Outsourcing Factory Canteen with 250 or more workers are not justified : Supreme Court
In 2011, the Karnataka Employers’ Association led by B C Prabhakar challenged the order of the state government.
Outsourcing Factory Canteen with 250 or more workers are not justified : Supreme Court
The Supreme Court on Thursday upheld the Karnataka High Court’s order allowing employers in factories with 250 or more workers, to outsource the running of the canteen by engaging contractors or service providers.
A bench of Justices P S Narasimha and Manoj Misra dismissed a special leave petition filed against the High Court’s decision of March 24, 2011.
With the decision, managements of an establishment are permitted to engage contract labourers in the canteen provided and maintained at the factories employing 250 or more workers.
A factory employing 250 or more people is required by Section 46 of the Factories Act to provide and maintain a canteen. The majority of employers had contracted out the operation of the factory canteen to contractors or other service providers.
The Karnataka government issued a notification in 1997 outlawing the use of contract labor in industrial canteens.
More than 700 factories in the state were forced to end their arrangement with the contractor to run the canteen. In essence, the impact was that management was responsible for personally providing and maintaining the factory canteen.
Following a challenge to the notification, a division bench dismissed all writ petitions filed by the managements of several of the enterprises in March 1998. In 2011, the Supreme Court denied both a special leave petition and a review petition.
Following that, on the representation of the Karnataka Employers Association, the state government reversed the prior notification, which hindered investment in the state because there was no bar for outsourcing canteen at the factory in adjacent states.
A single judge bench granted a writ suit filed by trade unions challenging the legitimacy of the subsequent notification. However, the division bench supported the state government’s action.
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