Case Brief: Indian Oil Corporation Limited v. Narendra Singh Shekhawat & Anr.

INTRODUCTION

“The Rajasthan High Court’s ruling on August 18, 2023, in the case of Indian Oil Corporation Ltd vs Shri Narendra Singh Shekhawat and related matters addresses the frequently litigated issue of the legal status of individuals in training under the Apprentices Act, 1961, and their potential claims under the Industrial Disputes Act, 1947”. The primary contention revolved around a decision made by the Central Government Industrial Tribunal-Cum-Labour Court in Jaipur. This decision mandated that Indian Oil Corporation Limited (IOCL), the petitioner, reinstate the respondents as ‘workmen’. IOCL contested this award, arguing that the respondents were only employed as ‘apprentices’ for a limited duration of 11 months under a special training scheme governed by apprenticeship agreements. Their argument was that, as per “Section 18 of the Apprentices Act, 1961, apprentices are to be considered trainees rather than workmen. Therefore, general labour laws like the Industrial Disputes Act, 1947”, do not pertain to them, which renders any involvement of the Labour Court beyond its jurisdiction. On the other hand, the apprentices contended that they performed the duties of workmen and that their apprenticeship contracts were a pretense used by IOCL to employ them without providing the rights of regular employees. In determining the status of apprentices, the judgment stresses the hierarchical relationship between the special law (Apprentices Act, 1961) and the general law (Industrial Disputes Act, 1947).

FACTS

This case involves multiple individuals, including “Shri Narendra Singh Shekhawat, Shri Chanda Ram Meena, and Shri Ram Kishan Meena. Their names were put forward by the Jaipur Employment Exchange for an 11-month training period at Indian Oil Corporation Limited’s (IOCL) Company Owned & Company Operated (COCO) Retail Outlet. An apprenticeship agreement was signed for each respondent, outlining the training terms. Under these conditions, training for 11 months was mandated, with a monthly pay of Rs. 1664/-. It was explicitly stated in the contract that the engagement was solely for training and did not constitute employment, with no employer-employee relationship arising during the training period. It was also stated that IOCL was not obliged to employ the trainees after they completed their training successfully, although they would receive training certificates. The 11-month apprenticeship training was completed by the respondents, who accepted these conditions.
After the fixed 11-month period was completed, their apprenticeship ended automatically. The respondents subsequently approached the Central Government Industrial Tribunal-Cum-Labour Court in Jaipur and submitted an industrial dispute. It was claimed that they had been employed as laborers or petrol fillers (Shri Narendra Singh and Shri Chanda Ram since 02.06.2000, and Shri Ram Kishan since 07.12.2001), had worked over 240 days, and that their services were unlawfully terminated without adhering to the requirements of Sections 25F and 25H of the Industrial Disputes Act, 1947. IOCL contested this in the Tribunal, denying any employer-employee relationship and asserting that they were trainees. The Tribunal found the respondents to be workmen who had worked over 240 days, deemed their termination illegal, and mandated their reinstatement with continuity of service and payment of back wages at a rate of 50%”. Through writ petitions, IOCL challenged this award in the Rajasthan High Court.

ISSUE RAISED

• The legality of referring to individuals engaged in formal apprenticeship agreements with their employer under the Apprentices Acts, 1961 as ‘workmen’ according to the definition in “Section 2(s) of the Industrial Disputes Act, 1947”. 
• Whether individuals whose employment is governed by the specific provisions of the “Apprentices Act, 1961”, are subject to the provisions of the “Industrial Disputes Act, 1947”, which is a general labour law. 
• Whether the Central Government Industrial Tribunal-Cum-Labour Court had the necessary legal authority to hear and resolve a dispute brought by individuals who were acknowledged to be working as apprentices under the “Apprentices Act, 1961”.
• Whether the Industrial Tribunal erred in its factual determination that the respondents were workmen under the “Industrial Disputes Act, 1947”, despite the existence of apprenticeship agreements and the clear legal distinction established by the “Apprentices Act, 1961”.

PETITIONER’S ARGUMENTS

The petitioner, Indian Oil Corporation Limited (IOCL), strongly argued that the respondents were employed solely as ‘apprentices’ under the Apprentices Act, 1961, for a limited training duration of 11 months. They highlighted that the apprenticeship agreements explicitly defined the relationship as one of training rather than employment, dispelling any expectations of subsequent absorption. The primary legal argument presented by IOCL hinged on “Section 18 of the Apprentices Act, 1961”. This section clearly states that apprentices are to be considered trainees rather than workers and that no provisions in any existing labour laws apply to apprentices.

IOCL argued, citing Supreme Court precedents like U.P. State Electricity Board v. Shiv Mohan Singh, that the Apprentices Act of 1961 is a special law that takes precedence over the general provisions of the Industrial Disputes Act of 1947 in cases of inconsistency. Consequently, they claimed that the Industrial Tribunal lacked the authority to consider the respondents’ claim under the Industrial Disputes Act, as matters concerning the status of apprentices and related issues are exclusively governed by the Apprentices Act, 1961.

RESPONDENT’S ARGUMENTS

The respondents countered the petitioner’s arguments by asserting that their actual work role was that of ‘workmen’, irrespective of the ‘apprentice’ label in the agreement. They contended that their role involved filling petrol, and that they carried out duties typically performed by workmen rather than merely training. The respondents argued that IOCL employed apprenticeship contracts as a means of unfair labor practice to deny them the rights and benefits of permanent workers. Their argument was based on the definition of ‘workman’ in “Section 2(s) of the Industrial Disputes Act, 1947”, which states that ‘workman’ includes “any person (including an apprentice) employed in any industry”. They contended that this definition encompassed them within the ID Act’s scope.

“The respondents maintained that they had completed over 240 days of service and that their dismissal was illegal because it did not adhere to the necessary procedures outlined in Sections 25F and 25H of the ID Act, a point the Labour Court correctly affirmed. Their argument was that the Tribunal’s determination of fact regarding their status as workmen involved an assessment of the evidence and, per Article 226, was beyond the High Court’s ability to alter”.

JUDGEMENT

Justice Anoop Kumar Dhand and the Rajasthan High Court ruled in favor of Indian Oil Corporation Limited, the petitioner. The Court examined the legal issue of the applicability of either the “Apprentices Act, 1961, or the Industrial Disputes Act, 1947”. Considering the Supreme Court’s authoritative ruling in “U.P. State Electricity Board v. Shiv Mohan Singh”, the High Court determined that the Apprentices Act, 1961, is a special law governing the relationship and status of apprentices, and its provisions take precedence over the general provisions of the Industrial Disputes Act, 1947.

The Court noted that “Section 18 of the Apprentices Act, 1961” clearly states that apprentices are considered trainees, eliminating any doubt about the non-application of labor legislation to them. Consequently, the Court ruled that the respondents, as apprentices covered by the 1961 Act, should not be classified as ‘workmen’ under the “Industrial Disputes Act of 1947”. The Court determined that the Industrial Tribunal acted unjustifiably in assuming jurisdiction and issuing an award under the Industrial Disputes Act, as disputes concerning apprentices fall outside its jurisdiction and should be resolved through the mechanisms specified in the Apprentices Act, 1961, specifically via the Apprenticeship Adviser as outlined in Section 20.

CONCLUSION 

The Rajasthan High Court case Indian Oil Corporation Ltd vs Shri Narendra Singh Shekhawat clarifies and confirms the long-standing legal principle that an apprentice hired under the Apprentices Act, 1961, is not considered a ‘workman’ under the Industrial Disputes Act, 1947. The High Court, relying significantly on the Supreme Court precedent established in “U.P. State Electricity Board v. Shiv Mohan Singh, affirmed that the special law (Apprentices Act, 1961) takes precedence over the general law (Industrial Disputes Act, 1947) when determining the rights and status of apprentices”. The Court’s decision serves as a definitive directive that apprentices, as outlined and governed by the 1961 Act, are trainees engaged in skill acquisition rather than workers to whom general labor laws apply, as explicitly stated in Section 18 of the Apprentices Act.

The ruling emphasizes that the inclusion of the term “apprentice” in the definition of “workman” in “Section 2(s) of the Industrial Disputes Act, 1947, does not extend the applicability of the ID Act to apprentices governed by the Apprentices Act, 1961”. The specific provisions of the special law regarding apprentices’ status and the non-applicability of other labor laws take precedence. The Industrial Tribunal’s assumption of jurisdiction and the reinstatement order under the Industrial Disputes Act were deemed legally unsustainable. The case affirms the legal principle that apprentice disputes, when presented for resolution, must be addressed according to the specific provisions of the Apprentices Act of 1961 rather than through the general adjudicatory processes outlined in the Industrial Disputes Act. The High Court ruling assists in maintaining the legislative intent behind enacting a separate statute for regulating apprenticeship training.