Research › Search › Judgment

Madhya Pradesh High Court · body

2019 DIGILAW 457 (MP)

Unichem Laboraties Ltd. v. Sanjay Goyal

2019-06-27

SHEEL NAGU

body2019
1. The factual and legal matrix involved in M.P. No.2653/2018 filed by the employer/petitioner and M.P. No.1984/2018 filed by the employee/petitioner are the same and so is the order under challenge in both the petitions which are thus analogously heard and decided by this common order. 2. Supervisory jurisdiction of this Court under Article 227 of the Constitution of India is invoked assailing the award dated 19.01.2018 passed by Labour Court No.1, Gwalior in Case No.COC-02/A/ID Act/2015 answering the reference of termination of services of respondent in favour of respondent/workman after holding the sales promotion employee respondent to be a workman u/S.2(s) of the Industrial Dispute Act (for brevity “I.D. Act”) and directing reinstatement without back-wages. Learned counsel for petitioner is heard. 3. The solitary ground as projected by learned counsel for the petitioner/employer is that the respondent/employee was discharging managerial and administrative functions and therefore is excluded from the definition of “Workman” u/S.2(s) of the I.D. Act. Learned counsel for employer has also pressed into service the Division bench decision of this Court rendered in W.A. No.75/2017 (Novartis India Limited Vs. Vipin Shrivastava & others) on 11.10.2018. Further reliance is placed on a recent decision of Single bench rendered in W.P. No.1307/2017 on 01.11.2018 after relying upon the aforesaid Division bench decision in Novartis India Limited (supra). 4. The bare facts giving rise to the present case are that respondent by letter of appointment (Annexure P/2) is appointed as Business Manager-Institutional Sales-Life Care in the all India Management Cadre of the petitioner/employer on 01.04.2013 on a basic salary of Rs.9,990/-per month along with certain allowances mentioned therein. Nature of the work was essentially of a medical representative. The services of respondent/employee were terminated on 28.04.2014 without following the provisions of Sec.25-F of the I.D. Act which impelled the respondent/workman to unsuccessfully raise industrial dispute before the Conciliation Officer, where after the Appropriate Government referred the 3 dispute to the labour Court for adjudication. 5. The labour Court after recording of oral evidence produced by the rival parties found that the work of respondent/employee was essentially of a medical representative having no managerial functions as respondent/workman was supposed to only meet and apprise the doctors of various kinds of pharmaceutical drugs produced and sold by the employer. The work essentially was of promoting sales of pharmaceutical drugs. The work essentially was of promoting sales of pharmaceutical drugs. This impelled the labour Court to hold that the respondent/employee fell within the category of workman as defined u/S.2(s) of the I.D. Act and therefore, since the provisions of Sec.25-F of I.D. Act had not been complied with at the time of termination of services, the impugned award was rendered in favour of workman holding the termination to be unlawful retrenchment and directing reinstatement without back-wages. 6. The statement of witness of management though reveals that no managerial or administrative functions were discharge by the respondent/workman but the division bench of this court in Novartis India Limited (supra) while dealing with a similar case of medical representative, relying upon the decision of the Apex Court in H.R. Adyanthaya and others Vs. Sandoz (India) Ltd. and others, (1994) 5 SCC 737 , held that when the employee essentially performs functions of sales representative in a pharmaceutical company, the duties attached to his post are neither managerial nor administrative. The division bench held that the sales representative may not supervise any person but is master of his own affairs reporting to management only in respect of quantification of sales and therefore the division bench held that a medical representative cannot be treated to be a workman to fall within Sec.2(s) of the I.D. Act. The relevant paragraphs 14, 15, 16, 17 and 18 are reproduced below for ready reference and convenience:- “14. In view of the aforesaid judgment, the question as to whether a person is a workman within the meaning of Section 2(s) of the ID Act mainly depends upon the nature of the industry, type of work in which he is engaged, organizational set up of particular unit of industry and other factors. In the present case, the respondent was engaged as Sales Representative in a Pharmaceutical Company. His primary duty was to visit doctors, chemists as well as stockists. Meeting different professionals to promote sale of product of the appellant cannot be said to be manual or clerical work as it requires knowledge of product, its uses and also persuasive skills. The respondent may not be controlling any subordinate but he was master of the work assigned to him. The manner of performing the job was solely in the discretion of the respondent. The interest of the management was that the Medical Representative should achieve the sales target. The respondent may not be controlling any subordinate but he was master of the work assigned to him. The manner of performing the job was solely in the discretion of the respondent. The interest of the management was that the Medical Representative should achieve the sales target. The supervisory capacity necessarily has to be examined keeping in view the manual, unskilled, skilled, clerical work and the person performing such work is a workman. May be, he does not supervise any person but he is the master of his own affairs reporting to management only in respect of quantification of sales, therefore, a Medical Representative cannot be treated to be a workman within the meaning of Section 2(s) of the ID Act. 15. The judgment in H.R. Adyanthaya’s case (supra) has come up for consideration before a Division bench of this Court in Samat Kumar v. M/s Parke Davis India Ltd., 1997 (2) JLJ 353 wherein the reference to Labour Court was subject matter of challenge on the part of the management. Though the workman was said to be working as Area Sales Manager in managerial capacity drawing salary of more than Rs.1,600/-, therefore, he was not a workman but while examining the scope of Adhyanthaya’s case (supra), the Court has held that the work of promotion of sales of the product or services of the establishment is distinct from and independent of the types of work covered by the said definition under Section 2(s) of the ID Act. The relevant extract of the Division bench judgment reads as under:- “10. As against it, learned counsel for the respondent No.1 has placed reliance on a case as reported in 1988 (II) MPWN 116 = AIR 1988 SC 1700 (Miss A. Sundarambal v. Govt. of Goa, Deman & Diu and others) whereby it was held that teacher employed in a school is not a workman. But, now dispute stands resolved with respect to the cases of Medical Representative as reported in AIR 1994 SC 2608 [H.R. Adyanthya etc. etc. v. Sandoz (India) Ltd. etc. etc.) whereby it has been held that ‘Workman’ does not include all employees except those covered by four exceptions in said definition of section 2(s) of Industrial Disputes Act. Medical Representatives do not perform duties of ‘skilled’ or ‘technical’ nature and therefore, they are not ‘workmen’. etc. v. Sandoz (India) Ltd. etc. etc.) whereby it has been held that ‘Workman’ does not include all employees except those covered by four exceptions in said definition of section 2(s) of Industrial Disputes Act. Medical Representatives do not perform duties of ‘skilled’ or ‘technical’ nature and therefore, they are not ‘workmen’. The connotation of word ‘skilled’ in the context in which it is used, will not include work of a Sales Promotion Employees such as Medical Representative. That word has to be construed ejusdem generis and thus construed, would mean skilled work whether manual or non-manual, which is of a genre of the other types of work mentioned in the definition. The work of promotion of sales of the product or services of the establishment is distinct from and independent of the types of work covered by the said definition.” After returning such finding it was held that the reference was not maintainable as Medical Representative would not fall within the definition of workman. We are not only bound by the aforesaid judgment but we find the same to be a correct enunciation of law. 16. Learned Single bench of this Court in German Remedies Limited’s case (supra) relying upon H.R. Adyanthaya’s case (supra) held that the Medical Representative is a workman. The relevant extracts of the said decision in German Remedies Limited’s case read as under:- “14. With regard to meet out, the objections -the petitioner about the status of respondent No. 2, whether he would be a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, has to be dealt with. The Apex Court had an occasion to consider a similar question in a judgment H.R. Adyanthaya v. Sandoz (India) Ltd. And others [ (1994) 5 SCC 737 ]. The Apex Court in the said case was considering the status of Medical Representatives and the Apex Court came to the conclusion that since there had been an amendment in the provisions of the Industrial Disputes Act, 1947 and also by virtue of the provisions of Section 6 of the Sales Promotion Employees (Conditions of Service) Act, 1976 makes application to the provisions of the Industrial Disputes Act, 1947 as in force for the time being, therefore, the Apex Court held that a Medical Representative shall be a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. 15. 15. The aforesaid judgment passed by the Apex Court had also been considered by the Rajasthan High Court in Dolphin Laboratories Ltd. v. Judge, Labour Court, Udaipur and Another 2001-II-LLJ-559 (Raj.) and also by Punjab & Haryana High Court in Ripu Daman Bhanot v. Presiding Officer, Labour Court, Ludhiana and Ors. 1997-I-LLJ-557 (P&H). The aforesaid two High Courts have also dealt with the similar questions and relying upon the ratio of Sandoz's case (supra) held that Medical Representative is a workman for the purpose of Section 2(s) of the Industrial Disputes Act, 1947. 16. In view of the aforesaid law laid down by the two High Courts based upon the earlier judgment passed by the Apex Court in Sandoz's case (supra), this objection of the petitioner also cannot be accepted.” The Single bench in German Remedies Limited’s case (supra) has misread the judgment in H.R. Adyanthaya’s case (supra) to hold that Medical Representatives are workmen within the meaning of Section 2(s) of the ID Act. In fact, three categories were created by the Supreme Court. In respect of the Medical Representatives engaged prior to enactment of SPE Act w.e.f. 06.03.1976, they were held not governed either by ID Act or SPE Act. In respect of employees whose services were terminated after 06.03.1976, the appeals were dismissed for the reason that it is not the case of the employees that their wages were less than Rs.750/-per month excluding commission, therefore, the SPE Act did not apply to them. The only dispute which was referred to Industrial Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1971 was in respect of transfer of the employees affected on 16.02.1988. The Supreme Court found that the definition of workman under ID Act will not cover the sales promotion employees within the meaning of SPE Act. The argument raised that the sales promotion employees are skilled or operational employees was not accepted. Therefore, the order of the learned Single bench is not the correct reading of H.R. Adyanthaya’s case (supra) and is, thus, overruled. 17. A Division bench of Patna High Court in Deepak Kumar v. State of Bihar (2016) 149 FLR 528, held as under:- “9. Therefore, the order of the learned Single bench is not the correct reading of H.R. Adyanthaya’s case (supra) and is, thus, overruled. 17. A Division bench of Patna High Court in Deepak Kumar v. State of Bihar (2016) 149 FLR 528, held as under:- “9. The Sales Promotion Employee as defined under the SPE Act as reproduced above includes any person by whatever name called (including an apprentice) employed or engaged in any establishment for hire or reward to do any work relating to promotion of sales or business, or both. The main provision is wide enough to include all categories of employees engaged for hire or reward to do any work relating to promotion of sale of business. The petitioner falls within such category. As admittedly, he was appointed as a person to promote sale of the pharmaceutical products, as is evident from Charge Sheet dated 13th December, 2002, which is to the effect that the appellant has failed to achieve the targets of sale of group of medicines. The notice (Annexure-2 to the writ petition) itself recites the appellant as a Medical Representative. Therefore, he is a Sales Promotion Employee. But there is exclusion clause of Sales Promotion Employees and not all Sales Promotion Employees are the employees within the meaning of Section 2(d) of the SPE Act. The employees who are employed or engaged in supervisory capacity drawing wages exceeding Rs.1,600/-per mensem is the first category which are not the Sales Promotion Employees. The second category is the employees who are employed or engaged mainly in a managerial or administrative capacity.” 18. In view of the said fact, the Award passed by the learned Labour Court and the order passed by the learned Single bench is set aside holding that the Medical Representative is not a workman within the meaning of Section 2(s) of the ID Act and Section 2(d) of the SPE Act. The appeal stands allowed and disposed of.” In view of above, this Court after perusing the record, material placed and evidence adduced is of the considered opinion that the present case is prima facie similar to the case of employee before the division bench in Novartis India Limited (supra). The appeal stands allowed and disposed of.” In view of above, this Court after perusing the record, material placed and evidence adduced is of the considered opinion that the present case is prima facie similar to the case of employee before the division bench in Novartis India Limited (supra). Since, the decision of division bench in the case of Novartis India Limited (supra) is binding upon this Court and in view of clear findings recorded by the division bench especially in para 14 and 15 of it's judgment in Novartis India Limited (supra) where a sales/medical representative working in a pharmaceutical company has been held not to be a “Workman” u/S.2(s) of I.D. Act, this Court is left with no option but to interfere in the matter. The impugned award has been passed by treating the respondent sales/medical representative to be a “Workman” u/S.2(s) of I.D. Act which view runs contrary to the verdict of the 10 division bench in Novartis India Limited (supra). In view of above, the impugned award dated 19.01.2018 passed by Labour Court No.1 Gwalior in COC-02/A/ID Act/2015 is set aside and the present appeal of employer stands allowed. Since this Court has held (supra) that the labour Court has no jurisdiction to entertain the dispute of petitioner in M.P. No.2653/2018 for the employee not falling within the definition of workman u/S.2(s) of I.D. Act, the connected M.P. No.1984/2018 filed by the employee claiming back-wages also stands dismissed as a necessary consequence. No cost.