"C.R." IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. [ENTITY] & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 14TH DAY OF MARCH 2013/23RD PHALGUNA [CASE NUMBER]34 WA.No. 432 of 2013 () IN [CASE NUMBER] JUDGMENT IN [CASE NUMBER] of HIGH COURT OF KERALA DATED 21/01/2013 APPELLANT/PETITIONER: EXPRESS PUBLICATION (MADURAI) LIMITED, EXPRESS HOUSE, KALOOR, KOCHI-17, REPRESENTED BY ITS ASSISTANT GENERAL MANAGER - KERALA, [ENTITY]. BY [ENTITY] [ENTITY] [ENTITY] RESPONDENTS/RESPONDENTS: 1. THE REGIONAL PROVIDENT FUND COMMISSIONER-II, EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL OFFICE, KERALA, BHAVISHYANIDHI BHAVAN, PATTOM, THIRUVANANTHAPURAM-695 004. 2. [ENTITY], GENERAL SECRETARY, THE NEW INDIAN EXPRESS EMPLOYEES' ASSOCIATION, NARAYANEEYAM, NEAR STATUE JUNCTION, TRIPUNITHURA, KOCHI-682 301. R1 BY SR.ADV.SRI.N.N.SUGUNAPALAN ADV.SMT.T.N.GIRIJA, SC,EPF ORGANISATION R2 BY ADV.SRI.THAMPAN THOMAS THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 14-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: [ENTITY], C.J. & [ENTITY], J.
Dated this the 14th day of March, 2013 Judgment [ENTITY], C.J.
The appellant herein was the writ petitioner before the learned Single Judge. The entire issue revolves round 47 employees who are termed as 'working journalists' by the employer and according to the 2nd respondent-Union, they are the employees under the appellant-management and there is relationship of employer and employee between them. As a matter of fact, the issue involves the provisions of the [ACT] (for short 'the Act'). Ext.[SECTION] is the order of the Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation, Regional Office, Trivandrum which was the subject matter of challenge before the learned Single Judge. [SECTION] of the Act and [SECTION] of the Employees' Provident Funds Scheme, [CASE NUMBER]52 (for short 'the Scheme') were taken up for consideration before the learned Single Judge.
2. Ext.[SECTION] is the initial order dated 3.8.2012 by the Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation, Trivandrum. The appellant is an establishment admittedly covered under the provisions of the Act. The General Secretary of the New Indian Express Employees Association and also one cleaning staff of the establishment by name [ENTITY] said to have sent complaints to the Assistant Commissioner under the Act. Therefore, an Enforcement Officer was deputed to the establishment for conducting a detailed inspection. During the course of inspection, it was not only observed that five employees including one of the complainant by name [ENTITY] were not admitted to the membership under the Act for the period between 10/[CASE NUMBER]95 to 4/2011 but all the 47 so-called working journalists were not admitted under the Act for the period between 12/2001 to 4/2011. Except covering 27 employees, none of the above persons were covered.
3. An enquiry came to be ordered under [SECTION] of the Act by the Assistant Provident Fund Commissioner who proceeded with the matter after giving due notice to the parties concerned. The appellant-management as well as the respondent working journalists were represented. The main contention before the authority was relationship of employer and employee between the appellant and 47 working journalists who are members of the 2nd respondent-Union and are the employees of the appellant-management. The Commissioner made a detailed enquiry giving an opportunity to both the employer and the employees. Before the Commissioner, not only the 2nd respondent-Union but also some of the members of the Union represented. After conducting a detailed enquiry clubbing the proceedings as proceedings contemplated under [SECTION] of the Act and also para 26B of the Scheme, the Commissioner concluded saying all the 47 working journalists necessarily fall within the ambit and scope of definition of employee under the Act and proceeded to determine the quantum of contribution that has to be paid by the appellant-management. Aggrieved by the said determination, challenging Ext.[SECTION], appellant-management approached the learned Single Judge. The learned Single Judge proceeded with the matter opining that enquiry under [SECTION] of the Scheme is only a prelude to the enquiry under [SECTION] of the Act. Therefore, no objection or error was observed so far as procedural aspect of the matter by the Regional Commissioner. By placing reliance on [PRECEDENT], the learned Single Judge opined, the enquiry and the decision of the Commissioner is very much in order and the only recourse open to the appellant- management was to challenge the said order before the Tribunal under [SECTION] of the Act by filing an appeal. With regard to the limitation contemplated under the Act, some concession was given to the appellant-management to approach the Tribunal. Aggrieved by the said judgment of the learned Single Judge, the management is before us.
4. The first and foremost argument of the learned Senior Counsel Mr.[ENTITY] on behalf of the appellant- management is with regard to the nature of relationship between the appellant and 47 working journalists. According to learned Senior Counsel, none of the terms of the contract would determine or decide that these 47 persons were engaged on regular basis as their employees and, on the other hand, it would only indicate that some working contract arrangement was made between the parties as the 47 employees were not subject to any disciplinary action, particular hours of work etc. According to him, when the establishment is having employees appointed on regular basis working for them who are subject to the provisions of the Act, there was no need for the management to conceal or shy away from getting 47 members admitted to the P.F.Scheme. Therefore, the terms and conditions of the contract alone would determine the relationship between the parties. He further contends that determination of relationship between the parties cannot be gone into or enquired into by the Regional Commissioner as such a dispute has to be an industrial dispute to be determined under the [ACT] (for short '[ACT]') as the employer and the workmen adjudication has to be done under a separate enactment. Therefore, according to him, though para 26B of the Scheme would apply to say whether a particular employee is entitled to be admitted to the membership or not, but before determining such eligibility, there has to be determination of relationship of employer and employee under the [ACT] Therefore, in the absence of such determination, none of the opinions of the Commissioner which came to be confirmed by the learned Single Judge is sustainable. The learned Senior Counsel also points out that a composite enquiry for determining the controversy under [SECTION] of the Act and the issue under para 26 of the Scheme is erroneous and therefore, Ext.[SECTION] ought to have been set aside by the learned Single Judge. In support of his contention, learned Senior Counsel relies on the decisions of the Supreme Court in S.K.Nasiruddin Beedi Merchant Ltd. v. [ENTITY] [ (2001) 2 SCC 612] and [PRECEDENT].
5. As against this, Mr.[ENTITY], learned counsel appearing for the 2nd respondent-Union contends that the terms of the so-called contract would clearly indicate that it was nothing but an employer and employee relationship and only to overcome other statutory provisions, the terms of contract is referred as if it is a contract between two parties. But all other terms of the contract would indicate that there was a monthly payment of wages apart from allowing House Rent Allowance and food expenses on monthly basis. Learned counsel further points out, though the document was intended to be a contract between the parties, it was indicating the terms and conditions of the employment between the parties. Learned counsel places reliance on the decisions of the Supreme Court in [PRECEDENT] and The Management of Express Newspapers Ltd. v.
B.Somayajulu (AIR [CASE NUMBER]64 SC 279).
6. We have gone through the above judgments as well as the relevant provisions of the Act including the Scheme. It is not in dispute that both the appellant and the 2nd respondent-Union appeared before the Regional Provident Fund Commissioner and brought on record the relevant material in respect of their contentions raised before the Commissioner which became the basis for the order of the Commissioner at Ext.[SECTION]. Neither of the parties are referring to irregularities or procedural lapses. The only grievance of the appellant is with regard to the composite enquiry under [SECTION] of the Act and also para 26B of the Scheme. So far as the contention of learned counsel for the 2nd respondent-Union, as the very same Regional Commissioner has to determine whether a member is entitled to be admitted to the benefit of the Provident Fund and also to determine the quantification under [SECTION] of the Act, there is no error on the part of the Regional Commissioner to have a composite enquiry which led to passing of Ext.[SECTION].
7. As against this, learned Senior Counsel appearing for the appellant-management contends that the entire order at Ext.[SECTION] clearly indicates that there was an opportunity so far as para 26B of the Scheme is concerned, but there was no opportunity so far as [SECTION] enquiry as the management was not asked to place on record any of the documents which could ultimately assist the Commissioner to quantify the amount that has to be contributed by the employee.
8. With these material, at our command, we proceed to analyse the entire controversy. [SECTION] of the Act pertains to determination of moneys due from employers which reads as under:
"7A. Determination of moneys due from employers.- (1) The [ENTITY], any Additional [ENTITY], any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may, by order,-
(a) in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and
(b) determine the amount due from any employer under any provision of this Act, the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary."
The authorities referred to in the above Section are not only entitled to decide a dispute whether an establishment is covered under the Act or not, they also have to determine the amount due from any employer under the provisions of the Act. So far as dispute with regard to the employees, the eligibility to be covered under the Act, [SECTION] is silent. Para 26B of the Scheme relates to such benefits extended to the employees. [SECTION] of the Scheme deals with various provisions pertaining to membership of the fund. Para 26 of the Scheme deals with different classes of employees who are entitled and required to join the fund. Para 26A of the Scheme refers to retention of membership by a member of the fund and Para 26B of the Scheme refers to resolution of doubts with regard to eligibility of membership to the employee. Para 26B of the Scheme reads as under:
"26B. Resolution of doubts.- If any question arises whether an employee is entitled or required to become or continue as a member, or as regards the date from which he is so entitled or required to become a member, the decision, thereon of the Regional Commissioner shall be final:
Provided that no decision shall be given unless both the employer and the employee have been heard."
Reading of Para 26B makes it clear that whenever a question arises pertaining to determination whether an employee is entitled or required to become or continue as a member of the fund and so also from what date the Commissioner has to determine such dispute, the decision of the Regional Commissioner is final. However, such decision cannot be made unless both the employer and employee are heard. According to learned Senior Counsel for the appellant-management, this determination under para 26B of the Scheme pre-supposes that a determination already in the offing so far as the relationship between the parties as contemplated under the [ACT] In other words, unless there is a finality to the controversy of relationship between the parties as contemplated under the [ACT] the Regional Commissioner cannot decide the eligibility of the member under the Act.
9. In the first case relied upon by learned Senior Counsel Mr.[ENTITY], i.e., S.K.Nasiruddin Beedi Merchant Ltd. v. [ENTITY] (supra), was a case where the employer, a manufacturer of beedis was before the Apex Court. The manufacturer received a notice under the [ACT]. He challenged the same pleading that the Act was not applicable in respect of homeworkers engaged through independent contractors to roll beedis. This issue came to be decided against the manufacturer-appellant before the High Court. Hence, a SLP came to be filed. Meanwhile, Provident Fund Commissioner passed orders under [SECTION] of the Act relating to a particular period and the said orders also came to be challenged before the High Court concerned. The Supreme Court directed the High Court to consider the matter in the pending proceedings. The High Court again decided the issue against the appellant- manufacturer. Therefore, the matter came up for consideration before the Apex Court. While deciding with that controversy, the Supreme Court, as a matter of fact, did not determine the issue whether the employees, i.e., homeworkers engaged through independent contractors to roll beedis were employees of the appellant-manufacturer or not as in a similar matter pertaining to [PRECEDENT] the Supreme Court had already determined such homeworkers engaged in beedi rolling are also employees though they are engaged through contractors. The Supreme Court also referred to P.M.Patel & Sons v. Union of India (AIR [CASE NUMBER]87 SC
447) regarding applicability of [ACT] to homeworkers in respect of beedi rolling. Learned Senior Counsel for the appellant- management places emphasis on a particular portion in paragraph 6 of the judgment which reads as under:
"The applicability of the Act to any class of employees is not determined or decided by any proceeding under [SECTION] of the Act but under the provisions of the Act itself. When the Act became applicable to the employees in question, the liability arises. What is done under [SECTION] of the Act is only determination or quantification of the same."
Reading of the above paragraph with the facts analysed above, especially the actual lis pending before the Apex Court clarifies the position that there was no need for any determination of class of employees in the said case as such a determination was already decided in earlier decisions of the Apex Court in [PRECEDENT]'s case (supra). Therefore, the issue before the Apex Court was only quantification of the amount determined under [SECTION] of the Act. In other words, the Apex Court never laid down any precedent saying the authorities under the [ACT] have no jurisdiction to determine the applicability of the Act to a particular class of persons. On the other hand, the sentence referred to in paragraph 6 says, it has to be decided under the provisions of the Act itself. Therefore, this decision of the Apex Court is not of much assistance to the contention raised by learned Senior Counsel for the appellant.
10. Then coming to [PRECEDENT]'s case (supra), this was a case where the [ACT] and the Contract Labour (Regulation and Abolition) Act, [CASE NUMBER]70 were brought before the Apex Court for consideration. In the above said case, there was a complaint of unfair labour practice where locus standi and maintainability was the defence raised. Then Their Lordships said, unless there is certainty of the employee of the person against whom a complaint is lodged and when such status of the complainant is the subject matter of the dispute, then the real status of the complainant has to be first decided by the competent forum under the [ACT] Under the [ACT], there was no definition of employer and employee and on the other hand, there was a positive provision to adopt the procedure contemplated under the [ACT] adopting the definitions under the [ACT] In that context, their Lordships said that unless there was a decision on relationship between the parties under the [ACT] they could not have further proceeded to decide the controversy pertaining to unfair labour practice in the establishment. As a matter of fact, at paragraph 24 they refer to law laid down in [PRECEDENT] by the Apex Court which again refers to the employees working under a contract labour system. Therefore, the decision in Cipla Ltd.'s case (supra) is not directly on the controversy with which we are faced in the present case.
11. Then coming to the decision relied upon by learned counsel for the 2nd respondent-Union in The [PRECEDENT] (supra) was a case dealing with the status of working journalist, a part-time employee. Their Lordships held that even a working journalist satisfy all the construction tests prescribed to decide him as an employee under the employer though he was a part-time employee. Then coming to the decision in [PRECEDENT] (supra), was a case filed under [SECTION] of the [ACT] where the provisions of the [ACT] came to be examined, especially the constitutionality of [SECTION] of the Scheme and the effect of the Scheme on the employees of newspaper industry. As a matter of fact, in the present case, the appellant-management is not denying its coverage under the [ACT] is a welfare legislation. The dispute is with regard to a particular class of employees who are termed as working journalists.
12. So far as the present dispute is concerned, the Regional Commissioner could have gone into the controversy of relationship between the parties and decided it. [SECTION] of the Act defines who is an 'employee' under the Act which reads as under:
" "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets, his wages directly or indirectly from the employer, and includes any person,-
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the [ACT], or under the standing orders of the establishment;"
Reading of [SECTION] clearly indicates, even if a person is employed by or through a contractor in or in connection with the work of the establishment, they are employees. The term 'employer' also is defined under [SECTION] of the Act which reads as under:
" "employer" means-
(i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause (f) of sub-section (1) of Section 7 of the [ACT], the person so named; and
(ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent;"
Though there is a reference to [ACT] under [SECTION], there is no reference to [ACT] either under [SECTION] or [SECTION] of the Act. In the light of clear indications as to who is an 'employee' and who is an 'employer' under the Act under which the Regional Commissioner was discharging his duties in terms of para 26B of the Scheme, there would not be any impediment or embargo on the jurisdiction of the Regional Commissioner to determine whether a particular person or class of persons are falling within the definition of employee as defined under the Act itself. This is the exercise the Regional Provident Fund Commissioner has done under Ext.[SECTION]. With reference to various clauses of agreement and terms of employment between the parties, he determined the relationship between the parties. The jurisdiction or the power vested with the Regional Commissioner under para 26B of the Scheme shall include the power to determine the relationship between the parties as the very section contemplates 'Resolution of doubts'. If we read the entire Act including the Scheme, the purpose of this enactment was to create a welfare legislation regarding the contributions and the duty of the employer to extend benefit to the employees in the matters concerning the present Act. When a welfare legislation is brought in, particularly dealing with the benefits that could be extended to the employees, it is only to ensure financial security on retirement, compelling the employer also to contribute for such welfare fund under the Act. If the very purpose of the enactment was to be considered as the welfare legislation, definitely it could not have been the intention of the legislators to entrust the power of determination of relationship between the parties to a different authority under a different enactment and again come back to the welfare legislation where the entitlement to the membership has to be determined. Reading of para 26B of the Scheme or any other provisions of the Act, by no stretch of imagination, can be understood that the intention of the makers of this statute was to drive the parties to a different forum for determination of relationship and then come back to the forum constituted under this enactment. In that view of the matter, we are of the opinion, Regional Provident Fund Commissioner who has to decide the entitlement or requirement or continuation of a member to the Provident Fund is also empowered to decide the relationship of employer and employee between the parties.
13. Then coming to Ext.[SECTION], as already indicated, the Commissioner ought to have conducted a detailed enquiry so far as the controversy pertaining to [SECTION] of the Act as the employer has to bring on record several details before the authority concerned. This enquiry is indicated under [SECTION] of the Act and the enquiry has to be in strict compliance of procedure contemplated under [SECTION] of the Act. In order to decide the quantification as indicated at [SECTION] unless there is a determination or resolution of doubts under para 26B of the Scheme, the authority could not proceed with quantification under [SECTION]. In that view of the matter, the Commissioner ought to have done first determination of the relationship and the entitlement of the employee to the membership. Thereafter, the enquiry contemplated under [SECTION]. If the same authority were to conduct both the enquiries, still it has to be done in accordance with the procedure contemplated under the statute. If a procedure indicates that a particular enquiry has to be done in a particular manner, it shall be done in the said manner.
14. In the light of above observation, we have to restrict the order at Ext.[SECTION] as an order only with regard to para 26B of the Scheme and so far as [SECTION] determination, there has to be an enquiry as contemplated under [SECTION] of the Act. We uphold the order in so far as it related to the determination under para 26B of the Scheme. With these observations, we dispose of the Writ Appeal directing the authority concerned under the Act to proceed with the enquiry contemplated under [SECTION] The authority shall determine the amount due from the employer under this enactment after giving an opportunity to both the parties. The entire exercise shall be completed within three months from today.
[ENTITY], CHIEF JUSTICE.
[ENTITY], JUDGE.