Dharangadhara Chemical Works Ltd. v. State of Saurashtra
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Citation: AIR 1957 SC 264
Facts
Dharangadhara Chemical Works Ltd. (the appellant) employed certain agarias at their salt works. The dispute arose regarding the conditions under which the agarias should be engaged by the appellant in the manufacture of salt. Therefore the dispute was presented before the Industrial Tribunal.
Appellant Contentions
- The agarias were independent contractors and not workmen on the ground that the agarias had power to engage extra labour therefore the State was not competent to refer the present case for adjudication under Section 10 of the Industrial Dispute Act.
Issue
- Whether the agarias are workmen within the meaning of the Industrial Dispute Act, 1947?
Case History
- The Industrial Tribunal favoured the respondent (Agarias) while holding that the Agarias are workmen within the meaning of the Act.
- The Labour Appellate Tribunal also while dismissing the appeal favoured the respondent.
- High Court: dismissed appeal therefore the appellant approached the Supreme Court.
Judgement
- The Supreme Court of India had to determine the nature of the employment relationship. The Court emphasized that the determination of whether a person is an employee or an independent contractor depends on the degree of control and supervision exercised by the employer over the work performed.
- The essential test to determine the relationship is the existence of the right to control and supervise the manner in which the work is performed.
- In this case, it was found that the agarias were subject to significant control and supervision by the company. The company provided the tools and materials for the work, specified the work procedures, and had the authority to dismiss the workmen for unsatisfactory performance.
Conclusion
The Supreme Court concluded that the agarias were indeed employees of Dharagadhara Chemical Works Ltd. and not independent contractors. Consequently, they were entitled to the benefits and protections provided under the Industrial Disputes Act, of 1947.
