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2025 Supreme(Online)(Mad) 62309
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.Vijayakumar, J
The Management M/s.Kanyakumari District Central Co-operative Bank Ltd. – Appellant
Versus
The Assistant Commissioner of Labour (Enforcement) Authority under Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 – Respondent
W.P(MD).Nos.8110 & 8111 of 2019 and 25719 to 25722 of 2022 and WP(MD).No.14833 of 2023
For the Appellants/Petitioners: Mr.D.Shanmugaraja Sethupathi
For the Respondents: M/s.D.Farjana Ghoushia, Mr.S.C.Herold Singh
Commission-based appointments do not establish employer-employee relationships under the CPS Act.
Headnote:(A) Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 - Appointment status - The Jewel Appraisers were appointed on a commission basis without a master-servant relationship with the Bank, thus, not qualifying for permanent status. (Paras 5, 23-25)
(B) Employment status determination - The court observed that the lack of regular salary and attendance records indicates non-employee status. (Paras 17, 19)
Facts of the case:
The Jewel Appraisers, appointed by the Bank on commission, claimed permanent status citing completion of requisite service days, which was disputed by the Bank management.
Findings of Court:
Authority's order granting permanent status misapplied CPS Act, lacking jurisdiction since no employer-employee relationship existed.
Issues: Whether Jewel Appraisers can claim employee status under CPS Act?
Ratio Decidendi: The court ruled that commission-based appointments, lack of salary, and absent employer oversight negate the employee relationship, thus not satisfying CPS Act requirements.
Result: Writ petitions allowed, order set aside.
| Table of Content |
|---|
| 1. introduction of case and parties involved (Para 1 , 2 , 3 , 4 , 5) |
| 2. details on employment status and disputes (Para 6 , 7 , 8) |
| 3. arguments from petitioner regarding employment (Para 11 , 12 , 13) |
| 4. court observations on appointment and employment rights (Para 16 , 19 , 20) |
| 5. conclusion on employment status and cps act applicability (Para 23 , 24) |
COMMON ORDER
These writ petitions have been filed by the Management of Kanyakumari District Central Co-operative Bank Limited challenging the order passed by the authority under Tamil Nadu Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 (CPS Act) on 23.01.2019, 29.09.2022 and 03.03.2023 conferring permanent status upon the Jewel Appraisers engaged in various branches of petitioner Co-operative Bank.
(A).Factual Background:
2.The second respondent in WP(MD).No.8110 of 2019 was appointed in Kanyakumari Central Co-operative Bank on 12.05.2012. The petitioner in WP(MD).No.8111 of 2019 was appointed on 20.04.2012. The petitioner in WP(MD).No.25719 of 2022 was appointed on 06.09.1994. The petitioner in WP(MD).No.25720 of 2022 on 11.07.2014. The petitioner in WP(MD).No.25721 of 2022 was appointed on 07.12.2001. The petitioner in WP(MD).No.25722 of 2022 was appointed on 22.06.2015. The petitioner in WP(MD).No.14833 of 2023 on 18.09.2009. All of them were appointed as Jewel Appraisers.
3.They have approached the first respondent under Section 3(1) of CPS Act contending that they had completed 480 days of services within a period of 24 months. According to them, they were appointed as Jewel Appraisers on commission basis in the petitioner Bank. As per Special Byelaws, a deposit of Rs.10,000/- was made by them at the time of their appointment. It was further contended that as per 2(2)(c) of CPS Act, the petitioner management is an industry and they are workmen as contemplated under Section 2(4) of the above said Act. Even though they are working for several years, their services have not been regularised. The request made by them for regularizing their services have not been considered. It was further alleged that they have not been brought under EPF Scheme. Hence, the present writ petitions.
4.The petitioner Bank has filed a counter contending that the second respondent herein have been appointed on a commission basis in various branches of the Bank and they were not paid monthly salary. It was further contended that the Jewel Appraisers were not appointed on a regular basis as per cadre strength. Their appointments were not as per Tamil Nadu Co-operative Societies Rules and Byelaws of the Bank. It was further contended that the Jewel Appraisers were not employees of the Bank. On the other hand, they have been engaged for the specific work of appraising the jewels and the commission was paid by collecting the same from the customers who pledged their jewels.
5.The management had further contended that there is no fixed working hours and no attendance register is being maintained for those Jewel Appraisers. According to the Bank, there is no master and servant relationship between them and the Jewel Appraisers. It was further contended that there is no contract of employment between the Jewel Appraisers and Bank. The Bank does not have any disciplinary control over the Jewel Appraiser. The Bank had also relied upon the judgment of the Hon'ble Supreme Court reported in(2006) 3 SCC 729 ( Indian Overseas Bank Vs. Workmen ) to contend that a Jewel Appraiser cannot be considered to be an employee of the Bank.
6.The Management had further contended that the Jewel Appraiser cannot be considered to be an employee of the Co-operative Society under Rule 149 of the Co-operative Societies Rules. The name of the respondents were not sponsored through employment exchange nor they were recruited through Recruitment Bureau as constituted under Section 75 of the Tamil Nadu Co-operative Societies Act. It was further contended that the Jewel Appraiser post is not a sanc
