AI Structured Summary
Not yet generated for this judgment
Judgment
S. Jagadeesan, J.—These writ appeals are directed against the common order of the learned single Judge dated March, 2, 1994 made in
W.P. No. 3860 of 1984 and W.P. 4555 of 1987. The appellant and the second respondent in both the appeals are the same.
Heard Mr. A.L. Somayaji, the learned senior counsel for the appellant. Mr. M.R. Prabhu for the second respondent and the Special
Government Pleader on behalf of the respondents 1 and 3 in W.A. 606 of 1995 and first respondent in W.A. 607 of 1995.
The second respondent was employed by the appellant as Assistant Works Manager (Production) in their Fertilizer factory at Ennore on May
2, 1973. Subsequently he was promoted and posted as General Manager of the said factory with effect from May 1, 1976. While the second
respondent was working as the General Manager, his services was terminated by the appellant by order dated November 22, 1992.
Aggrieved by the same, the second respondent preferred an appeal to the Appellate authority constituted under the Tamil Nadu Shops and
Establishments Act, 1947 (hereinafter called as ''the Act''), the first respondent in W.A. 607 of 1995.
The appellant herein challenged the maintainability of the appeal filed by the second respondent herein, contending that the second respondent
herein is not a ''person employed'' as defined in the said Act and therefore the second respondent herein cannot invoke the provisions of the said
Act and the matter should be heard by the Commissioner of Labour, as per Section 51 of the said Act.
However, the Commissioner of Labour, the first respondent in W.A. 606 of 1995 held that the second respondent herein satisfied the definition
of the term ''person employed'' in the said Act and therefore the appeal filed by the second respondent herein under the said Act was maintainable.
Challenging the order of the first respondent in W.A. 606 of 1995, the appellant herein filed W.P. 3860 of 1994.
Thereafter, the Deputy Commissioner of Labour, the appellate authority constituted under the Tamil Nadu Shops and Establishments Act, the
first respondent in W.A. 607 of 1995 decided the appeal filed by the second respondent on merits. Ultimately the appellate authority held that the
termination of the second respondent was not for a reasonable cause and the same was in violation of the principles of natural justice and against
the provisions of Section 41(1) of the said Act. Consequently the Deputy Commissioner of Labour, the first respondent in W.A. 607 of 1995 by
his proceedings dated February 21, 1997 set aside the order of termination of the second respondent. Against which the appellant filed W.P. 4555
of 1987.
Before the learned single Judge the only ground urged by the parties is that the second respondent herein was employed in the appellants factory
at Ennore and be was not a member bf the clerical staff and therefore he is not a ''person employed'' within the meaning of Section 2(12)(ii) of the
said Act and as such consequently the appeal filed by him under the said Act is not maintainable.
The learned single Judge, after discussion, held that the second respondent is a ''person employed'' for the purpose of the Act and upheld the
decision of the first respondent in W.P. 3860 of 1984 that the second respondent is governed by the provision of the said Act. Consequently the
order of the first respondent in W.A. 607 of 1995 setting aside the order of termination of the second respondent also upheld on merits.
Before us also the counsel for both sides confined their argument regarding the question as to whether the second respondent would satisfy the
definition of the term ''person employed'' in the said Act. If the second respondent does not fall within the definition of ''person employed'' under
the said Act, then the first respondent in W.A. 607 of 1995 has no authority to entertain the appeal and consequently his order has to be set aside.
The finding of the first respondent in W.A. 606 of 1995 with regard to the maintainability of the appeal on the ground of applicability of the
provisions of the Act is also liable to be set aside.
We gave our anxious consideration to the contentions raised by both the counsel. Section 2(12)(iii) defining ''person employed'' reads as
follows:
2(12) ''Person employed'' means -
i)....
ii)....
iii) In the case of a commercial establishment other than a clerical department of a factory or an industrial undertaking, a person wholly or
principally employed in connection with the business of the establishment, and includes a peon.
A reading of the above provision prima facie reveals that in the case of commercial establishment, those who are working in the clerical
department of a factory or an industrial undertaking may not fall under the definition of the term ''person employed''. But, however, an argument
was advanced on behalf of the respondents that the appellant falls within the definition of the ''commercial establishments'' as defined under the said
Act which is as follows:
Commercial Establishment"" means an establishment which is not a shop but which carries on the business of advertising, commission, forwarding
or commercial agency, or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock
company, bank, broker''s office or exchange and includes such other establishments as the State Government may by notification declare to be a
commercial establishment for the purpose of this Act.
It is further contended by the learned counsel for the second respondent that the appellant being a joint stock company and the second
respondent was employed under them, naturally the services of the second respondent is governed by the said Act. This seems to have weighed
with the learned single Judge.
Before us, without advancing any elaborate argument, the learned senior counsel for the appellant contended that the government had issued
G.O. Ms. No. 545 Development dated February 10, 1950, granting exemption from the applicability of the said Act in respect of persons who are
employed on any kind of work in a Factory and ''governed by the Factories Act, 1948''. In view of the exemption granted by the said G. O. the
second respondent cannot file the appeal before the first respondent in W.A. 607 of 1995, since the provisions of the Shops and Establishments
Act cannot be made applicable to the second respondent.
To appreciate the contention of the learned senior counsel for the appellant, it is necessary to go through the said G.O. which reads thus:
G.O. Ms. No. 545 Development, dated February 10, 1950
In exercise of the powers conferred by Section 6 of the Madras Shops and Establishments Act, 1947 (Madras Act 34 of 1947) and in
supersession of the Development Department notification No. 1085 dated November 5, 1948 published at page 1101 of Part I of the Fort St.
George Gazette, dated November 16, Governor of Madras hereby exempts permanently all persons employed in any kind of work in factories
and governed by the Factories Act, 1948 (Central Act LXII of 1948) from all provisions of the Madras Shops Establishments Act, 1947.
On a perusal of the terms of the above G.O. one could see that the government has granted exemption from all the provisions of the Madras
Shops and Establishments Act, 1947 permanently to all persons employed in any kind of work in factories and they are governed by the Factories
Act, 1948.
Hence it is necessary for us to consider whether the second respondent herein is ''person employed'' in any kind of work in the factory and
governed by the Factories Act, 1948.
In the memorandum of appeal filed before the first respondent in W.A. 607 of 1995, the second respondent herein clearly stated that he joined
the appellant company in May, 1973 and was allotted duties as Assistant works Manager (Production) at their fertilizer company at Ennore and he
was promoted as General Manager incharge of the Fertilizer plant at Ennore in 1976. He further stated that by virtue of his hard work, technical
skill and personal qualities, he improved the working of the fertilizer plant. Form this it is clear that the second respondent herein was throughout
working in the appellant''s Fertilizer factory at Ennore.
Section 2(1) of the Factory Act, 1948 defines ''worker'' thus:
worker"" means a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal
employer, whether for remuneration or not in any manufacturing process, or in cleaning any part of the machinery or premises used for a
manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the
manufacturing process, but does not include any member of the armed forces of the Union.
The second respondent being a worker in the factory and was incharge of the Fertilizer plant, in our view, the second respondent would fall
within the term ''worker'' as defined above. From the averment referred above and from the statement of facts stated by the second respondent in
his appeal petition, it is clear that the second respondent herein was employed directly in the manufacturing process in the Fertilizer factory of the
appellant. In view of the nature as well as the place of work, undoubtedly the second respondent would fall within the term ''worker'' as defined
under the Factories Act.
The judgment of the Supreme Court in Rohtas Industries Ltd. Vs. Shri Ramlakhan Singh and Others, : lends support to our view where the
Supreme Court had an occasion to consider the question as to whether the employee is a ''worker'' within the definition of the Factories Act and
also had an occasion to consider a similar question with regard to the maintainability of the application under the Shops and Establishments Act
before the Labour Court and held thus:
According to the finding of the Labour Court, the respondent was engaged in supervising and checking quality and weighment of waste papers
and rags which are the basic raw materials for the manufacture of Duplex Board and vulcanised fibre. He used to deal with receipts and maintain
records of stocks. He also used to pass the bills of the suppliers of the waste paper and rags and used to check the quality of the supplies. The
respondent had admitted that he used to work in the precincts of the factory and in case of necessities had to work inside the factory. He used to
go to the paper sorting house when there were instructions for it. But thinking that checking of rags and their quality was not the main duty of the
respondent, the Court came to the conclusion that his work was not incidental to manufacturing process. The High Court thought that the Labour
Court had found as a fact that the respondent was not concerned with the manufacturing of paper either directly or incidentally and hence he was
not a factory worker. In our opinion, the judgments of the Courts below in this regard cannot be sustained.
The respondent was not employed ""in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing
process"". But the question for consideration is whether he was employed in ""any other kind of work incidental to, or connected with, the
manufacturing process or the subject of the manufacturing process"". This Court in State of U.P. v. M.P. Singh (supra) did not decide as to what
was the precise meaning of the expression ""subject of the manufacturing process"" in Section 2 Clause (1) of the Factories Act. We are called upon
to decide this question in this appeal. Raw materials used in the manufacturing process for producing paper and its various products undoubtedly,
will be a ""subject of the manufacturing process"", whatever else may or may not be such subject. If that be so, the respondent was engaged in a
work which was connected with the subject of the manufacturing process. And as we see the evidence discussed in the order of the Labour Court,
there cannot be any doubt that he was working in the factory premise or its precincts in connection with the work of the subject of the
manufacturing process namely, the raw materials. In our judgment, therefore, he was a factory worker within the meaning of Clause (1) of Section
2 of the Factories Act, 1948. Hence he was not an employee within the meaning of the Bihar Act and the petitioner of complaint filed by him u/s
26(2) was not maintainable.
On the basis of the principles laid down by the Apex Court in the above judgment, we are of the view that the second respondent is governed
by the Factories Act. When the services of the second respondent is governed by the Factories Act, naturally G.O. Ms No. 545 dated February
10, 1950 granting exemption from the application of the Tamil Nadu Shops and Establishments Act would come into force. The learned single
Judge did not have the benefit of the above judgment of the Supreme Court.
The learned counsel for the second respondent, however, placed reliance on the Division Bench judgment of this Court in Automac (M) (P)
Ltd. v. Dy. Commr. of Labour 1992 I LLJ 15. The facts of the said case do not render any assistance to the second respondent herein, since the
question arose for consideration before the Division Bench in that case was whether the worker employed as a Clerk in the managerial cadre can
be considered as ''worker'' as defined under the Factories Act.
In view of the Apex Court judgment referred to above, we have no hesitation to hold that the second respondent would fall within the definition
of ''worker'' under the Factories Act and as such the exemption in G.O. 545 dated February 10, 1950 will come into operation.
On the basis of the exemption in G.O. Ms. No. 545 dated February 10, 1950 the second respondent is exempted from the application of the
provisions of the Tamil Nadu Shops and Establishments Act. Hence the finding of the first respondent in W.A. 606/1995 regarding the
maintainability of the appeal before the first respondent in W.A. 607/1995 is liable to be set aside and the appeal preferred by the second
respondent herein before the first respondent in W.A. 607/1995 is not legally maintainable.
In view of our above finding, both the appeals are allowed and consequently the appeal preferred by the second respondent before the Deputy
Commissioner of Labour (Appeals), the Appellate Authority, constituted under the Tamil Nadu Shops and Establishments Act, the first respondent
in W.A. 607 of 1995 is liable to be dismissed and accordingly the same is dismissed and the order, reinstating the second respondent is also set
aside. Parties are directed to bear their own cost. We direct the appellant to pay to the second respondent 3 month''s salary as ex gratia.