2018 (11) TMI 889 – UTTARAKHAND HIGH COURT – 2018 (19) G. S. T. L. 387 (Uttarakhand) – Deduction of GST and service tax from salary – Exploitation of the workmen by the State Government as well as local bodies – upgradation of honorarium/salary component from time to time as per the labour index – Held that:- The State must act like a Modal employer. Something which cannot be done directly cannot be permitted to be done indirectly. The agreement entered into between the UPNL and its employees is unconstitutional. Thus, violative of Articles 14 and 16 of the Constitution of India. The employees working through agency of UPNL, deployed by the State Government and local bodies are entitled to at least minimum of pay-scale, which is being paid to their counterparts on the principle of “Equal Pay for Equal Work.” The employees sponsored through UPNL are working without being regularized for decades together. It amounts to begaar.
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In the instant case also, the arrangement made by the
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dvocate General for the State. Per: Hon ble Rajiv Sharma, J. Uttarakhand UPNL Savinda Karamchari Sangh through its General Secretary has filed Impleadment Application No.16484 of 2018 highlighting therein the exploitation of the workmen by the State Government as well as local bodies. It is stated in the application that though, the workmen are being paid the honorarium of ₹ 8,400/-, however, the GST @18% and 2.5% Service Tax are also deducted from their salary. It is also highlighted that the administrative, disciplinary and financial control on each and every employee is of the establishment, in which, they are working. They are discharging the same duties which are being discharged by their counterparts. There is only a meager increase in their honorarium from time to time. 2. In view of the aforesaid facts, the impleadment application is allowed. 3. The State Government was directed to apprise the Court on the following aspects vide order dated 29.08.2018:- i. Whether there i
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difficulties faced by them. 4. In sequel to the directions issued by this Court, the State Government has filed the comprehensive affidavit. According to the averments made in the affidavit, the employees have been engaged in the various Government Departments and other institutions/corporations/local bodies etc. through outsource. The Government of Uttarakhand issued G.O. dated 12.06.2013 by which after fixing the categories of the officers/personnel, the honorarium was also fixed for the employees engaged through outsourcing. The honorarium of the personnel sponsored through UPNL was revised on 10.05.2018. The honorarium has been increased to ₹ 8,400/-. 5. A copy of Memorandum and Articles of Association was placed on record by learned Amicus Curiae for the petitioners. 6. On 09.06.2016 and 05.07.2016, the Government has taken a decision to sponsor the Ex-Army personnel and their dependants through UPNL only. 7. To the queries raised by the Court, it is stated that the persons
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stage to take into consideration the Memorandum and Articles of Association of Uttarakhand Purv Sainik Kalyan Nigam Limited (as amended vide extraordinary General Meeting held on 01.09.2015). The main objects of the company are to provide employment/self employment to Ex-servicemen and their dependants and in case suitable Ex-servicemen/their dependants are not available, employment can be provided to others to meet the requirements of Principal Employer. 11. Thus, it is evident that it is only when suitable Ex-servicemen/their dependants are not available, then the employment could be provided to others to meet the requirements of Principal Employer. 12. The main object of the company is also to provide financial assistance to the ex-servicemen, their dependants, family members of ex-servicemen including imparting them necessary training. 13. The Contract Labour Abolition and Contract Act, 1970 was in force in the State of Uttar Pradesh. The same is also now in force in the State of
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the local authority, as the case may be, may specify in that behalf. 17. It is evident from the Memorandum and Articles of Association of UPNL, the UPNL was required to provide employment/self-employment to Ex-servicemen and their dependants and in case suitable Ex-servicemen/their dependants are not available employment can be provided to others to meet the requirements of Principal Employer. 18. The State Government in its own wisdom vide letter dated 09.06.2016 had directed that in future UPNL will sponsor ex-servicemen only and thereafter, vide letter dated 05.07.2016 UPNL has been allowed to sponsor dependants of ex-servicemen also. 19. The UPNL is neither registered under Section 7 of the Act nor it has got license as contractor under Section 12. 20. The UPNL has sponsored the names of thousands of employees for engagement by State Government. The funds are provided by the State Government. The disciplinary control is also of the State Government. The agency of UPNL has been used
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the Constitution of India. The employees working through agency of UPNL, deployed by the State Government and local bodies are entitled to at least minimum of pay-scale, which is being paid to their counterparts on the principle of Equal Pay for Equal Work. The employees sponsored through UPNL are working without being regularized for decades together. It amounts to begaar. 24. The State Government while filing the affidavit has overlooked Section 2(i)(iv) and 2(z) of the Industrial Disputes Act, 1947. 25. In AIR 1964 SC 355, in the case of M/s Basti Sugar Mills Ltd. vs. Ram Ujagar & others , the Constitution Bench of Hon ble Supreme Court has held as under:- 6. Section 2(i) of the Act contains an inclusive definition of employer. The effect of sub-clause (iv) of Section 2(i) is that where the owner of any industry in the course of or for the purpose of conducting the industry contracts with any person for the execution by or under such person of the whole or any part of any work
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d or unskilled, manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied are by themselves sufficiently wide to bring in persons doing work in an industry whether the employment was by the management or by the contractor of the management. Unless however the definition of the word employer included the management of the industry even when the employment was by the contractor the workmen employed by the contractor could not get the benefit of the Act since a dispute between them and the management would not be an industrial dispute between employer and workmen. It was with a view to remove this difficulty in the way of workmen employed by contractors that the definition of employer has been extended by sub-clause (iv) of Section 2(i). The position thus is: (a) that the respondents are workmen within the meaning of Section 2(z), being persons employed in the industry to do manual work for reward, and (b) they were employed
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a person of his fundamental right, in this case the right to life, must conform to the norms of justice and fair play. Procedure, which is unjust or unfair in the circumstances of a case, attracts the vice of unreasonableness, thereby vitiating the law which prescribes that procedure and consequently, the action taken under it. Any action taken by a public authority which is invested with statutory powers has, therefore, to be tested by the application of two standards: the action must be within the scope of the authority conferred by law and secondly, it must be reasonable. If any action, within the scope of the authority conferred by law, is found to be unreasonable, it must mean that the procedure established by law under which that action is taken is itself unreasonable. The substance of the law cannot be divorced from the procedure which it prescribes for, how reasonable the law is, depends upon how fair is the procedure prescribed by it. Sir Raymond Evershed† says that, fr
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g dearness allowance is arbitrary and unreasonable. 30. The employees have a legitimate, statutory and fundament rights to be regularized. The workmen are being paid meager honorarium and out of the same, GST and Service Tax are also deducted. Every workman is entitled to living and fair wage to make both ends meet. The UPNL has not obtained the license as Contractor nor has registered under the Act qua most of the departments and local bodies. 31. Salary is the property within the meaning of Article 300-A of the Constitution of India. No GST or Service Tax can be deducted from the salary of the petitioners without any authority of law. 32. It is reiterated that the Principal Employer is the State Government. The master-servant relationship exists between the State Government and its employees, even though sponsored by the UPNL. The employees sponsored by UPNL are discharging similar duties which are being discharged by their counterparts. They are qualified and fulfill other eligible
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