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1998 DIGILAW 2 (KER)

Chirakadavu S. Co. op. Bank Ltd. v. Authority under Payment of S. A. Act.

1998-01-06

B.N.PATNAIK

body1998
Judgment :- 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. 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 appointed and subsequently dismissed on the basis of a report after an enquiry would go to show that he was treated as an employee of the petitioner-Bank. 6. Appendix III of the Kerala Co-operative Societies Rules, 1969 lays down the staff pattern of Co-operative Banks in the State of Kerala. Column 4 points out the designation of the employees. 6. Appendix III of the Kerala Co-operative Societies Rules, 1969 lays down the staff pattern of Co-operative Banks in the State of Kerala. Column 4 points out the designation of the employees. On a perusal of the same, it does not appear that a collection agent is included in the staff pattern of a Co-operative Bank. Appointment of any person to a post other than the designated posts as per Appendix III requires approval of the Government or the statutory authorities. The post of collecting agent in the petitioner-Bank has neither been approved by the concerned statutory authority or the Government nor has been mentioned as one of the designated posts in the said Rules. 7. In South Indian Bank v. Antony (1980 KLT 317), a Division Bench of this Court had the occasion to consider the question as to whether a Canvasser of deposits employed is an employee under the Kerala Shops & Commercial Establishments Act, 1960. In that Act, it has been laid down that "employee" means a person wholly or principally employed in, and in connection with, any establishment and includes an apprentice. This Court, after considering various aspects of the matter, held that a Canvasser of deposits employed by a Bank is not an employee. In George v. New India Assurance Co. Ltd. - O.P. No. 1030/80E - (1982 KLT SN. 28 - Case No. 44), a learned single judge of this Court considered the question as to whether a Canvassing agent of Insurance Company is a workman or an employee under the Industrial Disputes Act, 1947. It was held that since the petitioner's work was substantially not that of a clerk and it was only incidentally that he did some work of clerical nature, he would not come within the definition of a "workman". The mere fact that a canvassing agent, which the petitioner was found to be, signed cover notes and collected money from the customers did not mean that he was engaged otherwise than as a canvassing agent. In Urban Co-operative Bank v. Madhusuddanan Babu (1992 (1) KLT Short Notes 52 Case No. 66), the Supreme Court had the occasion to consider as to whether an appraiser engaged by a Bank to weigh and test gold at a commission of 25 paise for hundred rupees is a workman under the Industrial Disputes Act, 1947. In Urban Co-operative Bank v. Madhusuddanan Babu (1992 (1) KLT Short Notes 52 Case No. 66), the Supreme Court had the occasion to consider as to whether an appraiser engaged by a Bank to weigh and test gold at a commission of 25 paise for hundred rupees is a workman under the Industrial Disputes Act, 1947. It was held that he is not a workman because there is no master and servant relationship between them. The prima facie test of relationship of master and servant is the existence of the right in the master to supervise and control the work done by the servant (the measure of supervision and control apart) not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work. In the instant case, nothing has been shown by the second respondent to establish that there is master and servant relationship between them and that he was directed to do the work in the manner in which the petitioner wanted. There was a fair element of freedom though coupled with responsibility for the second respondent in the manner in which he could do his work. All the above decisions clearly point out that unless the master has control and the right of supervision over the work of the servant and unless the employee is required to work in the manner in which the employer directs and the above all unless there is clear master and servant relationship between them, a canvassing agent or a collecting agent at a commission of certain percentage of the total collection cannot be considered as an employee. Viewed from this angle, the definition in the Act excludes the second respondent from the category of employee of the petitioner-Bank. Hence, the finding of the authority that the second respondent is an employee cannot be sustained. 8. Admittedly, no fixed remuneration was paid to the second respondent at any time. The first respondent came to the conclusion that the average remuneration of the second respondent was Rs. 750/-per month on mere surmise. Hence, the finding of the authority that the second respondent is an employee cannot be sustained. 8. Admittedly, no fixed remuneration was paid to the second respondent at any time. The first respondent came to the conclusion that the average remuneration of the second respondent was Rs. 750/-per month on mere surmise. Under similar such circumstances, a Division Bench of this Court in South Indian Bank v. Antony (1980 KLT 317) laid down as follows: - "The law of average seems ill suited to mulct an employer on the ground that had an employee continued in employment he would have procured so much of work and earned so much of commission". I do not see any reason to differ from the above said observation of the Division Bench of this Court. 9. For the reasons stated above, I find that the first respondent has committed an illegality by misinterpreting the provisions of the Act and as such Ext. P2 order cannot be sustained. The Writ Petition is allowed. The impugned order (Ext. P2) is set aside. No costs.