Nestle India Limited v. Presiding Officer, Labour Court, Bhatinda
2001-08-24
MEHTAB S.GILL, S.S.SUDHALKAR
body2001
DigiLaw.ai
Judgment , 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 letter is exhibited as M-4 before the Labour Court. Vide letter dated November 24, 1989, the agreement of respondent No.2 for collection of milk was extended for a period of another one year. A copy of said letter has been attached as annexure P6 and the same was exhibited in the labour Court as M-5. 6. Respondent No.2 stopped collecting milk for the petitioner from July, 1990 and did not collect and supply it to the petitioner-Company till January, 1991. Respondent No.2 informed the petitioner that due to personal reasons, he could not supply milk for six or seven months and requested that once again, he be appointed as a Commission agent for collection of milk.
Respondent No.2 stopped collecting milk for the petitioner from July, 1990 and did not collect and supply it to the petitioner-Company till January, 1991. Respondent No.2 informed the petitioner that due to personal reasons, he could not supply milk for six or seven months and requested that once again, he be appointed as a Commission agent for collection of milk. A copy of this letter has been attached as Annexure P7. This letter has been exhibited before the Labour court as M-7. The petitioner accepted the request of respondent No.2 and a fresh agreement dated February 8, 1991 was executed, appointing respondent No.2 as a commission Agent for one year. The terms and conditions remained the same. Copy of agreement dated February 8, 1991 has been attached as Annexure P8 and before the Labour court, it was exhibited as M-8. 7. The petitioner has further averred that quantity and quality of milk as per agreement is monitored by it only for assessing commission to be paid to the Commission agent. Statement of account regarding the milk collected is filed by the Commission Agent every fortnight and after checking the record by the petitioner-Company, the commission is credited to the account of Commission Agent in the Bank. The Commission Agent then pays the amount to the farmers, from whom he had purchased the milk. 8. Respondent No.2 vide his letter dated january 16, 1992, requested the petitioner-Company for further extension of agreement. The copy of this letter has been attached as Annexure P9 and before the Labour court, it is exhibited as M-9. Again, the agreement was extended and another agreement was signed, a copy of which has been attached as Annexure P10 and in the labour Court, it is Exhibit M-10. During the course of agreement Annexure P10, respondent No.2 started supplying poor quality of milk to the petitioner-Company. Record of the petitioner -Company showed that from 1992 onwards, both the quantity and quality of milk supplied by respondent No.2 was reduced and it had deteriorated. From June 23, 1992, respondent No.2 stopped supplying milk to the petitioner-Company. The agreement was not terminated nor the terms of agreement was over. 9. Respondent No.2 raised an industrial dispute and the matter was referred to the government of Punjab. Copy of claim statement has been attached as Annexure P11.
From June 23, 1992, respondent No.2 stopped supplying milk to the petitioner-Company. The agreement was not terminated nor the terms of agreement was over. 9. Respondent No.2 raised an industrial dispute and the matter was referred to the government of Punjab. Copy of claim statement has been attached as Annexure P11. Written statement was filed before the Labour court and a copy of the same has been attached as Annexure P12. The Labour Court vide award dated June 19, 1998 held that respondent no.2 is a workman and entitled to reinstatement with continuity of service. Further, respondent No.1 ordered the payment of back wages @ Rs.1200.00 per month to respondent No.2. A Copy of said award dated june 19, 1998 has been attached as Annexure p13. 10. Notice of motion was issued. 11. Respondent No.2 filed written statement in which he stated that the persons who were entrusted with the job of collection of milk were workmen and were paid wages on commission, supervision and control over their work. It was further stated in the written statement that the petitioner-Company got the agreement executed in order to defeat the rights of the workmen under the Industrial disputes Act. These agreements are sham transactions. Further, it was agreed that agreements were not executed between the petitioner and himself and he had categorically deposed before the Labour court that the petitioner-Company used to obtain his signatures on blank papers. It is further stated in the written statement by respondent No.2 that his nomenclature was changed to milk agent illegally and arbitrarily by the petitioner-Company. The wages were paid to him on commission basis. The rent of the room where the milk was collected was paid by the petitioner- Company. All the instruments, i. e. drums, small bottles, barometers, weighing machine, chemical, buckets and stationery etc. were of the company. His duty started from 4 AM. Respondent No.2 admitted that milk was brought from the farmers and an entry was made in the milk sheet. Samples, were taken and milk was supplied at the pick up point at the time of fixed by the petitioner-Company. Similarly, in the evening, the same work was done from 4 PM to 9 PM. The pay rolls of farmers were prepared by the petitioner-Company and payments were made in the envelopes supplied by the Company.
Samples, were taken and milk was supplied at the pick up point at the time of fixed by the petitioner-Company. Similarly, in the evening, the same work was done from 4 PM to 9 PM. The pay rolls of farmers were prepared by the petitioner-Company and payments were made in the envelopes supplied by the Company. The petitioner-Company had a right to reject the milk if it turned sour. 12. We have heard counsel for the petitioner and counsel for respondent No.2 and have carefully perused the paper book. 13. The learned counsel for the petitioner has vehemently argued that a bare perusal of agreements which were entered between the petitioner and the respondent No.2, reveal that respondent No.2 was purely a Commission agent. At no stage, relationship of employer and employee developed between the two. The respondent No.2 was free to deliver the milk himself or through any person he wished to do so. Counsel for the petitioner drew our attention to the statement of respondent No.2 and the agreement signed between the petitioner and respondent No.2. 14. Respondent No.2 while appearing as ww- 1 before the Labour Court has admitted, in his cross-examination that the petitioner-Company had a strength of about thousand employees. Appointment letters have been issued to these employees. The permanent employees are paid wages, allowances, bonus and their provident fund is deducted by the petitioner-Company. He admitted in his cross-examination that he has not been issued any appointment letter nor any of the above benefits have been given to him. Respondent no.2 has further admitted that he did not make any complaint to the Labour Department regarding the fact that he had not been issued any appointment letter nor he had been given benefits which were being given to other permanent employees. The statement of respondent No.2 has been attached as annexure P14. 15. Going through the statement of respondent No.2 which has been attached as annexure P14, it comes out that he had admitted that whenever he was sick or had gone out of the village, then his brother used to collect milk for him. Further, he was not required to obtain any leave from the Company if he was sick and was to go outside the village. 16.
Further, he was not required to obtain any leave from the Company if he was sick and was to go outside the village. 16. Further it has been mentioned in para no.6 of the agreement entered into between the petitioner and respondent No.2, (Copy annexure P1) that the Commission Agent would be free to carry on his present vocation/profession and/or take up any other assignment. In sub para (c) of para No.10 thereof, it has been stated that this agreement is purely 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. 17. The Labour Court has relied upon Civil writ Petition No.1895 of 1974 decided on december 1, 1975. The judgment does not have any bearing on the present petition as in that particular case, there was no agreement between the parties. In that Writ Petition, minimum commission was given while in the present petition, respondent No.2 has in his statement admitted that there was no agreement that he was to be paid some minimum commission. The commission given can vary according to quantity and quality of milk supplied. 18. Going through letter dated October 28, 1988, copy Annexure P2, which has been written by respondent No.2, it comes out that he had requested that he be given agency for supplying milk. He has stated in his letter that he will perform the work as per terms and conditions of the factory. It is pertinent to mention here that in his statement, respondent no.2 has clearly stated that there was no agreement between the petitioner-Company and Agent then pays the amount to the farmers, from whom he had purchased the milk. 19. Respondent No.2 vide his letter dated january 16, 1992, requested the petitioner-Company for further extension of agreement. The copy of this letter has been attached as annexure P9 and before the Labour Court, it is exhibited as M-9. Again, the agreement was extended and another agreement was signed, a copy of which has been attached as Annexure p10 and in the Labour Court, it is Exhibit m-10. During the course of agreement annexure P10, respondent No.2 started supplying poor quality of milk to the petitioner-Company.
Again, the agreement was extended and another agreement was signed, a copy of which has been attached as Annexure p10 and in the Labour Court, it is Exhibit m-10. During the course of agreement annexure P10, respondent No.2 started supplying poor quality of milk to the petitioner-Company. Record of the petitioner-Company showed that from 1992 onwards, both the quantity and quality of milk supplied by respondent No.2 was reduced and it had deteriorated. From June 23, 1992, respondent No.2 stopped supplying milk to the petitioner-Company. The agreement was not terminated nor the term of agreement was over. 20. Respondent No.2 raised an industrial dispute and the matter was referred to the government of Punjab. Copy of claim statement has been attached as Annexure P11. Written statement was filed before the Labour court and a copy of the same has been attached as Annexure P12. The Labour Court vide award dated June 19, 1998 held that respondent no.2 is a workman and entitled to reinstatement with continuity of service. Further, respondent No.1 claims to be a workman. There was no need for him to ask for leave from the petitioner-Company or to tell his superior officer was to what he was doing during the working time. No employer will keep such like employees to do whatever he likes during his time of work. In his statement, respondent No.2 stated that, he collected milk for two hours in the morning and two hours in the evening meaning thereby that throughout the day, he was free to work at his farm. 21. Counsel for respondent No.2 has cited dharangadhara Chemical Works Limited V/s. State of Saurashtra and others AIR 1957 SC 264 : 1957-I-LLJ-477. The facts of the case in hand and the case cited are clearly distinguishable. In the cited case, the Company had control over the performance and functioning of the Agarias. The Company had appointed a Salt Superintendent who was incharge of the salt works and generally supervised the works and the manufacture of salt. The density of water in the wells which were dug by the Agarias was examined by the salt Superintendent. The Agarias were required to prepare pans according to certain standards fixed by the Company. These pans were then tested by the Salt Superintendent. After the Salt crystals began to form in the pans they were again tested by the Salt superintendent.
The Agarias were required to prepare pans according to certain standards fixed by the Company. These pans were then tested by the Salt Superintendent. After the Salt crystals began to form in the pans they were again tested by the Salt superintendent. The collection of salt by the agarias from the pans was permitted only after the Salt Superintendent found the same to be of a particular quality. The salt crystals were thereafter loaded into railway wagons and transported to the depots where the salt was stored. The salt was tested again at the depots and if it was found to be of right quality then the Agarias made payment at the rate of Rs.5 or 6 per maund only in respect of quality of the salt which was of the approved quality. The salt which was rejected remained with the company and the Agarias were neither allowed to remove the rejected salt nor sell it. 22. Clause 6 of the agreement between the company and the Agarias which is most relevant is reproduced as under: "we bind ourselves to work as per advice and instructions of the officers appointed by them in connection with the drawing of brine or with the process of salt production in the Pattas and if there is any default, negligence or slackness in executing it on our part or if we do not behave well in any way, the managing agent of the said company can annul this agreement and can take possession of the Patta, brine, well etc. and as a result we will not be entitled to claim any sort of consideration or compensation for any half processed salt lying in our Patta: or in respect of any expense incurred or labour employed in preparing Kiwa Patta, well bamboo lining etc. " 23. It is on the basis of these facts that the industrial Tribunal in that case came to the conclusion that supervision and control exercised by the Company extended to all stages of manufacture from the beginning to the end. In the present case, the control of the company on the Commission Agents who collect milk, is missing as respondent No.2 could work as a Commission Agent and at the same time carry on his normal vocation as per clause 6 of the agreement (Annexure P 10 ).
In the present case, the control of the company on the Commission Agents who collect milk, is missing as respondent No.2 could work as a Commission Agent and at the same time carry on his normal vocation as per clause 6 of the agreement (Annexure P 10 ). Respondent No.2 could work himself or let any member of the family, relative or a friend to do work as per clause 10 (a) of the agreement. Thus, it was not necessary for him to personally supervise the work. He could get the entire work done through his own employees. It has been admitted by respondent no.2 that his brother worked for him when he was sick or had to go out of the village (statement of Bhupinder Singh is Annexure p14 ). Further, in the present case, there was no agreement between the petitioner or respondent No.2 to pay any minimum commission. As per clause 10 (c) of the agreement, Annexure P1o, the same was purely a commercial agreement and not one of employment and the same did not establish an employer-employee relationship. Respondent no.2 has further admitted that in case of regular employees of the Company, letters of appointment were issued to them and they all got benefits under the Industrial Laws. These conditions do not apply to respondent No.2 as he has also admitted in his statement before the labour Court that he had to deposit Rs.1,000.00 in order to enable him to work as a Commission agent as per clause 5 of the agreement. He has further stated that he could sell milk from his own cattle for which he was paid the price or collect milk from others for which he was paid a commission. Thus, the authority cited by the counsel for respondent No.2 has no bearing to the present case as the petitioner-Company had no control over the manner of functioning of respondent No.2. 24. With the above observations, these writ petitions are allowed and impugned award dated June 19, 1998, Annexure P13, in this civil Writ Petition, award dated June 19, 1998, annexure P14 in the connected Civil Writ petition No.4629 of 1999 and dated June 19, 1998, Annexure P27 in Civil Writ Petition No.4630 of 1999 are quashed. Parties to bear their own costs. .