Shri Birdhichand Sharma Vs. First
Civil Judge Nagpur & Ors  INSC 281 (9 December 1960)
CITATION: 1961 AIR 644 1961 SCR (3) 161
CITATOR INFO :
R 1962 SC 517 (11,31) RF 1963 SC1591 (16) R
1966 SC 370 (9,10,11,13) RF 1970 SC 66 (10,11) F 1971 SC 832 (2,6) R 1974 SC 37
(12,14,16,19) RF 1974 SC1832 (62,64,65,67) R 1987 SC 447 (9) RF 1992 SC 573
Industrial Dispute--Workers in bidi factory--
Liberty to come and go when they liked-Payment on Piece-rate-Control by
rejection of work not upto the standard--If workmen-Test- Factories Act, 1948
(LXIII of 1948), ss. 2(1) and 79.
The appellant employed workmen in his bidi
factory who had to work at the factory and were not at liberty to work at their
houses; their attendance were noted in the factory and they had to work within
the factory hours, though they were not bound to work for the entire period and
could come and go away when they liked; but if they came after midday they were
not supplied with tobacco and thus not allowed to work even though the factory
closed at 7 p.m.; further they could be removed from service if absent for 8
days. Payment was made on piece rates according to the amount of work done, and
the bidis which did not come upto the proper standard could be rejected.
The respondent workmen applied for leave for
15 days and did not go to work, for which period the appellants did not pay
their wages; in consequence the concerned workmen applied to the Payment of Wages
Authority for payment of wages to them.
The appellant's contention that the
respondent workmen were not his workmen within the meaning of the Factories Act,
was rejected and the claim for payment of wages was allowed.
The question therefore was whether the
appellants were workmen within the meaning of the Factories Act.
Held, that the nature of extent of control varies
in different industries and cannot by its very nature be precisely defined.
When the operation was of a simple nature and could not be supervised all the
time and the control was at the end of day by the method of rejecting the work
done which did not come up to proper standard, then, it was the right to
supervise and not so much the mode in which it was exercised which would
determine whether a person was a workman or an independent contractor.
The mere fact that a worker was a piece-rate
worker would not necessarily take him out of the category of a worker within
the meaning of S. 2(1) Of the Factories Act. In the instant case the respondent
workmen could not be said to be independent contractors and were workmen within
the meaning of s. 2(1) of the Factories Act.
Held, further, that the leave provided for
under S. 79 of the Factories Act arose as a matter of right when a worker had
put 21 162 in a minimum number of working days and he was entitled to it. The
fact that the workman remained absent for a longer period had no bearing on his
right to leave.
State v. Shankar Balaji Waje, A.I.R. 1960
Bom. 296, approved.
Dharangadhara Chemical Works Ltd. v. State of
Saurashtra,  S.C.R. 152 and Shri Chintaman Rao v. The State of Madhya
Pradesh,  S.C.R. 1340, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 370 of 1959.
Appeal by special leave from the judgment and
order dated August 6, 1957, of the Bombay High Court, Nagpur, in Misc. Petition
No. 512 of 1956.
M. N. Phadke and Naunit Lal, for the
Shankar Anand and A. G. Ratnaparkhi, for the
respondents Nos. 2-4.
N.P. Nathvahi, K. L. Hathi and R. H. Dhebar,
for the Intervener (State of Bombay).
1960. December 9. The Judgment of the Court
was delivered by WANCHOO, J.-This is an appeal by special leave in an
industrial matter. The appellant is the manager of a biri factory in Nagpur.
Respondents 2 to 4 are working in that factory. They applied for leave for
fifteen days from December 18, 1955, to January 1, 1956, and did not go to work
during that period. The appellant did not pay their wages for these days and in
consequence they applied to the Payment of Wages Authority (hereinafter called
the Authority) for payment to them of wages which had been withheld. Their
claim was that they were entitled to fifteen days' leave in the year under ss.
79 and 80 of the Factories Act, 1948. The Authority allowed the claim and
granted them a sum of Rs. 90/16/- in all as wages which had been withheld for
the period of leave. Thereupon, the appellant filed an application under Art.
226 of the Constitution before the High Court at Nagpur. His main contention
was that respondents 2 to 4 were not workers within the meaning of the Factories
Act and could not therefore claim the benefit 163 of a. 79 thereof The
respondents contended that they were workers within the meaning of the Factories
Act and were entitled to the sum awarded to them by the Authority. The High
Court on a consideration of the circumstances came to the conclusion that
respondents Fir2 to 4 were workers under s. 2(1) of the Factories Act and
therefore the order of the Authority was correct and dismissed the petition.
The appellant then applied for a certificate to appeal to this Court which was
refused. He then obtained special leave from this Court and that is how the
matter has come up before US. Sec. 2(1) defines a worker to mean a person
employed, directly or through any agency, whether for wages 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. The main contention of the appellant is that respondents 2 to 4 are
not employed in the factory within the meaning of that word in s. 2(1).
Reliance in this connection is placed on two decisions of this Court, namely,
Dharangadhara Chemical Works Ltd. v. State of Saurashtra (1) and Shri Chintaman
Rao v. The State of Madhya Pradesh (2).
In Dharangadhara Chemical Works (1), this
Court held with reference to s. 2 (s) of the Industrial Disputes Act, which
defined "workman" that the word "employed" used therein
implied a relationship of master and servant or employer and employee and it
was not enough that a person was merely working in the premises belonging to
another person. A distinction was also drawn between a workman and an
independent contractor. The prima facie test whether the relationship of master
and servant or employer and employee existed was laid down as the existence of
the right in the employer not merely to direct what work was to be done but
also to control the manner in which it was to be done, the nature or extent of
such control varying in different industries and being (1)  S.C.R. 152.
(2)  S.C.R. 1340.
164 by its nature incapable of being
precisely defined. The correct approach therefore to the question was held to
be whether having regard to the nature of the work, there was due control and
supervision of the employer.
The matter came up again for consideration in
Chintaman Rao's case (1) which also happened to relate to biri workers, and s.
2(1) of the Factories Act had to be considered in it. It was held that the test
laid down in Dharangadhara Chemical Works (2) with respect to s. 2(s) of the
Industrial Disputes Act would also apply to s. 2(1) of the Factories Act.
Finally, it was pointed out that the question whether a particular person
working in a factory was an independent contractor or a worker would depend
upon the terms of the contract entered into between him and the employer and no
general proposition could be laid down, which would apply to all cases. Thus in
order to arrive at the conclusion whether a person working in a factory (like
respondents 2 to 4 in this case) is an independent contractor or a worker the
matter would depend upon the facts of each case.
Let us then turn-to the facts which have been
found in this case. It has been found that the respondents work at the factory
and are not at liberty to work at their homes.
Further they work within certain hours which
are the factory hours, though it appears that they are not bound to work for
the entire period and can go away whenever they like; their attendance is noted
in the factory; and they can come and go away at any time they like, but if any
worker comes after midday he is not supplied with tobacco and is thus not allowed
to work, even though the factory closes at 7 p.m. in accordance with the
provisions of the Factories Act and when it is said that they can return at any
time, it is subject to the condition that they cannot remain later than 7 p.m.
There are standing orders in the factory and
according to those standing orders a worker who remains absent for eight days
(presumably without leave) can be removed. The payment is made on piece-rates
according to the amount of work done but the management has the (1) 
(2)  S.C.R. 152.
165 right to reject such biris as do not come
up to the proper standard. It is on these facts that we have to decide the
question whether respondents 2 to 4 were employed by the appellant.
It will be immediately noticed that the facts
in this case are substantially different from the facts in Shri Chintaman Rao's
case (1). In that case the factory entered into contracts with independent
contractors, namely, the Sattedars, for the supply of biris. The Sattedars were
supplied tobacco by the factories and in some cases biri leaves also. The
Sattedars were not bound to work in the factory nor were they bound to prepare
the biris themselves but could get them prepared by others. The Sattedars also
employed some coolies to work for them and payment to the coolies was made by
the Sattedars and not by the factory.
The Sattedars in their turn collected the
biris prepared by the coolies and took them to the factory where they were
sorted and checked by the workers of the factory and such of them as were
rejected were taken back by the Sattedars to be remade. The payment by the
factory was to the Sattedars and not to the coolies. In these circumstances it
was held that the Sattedars were independent contractors and the coolies who
worked for them were not the workers of the factory.
The facts of the present case, however, are
Respondents 2 to 4 have to work at the
factory and that in itself implies a certain amount of supervision by the
management. Their attendance is noted and they cannot get the Work done by
others but must do it themselves. Even though they are not bound to work for
the entire period during which the factory is open it is not in dispute that if
they come after midday, they are not given any work and thus lose wages for
that day, the payment being at piece- rates. Further though they can stay away
without asking for leave, the management has the right to remove them if they
so stay away for a continuous period of eight days. Lastly, there is some
amount of supervision inasmuch as the management has the right of rejection of
the biris prepared if they do not come up to the proper standard.
(1) (1958) S.C.R. 1340.
166 The question therefore that arises is
whether in these circumstances it can be said whether the appellant merely
directs what work is to be done but cannot control the manner in which it has
to be done; of course, the nature or extent of control varies in different industries
and cannot by its very nature be precisely defined. Taking the nature of the
work in the present case it can hardly be said that there must be supervision
all the time when biris are being prepared and unless there is such supervision
there can be no direction as to the manner of work. In the present case the
operation being a simple one, the control of the manner in which the work is
done is exercised at the end of the day, when biris are ready, by the method of
rejecting those which do not come up to the proper standard. In such a case it
is the right to supervise and not so much the mode in which it is exercised
which is important. In these circumstances, we are of opinion that respondents
2 to 4 who work in this factory cannot be said to be independent con- tractors.
The limited freedom which respondents 2 to 4 have of coming and going away
whenever they like or of absenting themselves (presumably without leave) is due
to the fact that they are piece-rate workers; but the mere fact that a worker is
a piece-rate worker would not necessarily take him out of the category of a
worker within the meaning of s. 2(1) of the Factories Act. Considering the
entire circumstances and particularly the facts that if the worker does not
reach the factory before midday he is given no work, he is to work at the
factory and cannot work else- where, he can be removed if lie is absent for
eight days continuously and finally his attendance is noted and biris prepared
by him are liable to rejection if they do not come up to the standard, there
can be no doubt that respondents 2 to 4 are workers within the meaning of s.
2(1) of the Factories Act. This is also the view taken by the Bombay High Court
in State v. Shankar Balaji Waje (1) in similar circumstances and that we think
is the right view.
Then it was urged that even if the
respondents are (1) A.I.R. 1960 Bom. 296.
167 workers under s. 2(1), s. 79 should not
be applied to them as they can absent themselves whenever they like. In this
very case it is said that the respondents remained absent for a longer period
than that provided in the Act and therefore they do not need any leave. This
argument has in our opinion no force. The leave provided under s. 79 arises as
a matter of right when a worker has put in a minimum number of working days and
he is entitled to it. The fact that the respondents remained absent for a
longer period than that provided in s, 79 has no bearing on their right to
leave, for if they so remained absent for such period they lost the wages for
that period which they would have otherwise earned. That however does not mean
that they should also lose the leave earned by them under s. 79. In the
circumstances they were entitled under s. 79 of the Factories Act to
proportionate leave during the subsequent calendar year if they had worked
during the previous calendar year for 240 days or more in the factory. There is
nothing on the record to show that this was not so. In the circumstances the
appeal fails and is hereby dismissed with costs. One set of hearing costs.