G.K.Jha vs The Presiding Officer & Ors. on 3 May, 2013

[Cites 21, Cited by 0]

Delhi High Court

G.K.Jha vs The Presiding Officer & Ors. on 3 May, 2013

1. By the present writ petition, the petitioner seeks to challenge the industrial award dated 04.02.1998, passed by the Labour Court- I: Tis Hazari Courts: Delhi in I.D. No. 67/1991. The Labour Court vide the said award held that the Petitioner is not a workman within the meaning of Section 2(d) of the Sales Promotion Employees (Conditions of Service) Act, 1978 (for short, the Sales Promotion Act) r/w Section 2(s) of the Industrial Disputes Act, 1947 (for short, the Act), and hence the dispute not an industrial dispute. Consequently, the dispute raised by the petitioner contained in the reference made to the Labour Court vide reference dated 14.01.1991 with regard to the termination of the petitioners services by the respondent management, has not been decided on merits on account of lack of jurisdiction.

W.P.(C) 5397/1998 Page 1 of 16

2. The background facts may be noticed. The petitioner was appointed as a Medical Sales Representative with the Respondent no. 3 on 04.06.1986. After serving for the probationary period, the petitioner got confirmed on 28.11.1986. The petitioner was transferred from Purnea to Muzzafarpur and was asked to be a team leader and co-ordinate between his team members. On 13.02.1987, the petitioner was promoted to the post of District Manager and was put on probation of 6 months. By letter dated 31.08.1987, the probation period of the petitioner was extended by 3 months i.e. upto 01.12.1987 after assessment of the petitioners performance. Vide telegram dated 01.12.1987, the respondent management again expressed its inability to confirm the petitioner in the post of District Manager. The petitioner was transferred from Muzzafarpur to Rajamundhry with effect from 01.06.1988. His area of operation was also reduced to Muzaffarpur area only. On account of his unsatisfactory performance, the management terminated the services of the petitioner vide letter dated 28.10.1988.

3. In August 1989, the petitioner filed a dispute before the Patna Labour Court. The said claim was apparently dismissed on the ground of lack of jurisdiction. Eventually, the reference, as aforesaid, came to be made by the appropriate government to the Labour Court which was registered as I.D. No. 67/91. The petitioner filed his statement of claim. The petitioner claimed that his services were terminated illegally and on false allegations. The respondent management, inter alia, raised a preliminary objection to the maintainability of the claim on the ground that the petitioner was not a workman as defined in Section 2(s) of the Act. The respondent claimed that the petitioner was employed as a District Manager and was discharging W.P.(C) 5397/1998 Page 2 of 16 managerial and/or sales functions. Other defences were also raised regarding territorial jurisdiction and estoppel. The respondent also claimed that the termination was made in terms of the stipulations contained in the appointment letter. On the basis of the pleadings, the Labour Court, on 03.08.1994, framed the following issues-

I. Whether the claimant is a workman in the employment of the Management as defined in law? O.P.W. II. Whether the workman is estopped from raising industrial dispute as similar industrial dispute is filed at Patna? O.P.M. III. Whether this court has no jurisdiction as the workman was posted at Rajahmundry A.P.? O.P.M. IV. As per the terms of reference? O.P.W. V. Whether the workman is gainfully employed?

4. The parties led their respective evidence. The Labour Court vide award dated 04.02.1998 decided issue no. 1 against the claimant, and held him as not being a workman. Consequently, it was held that the Labour Court did not have jurisdiction in the matter. The other issues were, therefore, not decided, as the dispute ceased to be an industrial dispute by the virtue of the finding of Labour Court on issue no. 1.

5. The Labour Court, on the basis of the pleadings in the statement of claim, held that the petitioner was drawing more than Rs.1,600/- per month as wages and he was working as a District Manager at the time of termination of his service. The petitioner was never demoted after the W.P.(C) 5397/1998 Page 3 of 16 management expressed its inability to confirm him in the post of District Manager. The petitioner continued to function in a managerial capacity as District Manager. The Labour Court relied upon several correspondences exchanged between the parties such as Exh. WW-1/10, 1/10A, WW-1/6, WW-1/6C and WW-1/M2, as well as the correspondences exchanged between the petitioner and medical sales representative i.e. WW-1/M6 to M11 and W-1/13 to 1/16 to conclude that the petitioner was serving in a managerial capacity as a District Manager. In Exh. WW-1/16 dated 21.01.1988, the petitioner claimed himself to be the District Manager, Muzafarnagar. The Labour Court also appreciated the other documents led in evidence by the parties to conclude that the petitioner was, in fact, working in a managerial capacity as District Manager even after the management did not confirm him as District Manager, i.e., beyond 01.12.1987. The Labour Court also rejected the petitioner's submission that he was working as a Group Leader of the medical sales representative, and not in managerial or administrative capacity. Reference was made to the document WW-1/M-6 to M-11, wherein the petitioner, as District Manager, had asked for explanations and had issued guidelines to medical sales representative of his District. The Labour Court concluded that the petitioner was not a Group Leader, but was the leader of the team of medical sales representative and was working in administrative and managerial capacity.

6. The Labour Court relied upon the judgment of the Supreme Court in S.K Maini vs M/S Carona Sahu Co. Ltd. and Ors. AIR 1994 SC 3 wherein it was held that a Manager or an Administrative officer is generally W.P.(C) 5397/1998 Page 4 of 16 invested with the powers of supervision, in distinction to stereo type work of a clerk. It was also observed that a Manager need not necessarily be invested with the powers of appointment and discharge of other employees.

7. Ld. Counsel for the Petitioner submits that the though the petitioner was engaged as a District Manager, but he was not engaged in any managerial or supervisory capacity. There were no changes in the job of the petitioner, and he was not assigned any controlling, supervising, administrative or managerial authority over the other team members on his promotion as District Manager. Upon his promotion as the District Manager, the only change was that-earlier the petitioner was working as a medical sales representative performing his duties alone and independently, and later he was asked to perform the same duties in a team of some other medical representatives as their "Team Leader." In support of his contention, the petitioner places reliance on letters dated 18.04.1988 and 19.08.1988 referring the petitioner as a "Leader".

8. The petitioner further submits that even as a team leader, he was required to concentrate more on his individual and independent work, and to work with the other team members for only 4 days in a month. The petitioner places reliance on a letter dated 14.03.1988 issued by the Management directing the petitioner to concentrate more on his independent work and not to work with the local MSR for more than 4 days in a month. The petitioner places reliance on letters dated 29.07.1988 and 03.03.1988. Both the letters prescribe the sales targets for the team members and the petitioner respectively. The petitioner submits that the Labour Court considered the petitioner as a "team leader" of Medical Service W.P.(C) 5397/1998 Page 5 of 16 Representatives, and not a Group Leader. On this basis, he seeks to submit that the petitioner was not discharging managerial duties. Ld. Counsel submits that the primary duties of the petitioner were to realize payment on due time from the market after creating demand by promotion of sales. Reliance is placed on a letter dated 15.07.1988 in this regard. The petitioner submits that duty of realizing payment from market, by no means, is Managerial or Supervisory in nature.

9. The petitioner, therefore, submits that by virtue of the primary and basic duties performed by him, he was a sales promotion employee as defined under Section 2(d) of the Sales Promotion Act which is applicable, in the first instance, to the employees of Pharmaceutical Industry only, and as per the provisions of Section 6(2) of the said Act, all the provisions and Protections of the Act are applicable to the Sales Promotion Employee, as they are applicable to a "workman" defined under Section 2(s) of the Industrial Disputes Act.

10. The petitioner, in support of his contention, places reliance on H.R Adyanthaya vs. Sandoz (India) Ltd., AIR 1994 SC 2608, wherein the Supreme Court observed:

"It will be noticed that under the SPE Act, the sales promotion employee was firstly, one who was engaged to do any work relating to promotion of sales or business or both, and secondly, only such of them who drew wages not exceeding Rs. 750 per mensem (excluding commission) or those who had drawn wages (including commission) commission not exceeding Rs. 9,000 per annum whether they were doing supervisory work or not were included in the said definition. The only nature/type of work which was excluded from the W.P.(C) 5397/1998 Page 6 of 16 said definition was that which was mainly in managerial or administrative capacity.

The SPE Act was amended by the Amending Act 48 of 1986 which came into force w.e.f 6.5.1987. By the said amendment, among others, the definition of sales promotion employee was expanded so as to include all sales promotion employees without a ceiling on their wages except those employed or engaged in a supervisory capacity drawing wages exceeding Rs. 1600 per mensem and those employed or engaged mainly in managerial or administrative capacity.

Section 6 of that Act made the Workmen Compensation Act, 1923, Industrial Disputes Act, 1947, (the ID Act), Minimum Wages Act, 1948, Maternity Benefit Act, 1961, Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972, applicable forthwith to the medical representatives. Sub-section (2) of the said section while making the provisions of the ID Act, as in force for the time being, applicable to the medical representatives stated as follows:

(2) The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, employees as they apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen within the meaning of that Act and for the purposes of any proceeding under that Act in relation to an industrial dispute, a sales promotion employee shall be deemed to include a sales promotion employee who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment had led to that dispute.

In other words, on and from 6th March, 1976 the provisions of the ID Act became applicable to the medical representatives depending upon their wages upto 6th May, 1987 and without W.P.(C) 5397/1998 Page 7 of 16 the limitation on their wages thereafter and upon the capacity in which they were employed or engaged.

It appears that the SPE Act was brought on the statute book, as the Statement of Objects and Reasons accompanying the Bill shows, as a result of this Court's judgment in May & Baker case (supra). The Committee of Petitions (Rajya Sabha in its 13th Report submitted on 14th March, 1972 had come to the conclusion that the ends of social justice would be met only by suitably amending the definition of the term "workman" in the ID Act in the manner that the medical representatives were also covered by the definition of workman under the ID Act. The Committee also felt that other workers engaged in sales promotion should similarly be considered as workmen. The legislature, however, considered it more appropriate to have a separate legislation for governing the conditions of services of the sales promotion employees instead of amending the ID Act, and hence the SPE Act."

(Emphasis supplied)

11. Reliance is also placed on Arkal Govind Raj Rao vs. Ciba Geigy of India Ltd, AIR 1985 SC 985, wherein the Supreme Court observed:

"Where an employee has multifarious duties and a question is raised whether he is a workman or someone other than a workman the Court must find out what are the primary and basic duties of the person concerned and if he is incidentally asked to do some other work, may not necessarily be in tune with the basic duties these additional duties cannot change the character and status of the person concerned. In other words, the dominant purpose of employment must be first taken into consideration and the gloss of some additional duties must be rejected while determining the status and character of the person. Appreciation of evidence by Labour Court cannot be faulted but it landed itself into an erroneous conclusion by drawing impermissible inference from the evidence and W.P.(C) 5397/1998 Page 8 of 16 overlooking the primary requirement of the principal and subsidiary duties of the appellant."

(Emphasis supplied)

12. On the other hand, Ld. Counsel for the Respondent submits that the Petitioner was working as a District Manager, i.e., in a managerial and administrative capacity and was not a workman. He submits that his primary duties, responsibilities and powers were managerial. Incidental assignment of duties or responsibilities which may not be managerial would not be conclusive of the nature of the duties, responsibilities and powers of the petitioner. He submits that the cross examination of the petitioner would show that he was deliberately evasive in his replies. The respondent had squarely put its case to the petitioner and the petitioner falsely denied the same. In support of his submission, he places reliance on the cross examination of the petitioner wherein he stated:

"Exs. WW-1/M]1 to WW-1/M-16 were marked Exhibits on admission by the workman. As a Medical Sales Rep. my areas were the districts of Purnia, Katihar, Madhepura and Saharsa. After my so called promotion I was given the territory of 10 to 15 distts. It is not correct that I was supervising the work of four to five Medical Service Reps. I was working with them as team leader. I am not able to remember whether I used to approve the tour programmes of Medical Service Reps. I did not used to fix their sales targets. I did not used to check their work. I only used to guide them but did not used to correct them. I did not use to supervise their work in the field. I do not remember whether I used to recommend their leave applications. I did not use to report for disciplinary actions against them. I did not use to allocate stock to stockists or distributors. I did not use to advice or improve the M.S.Rs. I do not remember that I had ever written approval notices for W.P.(C) 5397/1998 Page 9 of 16 grant of increment/confirmation of M.S.Rs. It was my prime duty to realise payment from the market and improve sales of my own area. It was not my duty to ensure that the MSRs should follow the work norms. I do not remember whether I used to help MSRs in preparing their call index sheets. I do not remember whether I used to get the tour programme of the MSRs prepared. While I was working with my team members I was visiting those doctors being visited by my team members. I do not remember whether I used to advice MSRs in preparation of programmes for utilisation of promotional inputs, gift items and sampling etc. I did not use to advice the co. for the improvement of sales. WW-1/M-17 bears my signatures on page no. 7 and 8. I had filed a complaint before the Hon'ble Labour Court at Patna and Bihar Shops and Estt. Act. WW-1/M-18 I received. It is not correct that the allegations levelled against me in Ex. WW-1/12 are true. At the relevant time I was B.Sc. Now I am LLB also and practicing as an Advocate. It is incorrect that I deposed false in respect of my income in my affidavit. It is incorrect to suggest that my claim is false.

(Emphasis supplied)

13. Ld. Counsel also places reliance on the examination of Shri Dinesh Jumrani MW-1 and Shri Sudarshan Puri MW-2. Reliance is also placed on a letter dated 14.03.1988 issued by Mr. Rajeev Lamba to the petitioner, asking for the contribution of the petitioner to the Muzaffarpur Market as a District Manager, and asking the petitioner to concentrate more on his independent work and not to work with local MSR for more than 4 days in a month.

14. The respondent places reliance upon a decision of Division Bench of the Calcutta High Court in Subir Guha Thakurta v. M/s Johnson and Johnson Ltd. & Ors., 2006 LLR 750, wherein the Division Bench upheld W.P.(C) 5397/1998 Page 10 of 16 the judgment of the learned Single Judge in the same case reported as Jhonson and Jhonson Ltd. v. Third Industrial Tribunal, West Bengal and Ors., 2006 LLR 15. The facts of that case are somewhat similar to the one in hand, and the issues raised and discussed in the said decision are also similar. In that case as well, the workman Subir Guha Thakurta was initially appointed as a medical sales representative in which post he was confirmed. He was subsequently promoted to the post of District Manager and thereafter as Zonal Manager. Upon amalgamation of the employer company with the respondent, he became an employee of the respondent company and thereafter was acting as the District Manager and Zonal Manager of the respondent company. The appellant was charged with claiming reimbursement of fictitious expenses and, on that basis, his services were terminated. The issue arose whether the appellant was a workman as defined under section 2(s) of the Act. The Division Bench held that the industrial adjudicator was wrong in holding that the onus lies on the employer to prove that the appellant is not a workman. In the facts before it, the Division Bench found that the appellant was working in the managerial cadre of the company, and he was not covered within the meaning of the expression workman defined under section 2(s) of the Act.

15. Having considered the rival submissions and having perused the impugned award and the documents and decisions relied upon by the parties, I am of the view that the present petition has no merit and is liable to be dismissed.

16. The issue whether the petitioner was serving merely as a sales representative or as a District Manager discharging managerial duties and W.P.(C) 5397/1998 Page 11 of 16 functions was a mixed question of fact and law. A perusal of the impugned award shows that the industrial adjudicator dwelled on the said issue in great depth. The industrial adjudicator marshaled the evidence and on that basis has returned the finding to the effect that the petitioner was serving in a managerial capacity as District Manager, and not merely as a medical sales representative of the respondent management. The exercise undertaken by the industrial adjudicator in marshaling the evidence is demonstrated by the following extract from the impugned award:

"As per pleadings of the claimant in the statement of claim he was drawing more than Rs.1,600/- p.m. as wages and as already discussed above he was working as District Manager at the time of termination of his services as is also clear from the facts that he was never demoted after management inability to confirm him vide Ex. WW-1/5 he in fact continued to function as District Manager. The fact that the claimant continued to work as Distt. Manager is borne out from the correspondence between the management and the claimant proved by the claimant himself as Ex. WW-1/10, WW-1/10A, WW-1/6, WW- 1/6C and WW-1/M-2 and the correspondence between the claimant and medical sales representatives proved by the management on admission by the claimant as Ex.WW-1/M-6 to 11 and WW-1/13 to 16. Ex. WW-1/16 is a letter written by the claimant on 21.1.88 referring himself to be D.M. Muzaffarnagar. Ex.WW-1/M-2 is a letter written by the management to the claimant referring him as District Manager. This letter is dated 29.8.88. Ex. WW-1/M-1 is Distt. Manager's Weekly Report from 15.7.88 to 23.7.88 of the claimant. These letters make it clear that the claimant was in fact working as Distt. Manger even after the management was unable to confirm him his extended service as Distt. Manager beyond 1.12.87.

There is further no substance in the arguments that the claimant in fact was working as a Group Leader of the W.P.(C) 5397/1998 Page 12 of 16 medical sales representatives and not in managerial or administrative capacity. Reliance is also placed in support of the arguments in case of Arkal Govind Raj Rao vs. Ciba Geigy of India Ltd., Bombay reported in AIR 1985 SC 985 and in case of Ved Prakash Gupta vs. M/s. Delton Cable India (P) Ltd. reported in AIR 1984 SC 914. To support the arguments reference has been made to Ex. WW-1/11-A wherein it was written to the claimant by the management that the claimant has no authority in case his any team member wishes to avail leave as he had to write directly to the headquarters. Ex.WW- 1/8 was letter to the claimant whereby annual targets for the year 1988 was sent for his team members. Not only the word referred in case of Arkal Govind Raj Rao v. Ciba Ceigy of India Ltd., Bombay (supra) is 'group leader' but the reference made in Ex.WW-1/11A was in respect of the 'team member' of the claimant who was working as Distt. Manager. Besides there are plenty of letters written by the claimant as Distt. Manager to the Medical Sales Representatives including WW- 1/M-6 to 11, wherein as Distt. Manager the claimant had asked for explanations and have issued guidelines to the Medical Sales Representatives of his Distt. So it is not a case of claimant being a group leader but he was a leader of the team of Medical Sales Representatives and was working in administrative and managerial capacity. On the face of Exhibits WW-1/M-1 and Ex. WW-1/M-2 to 5 which are letters written to the claimant as Distt. Manager and admitted letters Ex.WW-1/M-6 to M-11 and WW-1/M-13, 14, 15, 16 which are directions as well as explanations sought by the claimant from Sales Representatives in the capacity of Distt. Manager, Muzaffarnagar, no meaning can be taken from Ex.WW-1/7, 7-A, 10-A, 6-A, B, C, 10 and Ex.WW-1/9-A that the claimant was working as workman within the definition as contained in S.2(d) of the Act, 1976. Merely because by letter Ex.WW-1/9- A the claimant was asked to realize the payment on due date being primary duty of the Distt. Manger and Medical Sales Representatives, it cannot be constituted as the basic duty of the claimant as it was incidental to his job as Distt. Manager who was managing the Medical Sales Representatives in his W.P.(C) 5397/1998 Page 13 of 16 Distt. Similarly, directions to him as Distt. Manager to look at each and every market for Medical Sales Representatives coverage, as per letter Ex.WW-1/6-B, cannot by any stretch of imagination be termed as work of a Medical Sales Representative. To motivate the Medical Sales Representative to visit important retailers as an effective leader and asking him as Distt. Manager as to how much his team can sell the product, also cannot term the claimant as Medical Sales Representative. Also cautious letter Ex.WW-1/7-A to add in a subsequent month in case of not being 100% of the target of the given month can constitute the claimant as a Medical Sales Representative within the definition of clause (d) of S.2 of the Act, 1976. The authority in case of Arkal Govind Raj Rao vs. Ciba Geigy of India Ltd., Bombay (supra) rather goes against the claimant on facts and documents on record which have proved on record that the primary and basic duties of the claimant were as a responsible Distt. Manager of the management. In fact duties of the Distt. Manger have been proved as Annexure 'A' in Ex.WW-1/1 by the management witness Dinesh Jumrani. Perusal of the work responsibilities of the Distt. Manager (Annexure A) rather make it crystal clear that Distt. Manager was a responsible authority on the Medical Sales Representatives as overall Manager/Administrator in respect of achievement of sales conclusions as per budget in his assigned district. In fact he was a backbone of the management having effective supervision over the Medical Sales Representatives in a district. The reliance placed on the authorities by the claimant, as referred to above, is of no avail to him. Same is my opinion in respect of case of S.K. Verma vs. Mahesh Chandra and another reported in AIR 1984 SC 1462 as the same is on different facts wherein a Development Officer in L.I.C. was held to be a workman. On the other hand the case of S.K. Maini vs. M/s. Carona Sahu Co. Ltd. and others reported in (1994) 3 SC 510 squarely applies to the facts and circumstances of the case wherein their Lordship was of the opinion that a Manager or an Administrative Officer is generally invested with the powers of supervision in W.P.(C) 5397/1998 Page 14 of 16 distinction to the stereo type of work of a clerk. It was also observed that a Manager may not be invested with the powers of appointment and discharge of other employees. Similarly, supervision means supervision over men and not over machine as was laid down by their Lordship in case of Bombay Dyeing & Mfg. Co. Ltd. vs. R.A. Bidoo and another reported in 1990 LAC I.C. 116".

(Emphasis supplied)

17. The conduct and demeanor of the petitioner in diverting and denying the several queries put to him in cross examination has also been taken note of in the impugned award. The petitioner conveniently failed to remember several documents, and his own letters proved on record which showed that he was serving in managerial and administrative capacity. The evidence of the respondent management to show that the petitioner was serving in that capacity was not shaken during the cross examination of the respondents witness.

18. The petitioner has not been able to point out any infirmity in the aforesaid finding returned by the industrial adjudicator. No perversity has been pointed out in the approach of the industrial adjudicator. It has also not been pointed out that any relevant evidence has been ignored or irrelevant evidence has been considered. It is also not the petitioner's case that the finding returned could, under no circumstances, be returned on the basis of the evidence brought on record. This Court is not sitting as an appellate forum while examining the impugned award. The claim of the petitioner that he was merely a Sales Promotion Employee and that he was serving in administrative and managerial capacity as District Manager is, therefore, W.P.(C) 5397/1998 Page 15 of 16 rejected. Reliance placed by the petitioner on the definition of "Sales Promotion Employee" contained in Section 2(d) of the Sales Promotion Act is of no avail to the petitioner. The definition of the said expression contained in Section 2(d) reads as follows:

"(d) "Sales promotion employee" means any person by whatever name called (including an apprentice) employed or engaged in any establishment for hire or reward to do any work relating to promotions of sales or business, or both, but does not include any such person:-

(i) Who, being employed or engaged in a supervisory capacity, draws wages exceeding sixteen hundred rupees per mensem; or

(ii) Who is employed or engaged mainly in a managerial or administrative capacity."

(Emphasis supplied) Therefore, a person could not qualify as a Sales Promotion Employee if he is employed or engaged in manual or managerial or administrative capacity - which the petitioner was.

19. I, therefore, do not find any merit in the present writ petition and dismiss the same leaving the parties to bear their respective costs.

(VIPIN SANGHI) JUDGE MAY 03, 2013 W.P.(C) 5397/1998 Page 16 of 16

Unlock Advanced Research with PRISMAI

Delhi High Court