Hussain Bhai v. Alath Factory Employees Union (1978) 4 SCC 257

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  • There is a factory owner manufacturing ropes. A number of workmen were engaged to make ropes from within the factory, but those workmen were hired by contractors who had executed agreements with the owner to get such work done. Therefore, the owner contended that the workmen were not his workmen but the contractors’ workmen.
  • The work done by these workmen was an integral part of the industry concerned. The raw material was supplied by the Management. The factory premises belonged to the Management. The equipment used also belonged to the Management and that the finished product was taken by the Management for its own trade. The workmen were broadly under the control of the Management and defective articles were directed to be rectified by the Management. Even cases where this impressive array of factors were not present, would have persuaded an industrial court to the conclusion that the economic reality was employer-employee relationship and, therefore, the industrial law was compulsively applicable.
  • Where workers labour to produce goods or services and these goods or services are for the business of another, that other is in fact the employer. He has economic control over the workers’ subsistence, skill, and continued employment. He is in a position to lay-off the worker. If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefit and satisfaction of an enterprise, the absence of direct relationship or the presence of contractors or the make-believe trappings of detachment from the Management cannot snap bond. The liability cannot be shaken off.

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