Kemp and Co. Ltd. vs Commissioner for Workmen's Compensation and Another

Rajagopalan, J.—The petitioner-firm which has a branch at Madras has its head office at Bombay. The second respondent was in the

service of the petitioner at Madras and held the post which was designated branch manager. The petitioner-firm terminated the services of the

second respondent with effect from 28 August 1953, after giving-him a month''s salary in lieu of notice and also an additional payment ex gratia.

The second respondent preferred an appeal to the Commissioner for Workmen''s Compensation u/s 41(2) of the Madras Shops and

Establishments Act XXXVI of 1947. In the proceedings before the Commissioner, the preliminary objection of the petitioner, that the appeal was

not competent and the Commissioner had no jurisdiction, was overruled. It is the validity of that order of the Commissioner, dated 5 May 1954,

that the petitioner challenged by his application under Article 226 of the Constitution for the issue of a writ of certiorari.

Section 41(2) gives the ""person employed"" whose services have been terminated, a right of appeal to the appellate authority, that is, the

Commissioner. Section 4(1) of the Act provided:

Nothing contained in this Act shall apply to (a) persons employed in any establishment in a position of management

The plea of this petitioner before the Commissioner was that Section 4(1)(a) precluded the application of the provisions of the Act to the second

respondent. The Commissioner''s finding was:

I find that the applicant had no authority to appoint or dismiss an employee, that he had no power to decide policies, that he had to take permission

from the head office even in small administrative details and that he really had no power of management. He cannot therefore be deemed to be a

person excluded by the provisions of Section 4(1)(a) of the Act.

It is not every employee that is given a right of appeal u/s 41(2) of the Act; it is only a ""person employed"" as that term has been defined by

Section 2(12) of the Act. In deciding whether Section 4(1)(a) excluded an appeal u/s 41(2), the Commissioner will still have to find whether the

employee who preferred that appeal was a person employed within the meaning of Section 2(12) of the Act. It is only then that the other question

arises, whether that person employed was in a position of management within the meaning of Section 4(1)(a). The first of these questions, whether

the second respondent was a ""person employed"" within the meaning of Section 2(12), was not specifically decided by the Commissioner; but then

it must also be remembered that that was not the specific issue raised in the preliminary objection put forward by the petitioner before the

Commissioner. It was only during the arguments before me that the further question arose, whether the second respondent was a person employed

at all within the meaning of the Act.

Unless a given person is a person employed within the meaning of Section 2(12), he cannot avail himself of the appellate right created by

Section 41(2) of the Act. Even if he is a person employed, if he is a person employed in a position of management within the meaning of Section

4(1)(a), the statute takes away the rights conferred on such persons employed by the provisions of Section 41(2) of the Act among-others.

In deciding whether the second respondent was a person employed within the meaning of Section 2(12) of the Act, it is the requirements of the

statutory definitions that will have to be examined; the common law concepts of employer and employee and master and servant can have no

application. An employer can himself be a statutory ""employer"" within the scope of this Act.

It was common ground that the Madras office of the petitioner was a ""commercial establishment"" as defined by Section 2(3) of the Act and

therefore an ""establishment"" within the meaning of Section 2(6) of the Act.

Section 2(5) defines ""employer"":

''employer'' means a person owning, or having charge of, the business of an establishment and includes the manager, agent or other person acting in

the general management or control of an establishment.

With reference to a commercial establishment, ""a person employed "" has been defined by Section 2(12)(3):

''Person'' employed means... in the case of a commercial establishment...a person wholly or principally employed in connexion with the business of

the establishment and includes a peon.

One of the contentions of Mr. Thyagarajan was that the second respondent, though he was in the position of a paid employee of the petitioner-

firm, was an ""employer "" within the meaning of Section 2(5) of the Act, and therefore, he could not come within the scope of a ""person employed

as defined by Section 2(12)(3) of the Act. He contended that the expressions ""employer,"" ""person employed"" and ""a person employed in a

position of management ""must all be construed with reference to the establishment or the commercial establishment, that is, in this case the office at

Madras. A further contention was that, since the second respondent was a manager acting in general management or control of the establishment at

Madras, he was an employer, and that therefore in relation to that establishment at Madras, where he is a statutory employer, he could not be a

person employed"" within the meaning of Section 2(12) of the Act.

The question whether the second respondent was a person employed within the meaning of Section 2(12) of the Act was not decided by the

Commissioner, and he had no occasion to decide it. But the proceedings before the Commissioner are still in the preliminary stage, and the

contention now put forward by the petitioner will have to be decided by the Commissioner. It is not for me to decide at this stage what is really a

jurisdictional issue. If the second respondent was not a ""person employed"" at all within the meaning of Section 2(12), there should be no need to

go into the further question u/s 4(1)(a) whether he was ""a person employed in a position of management""; and the questions whether the petitioner

was a person employed, and if he was, whether he was employed in a position of management, are primarily for the tribunal below, that is, the

Commissioner, to decide.

The learned Counsel for the petitioner pointed out that the scheme underlying the Act marked out with reference to a given establishment, for

example, the branch of the petitioner at Madras (1) the employer, (2) the persons employed and (3) from among the persons employed, persons

employed in positions of management. Obviously, a statutory ""employer"" as such, even though he was an employee, cannot avail himself of the

right of appeal u/s 41(2) of the Act. The learned Counsel for the second respondent contended that the expression ""general management or control

of an establishment"" which made a person an ""employer"" within the meaning of Section 2(5) of the Act was something very much less in the scope

than the ""position of management ""referred to by Section 4(1) of the Act. If the scheme of the Act is as postulated by Mr. Thyagarajan, that an

employee may become a statutory employer because he is acting in general management or control of the establishment, the person employed in a

position of management in that establishment must be under that employer, and therefore the position of management contemplated by Section 4(1)

(a) of the Act means something less, probably very much less, than the general management or control of an establishment provided for by Section

2(5) of the Act.

Since the jurisdiction of the Commissioner arises only if the second respondent is a person employed within the meaning of Section 2(12) of

the Act, and that question has not been decided (the Commissioner, and possibly the parties also proceeded on the assumption that the second

respondent was a person employed, and therefore only the question whether Section 4(1)(a) applied was considered), I set aside the order of the

Commissioner which means that the whole question will have to be gone into afresh by the Commissioner. I have only set out the contentions put

forward for and against the plea that the second respondent is not a person employed at all, and I have refrained from deciding that question,

because the primary duty of deciding that question is that of the tribunal, that is, the Commissioner.

Petition allowed. Writ made absolute. No order as to costs.