1. Application under Section 33-A, Industrial Disputes Act, 1947 — Discharge of watchman during pending industrial dispute — Dispute over employee status. (Para 1 )
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1962 Supreme(SC) 254
SUPREME COURT OF INDIA
J.R.Mudholkar : K.C.Das Gupta : P.B.Gajendragadkar
Kirloskar Oil Engines
Versus
Hanmant Laxman Bibawe
Case No. : 523 of 1961
Date of Decision : 7/31/62
Advocates Appeared: Chaudhuri K.R. : Shroff I.M.
Advocates:
I.M.SHROFF, K.R.CHAUDHARY
I.M.SHROFF, K.R.CHAUDHARY
The employer-employee relationship is determined by the totality of facts and circumstances. The "control test" regarding the manner of work is not a universal rule; factors like payment, disciplinary power, and appointment are decisive in determining the legal master-servant relationship.
Headnote:(A) Industrial Disputes Act, 1947 - Sections 33 and 33-A - Determination of employer-employee relationship - Whether a person supplied under a government scheme where payment, discipline, and administrative control vest with the supplying authority can be considered an employee of the user company - Relationship of master and servant does not subsist if the user company lacks power of payment, discipline, and overall control. (Paras 5, 6)
(B) Employer-Employee Relationship - Test of control - The test of who is entitled to tell the employee the way in which he is to do the work is not a universal rule and must be applied in light of all relevant facts and circumstances. (Paras 8, 9, 10)
Facts of the case:
A watchman was discharged from service and filed an application alleging that the discharge violated statutory provisions requiring approval from an Industrial Tribunal during a pending dispute. The employer contended that the watchman was not its employee but was provided through a government scheme where the supplying authority managed payments, discipline, and administrative control.
Findings of Court:
The court found that the terms of the scheme and oral evidence established that the supplying authority, not the employer, held the rights of a master. The employer did not pay wages directly, could not punish the worker, and did not control the terms of employment.
Issues: Whether the respondent was an employee of the appellant and thus a workman concerned in a pending industrial dispute, making his discharge subject to the approval of the Industrial Tribunal.
Ratio Decidendi: The determination of an employer-employee relationship depends on the totality of facts and circumstances. A single test, such as the "control test" regarding the manner of work, is not universally applicable. Where a third party retains control over payment, discipline, and appointment, the user of the services is not the legal employer.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the watchman was an employee of the company or supplied via a police department scheme, rendering the discharge compliant with Section 33. (Para 2 , 4 )
3. The police department scheme, payment structure, and disciplinary control indicate the absence of a master-servant relationship between the company and the watchman. (Para 5 , 6 , 7 , 10 )
4. Determination of employer-employee relationship depends on all relevant facts; the control test regarding instructions on how to work is not a universal decisive rule. (Para 8 , 9 , 10 )
5. Appeal allowed — Tribunal order set aside — Application under Section 33-A dismissed. (Para 11 )
6. How is the employer-employee relationship determined in industrial disputes?
It is determined by analyzing all relevant facts and circumstances of each individual case, including who is the paymaster, who has the power to dismiss, and the overall scheme of employment. (Para 8 , 9 , 10 )
7. Is the control test regarding instructions on how to perform work a universal rule for determining employment?
No. The court held that this test is not of universal application. In some instances, workers may take daily orders from a person who is not their legal employer. (Para 9 )
8. Does the provision of services through a government scheme preclude a master-servant relationship with the user of those services?
Yes, if the government department retains control over payment, discipline, and appointment, and the user merely pays the department, no legal master-servant relationship exists between the user and the worker. (Para 5 , 6 , 7 )
P.B.GAJENDRA GADKAR, J.
(1) THE respondent Bibawe made an application to the Industrial Tribunal at Bombay under s. 33-A of the Industrial Disputes Act, 1947. He alleged that he had been employed by the appellant M/s. Kirloskar Oil Engines, Limited, as a watchman since July 21, 1958, and that he had been working as such watchman with the appellant and had become its permanent workman. On May 15,1960, the Security Officer of the appellant Company intimated to him that he had been discharged from service with effect from that date. The respondent urged that at the time when this order of discharge was orally served on him, an industrial dispute was pending between the appellant and its employees before an Industrial Tribunal and as such the respondent could not be discharged by the appellant without obtaining the approval of the Industrial Tribunal. In other words, his case was that his discharge was in contravention of the provisions of s. 33 and that is the basis of his application under s. 33-A.
(2) THE appellant denied that the respondent was its employee. It pleaded that the respondents services had been made available to the appellant by an arrangement, the terms of which clearly indicated that even whilst the respondent was working as a watchman of the appellant, he was not the employee of the appellant in the legal sense. That being so, it was argued that s. 33 was not contravened and the application under s. 33-A was incompetent.
(3) IT would thus be seen that the narrow point of dispute between the parties before the Tribunal was whether or not the respondent was the appellants employee and as such could be said to be a workman concerned in the dispute which was pending industrial adjudication at the time of his discharge. The Tribunal set forth the rival contention of the parties on this point and observed that it could not accept either of the extreme contentions taken by both the sides; even so in substance the Tribunal seems to have taken the view that s.33 had been contravened by the appellant and so an order has been passed directing the appellant to reinstate the respondent with full back wages from the date of his discharge. It is against this order that the appellant has come to this Court by special leave.
(4) ON behalf of the appellant Mr. Shroff contends that the view taken by the Tribunal that the respondent was the appellants employee is plainly inconsistent with the scheme under which the respondent began to work as a watchman of the appellant and he argues that the oral evidence adduced by the parties in the present proceedings also show that the conclusion of the Tribunal is erroneous. In our opinion this contention is well founded and must be upheld.
(5) TURNING to the scheme under which the respondent was asked to do the work as a watchman by the appellant, most of its material terms emphatically bring out the fact that the respondent cannot be treated as the appellants employee and cannot claim the status of an industrial employee. It appears that the scheme has been evolved by which watchman are supplied by the police Department to different employers and this scheme was evolved because it was found that there was a demand for such watchman by private individual. There are several paragraphs which set out the material terms and conditions of the scheme. The private person who require the services of watchman have to apply to the District Superintendent of Police, The District Superintendent of Police supplies a watchman if ho thinks a suitable watchman is available. The amount on account of pay of the watchman is recovered per month in advance from the employer. This amount has to be credited to the Watchman Fund on receipt of advance bills submitted from the office of the Superintendent of Police. Out of the amount thus recovered from the employer Rs.5/8.00 per month are deducted on account of the cost of clothing supplied and the balance is paid t
