Bombay High Court: Petitioners not entitled to claim wages as per the Memorandum of Settlement on the ground of M/s. Shipping Services being a sister concern of M/s. Damani Shipping Pvt. Ltd. without proving integrality of them.
Title: Dattu Shankar Dhumal & Ors. v. The Director, M/s. Damani Shipping Pvt & Anr.
Decided on: 25 August 2023
WRIT PETITION NO. 11047 OF 2022
CORAM: CORAM: SANDEEP V. MARNE, J.
Facts:
The case revolves around a petition challenging an award issued on August 28, 2019, by the Central Government Industrial Tribunal-II (Tribunal). The award in question rejected a reference made by the petitioners, who were seeking an enhancement of wages to be on par with the wages revised as per the Memorandum of Settlement (MoS) dated April 29, 2008, signed between the Bombay Customs House Agents Association and Transport & Dock Workers Union. The petitioners were members of Bhartiya Kamgar Karmachari Mahasangh. Respondent No.1, M/s. Damani Shipping Pvt. Ltd., was a partnership firm engaged in freight brokerage and manpower services. Respondent No.2, Shipping Services, dealt with Clearing and Shipping Agent, Transport Contractor, and Supervision and Administration work. Both these companies were sister concerns.
Issues:
- Whether the petitioners were entitled to the enhanced wages as per the MoS, even though they were employed by Shipping Services?
- Who was the actual employer of the petitioners?
Contentions:
The petitioners contended that they were employed by M/s. Damani Shipping Pvt. Ltd. but were treated as employees of Shipping Services. They alleged that this arrangement was designed to avoid paying them higher wages as per the MoS. They argued that they had produced appointment orders from M/s. Damani Shipping Pvt. Ltd., which proved their initial employment by the latter. The petitioners also claimed that they were directed to work for various sister companies within the Damani family.
In their Statement of Claims, the petitioners further asserted that there could not be different conditions of service for workers under one roof. They maintained that despite being appointed by M/s. Damani Shipping Pvt. Ltd., they were listed as employees of Shipping Services with mala fide intentions. They sought remand of the proceedings to address this issue.
The respondents argued that the petitioners were indeed employees of Shipping Services, which was not a member of the Customs House Agents Association and therefore not bound by the MoS. They pointed out that the petitioners had admitted receiving salary and benefits from Shipping Services. The respondents contended that the petitioners’ claim was not sustainable due to the lack of evidence supporting the functional integrality between the two companies.
The respondents further argued that the tribunal had properly considered all documents and evidence, including the petitioners’ appointment letters and other documents produced. They stressed that the petitioners had failed to establish that their services were utilized by M/s. Damani Shipping Pvt. Ltd. while being treated as employees of Shipping Services.
Decision:
The court considered the conflicting contentions presented by both parties. It acknowledged that there was a contradiction between the petitioners’ claims in their Statement of Claims and their subsequent arguments in the present petition. The court pointed out that the petitioners admitted in the present petition that they were employed by Shipping Services.
Given this admission, the court found that the petitioners’ reliance on an appointment letter from M/s. Damani Shipping Pvt. Ltd. was misplaced. The court noted that the evidence showed one of the petitioners had resigned from Shipping Services and his final settlement dues were also paid by Shipping Services, further confirming their employment there.
The court concluded that the petitioners failed to prove that they were employed by M/s. Damani Shipping Pvt. Ltd. or that there was functional integrality between the two companies. Therefore, the tribunal’s decision to reject the reference and deny the enhanced wages was upheld. The court dismissed the petition, emphasizing the contradictions in the petitioners’ claims and their failure to provide sufficient evidence to support their case.
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Written by- Aparna Gupta, University Law College & Dept. of Studies in Law