Messrs. P.M. Patel & Sons &
Ors, Vs. Union of India & Ors [1985] INSC 207 (25 September 1985)
PATHAK, R.S. PATHAK, R.S.
TULZAPURKAR, V.D.
SEN, AMARENDRA NATH (J)
CITATION: 1987 AIR 447 1985 SCR Supl. (3) 55
1986 SCC (1) 32 1985 SCALE (2)860
CITATOR INFO:
F 1992 SC 573 (12,14,39)
ACT:
Employees' Provident Funds and Miscellaneous
Provisions Act 1952 Section 2(f) - Workers employed- at their homes in
manufacture of beedis - Whether entitled to benefit of the Act.
Relationship of Master and servant - Element
of personal service - Of little significance when test of control and
supervision enables a right of rejection.
HEADNOTE:
The labour employed in the manufacture of
beedis consists of different categories. At the factory, which constitutes the
formal establishment, there are administrative and clerical staff, accountants,
packers, checkers and bhattimen. The work of rolling the beedis itself is done
by one or the other of different categories of workers. The first category is
where the work may be entrusted by the manufacturers directly to workers who
prepare the beedis at home after obtaining a supply of the raw material
consisting of tobacco, beedi leaves and thread from the manufacturers. The
second category consists of workers employed by the manufacturers through
contractors and the manufacturers pass on the raw material to such workers for
rolling the beedis in their dwelling houses and then supplying beedis. There is
thus a direct relationship between the manufacturers and workers. The third
category of home workers are those to whom the work is entrusted by independent
contractors who treat the workers as their own employees and get the work done
by them either at their own premises or in the dwelling homes of the workers in
order to fulfil and complete contracts entered into with the manufacturers for
the supply of the finished product from the raw material supplied by the
manufacturers to the contractors.
The home workers attend the factories within
specified hours everyday ant collect the raw material for taking to their homes
for rolling beedis. In the case of home workers who hold a direct relationship
with the manufacturers, the rolled beedis are brought by the home workers to
the factory and the beedis which H 56 conform to the standards envisaged by the
manufacturers are accepted while those which do not are rejected. The staff at
the factory maintains registers in which regular entries are made of the raw
material supplied to home workers, and of the rolled beedis which are delivered
by them at the factory. The payment of wages to such home workers may be mate
directly or distributed through the contractors engaged by the manufacturers.
In the case of contracts between the manufacturers ant independent contractors,
the manufactured product is collected by the contractors from their home
workers ant delivered to the manufacturer. The manufacturer is concerned only
with the payment under the contract to the contractors, and the payment of
wages to the home workers is a matter between the contractors ant the home
workers.
The Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 provides for the institution of provident
Funds for employees in factories ant other establishments. Originally, it did
not extent to the beedi industry. For the first time, by a Notification dated
May 17, 1977 mate by Government of India the beedi Industry was added to
Schedule I of the Act with effect from May 31, 1977. This was followed by
another Notification dated May 23, 1977 issued by the Central Government
amending clause (b) of sub-paragraph 3 of paragraph I of the Employees'
Provident Funds Scheme, 1952 in order to bring the beedi industry within the
province of that scheme with effect from May 31, 1977. The Central Government
Provident Funds Commissioner thereupon wrote to all the Regional Provident
Funds Commissioners for the enforcement of the scheme in the beedi industry.
The petitioners in the Writ Petitions who
were engaged in the manufacture and sale of beedis, challenged the
constitutional validity of the Notifications dated May 17, 1977 ant May 23,
1977, ant the enforcement of the Scheme in so far as it related to home workers
ant sought a declaration that the Employees' Deposit-Linked Insurance Scheme
ant the Employees' Family Pension Scheme framed under the Employees' Provident
Funds Act are unenforceable in respect of the beedi industry, contenting that:
(i) while the Employees' Provident Funds Act ant the Scheme may be applicable
to the workers employed in the factory itself, they cannot be extended to home
workers because there is no- relationship of employer ant employee between the
manufacturers ant the home workers, (ii) the Employees' Provident Funds Act ant
the Scheme cannot be applied to home workers in the beedi industry inasmuch as
they are subject to no retirement age and there is no 57 power in the
manufacturer to retire such home workers on the ground of superannuation, ant
(iii) the extension of the Scheme to the beedi industry constitutes an
unreasonable restriction on the Fundamental rights of the petitioners
guaranteed by sub-cl. (g) of clause (1) of Article 19 of the Constitution and
also violates Articles 14 and 31 of the Constitution in as much as the
financial burden occasioned thereby is so excessive that it is obvious that the
Central Government did not apply its mind to the paying capacity of the
industry.
On the question whether the workers employed
at their homes in the manufacture of beedis are entitled to the benefit of the
Employees' Provident Fund Scheme ant Miscellaneous Provisions Act 1952 ant the
Schemes framed thereunder.
Dismissing the Writ Petitions, ^
HELD: 1. The home workers are 'employees'
within the definition of 'employee' contained in clause (f) of s. 2 of the
Employees' Provident Funds Act 1952, and the Schemes framed thereunder. The
terms of the definition of 'employee' in section 2(f) of the Act are wide. They
include not only persons employed directly by the employer but also persons
employed through a contractor. Moreover, they include mot only persons employed
in the factory but also persons employed in connection with the work of the
factory. A home worker, by virtue of the fact that he rolls beedis, is involved
in an activity connected with the work of the factory. It is therefore mot
possible to accept the narrow construction sought by the 'petitioners that the
words 'in connection with' in the definition of 'employee' in section 2(f) must
be confined to work performed in the factory itself as a part of the total
process of the manufacture.
[67 G, 63 C-E]
2. The conditions and the circumstances in
which the home workers of a single manufacturer go about their work, including
the receiving of raw material, rolling the beedis at home and delivering them
to the manufacturer subject to the right Of rejection indicates sufficient
evidence of the requisite degree of control and supervision for establishing
the relationship of master and servant between the manufacturer and the home
worker. The work of rolling beedis is mot of a sophisticated nature, requiring
control and supervision at the time when the work is done. It is a simple
operation which has been performed satisfactorily by thousands of illiterate
workers. It is a task which can be performed by young and old, men and women,
with 58 equal facility. It does not require a high order of skill.
The right of rejection can constitute in
itself an effective degree of supervision and control, and there is evidence to
show that the rejection takes place in the presence of the home worker. This
factor however plays a merely supportive role in determining the existence of
the relationship of master and servant. The element of personal service is of
little significance when the test of control and supervision lies in the right
of rejection. [67 C-F] Shri Chintaman Rao and Another v. The State of Madhya
Pradesh, [1958] S.C.R.. 1340, Shri Birdhichand Sharma v. First Civil Judge,
Nagpur and Others, [1961] 3 S.C.R. 161.
Shanker Balaji Waje v. State of Maharashtra
[1962] Suppl. 1 S.C.R. 249, M/s. Orissa Cement Ltd. v. Union of India, [1962]
Suppl. 3 S.C.R. 837, D.C. Dewan Mohindeen Sahib and Sons v. The Industrial
Tribunal, Madras, [1964] 7 S.C.R.
646, Silver Jubilee Tailoring House v. Chief
Inspector of Shops & Establishments, [1974] 1 S.C.R. 747, Mangalore Ganesh
Beedi Works etc. v. Union of India etc. [1974] 3 S.C.R. 221, referred to.
3. Clause (a) of sub-para. (1) of Para 69 of
the Employees' Provident Funds Scheme provided that "a member may withdraw
the full amount standing to his credit in the fund on retiring from service
after attaining the age of 55 years". The law does not envisage the
fixation of a retirement age before that provision can apply. A worker is
entitled to withdraw the amount in the Fund if he retires at any time after
attaining the age of 55 years. There 18 no reference to any predetermined age
of superannuation. [68 A- B]
4. The expression 'retirement' does mot, in
the absence of anything more, necessarily imply a fixed age for leaving service.
It has a wide connotation. In a context where no age of superannuation has been
fixed, the expression must take on its ordinary meaning of the normal cessation
of service by an act of the employer or of the worker. That a person may retire
even before reaching any specified age 18 exemplified by cl. (b) of sub-para
(1) of para 69 which speaks of "retirement on account of permanent and
total incapacity for work due to bodily or mental infirmity." [68 C] Delhi
Cloth & General Mills Co. Ltd. v. Workmen and other etc. [1969] 2 S.C.R.
307, referred to.
Regional Provident Fund Commissioner, Andhra
Pradesh v. Shri T.S. Hariharan, [1971] Suppl. S.C.R. 305, distinguished.
59
5. The Beedi and Cigar Workers (Conditions of
Employment) Act, 1966 and the Rules made thereunder by the Maharashtra
Government have been framed specifically on the basis that in certain matters
home workers enjoy a status akin to the general category of workers. In the
Maharashtra Beedi ant Cigar Workers (Conditions of Employment) Rules 1968,
there is specific provision in respect of the payment of wages to home workers.
The contention that the provisions of the Employees Provident Funds Act and the
Schemes cannot be implemented at all in respect of the beedi industry has
therefore to be rejected. [69 C, E, F]
ORIGINAL JURISDICTION: Writ Petitions Nos.
3605 to 3609 of 1978 etc.
(Under Article 32 of the Constitution of
India.) M.N. Phadke, B. Kanta Rao, M.Q. Qazi, V.N. Ganpule and Mrs. Veena
Khanna for the Petitioners.
Abdul Khader, Girish Chander and Miss A.
Subhashini for the Respondents.
Mr. Rameshwar Nath for the Interveners.
The Judgment of the Court was delivered by
PATHAK, J. This and the connected cases raise the important question whether
the workers employed at their homes in the manufacture of beedis are y entitled
to the benefit of the Employees' Provident Funds and Miscellaneous Provisions
Act, 1952 and the & heme framed thereunder.
The question for consideration is
surrounded`by a welter of facts, many of which are disputed through affidavits
filed on the record, and it has not been an easy task to pick our way through
them to arrive at an intelligent and coherent picture for the purpose of
deciding these cases. We propose to take Writ Petitions Nos. 3605 to 3609 of
1978 filed by Messrs. P.M. Patel & Sons and others as the leading group of
cases, because the principal arguments on the several points arising in these
cases were argued by learned counsel in those writ petitions.
The petitioners are engaged in the
manufacture and sale of beedis. The labour employed in the manufacture of
beedis consists of different categories. At the factory, which constitutes the
formal establishment. there is an administrative ant clerical 60 staff, accountants,
packers, checkers and bhattimen. The work of rolling the beedis itself is done
by one or the other of different categories of workers. The work may be
entrusted by the manufacturers directly to workers who prepare the beedis at
home after obtaining a supply of the raw material consisting of tobacco, beedi
leaves and thread from the manufacturers. Another category consists of workers
employed by the manufacturers through contractors, and the manufacturers pass
on the raw material to such workers for rolling the beedis in their dwelling
houses, and there is, in a sense, a direct relationship between the
manufacturers and those workers. m e third category of home workers are those
to whom the work is entrusted by independent contractors who treat the workers
as their own employees and get the work done by them either at their own
premises or in the dwelling homes of the workers in order to fulfil and
complete contracts entered into with the manufacturers for the supply of the
finished product from the raw material supplied by the manufacturers to the
contractors. A cording to the manufacturers the home workers attend at the
factories within specified hours every day and collect the raw material for
taking to their homes for rolling beedis.
While that is true of home workers employed
directly by the manufacturers or who have been placed in employment through
contractors with the manufacturer, in the case of home workers employed by
independent contractors that may not be so. In the case of home workers who
hold a direct relationship with the manufacturers, the rolled beedis are
brought by the home workers to the factory and the beedis which conform to the
standards envisaged by the manufacturers are accepted while those which do not
are rejected. m e acceptance or rejection is effected in the presence of the
home worker to whom the work was entrusted.
The staff at the factory maintains registers
in which regular entries are made of the raw material supplied to home workers,
and of the rolled beedis which are delivered by them at the factory. m e
payment of wages to such home workers may be made directly or distributed
through the contractors engaged by the manufacturers for engaging them.
In the case of contracts between the
manufacturers and independent contractors, the manufactured product is
collected by the contractors from their home worker and delivered to the
manufacturer. It is evident that the manufacturer is concerned only with
payment under the contract to the contractors, and the payment of wages to the
home workers is a matter between the contractor and the home workers.
The employees' Provident Funds and
Miscellaneous Provisions Act, 1952 (hereinafter referred to as the Employees'
Provident Funds Act ) provides for the institution of provident funds for 61
employees in factories and other establishments. Originally, it did not extend
to the beedi industry. For the first time, by Notification No. GSR. 660 dated
May 17, 1977 made by the Government of India under sub-s. (1) of s. 4 of that
Act, the beedi industry was added to Schedule I of the Act with effect from May
31, 1977. This was followed by Notification No. GSR. 677 dated May 23, 1977
issued by the Central Government amending clause (b) of sub-paragraph 3 of
paragraph 1 of the Employees' Provident Funds Scheme, 1952 (hereinafter
referred to as the "Scheme") so as to bring the beedi industry within
the province of that Scheme with effect from May 31, 1977. Closely thereafter,
the Central Government Provident Funds Commissioner wrote to all the Regional
Provident Funds Commissioners about the extension of the Scheme to the beedi
industry with effect from June 1, 1977. By these writ petitions the petitioners
challenge the constitutional validity of the Notifications dated May 17, 1977
and May 23, 1977 and the proceedings taken by the respondents against the
petitioners for the purpose of enforcing the employees' Provident Funds Act and
the Scheme so far as they relate to home workers. The petitioners also seek a
corresponding declaration that the Employees' Deposit-Linked Insurance Scheme
and the Employees' Family Pension Scheme framed under the Employees' Provident
Funds Act are unenforceable in respect of the beedi industry.
The principal grounds on which the
petitioners challenge the impugned Notifications may be shortly enumerated:-
(1) While the Employees' Provident Funds Act and the Scheme may be applicable
to the workers employed in the factory itself, they cannot be extended to home
workers because there is no relationship of employer and employee between the
manufacturers and the home workers. It is submitted that a home worker cannot
be described as an "employee" within the definition set forth in
clause (f) of 8. 2 of the Employees' Provident Funds Act.
(2) The Employees' Provident Funds Act and
the Scheme cannot be applied to home workers in the beedi industry inasmuch as
they are subject to no retirement age and there is no power in the manufacturer
to retire such home workers on the ground of superannuation. Having regard to
the peculiar features of the arrangements under which home workers 62
manufacture beedis, it is not reasonably possible to apply and implement the
provisions of the Employees Provident Funds Act and the Scheme in relation to
them.
(3) The extension of the Employees' Provident
Funds Act and the Scheme to the beedi industry constitutes an unreasonable
restriction on the Fundamental Rights of the petitioners guaranteed by sub-cl.
(g) of clause 1 of Article 19 of the Constitution and also violates Articles 14
and 31 of the Constitution inasmuch as the financial burden occasioned thereby
is so excessive that it is obvious that the Central Government did not apply
its mind to the paying capacity of the industry. Moreover, the burden imposed
on the industry-bears no nexus to the object of the statute, namely, to provide
post retirement benefits.
Having considered the material on the record
before us in this leading group of writ petitions it appears that some of the
home workers have been working regularly for several years exclusively for a
single manufacturer, and depend for their livelihood on this work, that they
attend the factory during specified hours to secure raw material for making
beedis at home and for delivering the manufactured beedis to the staff at the
factory, that the quantity of leaves and tobacco supplied is fixed by the
manufacturer, and that registers of the raw material and of payment of wages
are maintained at the factory, that a record is maintained of the manufactured
beedis received from the home workers and the quantity rejected, and that a log
book or a wage card is issued to the home workers.
In order to organise the conditions in which
the beedi workers worked and to give them greater security of employment
Parliament enacted the Beedi and Cigar Workers (Conditions of Employment) Act,
1966 and the State Governments framed rules under that statute. The said Act
applied to home workers, as is clear from the definition of
"employee" in clause (f) of 8. 2 of that Act and provides for the
application of certain labour laws.
There is no dispute that pursuant to the
impugned Notification dated May 17, 1977 the beedi industry has been brought
within the scope of the Employees' Provident Funds Act and that the impugned
Notification dated May 23, 1977 has made the Scheme applicable to the beedi
industry. Clause (a) of sub-s. 63 (3) of 8. 1 of the Employees' Provident Funds
Act applies that Act to every establishment which is a factory engaged in any
industry specified in Schedule I and in which twenty or more persons are
employed. Admittedly, the factory belonging to the manufacturer is, therefore,
drawn within the compass of the Employees' Provident Funds Act and the Scheme.
It is also admitted by the petitioners that the workers employed within the
factory premises would be covered by the Act and the Scheme. The real question
is whether the home workers are entitled to that benefit.
Clause (f) of s. 2 of that Act defines an
"employee" to mean "any person who is employed for wages in any
kind of work, manual or otherwise, in or in connection with the work of an
establishment, and who gets his wages directly or indirectly from the employer,
and includes any person employed by or through a contractor in or in connection
with the work of the establishment." It will be noticed that the terms of
the definition are wide. They include not only persons employed directly by the
employer but also persons employed through a contractor, Moreover, they include
not only persons employed in the factory but also persons employed in
connection with the work of the factory. It seems to us that a home worker, by
virtue of the fact that he rolls beedis, is involved in an activity connected
with the work of the factory. We are unable to accept the narrow construction
sought by the petitioners that the words "in connection with" in the
definition of "employee" must be confined to work performed in the
factory itself as a part of the total process of the manufacture.
Now to be an employee it is necessary that
the relationship of master and servant should exist with the employer. The
principal question is whether such a relationship exists between the
manufacturer and a home worker. Several cases were placed before us by the
parties in this connection, and reference may be made to them. In Shri
Chintaman Rao and Another v. The State of Madhya Pradesh, [1958] S.C.R. 1340,
this Court held that independent contractors, known as Sattedars, with whom a
manufacturer contracted for the supply of beedis could not be described as
workers within the definition of sub-8- (1) of 8- 2 of the Factories Act, nor
could their collies, because the Sattedars undertook to supply the beedis by
manufacturing them in their own factories or by entrusting the work to third
parties. The Sattedars were not subject to a right of control by the
manufacturer in respect of the manner in which the work was to be done. The
Court applied the principle that the test for determining the relationship of
master and servant lay in the 64 existence of the right in the master to
supervise and control the A work done by the servant not only in the matter of
directing what work the servant was to do but also the manner in which he
should do it. In passing, the Court referred to home workers employed by the
Sattedars for making beedis in their respective homes, and the Court observed
that they could not be regarded as persons employed by the manufacturer
directly or through any agency.
Thereafter, in Shri Birdhichand Sharma v.
First Civil Judge, Nagpur and Others, [1961] 3 S.C.R. 161, this Court
considered a case where the manufacturer had employed workmen in his beedi
factory and who were at liberty to work at their homes, and the Court held that
the conditions in which they worked made them "workers" within the
meaning of clause (1) of s. 2 of the Factories Act. The significant feature of
the judgement lies in the observation of the Court that in the case of the
beedi industry the right of rejection of the beedis if they did not come up to
the proper standard was evidence of the supervision and control exercised by
the manufacturer. Noting that the nature and extent of supervision and control
varied in different industries. the Court said :- "Taking the nature of
the work in the present case it can hardly be said that there must be
supervision all 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." Reference may be made next to Shankar
Balaji Waje v. State of Maharashtra, [1962] Suppl. 1 S.C.R. 249. The majority
view taken on the particular facts of that case was that the workers were not
subject to the control and supervision of the manufacturer. The learned Judges
constituting the majority appear to have overlooked the observations in
Birdhichand Sharma (supra) that the right of rejection of the beedis prepared
by the workers in itself constituted a sufficient element of supervision and
control. Our attention was also invited by the petitioners to . Orissa Cement
Ltd.
v. Union of India [1962] Suppl. 3 S.C.R. 837,
but this is a case where the question was whether a notification was valid
which made the employer liable to pay into 65 the provident fund, constituted
under the provident Funds Act, 1952, the share of workers who were in fact the
employees of A independent contractors. The Court drew a careful distinction
between labour employed by the manufacturer and that employed by an independent
contractor.
Most of these cases were considered
thereafter by this Court in D.C. Dewan Mohideen Sahib and Sons v. The Industrial
Tribunal, Madras, [1964] 7 S.C.R. 646, and while reviewing the law the Court
rejected the plea of the manufacturers against the application of the
Industrial Disputes Act on the ground that the workers ostensibly employed by
the "so- called contractors" were in fact the workmen of the
appellants who had employed them through their agents or servants. It may be
pointed out, however, that the Court reiterated the view expressed in
Birdhichand Sharma's case (supra) that the rolling of beedis was work of such a
simple nature that supervision was not required all the time and it was
sufficient if supervision was exercised at the end of the day through the
system of rejecting defective beedis.
The law took a major shift in Silver Jubilee
Tailoring House and others v. Chief Inspector of Shops and establishments and
another [1974] 1 S.C.R. 747, as to the criteria which determined the
relationship of master and servant. Mathew, J., who spoke for the Court,
reviewed the earlier decisions of this Court as well as some of the decisions
rendered in England, and pointed out that the test of control as traditionally
formulated was no longer treated as an exclusive test. He observed - "It
is exceedingly doubtful today whether the search for a formula in the nature of
a single test to tell a contract of service from contract for service will
serve any useful purpose. The most that profitably can be done is to examine
all the factors that have been referred to in the cases on the topic. Clearly,
not all of these factors would be relevant in all these cases or have the same
weight in all cases. It is equally clear that no magic formula can be
propounded which factors should in any case be treated as determining ones. The
plain fact is that in a large number of cases, the court can only perform a
balancing operation weighing up the factors which point in one direction and
balancing them against those pointing in the opposite direction.
During the last two decades the emphasis in
the field has shifted and no longer rests so strongly upon the question of
control. Control is obviously an 66 important factor and in many cases it may
still be the decisive factor. But it is wrong to say that in every case it is
decisive. It is now no more than a factor, although an important one He was
dealing with a case where the workers who were tailors went to tailoring shops
and were given work as and when work was available, and when cloth was given
for stitching to a worker he was told how he should stitch it, and if the
instructions were not carried out the work was rejected and he was asked to
restitch it. Some of the workers were allowed to take the clothes home for
stitching.
The Court held that there was a relationship
of master and servant because of the right in the employer to reject the work
done, and it reiterated that "the degree of control and supervision would
be different in different types of work".
In the present cases, the right of rejection
can similarly be said to represent the control and supervision exercised by the
manufacturer over the beedis prepared by the home workers. Quite obviously,
while in the Silver Jubilee Tailoring House case (supra) it was possible for,
the employer to direct re-stitching of the garment, no such direction can be
reasonably envisaged in the case of sub- standard beedis. A Constitution Bench
of this Court had occasion to consider the law in Bangalore Ganesh Beedi Works
etc. v. Union of India etc. [1974] 3 S.C.R. 221, which questioned the validity
of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966. The Court
adopted the test of rejection of defective beedis for determining whether the beedi
workers were the employees of the manufacturer or the independent contractors.
The Court observed:- "...the manufacturers or trade mark holders have
liability in respect of workers who are directly employed by them or who are
employed by them through contractors. Workers at the industrial premises do not
present any problem. The manufacturer or trade mark holder will observe all the
provisions of the Act by reason of employing such labour in the industrial
premises. When the manufacturer engages labour through the contractor the
labour is engaged on behalf of the manufacturer, and the latter has therefore
liability to such contract labour. It is only when the contractor engages
labour for or on his own behalf and supplies the finished product to the manufacturer
that he will be the principal employer in relation to such labour and the
manufacturer will not be responsible 67 for implementing the provisions of the
Act with regard A to such labour employed by the contractor. If the right of
rejection rests with the manufacturer or trade mark holder, in such a case the
contractor who will prepare beedis through the contract labour will find it
difficult to establish that he is the independent contractor- In the context of
the conditions and the circumstances set out earlier in which the home workers
of a single manufacturer go about their work, including the receiving of raw
material, rolling the beedis at home and delivering them to the manufacturer
subject to the right of rejection there is sufficient evidence of the requisite
degree of control and supervision for establishing the relationship of master
and servant between the manufacturer and the home worker. It must be remembered
that the work of rolling beedis is not of a sophisticated nature, requiring control
and supervision at the time when the work is done. It is a simple operation
which, as practice has shown, has been performed satisfactorily by thousands of
illiterate workers. It is a task which can be performed by young and old, men
and women, with equal facility and it does not require a high order of skill.
In the circumstances, the right of rejection can constitute in itself an
effective degree of supervision and control. We may point out that there is
evidence to show that the rejection takes place in the presence of the home
worker. That factor, however, plays a merely supportive role in determining the
existence of the relationship of the master and servant. The petitioners point
out that there is no element of personnel service in beedi rolling and that it
is open to a home worker to get the work done by one or the other member of his
family at home. The element of personal service, it seems to us, is of little
significance when the test of control and supervision lies in the right of
rejection.
In our opinion, the home workers are
"employees" within the definition contained in cl. (f) of s. 2 of the
Employees' Provident Funds Act.
The next question is whether having regard to
the peculiar features of the home workers' system of employment the provisions
of the Employees' Provident Funds Act and Scheme can be applied on their terms
to home workers. The principal contention in this connection is that no
retirement age is fixed in the case of home 68 workers and, therefore, the
Scheme cannot be implemented in respect of them. Cl. (a) of sub-para (1) of
Para. 69 of the Employees' Provident Funds Scheme provides that "a member
may withdraw the full amount standing to his credit in the Fund on retirement
from service after attaining the age of 55 years". It seems to us that the
law does not envisage the fixation of a retirement age before that provision
can apply. A worker is entitled to withdraw the amount standing to his credit
in the fund if he retires at any time after attaining the age of 55 years.
There is no reference to any pre-determined age of superannuation. The
expression "retirement" does not, in the absence of anything more
necessarily imply a fixed age for leaving service. It has a wide connotation.
In a context where no age of superannuation has been fixed, the expression must
take on its ordinary meaning of the normal cessation of service by an act of
the employer or of the worker. That a person may "retire" even before
reaching any specified age is exemplified by cl. (b) of sub-para. (1) of Para.
69 which speaks of "retirement on account of permanent and total
incapacity for work due to bodily or mental infirmity". We may point out
that in Delhi Cloth & General Mills Co. Ltd., V. Workmen and others etc.
[1969] 2 S-C-R. 307, this Court has held that a gratuity scheme could be
effective even if no age of superannuation was fixed. Learned counsel for the
petitioners had referred us to Regional Provident Fund Commissioner, Andhra
Pradesh v. Shri T.S. Hariharan [1971] Suppl. S.C.R. 305, where this Court
observed in respect of the Employees' Provident Funds Act:- "The Act was
brought on the statute book for providing for the institution of a provident
fund for the employees in factories and other establishments. The basic purpose
of providing for provident funds appears to be to make provision for the future
of the industrial worker after his retirement or for his dependants in case of
his early death. To achieve this ultimate object the Act is designed to
cultivate among the workers a spirit of saving something regularly, and also to
encourage stabilisation of a steady labour force in the industrial
centres," and it is pointed out that the Court rejected the plea that the
Act could apply to short term employees also. The case, in our opinion, is distinguishable
because the workers there were taken in employment on account of an emergency
and for a very short period necessitated by an abnormal contingency.
That is not the 69 position here. In the
present cases, the employment was entered A into in the regular course of
business. We hold that there is no substance in the contention of the
petitioners that the provisions of the Employees' Provident Funds Act and the
Scheme cannot be applied at all to home workers. There is no reason why the
provisions of the Act and Scheme should not apply where their terms permit such
application- We may also point out that the Beedi and Cigar Workers (Conditions
of Employment) Act, 1966 and the rules made thereunder by the Maharashtra
Government have been framed specifically on the basis that in certain matters
home workers enjoy a status akin to the general category of workers. Not only
do these provisions apply to "industrial premises" as defined under
clause (i) of s.2 of that Act but also to an "establishment" as
defined in clause (i) of s. 2 of the Act. There are several provisions which
apply to employees in establishments and are not confined to industrial
premises. An "establishment", by the terms of its definition is wide
enough to include the dwelling house of a home worker. A home worker would be
entitled, therefore, to annual leave with wages and wages during leave period
among other things. In the Maharashtra Beedi and Cigar Workers (Conditions of
Employment) Rules, 1968 there is specific provision in respect of the payment
of wages to home workers. The Rules relating to the issue of raw material by
the employer would extend to home workers also.
Accordingly, we reject the contention that
the provisions of the Employees Provident Funds Act and the Schemes cannot be
implemented at all in respect of the beedi industry.
The last contention of learned counsel for the
petitioners is that the financial burden which will be suffered by the beedi
industry in consequence of the Employees' Provident Funds Act and the Schemes
envisaged by it being extended to the industry will be beyond the financial
capacity of the beedi industry and will severely handicap it in competing with
the cigarette manufacturing industry. There is no nexus, it is said, between
the burden imposed on the industry and the object of the statute of providing
postretirement benefits. It is urged that this aspect did not engage the
attention of the Central Government when the impugned Notifications were
promulgated.
On the basis of this submission the
petitioners contend that their Fundamental Rights under Article 14, sub-cl. (g)
of cl. (1) of Article 19 and Article 31 of the Constitution have been violated.
We have 70 carefully examined the record before us and we are unable to find
adequate material in support of this submission. We need say nothing more. The
contention is rejected.
In the result, we see no force in these writ
petitions, the connected writ petitions and the connected special leave
petitions, and they are all accordingly dismissed. There is no order as to
costs.
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