Madras High Court
O.726 vs Thanasingan on 20 December, 2018
Author: C. Saravanan
Bench: C. Saravanan
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 20.12.2018
CORAM:
THE HONOURABLE MR.JUSTICE C. SARAVANAN
W.P.(MD) No.7455 of 2014 and
M.P(MD).Nos.1 of 2014 and 1 of 2015
and
M.P.(MD) No.2 of 2014
O.726, Prakasapuram Co-operative Urban Bank Limited,
rep. by its Managing Director,
26, Main Road,
Prakasapuram – 628 616 : Petitioner
Vs.
1.Thanasingan
2.The Inspector of Labour,
Authority under the Tamil Nadu-
Industrial Establishment (Conferment of
Permanent Status to Workmen) Act, 1981,
Thoothukudi. : Respondents
Prayer: This Writ Petition is filed under Article 226 of Constitution of India
praying to issue a Writ of Certiorarified Mandamus calling for the records
relating to the impugned order in Na.Ka.No.1413/2013, dated 29.08.2013
passed by the second respondent, Inspector of Labour, Thoothukudi and quash
the same.
For Petitioner : Mr. D.Shanmugaraja Sethupathi
For R1 : Mr. K. Raja Prabhakaran
http://www.judis.nic.in
2
for M/s. V. Jeyarani
For R2 : No appearance
ORDER
This Writ Petition is filed to call for the records relating to the impugned order in Na.Ka.No.1413/2013, dated 29.08.2013 passed by the second respondent, Inspector of Labour, Thoothukudi and quash the same.
2. The impugned order dated 29.08.2013 confers “Permanent Status” to the 1st respondent by referring to definition of the Workman under Section 2(4) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and certain decisions of the Hon'ble Supreme Court.
3. The first respondent was appointed as a “Daily Collection Agent” by the petitioner's Bank in terms of agreement dated 15.10.2002.
4. A memorandum of Understanding dated 10.10.2012 was also signed. It is the case of the petitioner's Bank that the order passed by the second respondent pursuant to the direction of this Court in W.P(MD).No.70 of http://www.judis.nic.in 3 2014, conferring the permanent status to the first respondent is contrary to the provisions of the Tamil Nadu Co-operative Societies Act, 1983 r/w. Rule 1 (49) of the Tamil Nadu Co-operative Societies Rule, 1998.
5. The learned counsel appearing for the petitioner submitted that in the contract between the petitioner's Bank and the first respondent there was no employer-employee relationship between them. He further submitted that neither the petitioner acted as a master nor the first respondent acted as a servant.
6. The 1st respondent acted an agent. Therefore, conferment of permanent status by the 2nd respondent is contrary to the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981.
7. He further submitted that the first respondent was only paid commission and he was working as a collection agent and there was no regular payment of salary nor the first respondent was worked exclusively for the petitioner's Bank.
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8. The learned counsel further submitted that the first respondent was worked exclusively agent and was entitled to receive only commission on the basis of daily collection.
9. In this connection, the learned counsel appearing for the petitioner relied on the decisions of the Hon'ble Supreme Court in Indian Overseas Bank Vs. Workmen, 2006(3) SCC 729wherein, the the Hon'ble Supreme Court considered the scope of the Industrial Disputes Act, 1947 particularly Section 2 of the said Act and in the said context employees employed as jewel appraiser by the Bank.
10. In the said case the Hon'ble Supreme Court noted the distinction between jewel appraisers and the regular employees of the Bank. The question raised in the said issue was whether jewel appraisers for loans were to be treated as regular and were to be absorbed as part time clerical staff of the Bank. The jewel appraisers were required to assess the quality and value of the jewels. The Court held that they cannot be treated as regular employees of the Bank. .The relevant paragraph No.18 of the said Judgment reads as follows:
http://www.judis.nic.in 5 S.No. Regular Employees Jewel appraisers 1 Subject to qualification and age No qualification / age prescribed 2 Recruitment through employment Direct engagement by the local exchange / Banking Service Manager Recruitment Board 3 Fixed working hours No fixed working hours 4 Monthly wages No guaranteed payment, only commission paid 5 Subject to disciplinary control No disciplinary control 6 Control/Supervision is exercised No control/supervision over the not only with regard to the nature of work to be performed allocation of work, but also the way in which the work is to be carried out.
7 Wages are paid by the Bank Charges are paid by the borrowers 8 Retirement age No reitrement age 9 Subject to transfer No transfer 10 While in employment cannot carry No bar to carry on any avocation on any other occupation or occupation.
11. The learned counsel thereafter referred to the decision of the Hon'ble Division Bench of this Court in the Judgment reported in L. Justine and another Vs. The Registrar of Coop Societies, Chennai and two others2002(4) CTC 385. There, the Court concluded that the neither the Tamil Nadu (Industrial Establishment Conferment of Permanent status to workmen) Act, 1981 nor the Industrial Disputes Act, 1947, imply that regardless of the illegal nature of appointments even at the entry stage, statutory protection is http://www.judis.nic.in 6 afforded under the above Acts after the completion of the man-days, be it 480 or 240 prescribed under the above statues.
12. The Court further held that both enactments have to be read and understood in the context that if only the appointments are authorised and the employees continued on temporary positions beyond the respective man days prescribed, the workmen get right to continue further on the legal presumption that the temporary posts are allowed to be treated as permanent.
13. The Court referred to several decisions of the Hon'ble Supreme Court particularly in Ashwini Kumar vs. State of Bihar (1997) 2SCC1 and concluded that the appointment of staff made to a co-operative society by the elected bodies or the officers in charge, in violation of the cadre strength or the prescriptions of the educational qualifications, cannot stand and are held to be null and void.
14. The above decision of the Division Bench of this Court rendered in the context of Tamil Nadu Industrial Disputes Act, 1958 and Tamil Nadu (Industrial Establishment Conferment of Permanent status to workmen) Act, http://www.judis.nic.in 7 1981.
15. The recruitment of staffs in the co-operative societies was made without inviting vacancy from the employment exchange and the list. In the process several appointees who did not satisfy the requirement of the educational qualifications were employed.
16. The learned counsel thereafter, referred to the decision of the Hon'ble Supreme Court reported in A.Umarani Vs. Registrar of Co-operative Societies2004 (7) SCC 112wherein it washeld that no regularization is permissible in exercise of the power conferred under Article 162 of the Constitution if the appointments have been made in contravention of the statutory rules.
17. The learned counsel for the petitioner referred to Division Bench Judgment of this Court and the decision of the Full Bench of the Principal Bench of this Court in R.Radhakrishnan vs Deputy Registrar of Societies(2007) 6 MLJ 455 wherein the Full Bench of the Principal Bench of this Court, following the decisions of the Hon'ble Supreme Court in A. Umarani Vs. Registrar of Co-operative Society(2004) 7 SCC 112 concluded that the State cannot request the Co-operative Societies of the State of Tamil http://www.judis.nic.in 8 Nadu to appoint without following the procedure and against Constitutional mandate contrary to the clear dicta Similar view taken by another decision of this Court in 2009(4) MLJ 186.
18. Per contra, the learned counsel for the first respondent submitted that the first respondent had worked full time in the capacity of the daily collection agent from the year 2002.
19. Since the first respondent had completed more than 480 days he was entitled to be observed as a permanent employee as per the Tamil Nadu (Industrial Establishment Conferment of Permanent status to workmen) Act, 1981.
20. It was further submitted that even as per Section 2(s) of the Industrial Disputes Act, 1947 the first respondent was entitled to raise Industrial Disputes in terms of Section 2(k) of the said Act.
21. The learned counsel further submitted that commission paid by the petitioner to the first respondent was wages within the mentioning of Section 2(r) of the Industrial Disputes Act, 1947. He further submitted that first respondent was indeed paid commission for promoting business of the Bank and therefore, on all corners the first respondent was a workman.
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22. The learned counsel for the first respondent also submitted that though the first respondent was working since 2002, the petitioner was paying only commission subject to maximum Rs.20,000/- and therefore, the petitioner was guilty on unfair labour practice. It was further submitted that the management was liable to be punished under Section 25(d) of the Industrial Disputes Act.
23. He also submitted 90 pages of document in support of plea that the first respondent had worked in various capacities as Societies Clerk and that the first respondent was working right from 2002 and he has been unfairly overlooked by the petitioner.
24. The learned counsel therefore submitted that the order passed by the Inspector of Labour pursuant to the directions of this Court in W.P(MD).No.70 of 2014 dated 20.02.2014 cannot be set aside based on the averments and submissions of the learned counsel for the petitioner.
25. I have also gone through the facts of the submissions made on behalf of the either sides. The Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 applies to several http://www.judis.nic.in 10 categorizes of industrial establishments and undertakings in which not less than fifty workmen were employed on any day of the preceding twelve months.
26. Sections 2 and 3 of the Tamil Nadu Industrial Disputes Act of the said Act was amended in tune with the provisions of the Industrial Disputes Act 1947.Workman employed in supervisory capacity and managerial or Administration Capacity are outside the provisions of the Act.
27. The Act provides that the period of uninterrupted service includes service which may be interrupted on account of sickness or authorised leave or an accident or strike, which is not illegal, or a lock out or a cessation to work which is not due to any fault on the part of the workman.
28. The petitioner's Bank is an Industrial Establishment and is therefore governed by the provisions of the Act.
29. The only question that arises for consideration is whether the first respondent was a “workmen” or not within the meaning of the provisions of the Tamil Nadu (Industrial Establishment Conferment of Permanent status to workmen) Act, 1981. If so, whether he was entitled to http://www.judis.nic.in 11 be conferred with the permanent status of Tamil Nadu (Industrial Establishment Conferment of Permanent status to workmen) Act, 1981.
30. The definition of the workman”” in Section 2(4) of the said Act is an inclusive definition. It only excludes following categories of the workmen:
(a) who is employed in the police service or as an officer or, other employee of a prison; or
(b) who is employed mainly in managerial or administrative capacity; or
(c) who, being employed in a supervisory capacity, draws wages exceeding three thousand and five hundred rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Under Section 2(4) of the Act, it is mandatory for the management to confer permanent Status to workman under Section 3 of the said Act.
31. The learned counsel for the first respondent has filed a typed set of papers stating that the first respondent was employed to carry on work as an Assistant, Clerk and Cashier for the Petitioner Bank and therefore, was a workman within the meaning of Section 2(4) and was therefore entitled to be absorbed as a permanent employees and therefore submitted that that the reasoning the second respondent in the order dated 29.08.2003 cannot be faulted.
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32. The decision of the Hon'ble Supreme Court in A.Umarani vs. Registrar Co-operative Societies (2004) 7 SCC 112 was rendered in the context of the G.O.Ms.No.86, dated 12.03.2001.
33. There, by G.O.Ms.No.86 dated 08.07.1980, the cut-off date was extended upto 11.03.2001 and thereby the Government of Tamil Nadu sought to regularise appointments made after 08.07.1980 in the co-operative societies without notifying the employment exchange in respect of those employees who had completed 480 days of service in two years purported to be in terms of the Tamil Nadu Industrial Establishments(Conferment of Permanent Status to Workmen) Act, 1981. The issue addressed by the Hon'ble Supreme Court framed the following issues:
18.The primal question which arises for consideration in these appeals is as to whether the State had the requisite authority to direct regularization of services of the employees of the co-operative societies by person of the impugned G.O.Ms.No.86 dated 12.03.2001.
34. In para 35, the Hon'ble Supreme Court held as follows:
http://www.judis.nic.in 13
35. No appointment, therefore, can be made in deviation of or departure from the procedures laid down in the said statutory rules.
35. The Court further held that the State has not created any post nor could it do so on its own. The State has not borne any part of the financial burden. It was, therefore, impermissible for the State to direct regularization of the services of the employees of the co-operative societies. Such an order cannot be held also on the ground that the employees allegedly served the co-operative societies for a long time.
36. There the Hon'ble Supreme Court following the several other decisions held that since the appointment was made on adhoc capacity the appellant therein could continue to hold the post in that capacity alone.
37. The Hon'ble Supreme Court further held that the appointment cannot be made on political consideration and in violation of the Government directions for reduction of establishment expenditure or a prohibition on the filling up of vacant posts or creating new posts including regularization of http://www.judis.nic.in 14 daily waged employees.
38. The Hon'ble Supreme Court has also held that the State has not borne any part of the financial burden. It was, therefore, impermissible for the State to direct regularization of the services of the employees of the co- operative societies. The Court held that such an order cannot be upheld also on the ground that the employees allegedly served the cooperative societies for a long time.
39. The above decision came to be passed in the background of G.O.Ms.No.86, dated 12.03.2001, wherein the employees who were employed contrary to the Rule 149 of the Tamil Nadu Co-operative Societies Rules and were sought to be regularized which came to be challenged before the Court.
40. The Court considered illegality in the manner of appointment and held that the employee cannot be appointed as per the Tamil Nadu (Industrial Establishment Conferment of Permanent Status to Workmen) Act, 1981.
41. This view was reiterated of the Division Bench in R.Radhakrishnan vs. Deputy Registrar of Co-operative Societies (2007) 6 http://www.judis.nic.in 15 MLJ 455. In para 13 it was held as follows:
13.From the aforesaid findings of the Supreme Court in the case of A.Umarani v. Registrar of Co-operative Societies (supra) the following facts emerge:
i) G.O.Ms.No.86 dated 12.03.2001, waas declared as a nullity, the State Government having no power to issue each other.
ii) Rule 149 framed under Act, 1983, reflect the legislative recruitment policy and such provisions are mandatory in nature.
iii)Regularization cannot be the mode of recruitment by any State within the meaning of Article 12 of the Constitution of India or any body or authority governed by the statutory Act or Rules framed thereunder.
iv) Appointments made in violation of mandataory provision of the statute ignoring the minimum educational qualification etc., is wholly illegal, which cannot be cured by taking recourse to Regularization.
Those who have come by the backdoor should go through that and for that no show cause notice is required to be issued.
In view of such finding of Supreme Court in A.Umarani v. Registrar of Co-operative Societies (supra) the observations, findings and directions given by Division Bench of this Court in L.Justine v. Registrar of Co- operative Societies, Chennai (supra) at paragraph 19(i), last portion of paragraph 19(v) and the finding with regard to regularization of service of employees recruited prior to 12.03.2001, stand overruled.
42. In Special Officer ,Palayamkottyai Urban Co-operative Bank Ltd., vs. Presiding Officer (2009) 4 MLJ 186, this Court referred to a passage the decision in L.Justine vs. Registrar of Co-operative Societies, Chennai http://www.judis.nic.in 16 2003(1) LLJ 284 wherein it was held as follows:
“19(vii) that either the provisions of Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 or the Industrial Disputes Act, 1947, or the settlements entered under Sections 12 or 18 thereof, shall have no application to the staff of the co-operative societies appointed without adequate qualifications or beyond the cadre strength for the period from 9.7.1980 to 11.3.2001. This is equally applicable to the staff appointed to the co-operative societies, otherwise than through employment exchange, for the period from 12.03.2001 onwards”.
43. In this case the petitioner had been engaged by the petitioner from 2002 pursuant to an agreement. The 1st respondent was appointed as a collection agent and he appears to have rendered services in various capacities.
44. The decision rendered A.Umarani vs. The Registrar of Cooperative Societies cited supra dealt with the larger issue as to whether the government can pass government orders to regularise the employment contrary to Rule 149 of the Tamil Nadu Cooperative Society Rules, as amended by G.O.Ms. 212, Corporation, Food and Consumer Protection Department and contrary to cadre strength.
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45. The employment there was also made there without the candidate having requested qualification and without following be reservation policy. Therefore, to regularise such appointments made was held illegal and arbitrary manner. The State Government issued various government orders and appointments made from time to time were sought to be regularised the cut-off date. This was done without notifying the Employment Exchange in respect of those employees who were in service over a period of two years and in purported compliance of the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act 1981.
46. In the present case however the conferment of permanent status is not based on any G.O of the Government of Tamil Nadu. The second respondent has conferred the status of an permanent employee to the first respondent on the ground that the first respondent had worked more than 480 days and was therefore entitled to be conferred with the status of a permanent employee under the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act 1981.
47. However, there are no discussion as to how the first respondent would qualify as “workmen” within the meaning of Section 2 (4). The http://www.judis.nic.in 18 exception provided in the definition of workmen states that a person employed in a managerial or administrative capacity or in supervisory capacity or exercises either nature of duties attached to the office or by reason of powers vested in him which are managerially nature cannot be considered to be a workman.
48. This aspect requires proper determination. Mere rendering of service beyond the period prescribed in Section 3 is not sufficient. It is also to be seen whether a person was a “workman” within the meaning of section 2 (4) of the Act. Though, the Act contemplates special dispensation in view of the language in Section 3 as it starts with a non obstante clause, to be conferred with a special status of a permanent workmen, the person should also qualify as a worker. This aspect requires proper determination after taking into consideration of the corresponding amendments to the definition of workmen the Act and under the provisions of the Industrial Disputes Act, 1947.
49. Therefore, to meet the ends of justice, the case is remanded back to the second respondent to pass speaking order on merits within a period of six weeks from date of communication of this order. Needless to state, order shall be passed only after hearing the 1st respondent after http://www.judis.nic.in 19 following the principles of natural justice. If the petitioner had been indeed employed the first respondent as a workman, he shall be conferred with the status of permanent employment. On the other hand, if the first respondent merely acted an as agent he shall not be conferred with the permanent status.
50. Accordingly, the impugned order is hereby set aside and this Writ Petition is disposed by way of remand. No costs. Consequently, connected Miscellaneous Petitions are closed.
20.12.2018 Index : Yes/No Internet: Yes/No trp C. SARAVANAN, J., trp/kkd To The Inspector of Labour, Authority under the Tamil Nadu-
Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981, Thoothukudi.
http://www.judis.nic.in 20 W.P.(MD) No.7455 of 2014 and M.P(MD).Nos.1 of 2014 and 1 of 2015 20.12.2018 http://www.judis.nic.in