Workmen of the Canteen of Coates of India Ltd v. Coates of India Ltd. (2004) 3 SCC 547

Main Question: Are contractor-run canteen workers on a factory campus the company’s own workmen?

Answer: No. The Supreme Court held they are contractor’s employees. Coates did not directly appoint them and did not exercise supervisory control over them.

• Do canteen workers become company employees just because they work inside the premises?
• Does the Factories Act canteen requirement automatically make the company the employer?

Two essentials to fix employer status: (1) Direct appointment by the company, and (2) supervisory control by the company over the workers. If both are missing, they are not the company’s workmen.

Note: A statutory duty to run a canteen does not by itself decide employment status.

The Supreme Court held that the canteen workers were not workmen of Coates of India Ltd. They were employees of the contractor who ran the canteen. Neither direct appointment nor supervisory control by Coates was shown. The High Court’s view was affirmed.

Who hired? Who controls? Without direct appointment and company supervision, canteen staff engaged through a contractor remain the contractor’s employees, even if the canteen is on-site and required by statute.

• Guides factories using outsourced canteens on employer liability.
• Clarifies that premises + benefit alone don’t prove employment.
• Separates statutory obligation from employment status.

Mnemonic: “AD-C” — Appointment • Direction–Control.

1. Ask: Who appointed the worker?
2. Check: Who controls/supervises them?
3. Conclude: If neither is the company, status stays with the contractor.

Issue: Are contractor-run canteen workers the company’s workmen?

Rule: Employer identity depends on direct appointment and company’s supervisory control.

Application: Contractor hired, paid, and supervised staff; Coates lacked direct control; statutory canteen duty doesn’t change status.

Conclusion: Workers are employees of the contractor, not Coates of India Ltd.

Supervisory Control

Company’s power to oversee work, discipline, and set daily instructions.

Principal Employer

Entity legally treated as the employer for labour-law purposes.

Statutory Canteen

A canteen mandated by the Factories Act; may be run in-house or via contractor.

• Decisions on outsourced services in factories (canteens, security, housekeeping).
• Cases distinguishing principal employer from contractor in labour disputes.