal employer cannot simply hire fresh candidates from the open market while ignoring the displaced contract workers. They are legally bound to consider the contract workers who were working in that establishment. (3) To ensure this "preference" is meaningful, the principal employer may relax maximum age limit and academic qualifications; specifically, nontechnical posts to accommodate experienced workers-

Legal Maxims - Ubi jus ibi remedium- Where there is a right, there is a remedy in law. (Para 35)