ENGAGEMENT OF GUARDS IN MAHARASHTRA THROUGH SECURITY AGENCIES: REGULATION OR ABOLITION?

The enforcement regime under the Maharashtra Act and Maharashtra Scheme is a classic example of aberration from the letter and spirit of the law due to which several establishments are becoming wary of engaging security guards through third party agencies…

The practical challenges faced by several establishments in the State of Maharashtra in relation to engagement of security guards through private security agencies have drawn attention to the seemingly confusing jurisprudence that has developed around the law, leading some to even believe that such kind of arrangement is prohibited even though such prohibition is not expressly envisaged. In this context, the authors review the framework of the law, examine the limited jurisprudence there under, and share practical experiences of establishments seeking to obtain security services through third parties.

Framework of the law on engagement of security guards

The State of Maharashtra has enacted the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 (Maharashtra Act) read with Private Security Guards (Regulation of Employment and Welfare) Scheme, 2002 (Maharashtra Scheme). Interestingly, at the Central level, Parliament enacted the Private Security Agencies (Regulation) Act, 2005 (PSARA), which deals with regulation of the business of private security agencies. While PSARA provides for licensing of such agencies (including the eligibility criteria for obtaining the license), the eligibility criteria for becoming a private security guard, and the conditions to be complied with by a private security agency to retain the license, it does not discuss the aspect of engagement of private security guards by an establishment through private security agencies or the terms and conditions of employment / engagement of such security guards.

In that sense, the Maharashtra Act (including Maharashtra Scheme) is a unique legislation, and other states largely have not come up with a law of this nature. The law deals with grant of exemption to security guards (so that they may be engaged by private security agencies), registration of principal employer and private security agencies (being the immediate employers), and terms and conditions of employment / engagement of such security guards.

Prima facie and this is where the enforcement mechanism tends to depart from the text of the statute – the law envisages three kinds of security guards in the state viz. (a) security guards registered with the Security Guards Board for Brihan Mumbai and Thane District (Board), (b) security guards of an employer agency registered with the Board; and (c) security guards directly employed by an establishment (reference Clause 28(1) of Maharashtra Scheme).

When an establishment seeks to engage private security guards through a private security agency and accordingly enters into a manpower services agreement with such agency, the private security agency, either by itself or through its security guards, applies to the Board for granting an exemption to the concerned security guards. The exemption is granted not to the agency but to the security guards, and the intent of the same is to enable the security guards to be employed by the private security agency for further deployment at the principal employer's premises. Within 15 days from the date of publication of the state government's notification regarding exemption of its security guards, the contractor i.e. private security agency is required to get itself registered with the Board (reference Clause 13(2) of Maharashtra Scheme). The same timeline applies to the principal employer to get itself registered with the Board (reference Clause 13(1) of Maharashtra Scheme read with the notification dated 9 June 2016 issued by the Industries, Energy and Labour Department, Government of Maharashtra). Every security guard who is exempted in the manner discussed above is required to get himself registered with the Board within 2 months from date of publication of such notification.

Jurisprudence Around Engagement Of Security Services Through Third Parties

From a bare reading of the provisions cited above, one would infer that the law does envisage a possibility where an establishment can obtain security services through third parties in Maharashtra. The limited jurisprudence evolved around the law also points towards the availability of such choice with an entity (principal employer). Reference may be made to the observations of the Bombay High Court in Karantikari Suraksha Rakshak Sanghatana v State of Maharashtra [2006 (6) BomCR 673], as below:

"There are different classes of security guards contemplated under the Act. Those who are directly and regularly employed by the factory or establishment, those who are engaged at the factory or establishment through the Board and those who are employed through the security agencies but deployed at the factory and/or establishment. Their status is different and the relationship with their employers is on a different footing. Whereas the directly employed Security Guard will get his wages and service benefits from the employer of the factory or the establishment, the one who is engaged through the Board, will get them from the Board. The recruitment and the disciplinary authority in their case will be the employer of the factory or establishment or the Board, as the case may. It is now clarified that as far as security guards engaged through the security agencies are concerned, they will be treated as employees of the security agencies for all purposes. Their wages and service conditions will depend upon their contract with the security agencies. Although all the three categories of employees work as security guards, they work under different employers."

In view of the above, it can be said that by obtaining the services of security guards through private security agencies, an entity is not in violation of the law. Having said that, significant confusion has been caused by the wording of Clause 25(2) of the Maharashtra Scheme. The said clause states that a registered principal employer shall not employ a security guard other than a security guard who has been allotted to it by the Secretary of the Board (unless a security guard is directly employed on the payroll of the principal employer). Read in isolation, the clause may lead one to infer that a principal employer, once registered, cannot engage security guards through a private security agency.

One of the fundamental canons of interpretation of statutes is that a law should be read in its entirety. Clause 25(2) of the Maharashtra Scheme, accordingly, must be read with the other provisions of the scheme as well as the provisions of the Maharashtra Act, in order to decipher the possible intent of the restrictions envisaged therein. The Maharashtra Act defines a 'security guard' or a 'private security guard' as a person who is engaged 'through any agency or agent or Board' to do security work or watch and ward work in any factory or establishment. The use of the word 'or' in the definition makes it clear that an establishment need not necessarily engage security guards from the Board and could obtain their services from a security agency. Further, Clause 13(1) of the Maharashtra Scheme envisages registration of 2 kinds of principal employers viz. (a) principal employer that engages registered security guards of the Board, and (b) principal employer that engages security guards of employer agencies (whose security guards are granted exemption by the state government). Therefore, until the framework of the Maharashtra Act and the Maharashtra Scheme is fundamentally altered, it may be difficult to hold the view that a registered principal employer cannot obtain security services through a third party that has duly obtained required registration for itself and exemption for its security guards. Reading all provisions together, it may be said that Clause 25(2) of Maharashtra Scheme seems to be covering situations where a registered principal employer seeks to engage guards through agencies which have not been able to obtain exemption from the state government for the purpose of deployment of their guards at the principal employer's premises.

Observations

Notwithstanding the understanding of the law as set out above, the Board has initiated several prosecutions under Maharashtra Act and Maharashtra Scheme against establishments in the state for engaging guards through agencies and not through the Board, and it has also managed to be successful in its pursuit. Unfortunately, the orders passed in favour of the Board and available in the public domain do not seem to be examining the provisions of Maharashtra Act and Maharashtra Scheme other than Clause 25(2).

In view of the above, authors view the enforcement regime under Maharashtra Act and Maharashtra Scheme as a classic example of aberration from the letter and spirit of the law. As a result, several establishments are becoming wary of engaging security guards through third party agencies, which in turn is causing an adverse impact on the operations of such agencies and the guards employed by them. It is hoped that the state government takes cognizance of the matter and initiates necessary legislative and / or executive action in this regard.

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.