Difference between revisions of "International Airport Authority of India v. International Air Cargo workers union and others INSC 722 13th April 2009"

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International Airport Authority of India v. International Air Cargo Workers’ Union and Anr.

                                                              …on the 13th of April, 2009.


Introduction: This case is of Civil Appellate jurisdiction and was brought into the Supreme Court of India by appellant_ International airport authority of India. The respondents being International Air Cargo workers’ Union and others.

This appeal by special leave is filed against the judgment and order dated 12.11.2001 passed by the High Court of Madras in Writ Appeal No.544/1998 reversing the order dated 15.12.1997 passed by a learned Single Judge In Writ Petition No. 6126 of 1995 and restoring the award dated 23.12.1994 passed by the Industrial Tribunal, Madras in ID NO.65 of 1991. The case has a chequered history and has come up after several rounds of litigations.

Facts: The International Airport Authority of India employed the International Air Cargo Association for handling its ground business of import. The International Airport Authority of India (IAAI for short), was established under the International Airports Authority Act, 1971. It established a cargo complex at Madras in the year 1978. Under an agreement dated 30.1.1978, it granted a license to a private company known as M/s. Airfreight Private Ltd. to be its ground handling agent in respect of export, import, and transshipment cargo consignments. Under the said agreement, Airfreight was to receive payment from the owners of the cargo for the work done, had to engage the services of the required number of workers for handling the cargo, and be responsible for payment of wages to the workers. In the year 1985, IAAI decided to take over the ground handling work and entrust it to a new licensee. The workers (loaders and packers) employed by Airfreight in connection with the ground handling workers, who were likely to be retrenched/discharged, appealed to IAAI to provide them employment. This was the first round of litigation. A writ petition was filed by the workers in the year 1885. As a result of this writ appeal, a separate co-operative society was formed which was registered under the name and style of `Airport Industrial Co-operative Service Society Ltd.' The second round continued when The Airfreight Workers Union and the society, filed Writ Petition in the year 1986 seeking a direction to IAAI to hand over the ground handling work at the Madras Airport Cargo Complex to the society, on terms to be mutually agreed or in the alternative absorb the ex-employees of Airfreight on its permanent rolls and till then maintain status quo. During the pendency of the said writ petition, an agreement was made. The agreement confirmed that the settlement had been arrived at without any pressure from either side, in mutual interest, for the smooth operation of the cargo complex. Because of it, the petition was dismissed as withdrawn. In the third round, a few other clauses were agreed upon regarding the scope, salary, supervision, and span of workers. The society entered into a fresh agreement in the year 1987. Two additional writs were filed by the association in the years 1990 and 1994 which were dismissed because a writ for similar relief was rejected earlier. There are a total of 7 rounds in this case-the seventh being the current.

Case Summary: The case deals with the question of whether Contract workers qualify as Direct employees. And it is thus being established in the decision given by The Supreme Court in International Airport Authority of India v. International Air Cargo Workers' Union ((2009) 13 SCC 374). Here, the supreme court explained the expression, 'Exercise of control and supervision'. The Court held that "If the contract is for the supply of labor, necessarily, the labor supplied by the contractor will work under the directions, supervision, and control of the principal employer but that would not make the worker a direct employee of the principal employer, if: (i) the salary is paid by a contractor;(ii) the right to regulate the employment is with the contractor; and (iii) the ultimate supervision and control lie with the contractor. The principal employer only controls and directs the work to be done by contract labor, when such labor is assigned to him. But it is the contractor as an employer, who chooses whether the worker is to be assigned/ allotted to the principal employer or used otherwise. In short, a worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is a secondary control. The primary control is with the contractor.”

Principal employers need to be conscious of the two-part test while employing contract laborers. To avoid such claims, a detailed contract for the supply of contract labor should be in place between the principal employer and the contractor. Further, the contract should explicitly lay down the rights and obligations of the principal employer and the contractor, for instance, who shall pay the employed contract laborers. All steps should be taken to ensure that the ultimate supervision and control over the contract laborers rest with the contractor.