1st SURANA & SURANA & SCHOOL OF LAW, RAFFLES UNIVERSITY

LABOUR LAW MOOT COURT COMPETITION 2018

SOL, Raffles University Surana & Surana
Neemrana 16 – 18 February 2018 International Attorneys

Moot Proposition

1. Unnati Industrial Corporation (UIC) is a Public Sector Undertaking of the Government of

India, under the administrative control of Ministry of Corporate Affairs. It is also listed on
national Stock Exchange. UIC employs more than 5000 employees and workers in its
complex named ‘Unnati Complex’. The complex provides services like canteen-cum-food
court facility (Canteen) to all those who work in the complex. UIC is responsible for
providing facilities like furniture and electricity (for which the UIC pays bill), water supply,
water purifier, centralized Air Conditioning etc. This canteen is run by a contractor named
Bhola Prasad under the supervision of UIC Canteen and Management Committee
(Committee) through a written understanding. The committee ensure the smooth functioning
for anyone who avails the canteen services. A total of 18 workers (4 of which are permanent
workmen of UIC) work in the canteen regularly.

2. With an objective of providing quality education in the vicinity to the children of officers and
workers of UIC, the UIC has setup a recognized educational institution within the acquired
area near Unnati Complex named as Unnati Shiksha Kendra. The school also provides 25
percent reservation in the total number of intake for the outsiders.

3. On August 10th 2017, Bhola Prasad submitted a written memorandum before the management
of the UIC along with the government notification for charging Goods and Services Tax
(GST) on the canteen items mentioned in the notification with effect from July 1st 2017.
Bhola Prasad made a submission that he is not willing to pay GST as he is not able to make
any profit by selling the goods, and providing services at a higher rate than before. The
Committee however, was adamant that the price should not increase form the existing and
the contractor must sell the goods and provide the services at the same rates as before.
Providing food services at higher rates after the implementation of GST would be against the

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 principles based on which the canteen was established, (i.e. to provide quality food to the
workers and employees of UIC at cheap rates). Pursuant to this refusal, Bhola Prasad shut
down the canteen and apprise about uncooperative and irresponsible attitude of the workers
against the UIC in general and Committee in particular to show-case a situation that because
of the workers hesitation he is forced to shut it down. He convinced the workers that he would
not be able to re-open the canteen and pay the wages due to rise in prices which caused to
shrink his profit margin to nearly zero. Therefore, UIC must pay the GST to restore the
situation.

4. On August 13th 2017, the workers of the canteen went for two weeks flash strike raising the
issue that the canteen workers are unemployed due to the unsolved dispute between the
contractor and the UIC. They also raised their concern regarding payment of lesser wages as
compared to the other Class 4 employees of the entire UIC unit. This compelled the
management of UIC to have a meeting with the elected representatives of the registered Trade
Union (Union) of the canteen workers. Following the meeting, the management sanctioned
an order to terminate the services of three of the workers. Having aggrieved by the said order,
the matter reached to the Industrial Tribunal by following the appropriate procedure on
October 24th 2017.

5. The points raised by the Union are:

a. That UIC must pay the GST and free Bhola Prasad from this obligation so that the
canteen may continue of functioning smoothly as of the earlier times.

b. That UIC in its premises is providing the services such as furniture, electricity, water
supply, water purifier, centralized Air Conditioner etc. and electricity bill is also paid
by UIC itself. Hence, it is prayed that all the workers of the canteen cum food court
may also be made permanent employees of Unnati Industry as it is an innate part of
the corporation. Hence the control and supervision over the canteen is governed by
Canteen and Management Committee.

c. That workers whose services are terminated are the workmen of UIC hence they must
be reinstated.

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 d. That 4 out of 18 workers are already permanent employees of the UIC therefore, the
treatment awarded to the remaining 14 workers is discriminatory in respect of the
employment under Article 14 and Article 16 of the Constitution of India.

The tribunal through its award directed UIC to reinstate the employment of the terminated
workmen and also ordered to make their employment permanent. Hence, they shall be
awarded the wages that are paid to all other workmen falling under Class 4 employees of the
UIC. The award was challenged by the UIC in the Hon’ble High Court of Zafhisthan (High
Court).

6. The matter was taken by the means of writ of certiorari praying for quashing the proceedings
which took place before the Industrial Tribunal. A single judge bench of High Court affirmed
the findings of Industrial Tribunal and directed the UIC authorities to implement the award
of the Industrial Tribunal with immediate effect.

7. The single judge bench of the High Court in the view of UIC erred by concluding that the
Industrial Tribunal’s Award was valid. Further the matter reached to the Divisional Bench of
the High Court which decided the case in favor of the UIC on the basis of the following
points:

a) Canteen workers are not the employees of the UIC but of the contractor. The UIC is
not substantially controlling and supervising the UIC is merely providing the basic
facilities needed to run a canteen in its premises.

b) Based on ‘a)’, the workers shall not be given the wages as per the norms of the UIC
set for paying wages to Class 4 employees.

c) The reinstatement order by the Industrial Tribunal which was later on affirmed by the
single judge bench of this High Court shall be quashed.

The Union has finally decided to file a Special Leave Petition (SLP) before the Hon’ble
Supreme Court.

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8. It is evident that the Union upon discussing with the Committee brought up the issue of
canteen employing 4 child workers, two of the age 12 and other two of the age 13 years and
8 months and 13 years 5 months respectively along with above mentioned issues. When the
State Government of Zafhistan referred the dispute to the Industrial Tribunal, it asked the
Tribunal to confine its adjudication only on the points of the nature of the employment of the
canteen workers and wages to be paid and reinstatement if made. The issue regarding ‘child
labour’ and that who should bear the burden of GST raised by the Union before the
management are not referred to the Tribunal as it is thought that the Tribunal is not the
appropriate forum. Therefore, the Tribunal was silent on this issue.

9. The Union then, was forced to take the recourse of filing a writ before the Hon’ble Supreme
Court raising the issue that the State Government of Zafhistan is ignoring the matter of child
labour on purpose for favouring the UIC. In a separate writ before the Hon’ble Supreme
Court, the Union raised the issue of burden of payment on UIC as per the law governing
imposition of GST.

10. The Hon’ble Supreme Court for the sake of brevity decided to club the SLP and both the
writs filed before the court on separate occasions. A 5-judges-bench has been formed to
decide on the merits of the case and serve the justice.

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