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2001 Supreme(P&H) 920
PUNJAB & HARYANA HIGH COURT
S.S.Sudhalkar and Mehtab S.Gill JJ.
Nestle India Limited
Versus
Presiding Officer, Labour Court, Bhatinda
C.W.P. No. 4628 of 1999,
of,
Decided On : AUGUST 24, 2001
The central legal point established in the judgment is the importance of the nature of the relationship between parties in determining the rights and entitlements of individuals under the Industrial Disputes Act, 1947.
Headnote:
Commission Agent - Labour Dispute - [Industrial Disputes Act, 1947, Section 2(s), Section 25F] - The court discussed the agreements between the petitioner and respondent No.2, emphasizing the absence of an employer-employee relationship and the freedom of the agent to carry out other assignments. The court highlighted the commercial nature of the agreements and the absence of control by the company over the agent's work.
Fact of the Case:
The petitioner company engaged commission agents to collect milk from farmers. A dispute arose when one agent, respondent No.2, stopped supplying milk and claimed to be a workman entitled to reinstatement and back wages.
Finding of the Court:
The court found that the agreements clearly established a commercial relationship between the petitioner and respondent No.2, with no employer-employee relationship. The court emphasized the freedom of the agent to carry out other assignments and the absence of control by the company over the agent's work.
Issues: The main issue was whether respondent No.2 was a workman entitled to reinstatement and back wages, or a commission agent with a commercial relationship with the petitioner company.
Ratio Decidendi: The court relied on the agreements, the absence of control by the company over the agent's work, and the freedom of the agent to carry out other assignments to determine the nature of the relationship between the parties.
Final Decision: The court quashed the award in favor of respondent No.2, emphasizing the commercial nature of the agreements and the absence of an employer-employee relationship.
, J.
1. In this Civil Writ Petition as well as in civil Writ Petition Nos.4629 and 4630 of 1999, common questions of fact and law are involved. Therefore, all the three Civil Writ petitions are being disposed of by this common judgment. However, facts have been extracted from Civil Writ Petition No.4628 of 1999.
2. The petitioner company has prayed for issuance of a writ in the nature of Certiorari for quashing award dated June 19, 1998, copy annexure P13.
3. The petitioner-Company has averred that it is manufacturing food products and milk is one of the important raw materials which is purchased from the farmers rearing milch cattle. Since there are large number of fanners from whom milk is to be collected and they are scattered in the villages surrounding the factory, the petitioner engages Agents for this purpose and enters into agreement/contract with each one of them in different areas from where the milk is to be collected. These agents are paid commission for collecting milk and the amount payable is based on the quantity and quality of milk. These Agents continue to pursue their other business/occupation even during the period they hold agency for the collection of milk. This collection of milk can be done by the agent himself or through anybody appointed by him and further the Agents after collecting milk from fixed points pass on the milk to the factory of the Company. For these services, the Agents are paid commission. There is no relationship of employer-employee or master-servant between the petitioner-company and the Agents. A copy of the specimen agreement has been attached as annexure P1. Some of the relevant terms of the agreement are reproduced hereunder: i) If the commission Agent engages persons, they will be his employees or agents and the Company will not have any concern whatsoever with them and will not be liable for the expenses incurred in that connection. ii) The Commission Agent specifically indemnifies the Company against any claim under any Act/legislation in respect of the employees or against any claim made by his employees against the Company, iii) It is clearly understood by the parties that this agreement is a commercial agreement and not that of employment and there shall not be any employer/employee relationship between the Company and the Commission agent and its employees. iv) The Commission Agent would be free to carry out his present vocation/profession and/or to take up any other assignment.
4. According to the agreement, the Agent is free to carry on with avocation, profession or do any other private assignment of his. Collection of milk and further bringing it to the point from where the Company picks it up is the sole responsibility of the Agent.
5. Respondent No.2 is a farmer in village ransih Kalan, Tehsil and District Faridkot (now Moga ). He requested the petitioner-Company that he be appointed as Agent for collection of milk in his village and for this purpose, he submitted his application dated october 28, 1988 (copy Annexure P2 ). This application was produced before the Labour court as Exhibit M 1. The petitioner accepted the request of respondent No.2 and an agreement dated January 9, 1989 was executed between respondent no.2 and the petitioner. He was appointed as a Commission Agent for a period of one year. A copy of agreement is attached as Annexure P3. This agreement has been exhibited before the Labour Court as M-2. vide this agreement, Annexure P3, it was clearly agreed and understood by both the petitioner and respondent No.2 that the status of latter would be that of a Commission Agent of the petitioner and there would be no relationship of employer and employee. A written undertaking dated January 9, 1989, (Annexure P3), a copy of this undertaking has been attached as Annexure P4 and in the labour Court, it is Exhibit M-3. Vide letter dated November 9, 1989, respondent No.2 requested the petitioner to enter into a fresh agreement (Copy Annexure P5 ). This l
