Shivnandan Sharma Vs. The Punjab
National Bank Ltd. [1955] INSC 15 (15 March 1955)
SINHA, BHUVNESHWAR P.
BOSE, VIVIAN JAGANNADHADAS, B.
CITATION: 1955 AIR 404 1955 SCR (1)1427
ACT:
Master and servant-Banker-Agreement between
Bank and Treasurers-Treasurers, whether servants or independent contractors
-Cashier appointed by Treasurer-Whether servant of the Bank.
HEADNOTE:
The appellant was appointed head cashier in
one of the branches of the respondent Bank by the Treasurers who were in charge
of the Cash Department of the Bank by virtue of an agreement between them. The
question arose as to whether the appellant was an employee of the Bank.
Held. (i) that the terms of the agreement
clearly showed that the Treasurers were servants of the Bank and not
independent contractors; and that (ii)as the direction and control of the
appellant and of the ministerial staff in charge of the Cash Department of the
Bank was entirely vested in the Bank, the appellant was an employee of the
Bank.
If a master employs a servant and authorizes
him to employ a number of persons to do a particular job and to guarantee their
fidelity and efficiency for a cash consideration, the employees thus appointed
by the servant would be, equally with the employer, servants of the master.
The question as to whose employee a
particular person is has to be determined with reference to the facts and
circumstances of each individual case, and among the many tests by which to
ascertain who is the employer, the most satisfactory one is to ask who is
entitled to tell the employee the way in which he is to do the work upon which
he is engaged.
(1) (1924] I.L.R. 51 Cal. 703.
(2) [1931] I.L.R. 59 Cal. 297, 1428 Donovan
v. Laing, Wharton & Down Construction Syndicate ([1893] 1 Q.B.D. 629) and
Mersey Docks & Harbour Board v. Coggins & Griffith (Liverpool) Ltd.
([1947] A.C.1), referred to.
CIVIL APPELLATE, JURISDICTION: Civil Appeal
No. 207 of 1954.
Appeal by special leave from the Judgment and
Order dated the 31st day of August 1953 of the Labour Appellate Tribunal of
India, Lucknow, in Appeal No. III-57 of 1953.
A. S. R. Chari (Bawa Shiv Charan' Singh and
M. R. Krishna pillai, with him), for the appellant.
Achhru Ram (Naunit Lal, with him), for the
respondent.
1955. March 15. The Judgment of the Court was
delivered by SINHA J.-This is an appeal by special leave against the orders of
the Lucknow Bench of the Labour Appellate Tribunal of India (hereinafter to be
referred to as "The Appellate Tribunal") dated the 31st August 1953,
setting aside the award dated the 13th October 1952 made by the Chairman,
Central Government Industrial Tribunal, Calcutta (hereinafter to be referred to
as "The Tribunal") reinstating the appellant as the head cashier with
back salary under the Punjab National Bank (hereinafter called "The
Bank").
The facts leading up to this appeal may
shortly be stated.
The appellant started his service as the head
cashier in the Una Branch of the Bank on the 18th June 1949. The Cash
Department of the Bank is in charge of Treasurers. The relation between the
Bank and the Treasurers is evidenced by an agreement dated the 1st May 1944
(Ex. 1) which will be noticed in detail hereinafter. That was an agreement
between the Bank and "Messrs Rai Bahadur Karam Chand Puri &
Bros". That firm was appointed the Treasurers at the head office of the
Bank and other places in and outside the Punjab. On the 28th September 1951 the
District Manager of the Northern Circle of the. Bank wrote a letter (Ex. 4) to the
Treasurers informing 1420 them that it had been decided to close the Una office
of the Bank with effect from the close of business on the 3rd November 1951. In
pursuance of that letter the Treasurers intimated by a letter dated 2nd October
1951 enclosing a copy of Ex. 4 to the appellant that the Una Branch of the Bank
will cease to function from the close of business on the 3rd November 1951 and
that his services will not be required after that date. The Punjab National
Bank Employees' Union (Punjab) took up the cause of the appellant as also that
of other employees and made representations to the Government of India. The
Government of India by a notification No. SRO-432 dated the 8th March 1952
published in the Gazette of India, Part II-Sec. 3, in exercise of its powers
under section 10 of the Industrial Disputes Act XIV of 1947 (hereinafter called
the Act) referred the industrial dispute between the Bank and its workmen named
in schedule 2 (concerning workers dismissed) and schedule 3 (relating to
workers transferred) for adjudication to the Industrial Tribunal at Calcutta
constituted under section 7 of the Act.
Schedule 1 in so far as it is necessary for
purposes of this case contains the following points of dispute between the
employer and the workmen:"1. Wrongful dismissal of the workmen mentioned
in schedule II and their reinstatement.
"2. In the event of any order for
reinstatement payment of wages and other allowances from the date of dismissal
to the date of reinstatement".
The appellant is No. 5 in schedule 2
aforesaid. The 'Tribunal gave its award on the 13th October 1952 in respect of
a number of employees whose cases were actually in controversy before it. It is
only necessary to refer to the award in so far as it concerned the appellant.
After overruling the preliminary objection of the Bank that the Union bad no
locus standi to represent the appellant the Tribunal formulated the following
point for its decision:"On merits the main point involved is as to whether
the services of an employee of the Cash 1430 Department can be terminated on a
change made in the services of the Contractor Cashier".
It answered this point in these words:"This
point has been agitated in more than one case and I have also held in Reference
No. 3 of 1951 as Chairman of Industrial Tribunal (P. N. Bank dispute) relating
to 5 cashiers that the employees of the Cash Department are the employees of
the Bank and not the nominees of the Contractor Cashiers so far service
conditions are concerned, and I think it will serve no useful purpose to
discuss all the legal precedents cited, more especially when the point has been
set at rest by their Lordships of the Supreme Court in Civil Appeal No. 66 of
1952 in the matter of United Commercial Bank Ltd. v. Secretary, U. P. Bank Employees'
Union and Others. I am of the opinion that the dismissal of Shri Sharma was
wrongful and liable to be set aside. Now the normal remedy is reinstatement and
I have no hesitation in allowing the same. He will also be paid his back salary
an allowance from the date of dismissal to the date of reinstatement".
Whatever may be the merits of the answer
given to the question propounded by the Tribunal, there is no doubt that the
question posed had been wrongly framed. The discharge or dismissal of the
appellant had nothing to do with the change in the personnel of the Treasurers.
The appellant's services were dispensed with on the ground that the Una Branch
where he was employed as head cashier being an uneconomic unit had to be closed
and that therefore the appellant's services were no more required. The respondent's
case appears to have been that the firm. known as Messrs R. B. Karam Chand Puri
& Bros. have been contractors for the Cash Department of the Bank at the
head office and some of the other offices in the Punjab and beyond; that from
time to time agreements were executed between the Bank and the aforesaid firm;
that the last agreement was executed on the 1st May 1954 (Ex. 1); that the
appellant according to the respondent-Bank was the -nominee of the said firm,
and that his services had been dispensed 1431 with by the said firm whose
employee he was and not by the Bank which had nothing directly to do with the
employment of cashiers and other workers in the Cash Department which was in
charge of the Treasurers described as "Contractor Treasurers". Hence
the main question in controversy between the parties was whether the appellant
was an employee of the Bank or of the said "Contractor Treasurers",
whom we shall call the "Treasurers" for the sake of brevity. The
Tribunal did not address itself to the determination of that question. This
Court also did not discuss and decide the matter in Civil Appeal No. 66 of
1952, but assumed that cashiers of the Bank were its employees. If that
question had been decided by this Court, as the Tribunal erroneously thought
this Court had, in Civil Appeal No. 66 of 1952, the controversy would have been
at an end. Therefore when the respondent preferred an appeal to the Appellate
Tribunal, the Bank at the forefront of its attack against the award of the
Tribunal raised the ground that the Tribunal had not determined the basic
question which could have given jurisdiction to the Tribunal to decide the
dispute whether the head cashier was an employee of the Bank or was a nominee
of the "Treasurer" as contended on behalf of the Bank. The Bank
relied very strongly before the Appellate Tribunal on the memorandum of
agreement (Ex. 1) and the correspondence that passed between the Bank and the
"Treasurers" on the one hand and the latter and the appellant before
us on the other (Exs. 2, 3, 4 and 5).
The Appellate Tribunal rightly remarked that
the Tribunal had recorded no finding on that basic question and had assumed
that the respondent before it was an employee of the Bank. The Appellate
Tribunal took the view that the agreement (Ex. 1) was decisive of that
question. After referring in great detail to the terms of the agreement the
Appellate Tribunal came to the conclusion that the cashier was not an employee
of the Bank but of the Treasurers and that therefore the Tribunal had no
jurisdiction to give any relief to the complainant before it. The 183 1432
award by the Tribunal was, in the result, set aside and the Bank's appeal
allowed.
The appellant in this Court through his counsel
Shri Chari, argued that the Appellate Tribunal had misinterpreted the
provisions of the Industrial Disputes Act in coming to the conclusion that the
Tribunal had no jurisdiction to entertain the dispute simply on the ground that
one of the parties to the dispute bad successfully denied the relationship of
employer and employee; that the Appellate Tribunal misconceived its functions
by basing its findings on the interpretation of the written agreement between
the Bank and its Treasurers when it should have gone into all the relevant
facts to determine the substance of the matter;
and finally, that the Appellate Tribunal
misdirected itself on the question of the interpretation of the agreement for
coming to the conclusion that the appellant was not an employee of the Bank but
was a nominee of the "Treasurers".
It was further argued on behalf of the
appellant that the Tribunal having based its decision on its previous award
dated the 16th September 1952 in Reference No. 3 of 1951 between persons more
or less in the same position as the appellant and the respondent-Bank, in the
background. of the decision of the previous Tribunals, e.g., the award of the
Conciliation Board presided over by Mr. Justice Bind Basni Prasad of the
Allahabad High Court, the award by the Tribunal presided over by Mr' K. C. Sen,
and the award of the All India Industrial Tribunal '(Bank Disputes), presided
over by Sri S. Panchapagesa Sastri and the award dated the 24th March 1951 in
Reference No. 20, the award of the Tribunal was really final. The argument was
that the award of the Tribunal was based on considerations of facts and
circumstances disclosed in those earlier awards to which the Bank and its
cashiers and other employees employed in the Cash Department were parties. It
was thus a final finding of fact which was not open to appeal before the
Appellate Tribunal. It was therefore contended that the Appellate Tribunal bad
no jurisdiction to entertain the appeal and to reverse the award of the
Tribunal.
1433 On behalf of the respondent-Bank it was
contended that no specific grounds had been taken either before the Appellate
Tribunal or in the memorandum of appeal to this Court that the Appellate
Tribunal had no jurisdiction on the ground now taken by the appellant in this
Court, nor was that ground taken in the statement of case. On merits it was
contended by the respondent's counsel that the Tribunal is as much bound by the
rules of evidence and procedure as any other Tribunal and as the Tribunal had
not addressed itself to the question whether the cashier-appellant was an
employee of the Bank, the question was open before the Appellate Tribunal which
was competent to pronounce on that basic question. Finally it was argued that
on a true construction of the provisions of the agreement (Ex. 1) this Court
should accept the finding of the Appellate Tribunal that the appellant was not
an employee of the Bank and that on that account the Tribunal had no
jurisdiction to grant any relief to the appellant.
On behalf of the respondent the case was
practically rested on the construction of the agreement (Ex. 1). With reference
to the terms of the agreement the learned counsel for the respondent argued
that the Treasurers were not servants or employees of the Bank but were
"independent contractors" and that the appellant and other employees
in the Cash Department having been nominees of the "independent
contractors" there could not be any relation of employer and employee
between the Bank and the appellant. It is therefore necessary to examine in
some detail the terms of the agreement aforesaid. We set out below, underlining
important words, the terms of the agreement in so far as they are relevant for
the determination of the true relation between the Bank and the Treasurers.
Though this agreement is dated the 1st May 1944, cl. (1) provides that it will
be deemed to have commenced and come into force from the 15th March 1942, the
date of the death of R. B. Karam Chand Puri and will take the place of the
previous agreement dated the 26th July 1941, thus maintaining the continuity of
the relationship between the 1434 Bank and the Treasurers'. The agreement
provides that the Treasurers shall diligently and faithfully serve the Bank at
the Head Office and its various offices mentioned in schedule A attached to and
forming part of the agreement and at other offices where they may hereafter be
appointed treasurers and shall in all respects diligently and faithfully obey
and observe all lawful orders and instructions of the Bank or the person placed
by the Bank in authority over them in relation to the due discharge of their
duties as Treasurers. The Treasurers in addition to the duties, liabilities and
responsibilities devolving upon them by virtue of the provisions of the
agreement shall also be liable to perform such duties and discharge such
responsibilities as by custom usually devolve on treasurers in the employ of a
bank. The Treasurers shall be paid for their services a remuneration as
mentioned in schedule A aforesaid or such remuneration as the General Board of
Directors of the Bank may determine from time to time. Out of the remuneration
paid to them by 'the Bank the Treasurers shall pay salaries to their nominees
employed by them for performing the duties of a cashier in the Bank on their
behalf or other functionaries of a similar nature. The salaries of such
nominees employed by them will be fixed by the Treasurers themselves but the
same will be subject to the approval of the Bank. The remuneration of the
Treasurers will be the net amount which will be left to them after paying
salaries to their nominees employed by them for working as cashiers, etc. The
Treasurers themselves will not be entitled to any kind of allowances besides
the net remuneration as aforesaid but their nominees or working cashiers will
be entitled to allowances which ,the authorities of the Bank may sanction for
members of the -staff from time to time. The Treasurers shall employ the number
of men at each office as mentioned in schedule A aforesaid. The Board of
Directors shall have the power to increase or decrease the number of their
nominees for any particular office and the amount of remuneration fixed for
that office. The Treasurers shall be responsible for the due safety, both
within and outside the premises of the Bank at any 1435 office placed under
their charge, of all money, specie, ornaments, bullion, cash, etc. and of other
valuable documents received by them for and on behalf of the Bank or from the
Bank and shall be answerable to the Bank for all losses occurring either
inadvertently or by or through the negligence or misconduct of the Treasurers
or any of their nominees. The Treasurers shall be entitled to resign the
services of the Bank by giving three calendar months' notice to the Bank. The
Bank shall also be entitled to dispense with the Treasurers' services on giving
three months' notice In case of gross negligence or misconduct or of any fraud,
misappropriation or embezzlement by the Treasurers or any of the nominees in
the discharge of ,their duties as such Treasurers, no notice shall be necessary
and the Bank shall have the right to dispense with their services forthwith.
The Bank shall have the right to take the Treasurers into the service of the
Bank after settlement of remuneration with the Treasurers at any other office
or offices of the Bank. The Treasurers and their nominees shall obey all the
orders, rules and regulations prescribed by the Bank with regard to the
discharge of their duties by the cashiers as well as with regard to the amount
of balance they are allowed to keep with them. It shall be the duty of the
cashiers to inform the manager of the Bank as soon as the balance in hand
exceeds the prescribed limit and to ask for orders on the point. The Treasurers
shall not engage any person as their assistant or peon about whose character,
conduct or reliability the manager of the Board of Directors of the Bank may
have any objection. The Treasurers shall also arrange that no person under
employment absents himself from duty without the written permission of the
manager for the time being. If any such employee is absent without leave, or he
is turned out on the objection of the Board or the Manager, the Treasurers
shall forthwith appoint a substitute in his place. The Treasurers shall be
responsible for the acts and defaults of all their nominees.
The Treasurers and their nominees shall be
entitled to traveling allowance according to rates sanctioned by the Board 1436
of Directors of the Bank. The Treasurers have deposited security of the value
of Rs. 15,000/on which they shall be entitled to receive interest at the rate
of 31 per cent. per annum. As a further security for the due performance of the
terms and conditions of the agreement as a cover for loss that may be caused to
the -Bank by any act or omission of themselves or any one of their nominees,
the Treasurers hypothecated properties as per schedule C attached to and
forming part of the agreement. Schedule A aforesaid contains the names of the
offices, the monthly remuneration of the Treasurers in respect of each one of
those offices separately, net savings of the Treasurers after paying the
salaries of the total number of men including cashiers, etc., as stated against
each one of the offices. Apart from the terms set out above bearing on the relation
between the Bank and the Treasurers, some of which apply equally to their
nominees, the following terms of the agreement bear directly on the relation
between the nominees of the Treasurers, like the appellant, and the Bank. In
this connection the agreement provides that the Board of Directors shall have
the power to increase or decrease the number of the Treasurers' nominees for
any particular office and the amount of remuneration fixed for that office.
Such nominees shall be entitled as servants of the Bank to any bonus which may
from time to time be declared for the members of the staff. The bonus of the
Treasurers shall be limited to the amount of their own net remuneration and no
further. They shall not be entitled to any bonus to which their cashiers are
not eligible under the rules of the Bank.
The nominees of the Treasurers shall be
entitled to participate as ordinary members of the staff in the provident fund
constituted by the Bank. Such nominees shall also be entitled to traveling
allowance according to rates sanctioned by the Board of Directors of the Bank
whenever they are required to go to out-stations on bank business.
From the terms of the agreement aforesaid set
out above almost verbatim omitting such clauses and words as are not relevant
to this case, it will appear 1437 that the Treasurers are under the employment
of the Bank on a monthly basis for an indefinite term, that is to say, until
such time as either party to the agreement terminated it in accordance with the
terms quoted above. They are under the complete control and direction of the
Bank through its manager or other functionaries. The Treasurers have to take
their orders from day to day as regards the cash balance or other cognate
matters relating to the safe custody of cash, valuable documents, etc.
belonging to the Bank or its constituents. The Treasurers receive in respect of
each office under the in-charge a certain name sum out of which they have to
pay the salary of a stated number of their assistants who may be head cashiers
or cashiers or assistant cashiers and other such functionaries. They are
entitled to receive bonus on the net amount secured to them as their
remuneration, being the lump sum fixed in respect of each office, minus the
salary of the assistants. It is true that these Treasurers are not and cannot
be expected to be personally present to discharge their onerous duties at each
one of the large number of offices spread over the Punjab and outside.
Naturally they had to be authorized to engage head cashiers, or assistant
cashiers in respect of each of the offices placed in their charge. They had to
guarantee the fidelity of the persons so employed as their assistants. Those
assistants had to be persons in whose reliability, 'honesty and efficiency both
the Bank and the Treasurers had confidence. The Treasurers have the right to
nominate those assistants but the Bank had the final words in the choice. The
Bank Manager has -complete control over such nominees in the matter of leave of
absence, discipline and conduct in the discharge of their duties as assistants
managing the cash and other valuables in the custody of the Bank. From the very
nature of things it bad to be a dual control in the sense that the Treasurers
had to nominate the assistants who are to discharge those responsible functions
in connection with cash and other valuables of the Bank and the Bank could not
abdicate its powers of full control over the day to day working of 1438 the
Cash Department. The nominees of the Treasurers are treated on the same footing
as the other servants of the Bank in the matter of bonus' travelling allowance
and provident fund, etc. It is true those nominees are to be paid by the,
Treasurers but it is out of the money provided by the Bank.
It is not always easy to determine whether
the relation between two parties, in the present case of the Treasurers
vis-a-vis the Bank, is that of servants to a master or of independent
contractors who have undertaken to do a particular job for their employer. The
question has generally arisen in connection with the determination of vicarious
liability of an employer in respect of acts done by his agent (using a neutral
word which includes an independent contractor as also a servant). The
distinction between a servant and an independent contractor has been the
subject matter of a large volume of case-law from which the text-book writers
on torts have attempted to lay down some general tests. For example, in
Pollock's Law of Torts,* the distinction has thus been brought out:
"A master is one who not only prescribes
to the workman the end of his work, but directs or at any moment may direct the
means also, or, as it has been put, 'retains the power of controlling the
work', a servant is a person subject to the command of his master as to the
manner in which he shall do his work........ An independent contractor is one
who undertakes to produce a given result but so that in the actual execution of
the work he is not under the order or ,control of the person for whom be does
it, and may use his own discretion in things not specified beforehand......................."
Clerk & Lindsell on Torts (11th Edn.) at p. 135 have adopted the
description of an independent contractor given by Pollock as quoted above.
In the 11th Edn. of Salmond's Treatise on the
Law of Torts, the same distinction has been clearly indicated in the following
passage at p. 98 *Pages 62 & 63 of Pollock on Torts, 15th Edn.
1439 "what then, is the test of this
distinction between a servant and an independent contractor? The test is the
existence of a right of control over the agent in respect of the manner in
which his work is to be done. A servant is an agent who works under the
supervision and direction of his employer; an independent contractor is one who
is his own master. A servant is a person engaged to obey his employer's orders
from time to time; an independent contractor is a person engaged to do certain
work, but to exercise his own discretion as to the mode and time of doing it-he
is bound by his contract, but not by his employer's orders".
Those learned authors have discussed in great
detail cases illustrative of those distinctions, indicating the circumstances
in which the general rule has been applied to individual cases with such
modifications as the facts and circumstances of a particular case required. We
are here not concerned with those nice distinctions which have been drawn in
connection with the rule of vicarious liability in torts. We are here concerned
only with the question how far the test laid down by the standard authors as
quoted above can be applied to determine the present controversy whether the
Treasurers of the Bank were its servants as contended on behalf of the
appellant or independent contractors as claimed on behalf of the respondent-Bank.
The agreement between the parties, as summarised above, is a composite
transaction constituting the Treasurers agents of the Bank, the former agreeing
to indemnify the latter against any loss occasioned to the Bank due to the lack
of fidelity and efficiency of the ministerial staff entrusted with the charge
of the Bank's cash and valuable documents. The Treasurers have been charged
with the duty of nominating their assistants who are to be responsible in their
day to day work to the Bank which all the time has full control over them in
the matter of their leave of absence, as to how they shall keep the cash and
other valuables and as to how they shall be under the general direction of the
Bank's manager or, some 184 1440 other functionary who may be nominated by the
Bank to supervise the work of the Cash Department. The Bank makes itself
answerable to the employees thus appointed by the Treasurers with the
concurrence of the Bank for their bonus, provident fund and travelling
allowance. For those purposes these assistants are to be on the same footing as
the other employees of the Bank.
It was contended on behalf of the respondent
Bank that its agreement with the Treasurers shows that the latter bad the
fullest responsibility for the appointment and dismissal and payment of salary
of the employees in charge of the, Cash Department of the Bank and that
therefore the Treasurers could not but be independent contractors. It has
already been noticed that the appointment of such assistants as are entrusted
with the work of the Cash Department is not under the absolute power of the
Treasurers. The appointment-has to be approved by the Bank and the Treasurers
cannot continue to employ those workmen in whose fidelity and efficiency the
Bank has no confidence. Hence both in the matter of appointment and dismissal
of the employees the Bank reserves to itself the power to' give direction to
the Treasurers. Similarly in the matter of the payment of salary the money
comes out of the coffers of the Bank, though it may be paid by the hand of the
Treasurers. In this connection it was contended on behalf of the appellant that
payment of salary of the employees in the Cash Department is made through the
Ban].,, itself but we have no tangible evidence in this case beyond the bare assertion
at the Bar. But, in our opinion, the situation in respect of the appointment,
dismissal and payment of salary of the employees of the Cash Department is
analogous to that of the employees of a particular department of Government, in
which appointment and dismissal of ministerial staff may rest with an authority
so empowered by the head of the department.
Payment of salary may also be made by the
appointing authority but the money comes out of the Government treasury. In
those circumstances, can it be rightly asserted that 1441 those employees are
not the servants of Government? The analogy may not be perfect, because, in the
present case, the appointment and dismissal of the employees of the Cash
Department is the joint responsibility of the Bank and its Treasurers. It has
got to be so because the Treasurers are the guarantors of the fidelity and
efficiency of the employees and the Bank has to exercise complete control over
the day to day discharge of their functions because it is the Bank which is
vitally and immediately concerned with the efficient and honest discharge of
the duties of the assistants in the Cash Department, the efficient running of
which is the most important of a bank's functions.
It will further be noticed with reference to
the terms of the agreement set out above that whereas the Treasurers and their
nominees have to take their orders from the Bank Manager or other such
functionary, there is no specific provision that those nominees shall discharge
their day to day functions under the direct control of the Treasurers or that
they will be subject to the immediate control of the Treasurers in the
discharge of their daily duties and in the matter of the grant of leave of
absence. There could not be such a provision, as a dual control of that kind in
the daily work of the employees would lead to a great deal of confusion and
lack of discipline amongst the ministerial staff. The employees of the Cash
Department have of necessity to be under the direct control of the Bank Manager
or of some other functionary appointed by the Bank. It is the Bank which has
undertaken the responsibility in the matter of their pay and prospects in the
service and naturally therefore, such employees, even as other employees of the
Bank, have to take their orders from the Bank. It must therefore be held that
the Treasurers are the servants of the Bank and that their nominees must
equally be so.
The Appellate Tribunal held that on a
reading-as a whole of the clauses of the agreement aforesaid the appellant was
an employee of the Treasurers and not of the Bank, It did not address itself
pointedly 1442 to the question as to what was the exact relation between the
Bank and the Treasurers. It did not also consider the question as to what would
be the position of the employees of the Cash Department vis-a-Vis the Bank if
it were held that the Treasurers Id. themselves were the servants of the Bank
and not independent contractors. Before the Appellate Tribunal both parties
appear to have concentrated their attention on the question as to whether the
employees of the Cash Department were servants of the Bank or of the
Treasurers. In our opinion, that was not a correct approach to the
determination of the controversy between the parties.
If the Treasurers' relation to the Bank was
that of servants to a master, simply because the servants were authorized to
appoint and dismiss the ministerial staff of the Cash Department would not make
the employees in the Cash Department independent of the Bank. In that situation
the ultimate employer would be the Bank through the agency of the Treasurers.
It was argued on behalf of the respondent that even if it were held that the
Treasurers were the servants of the Bank and not independent contractors, the
legal position of the employees of the Cash Department vis-a-vis the Bank would
be the same, namely, that they will be in law the servants of the Treasurers.
In our opinion, there is no substance in that contention. If a master employs a
servant and authorizes him to employ a number of persons to do a particular job
and to guarantee their fidelity and efficiency for a cash consideration., the
employees thus appointed by the servant would be equally with the employer,
servants of the master. It is not always correct to say that persons appointed
and liable to be dismissed by an independent contractor can in. no
circumstances be the employees of the third party. This would be clear from the
following observations of Lord Esher, M.R., in the case of Donovan v. Laing,
Wharton & Down Construction,Syndicate(1):"It is true that the'
defendants selected the man and paid his wages, and these are circumstances
which, if nothing else intervened, would be strong to show (1) (1893] 1 Q.B.D.
629 at 632, 1443 that he was the servant of the defendants. So, indeed, he was
as to a great many things but as to the working of the crane he was no longer
their servant, but bound to work under the orders of Jones & Co., and, if
they saw the man mis-conducting himself in working the crane or disobeying
their orders, they would have a right to discharge him from that
employment".
Those observations have been approved in the
latest decision of the House of Lords in the case of Mersey Docks & Harbour
Board v. Coggins & Griffith (Liverpool) Ltd.(1). The House of Lords
distinguished that ruling on facts but did not depart from the general rule
laid down in the earlier decision that the determinative factor is as to which
party had control over the workers as to how they would do their job from day
to day. Lord Macmillan in his speech at p. 14 has observed as follows:"Many
reported cases were cited to your Lordshipsbut where,, as all agree, the
question in each case turns on its own circumstances, decisions in other cases
are rather illustrative than determinative. So far as attempts have been made
to formulate a criterion of general application, it cannot be said that these
attempts have been very successful".
It would thus appear that the question as to
whose employee a particular person was has to be determined with reference to
the facts and circumstances of each individual case.
Lord Porter in the course of his speech in
the reported case (supra) at p. 17 has observed as follows:"Many factors
have a bearing on the result. Who is paymaster, who can dismiss, how long the
alternative service lasts, what machinery is employed, have all to be kept in
mind. The expressions used in any individual case must always be considered in
regard to the subject matter under discussion but amongst the many tests
suggested I think that the most satisfactory, by which to ascertain who is the
employer at any particular time is to ask who is entitled to tell the employee
the way in which he is to do the work upon which he is engaged".
(1) [1947] A.C. 1, 1444 As indicated above,
in the present case the direction and control of the appellant and of the
ministerial staff in charge of the Cash Department of the Bank was entirely
vested in the Bank through its manager or other superior officer. We have
therefore no hesitation in differing from the conclusion arrived at by the
Appellate Tribunal and in holding that the appellant was an employee of the
Bank.
That being so, the Tribunal had the
jurisdiction to make the directions it did in respect of the appellant. The
respondent did not at any stage of the proceedings challenge the orders of the
Tribunal on its merits. That conclusion being reached, there is no difficulty
in upholding the orders of the Tribunal in respect of the appellant. It is
therefore not necessary to pronounce upon the other points raised by the
parties. The appeal is accordingly allowed wit costs throughout.
Appeal allowed.
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