M/S. Rajakamal
Transport & Anr Vs. The Employees State Insurance Corporation, Hyderabad [1996] INSC 565 (17 April 1996)
Ramaswamy,
K.Ramaswamy, K.Bharucha S.P. (J)
CITATION:
1996 SCALE (3)806
ACT:
HEAD NOTE:
O R D
E R
These
appeals arise from the order of the Division Bench of the Andhra Pradesh High
Court dated February 7,
1985 made in C.M.A.
Nos.868 and 297/81. The admitted facts are that the appellants had engaged hamalis
for loading and unloading of the goods undertaken by them for carriage as carriers.
The respondent has applied the Employees' State Insurance Act, 1948 [Act No.34
of 1948] [for short, the 'Act'] to the appellants' establishment and called
upon them to pay their contribution for the periods mentioned in the notice
served on them with interest at 7% thereon. The appellants have disputed the
liability and made an application for determination under Section 76 of the
Act.
The Insurance Court had held that the hamalis are
employees within the meaning of Section 2(9) of the Act. Though the appellants
collect the charges from the customers and pay the amount to the hamalis at the
piece rate for the work they do, they have got supervision of loading and
unloading by the hamalis. The hamalis are not appointed or controlled by any
other agency. Accordingly appellants are liable to contribute the amount called
upon towards the insurance benefit of the workmen under the Act. The appeals
came to be dismissed by the High Court. Thus these appeals by special leave.
Shri
C. Sitaramiah, learned senior counsel appearing for the appellants contended
that there is no relationship of master and servant; no regular salary is paid
by the appellants to the hamalis and there is no fixed hours of work for the hamalis.
Under those circumstances, the hamalis cannot be considered to be the employees
nor the appellants be treated as employer under the Act. We find no force in
the contention.
Section
2(9) of the Act defines "employee" to mean any person employed for
wages in or in connection with the work of a factory or establishment to which
the Act applies.
Clause
(ii) envisages that they need not necessarily be directly employed by the
employer. Those who are employed by or through an immediate employer on the
premises of the factory or establishment or under the supervision of the
principal employer or his agent on work which is ordinarily part of the work of
the factory or establishment or which is preliminary to the work carried on in
or incidental to the purpose of the factory or establishment is an employee within
the meaning of Section 2(9) of the Act. The controversy is no longer res integra.
This
Court in Royal Talkies, Hyderabad & Ors. v. Employees State Insurance Corpn. [(1979) 1 SCR 80],
was called upon to consider whether workmen engaged in the cycle stand and
canteen of a cinema theater were employees of the theater within the meaning of
Section 2(9) of the Act. This Court, on interpretation, held that the reach and
range of the definition is apparently wide and deliberately transcends pure
contractual relationships. In the field of labour jurisprudence, welfare
legislation and statutory construction which must have due regard to Part IV of
the Constitution, a teleological approach and social perspective must play upon
she interpretative process. The primary test in the substantive clause being
thus wide, the employees of the canteen and the cycle stand may be correctly
described as employed in connection with the work of the establishment. A
narrower construction may be possible but a larger ambit is clearly imported by
a purpose-oriented interpretation. The whole object of the statute is to make
the principal employer primarily liable for the insurance of kind of employees
on the premises, whether they are there in the work or are merely in connection
with the work of the establishment.
Accordingly
it was held thereon that they were the workmen or employees within the meaning
of Section 2 [9] of the Act. The same ratio was followed in E.S.I. Corpn. v. South
Flour Mills [(1986) 2 SCR 863 at 864] where even the casual employees employed
by the employer were held to be employees within the meaning of Section 2(9) of
the Act.
The
same question was considered in another recent judgment of this Court in Kirloskar
Brothers Ltd. v. Employees' State Insurance Corpn. [(1996) 2 SCALE 1 t 5]
wherein this Court held in paragraph 11 that:
"The
test of predominant business activity or too remote connection are not
relevant. The employee need not necessarily be the one integrally or
predominantly connected with the entire business or trading activities. The
true test is control by the principal employer over the employee. That test
will alone be the relevant test." It is seen that the Insurance Court after elaborate consideration,
found as a fact, that the appellants have the control over loading and
unloading of the goods entrusted to the appellants. The appellants' regular
business is transportation of the goods entrusted to it as carrier. When the
goods are brought to the warehouse of the appellants, necessarily the appellants
have to get the goods loaded or unloaded through the hamalis and they control
the activities of loading and unloading. lt is true as found by the Insurance Court that instead of appellants directly
paying the charges from their pocket, they collect as a part of the
consideration for transportation of the goods from the customers and pay the
amount to the hamalis. The test of payment of salary or wages in the facts of
this case is not relevant consideration. What is important is that they work in
connection with the work of the establishment. The loading and unloading of the
work is done at their directions and control.
Shri
C. Sitaramiah next contended that the Andhra Pradesh Muttah Jattu and Other
Manual Workers (Regulation of Employment & Welfare) Act, 1976 applied to
the scheduled establishment in item 6 of the Schedule and that, therefore, the
Act has no application. Since the State Act has received the assent of the
President on December
27, 1976 in relation
to its application to the State of Andhra Pradesh, the Act stands repealed and, therefore, the appellants are
not liable to make the contribution under the Act. Though this argument appears
to have been raised in the High Court, the High Court has not rightly gone into
that question as no material was placed before the High Court not any material
has been placed before us in that behalf, hence, it is not necessary for us to
go into the question of the applicability of the local Act.
The
appeals are accordingly dismissed. No costs.
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