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1998 Supreme(Ker) 3
Judges : B.N.PATNAIK
Chirakadavu S.Co.op.Bank Ltd. - Appellant
Versus
Authority under Payment of S.A.Act. - Respondent
Case No : O.P. No. 13479 of 1991
Decided On : 01/06/1998
Advocates Appeared :
M. Ramachandran For Petitioner P.K. Sivadasan Nair & overnment Pleader (P.K. Santhamma) For Respondents
The main legal point established is that a collecting agent, paid a commission, does not qualify as an employee under the Kerala Payment of Subsistence Allowance Act, 1972 unless there is a clear master and servant relationship with control and supervision by the employer.
Headnote:
Subsistence Allowance - Employee Status - Kerala Payment of Subsistence Allowance Act, 1972 - S.2(a)
Fact of the Case:
The petitioner challenges an order directing them to deposit subsistence allowance due to the second respondent, who was engaged as a collecting agent by a Co-operative Bank. The second respondent claimed subsistence allowance during a period of suspension and filed an application under the Act, which was allowed by the Authority.
Finding of the Court:
The court found that the second respondent, as a collecting agent, did not fulfill the definition of 'employee' under the Act and therefore was not eligible for subsistence allowance. The court also held that the order misinterpreted the provisions of the Act and set it aside.
Issues: The main issue was whether a collecting agent appointed by a Co-operative Bank, paid a fixed percentage of the collection as commission, qualifies as an employee under the Kerala Payment of Subsistence Allowance Act, 1972.
Ratio Decidendi: The court relied on the definition of 'employee' under S.2(a) of the Act, and also cited previous case law to establish that a collecting agent at a commission cannot be considered an employee unless there is a clear master and servant relationship with control and supervision by the employer.
Final Decision: The court allowed the writ petition, setting aside the order for subsistence allowance and ruling in favor of the petitioner.
B.N. Patnaik, J.
Petitioner challenges Ext. P2 order dated 25.11.1991 rendered by the Deputy Labour Commissioner (Payment of Authority under the Payment of Subsistance Allowance Act, 1972, Kottayam) by which the petitioner was directed to deposit Rs. 7371/- towards substance allowance due to the second respondent herein.
2. The second respondent was engaged by the petitioner - Co-operative Bank as an agent to collect money from the depositors/ debtors once or twice in a month by visiting their places of residence. The petitioner, as per the terms of the contract, allowed 3.5% of the total collection as commission for the work done by him. He used to visit the residences of the depositors/ debtors occasionally in every month and deposit the collection in the petitioner - Bank at intervals of not more than two days. He was not required to attend the office regularly. He was suspended from doing such work from 25.4.1990 to 25.4.1991 on the ground of misconduct. After an enquiry his service was terminated by notice dated 13.6.1991. The amount of commission varied from month to month. The second respondent, however claimed that on an average he was getting Rs. 750/- as commission every month. Since he was not paid subsistance allowance during the period of his suspension, he filed an application on 25.4.1991 before the Authority under the Kerala Payment of Subsistence Allowance Act, 1972 (1st respondent) for payment of an amount of Rs. 7312.50 by recovering the same from the petitioner towards subsistance allowance. The said application was allowed by the first respondent, by Ext. P2 order dated 25.11.1991.
3. The first respondent held that the second respondent was an employee of the petitioner as defined in S.2(a) of the Kerala Payment of Subsistence Allowance Act, 1972. His duties fulfil the nature of business of the employer - Bank. There was no record to show that he was paid less than Rs. 750/- per month as commission. Further he held that the fact that he was appointed, suspended and dismissed shows that he was an employee and is eligible to get subsistance allowance at the rate of Rs. 750/ - per month from 25.4.1990 to 25.4.1991.
4. Heard the learned counsel for the petitioner as also the learned Government Pleader. None appeared on behalf of the second respondent although notice was duly served on him.
5. The short question that arises for consideration is whether a collecting agent appointed by a Co-operative Bank and is paid a fixed percentage of the collection as commission is an employee under the Kerala Payment of Subsistence Allowance Act, 1972 (Act 27 of 1993) - for short, the Act. Clause (a) of S.2 of the Act defines "employee" as follows:
"Any person employed in or in connection with the work of any establishment to do skilled, semiskilled or unskilled manual, supervisory, technical, clerical or any other kind of work for hire or reward, whether the terms of employment be express or implied, but does not include any such person who is employed mainly in a managerial or an administrative capacity or as an out worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the employer to be cleaned, washed, altered, ornaments or repaired by such outworkers in any place not under the control and management of the employer."
Admittedly, the second respondent was not employed in the establishment to do skilled, semiskilled or supervisory or technical work. Admittedly he is not employed mainly in a managerial or an administrative capacity. He cannot also be designated as an out worker as he is not required to clean, wash, alter or ornament any article or material given out on behalf of the petitioner. The second respondent claimed that he having been appointed by the petitioner to work as a collecting agent by a resolution of the Bank, he is an employee. His further contention was that in what manner or what amount of remuneration was paid is immaterial and the fact that he was
