Delhi District Court
5.1998 Is Legal And Justified; And If No vs Mohd. Afzal & on 3 November, 2017
IN THE COURT OF SURINDER KUMAR SHARMA
PRESIDING OFFICER LABOUR COURT
KARKARDOOMA , DELHI.
LIR No. 4753/16
INDUSTRIAL DISPUTE BETWEEN :
Ms. Padma Rao
D/o Late Dr. V.V.S.K. Rao
R/o A1/33, Panchsheel Enclave
New Delhi - 17.
.........Worklady
VERSUS
M/s. SpiegelVerlag (Spiegel Publishers)
A Newspaper Establishment Publishing
"Der Spiegel"
through Sh. Wieland Wagner
India Representative, 210A
Jor Bagh, 2nd Floor
New Delhi - 03.
.......Management
Date of Institution : 16.07.2013
Date of Arguments : 28.10.2017
Date of Award : 03.11.2017
LIR No.4753/16 Page 1 of 32
AWARD
1. Vide this Award, the Reference made by the
Government vide Ref. No. F.24 (182)/Lab./SD/2013/12115
dated 26.06.2013 shall be answered. The terms of reference
are as under:
"Whether the action of management, terminating
the services of worklady, Ms. Padma Rao D/o
Late Dr. V.V.S.K. Rao w.e.f. 30.04.2012 by not
renewing the contract agreement dated
01.05.1998 is legal and justified; and if no, to
what relief is she entitled and what directions are
necessary in this respect?"
2. Notice of the reference was issued to the Worklady and
she has filed the Statement of Claim. Brief facts as stated in
the statement of claim are that the claimant is a working
Journalist. Vide agreement dated 01.05.1998 she was
LIR No.4753/16 Page 2 of 32
appointed as South Asia Correspondent for "Der Spiegel", a
news magazine published by M/s. SpiegelVerlag (Spiegel Publishers), Germany. She rendered her services to the Management till April 2012 because her contract which used to be renewed every year was not renewed. Therefore, her fourteen years of services with the Management came to an end.
3. It is averred that though the agreement dated 01.05.1998 with claimant was styled as a 'Freelance employee' contract, but in essence it was a 'Permanent Employee' Contract stipulating the duties and responsibilities of the claimant. The claimant used to directly report to M/s. SpiegelVerlag in Hamburg, Germany. She used to draw her salary from Hamburg. Her duty timings were as per the Hamburg Head Quarter timing. For all the fourteen years, LIR No.4753/16 Page 3 of 32 she used to vote in the elections of the Employee's Advisory Council / Union Elections, like all other permanent employees. For traveling and for availing leaves, the claimant needed the permission from Hamburg. Thus, the claimant was a permanent employee of M/s. SpiegelVerlag.
4. The last drawn salary of the Claimant was 4850/ Euros per month. (Equivalent to Rs. 3,34650/ per month). It is alleged that the salaries of other identically situated Correspondents were more than that of the claimant, meaning thereby, the Management was indulged in unfair labour practice. It is further alleged that the claimant was not getting the benefits of Overtime Wages, annual bonus, medical insurance, shares in the company, Maternity benefits of one year paid leave, annual review of salary and increments, Overseas posting bonus, pension etc. It is alleged that the LIR No.4753/16 Page 4 of 32 claimant was always considered as a permanent employee while taking work from her, but she was treated as contractual employee while paying for the work.
5. In December 2011, the claimant had filed a status declaration suit in the Court in Germany for recognizing her as a permanent employee. In October 2012 the Court in Germany compensated the claimant by awarding monetary benefits/compensation. In April, 2012 the Management retaliated and did not extend the contract of the claimant on the pretext that the Management was closing its operation in India due to financial constraints. In September 2012 the Management sent a permanent staffer to Delhi to resume Indian operations.
6. The claimant served the Management with demand LIR No.4753/16 Page 5 of 32 notice dated 28.01.2013 which was duly replied by the Management. The conciliation proceedings, between the claimant and the Management, before the Conciliation Officer also failed and the case has been referred to the Court for adjudication. The Worklady has prayed for her reinstatement with continuity of service, full back wages and all other consequential benefits.
7. Vide Order dated 06.02.2015 Ld. Predecessor of the Court struck off the names of Management Nos. 2 and 3 from the array of parties as the claimant did not press her claim against Management nos. 2 and 3.
8. Notice of the Statement of Claim was issued to the Management and Management had filed the Written Statement to the Statement of Claim, wherein, the averments LIR No.4753/16 Page 6 of 32 of the claim have been denied by the Management. The Management has taken the preliminary objection that there is no relationship of employer and employee between the parties, as alleged. It is averred that the claimant was engaged as a 'Freelancer' with the Management and in this regard an agreement dated 09.04.1998 was executed between the claimant and the Management. The terms of the said agreement were extended and amended from time to time. The said agreement was lastly extended up to April 2012. It is averred that the said Agreement envisaged only a fixed term Contractual relationship between the claimant and Management. However, it is admitted that the claimant used to write articles for a German Weekly magazine namely 'Der Spiegel" published in Hamburg Germany. The articles of the claimant used to be edited and printed in Germany. It is averred that the said magazine does not satisfy the ingredients LIR No.4753/16 Page 7 of 32 of a 'newspaper' as defined u/s 2(b) of the Working Journalists Act, therefore, there cannot be an industrial dispute between the claimant and the Management, within the meaning of Section 2(k) of Industrial Disputes Act. It is alleged that the claimant is not entitled to any relief as prayed by her in her statement of claim.
9. It is averred by the Management that the claimant had filed an identical case involving the same subject matter, litigated between the same parties, before the Court in Germany. The said case was dismissed by the Court in Germany. Therefore, the present case is barred by res judicata and the principles of Estoppal. The Management has prayed for dismissal of the claim of the claimant.
10. It is also submitted by the Management in its Written LIR No.4753/16 Page 8 of 32 Statement that the agreement which was executed between the parties provides that it may be terminated by either party, observing a period of six weeks. The said agreement was also liable to be terminated without a notice as on April 30, 2000. As per the agreement only a fixed term contractual relationship between the claimant and respondent was there. The said contractual relationship between the parties came to an end by the efflux of time as it was not extended after 30.04.2012.
11. Rejoinder to the written statement of the Management has been filed on behalf of the claimant, wherein, she has reiterated her claim as mentioned in her Statement of Claim and denied the averments as made by the Management in its Written Statement.
LIR No.4753/16 Page 9 of 32
12. Thereafter, on the basis of the pleadings of the parties, the following issues have been framed vide order dated 18.08.2015 :
1. Whether the claim of the claimant is barred by resjudicata as the issue in this case has already been decided by the competent court? OPM.
2. Whether there exist relationship of employer employee between the claimant and the management? OPW
3. As per terms of reference. OPW
4. Relief.
13. The Workman in support of her case has examined two witnesses including herself.
14. Workman examined herself as WW1 and she has filed her evidence vide affidavit Ex. WW1/A. She has also relied upon documents Ex. CW1/A to Ex. CW1/H. LIR No.4753/16 Page 10 of 32
15. Sh. Sudhir Mohan Varma was examined as WW2. He is the Chartered Accountant of the claimant. He has filed his evidence by way of affidavit Ex. WW2/A. He has been filing income tax returns of the claimant since the year 199899. He has stated in his affidavit that the income of the claimant was only from SpiegelVerlag and apart from that the claimant had no income. He also stated that the respondent i.e. M/s. SpiegelVerlag does not have a place of business in India and it does not have a PAN or TAN and therefore, the Management was not deducting any income tax at source from the salary of the Workman. The claimant was paying her income tax of her own through advance tax and self assessment tax. He also stated that Germany and India are signatory to Double Tax Avoidance Treaty (DTAT). LIR No.4753/16 Page 11 of 32
16. On behalf of the Management, it examined Sh. Vinod Sahni as MW1. He has filed his affidavit Ex. MW1/A in support of the case of the Management. He has stated in his affidavit that he is a Chartered Accountant by profession. He has stated that under the Income Tax Act, an Indian resident even if earning salary from a foreign source has to categorized it as salary and not as income from business or profession.
17. I have heard the Ld. Authorized Representatives of the parties and have perused the file. I have also perused the lengthy written submissions and the case law relied upon by of the parties.
My findings on the issues are as under: ISSUE NO. 1 "Whether the claim of the claimant is barred by resjudicata as the issue in this case has already LIR No.4753/16 Page 12 of 32 been decided by the competent court? OPM.
18. The onus to prove this Issue is upon the Management.
The case of the Management is that the claim of the worklady is barred by the principles of resjudicata. It was submitted that prior to the present case, the claimant has filed a case in Germany Court and the said case of the worklady was dismissed by the Court of Germany. On the other hand, it was submitted by the Ld. AR of the Workman that the principles of resjudicata are not applicable to the facts of the case as the Germany Court has not given any finding on the Issues.
19. It is an admitted case of the parties that the claimant has earlier filed a case in a Court in Germany. The claimant has filed the English translation of the judgment dated 30.10.2012 given by the Germany Court. The perusal of the same reveals LIR No.4753/16 Page 13 of 32 that in that case the claimant raised the dispute. She was the regular employee of the Management. She has prayed for recognition that there existed an unrestricted employment Contract between the parties. In that case the defence of the Management was that the case was to be dismissed as there was no interest expressed by the applicant for a permanent contract and also the Indian Law was to be applied on contractual relationship. The said case of the Worklady was dismissed by the German Court by observing that the petition was not admissible.
20. It was submitted by the Ld. AR of the Management that the case of the Worklady was dismissed by the Germany Court, wherein, the Worklady has prayed for the same relief. It was contended that the decision of that Court has attained finality as the Worklady has not challenged the same in any LIR No.4753/16 Page 14 of 32 appeal against the said judgment dated 30.10.2012. It was also submitted that the German Court has held that the parties legal relationship was terminated on 30.04.2012 i.e. on the expiry of the Contract.
21. The perusal of the Judgment dated 30.10.2012 delivered by the German Court shows that the petition of the worklady was dismissed, vide the said judgment. However, it is important to note that the German Court has not given the findings on the issues raised by the parties and rather, the petition of the claimant was dismissed by observing that "the petition is not admissible."
22. For the application of the principles of resjudicata, it is required that the Court must have given the finding on merits in respect of the Issues involved in the Case. In the present LIR No.4753/16 Page 15 of 32 case, it was not so done by the German Court. It is further important to note that in the German Court the defence which was raised by the Management was that it was a Contractual relationship and the case has to be decided on the basis of Indian Law as in the present case, the Indian Law was required to be applied as it was a case pertaining to the Contract between the parties.
23. In view of the above discussion, it is held that the principles of resjudicata are not applicable. Accordingly, it is held that the Management has failed to prove this issue. Accordingly, the Issue is decided against the Management and in favour of the Worklady.
ISSUE NO. 2
"Whether there exist relationship of employer employee between the claimant and the LIR No.4753/16 Page 16 of 32 management? OPW"
24. The onus to prove this Issue is upon the Worklady. The Ld. AR of the claimant submitted that the Worklady was the employee of the Management and there existed relationship of employer and employee between them. It was contented that claimant was a Working Journalist under the Management which is a Newspaper establishment. She was considered and treated as its employee by the Management.
25. It was contended by the Ld. AR of the claimant that vide agreement dated 01.05.1998 the claimant was appointed as SouthAsia Correspondent of the Management and had worked continuously for 14 years with the Management. Her last drawn salary was Euro 4850/ as gross emoluments in addition to house rent allowance for residencecumoffice. It was submitted that the agreement dated 01.05.1998 was styled LIR No.4753/16 Page 17 of 32 as a 'freelance employee' Contract, but the nature of duties of the claimant were that of permanent employee. The claimant used to directly report to the Management in Hamburg, Germany and she used to receive her salary and the salary of her staff from Hamburg. It was contended that though the contract dated 01.05.1998 was for year to year but, she was getting benefits as that of permanent employee. Ld. AR of the claimant submitted that the documents placed on record on behalf of the claimant proving the relationship of employer and employee between the parties have remained unrebutted by the Management, which conclusively proves that the there existed relationship of employer and employee between the parties.
26. On the other hand, Ld. AR of the Management submitted that the claimant was never an employee of the LIR No.4753/16 Page 18 of 32 Management and there was no relationship of employer and employee between the parties. It was submitted that there existed a contractual relationship between the parties during the period w.e.f. 01.05.1998 to April,2012. The claimant was engaged as freelance employee and she provided her professional services to the Management. It was contended that claimant never enjoyed the benefits available to a permanent employee of the Management like overtime payment, annual bonus, medical insurance, pension etc. It was submitted by the Ld. AR of the Management that the status of the claimant was that of Freelance employee and not that of permanent employee. It was also submitted that Management is not a Newspaper establishment. It was submitted that the onus to prove this Issue is upon the claimant and the claimant has failed to prove this Issue by leading cogent evidence.
LIR No.4753/16 Page 19 of 32
27. It was also submitted that the Income Tax Returns filed by the claimant shows that in her Income Tax Returns she had claimed her source of Income as business i.e. Author / Writer.
28. The relevant part of the agreement between the parties in respect of the employment of the worklady is reproduced as under:
1. With effect from May 1,1998, you will be a freelance employee of SPIEGEL Publishers, Hamburg and will be based in Delhi.
29. The legal meaning of "Freelancer" is a person who works freelance. It is not the designation or nomenclature which decides the nature of the job of an employee, rather, the facts and circumstances or the service condition by which the LIR No.4753/16 Page 20 of 32 employee is governed, decide the nature of the job of the employee. In the present case, the claimant had been working only for the Management company and he was being controlled by the Management from Germany. During her employment with the Management she had been reporting to the Management in Germany and also she did not work for any other Company / Management. Throughout her employment with the Management she had worked only for the Management in question on full time basis for fourteen years. These facts have been established and proved by the worklady in her evidence. On the other hand, the Management did not lead any evidence to rebut the case put forward by the Worklady.
30. In view of the above discussion, it is proved that the claimant was an employee of the Management, therefore, it is LIR No.4753/16 Page 21 of 32 held that there existed relationship of employer and employee between the parties. The Issue is decided accordingly, in favour of the claimant and against the Management. ISSUE NO. 3 : As per terms of reference.
"Whether the action of management, terminating the services of worklady, Ms. Padma Rao D/o Late Dr. V.V.S.K. Rao w.e.f. 30.04.2012 by not renewing the contract agreement dated 01.05.1998 is legal and justified; and if no, to what relief is she entitled and what directions are necessary in this respect?"
31. The case of the claimant is that the services of the claimant were terminated illegally w.e.f. 30.04.2012 as the Management did not renew the contract / agreement dated 01.05.1998 executed between the parties. As per the case of the claimant, she was appointed with the Management vide agreement dated 01.05.1998. The said agreement used to be renewed every year and lastly it was renewed till 30.04.2012. LIR No.4753/16 Page 22 of 32 The claimant in her evidence has stated that after 30.04.2012, the Management did not renew the said agreement on the pretext of closing down its operations in India by the Management due to financial constraints. She has further stated that in September 2012, the Management had sent a permanent Staff in her place at New Delhi to resume the operations of Management in India. It was submitted that the claimant continuously worked for 14 years with the Management. It was submitted that the Management had no complaint or grievance against her. It was only when she filed a case against the Management in Germany Court, the Management was annoyed with her and on this account, the Management did not renew her contract. It was submitted that her services were terminated illegally by the Management by adopting unfair labour practices.
LIR No.4753/16 Page 23 of 32
32. On the other hand, the Management has submitted that the services of the Workman came to an end automatically with the expiry of the agreement which had been executed between the parties. It was submitted that the Contractual employee cannot claim to be retained permanently. It was submitted that the services of the contractual employee can be terminated as per the terms and conditions of the agreement. The Ld. AR of the Management has also relied upon various judgments in this regard to support his contention.
33. The case of the Management is that the Service of the claimant came to an end by the expiry of the agreement. On the other hand, the case of the claimant is that her services were terminated illegally by the Management by adopting unfair labour practice.
LIR No.4753/16 Page 24 of 32
34. It is an admitted case that the claimant had worked continuously with the Management for a long period of fourteen years. The case of the Management is that the services of the claimant were discontinued by not standing her contract due to financial problem. It is also the case of the Management that it had closed its operations in India after the expiry of the contract with the worklady.
35. Now the question is that whether in fact, the management had any financial problems on account of which it had closed its operations in India. It is important to note that the Management did not lead any evidence to substantiate this contention. Therefore, the plea of the Management that it had stopped its operations in India cannot be believed and accepted.
LIR No.4753/16 Page 25 of 32
36. As discussed above, it is the case of the Management that due to financial problems it had closed its operations in India after the expiry of contract with the claimant. This plea of the Management has been disbelieved above. On the other hand, the case of the claimant is that the Management is still carrying on its operation in India and in her place some staff has been sent to New Delhi. The claimant has led evidence vide her affidavit Ex. WW1/A. The perusal of this affidavit of the worklady shows that in para 34 of her affidavit Ex. WW1/A she has specifically stated that in September, 2012, the Management had sent a permanent staffer to New Delhi to resume Indian Operations. It is important to note that the claimant had examined herself as WW1 in the Court and she was crossexamined at length by the AR of the Management. However, the worklady was not crossexamined or challenged in respect of her deposition in para no. 34 of her affidavit Ex. LIR No.4753/16 Page 26 of 32 WW1/A. Therefore, it is clear that the deposition of the worklady in respect of her deposition that in September, 2012, the Management had sent a staff from Germany to resume its operation in India has remained unchallenged and unrebutted. Therefore, the same has to be accepted. Reliance in this regard can be placed upon the judgment of Hon'ble Delhi High Court which is reported as State Vs. Mohd. Afzal & Ors. 2003VII AD(Delhi)1.
37. The case of the claimant is that her services have been terminated by the Management by adopting unfair labour practice, whereas, the case of the Management is that the services of the claimant came to an end by the expiry of the contract / agreement executed between the parties. Now, the question is that whether the Management had adopted unfair labour practice.
LIR No.4753/16 Page 27 of 32
38. The Hon'ble Punjab & Haryana High Court in a case reported as 1994 LLR 454 has held that when a Workman had put in 265 days of service in a calender year, action of the termination is malafide and amounts to unfair labour practice. It was also held that when it is not the case of the Management that the services of the Workman were not required as the work assigned to him had completed. In the absence of same, the act of the Management amounts to unfair labour practice. It was also observed in the said case that if the termination is meant to exploit an employee or to increase the bargaining power of the employer, then it has to be excluded from the ambit of subclause (bb) of Clause (oo) and the definition of retrenchment has to be given full meaning. In a case reported as 2000 LLR 182, the Hon'ble Gujrat High Court has held that the engagement of casual and temporary LIR No.4753/16 Page 28 of 32 employment for years together and denial of permanency despite existence of work amounts to unfair labour practice.
39. The Hon'ble Supreme Court of India in a case reported as 2014 LLR 673 has held that artificial break in service, every year by reappointing the employee on the same post tantamounts to unfair labour practice u/s 2 (ra) of the Industrial Disputes Act and the same is not permissible. Similar view was held by the Hon'ble Delhi High Court in a case reported as 2002 LAB. I.C. 3798.
40. Now, the case in hand stands on better footings from the facts of the cases 1994 LLR 454, 2000 LLR 182, 2014 LLR 673 and 2002 LAB. I.C. 3798 (supra), because in the present case, the claimant had worked continuously for a long period of fourteen years and without any break and also the LIR No.4753/16 Page 29 of 32 post on which the claimant was working is still in existence as it has been held above that some staff has been sent from Germany by the Management to carryout the work of the Management in Delhi. Therefore, in view of the facts and circumstances of the present case and having regard to the law laid down in the judgments 1994 LLR 454, 2000 LLR 182, 2014 LLR 673 and 2002 LAB. I.C. 3798 (supra), it is held that the Management had illegally terminated the services of the Worklady Ms. Padma Rao by not renewing the contract agreement dated 01.05.1998. The judgments relied upon by the Management are not applicable to the facts and circumstances of the present case. The Issue is decided accordingly in favour of the claimant and against the Management.
LIR No.4753/16 Page 30 of 32 ISSUE NO. 4 : Relief
41. In her claim, the claimant has prayed for her reinstatement with full back wages along with all the benefits to which the claimant was entitled. The perusal of the claim petition filed by the claimant shows that the claimant has not pleaded that since the date of her termination she is unemployed. It is further important to note that the claimant has examined herself as WW1 and filed her affidavit Ex. WW1/A and the perusal of the affidavit Ex.WW1/A shows that the claimant has nowhere stated in her affidavit that she was unemployed since the date of her termination or that she made efforts to find some alternative job. The Hon'ble Supreme Court of India in a case reported as 2009 LLR 113 has held that for entitlement to back wages, the burden of proof that claimant remained unemployed would be on the claimant. Therefore, keeping in view the facts discussed LIR No.4753/16 Page 31 of 32 hereinabove, coupled with the law laid down in 2009 LLR 113, the claimant is not entitled to back wages.
42. In view of the above discussion, the claimant is ordered to be reinstated along with all the consequential benefits. The reference is answered accordingly.
43. Requisite number of copies of the Award be sent to the competent authority for necessary compliance. Copy of the Award be sent to concerned Ld. Senior Civil Judge,Delhi in compliance of provisions of Section 11 (10) of the Act. File be consigned to Record Room.
Announced in the Open Court today i.e. on 03.11.2017.
(SURINDER KUMAR SHARMA) PRESIDING OFFICER LABOUR COURT KARKARDOOMA COURTS (EAST) DELHI.
LIR No.4753/16 Page 32 of 32