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P.B. SAWANT, J. – The question that falls for consideration in these matters is whether the
‘medical representatives’ as they are commonly known, are workmen according to the
definition of ‘workman’ under Section 2(s) of the Industrial Disputes Act, 1947 (the ‘ID
Act’). The definition under this section has undergone changes since its first enactment. It is
necessary to keep in mind the said changes since the decisions of this Court delivered on the
point from time to time are based on the definition, as it stood at the relevant time. The
definition, as it stood originally when the ID Act came into force w.e.f. 1.4.1947, read as
follows:
“(s) ‘workman’ means any person employed (including an apprentice) in any
industry to do any skilled or unskilled, manual or clerical work for hire or reward and
includes, for the purposes of any proceeding under this Act in relation to an industrial
dispute, a workman discharged during that dispute, but does not include any person
employed in the naval, military, or air services of the Crown.”
It was amended by Amending Act 36 of 1956 which came into force from 29.8.1956 to
read as follows:
“(s) ‘workman’ means any person (including an apprentice) employed in any
industry to do any skilled or unskilled, manual, supervisory, technical or clerical work
for hire or reward, whether the term of employment be expressed in implied, and for
the purposes of any proceeding under this Act in relation to an industrial dispute,
includes any such person who has been dismissed, discharged or retrenched in
connection with, or as a consequence of, that dispute, or whose dismissal, discharge
or retrenchment has led to that dispute, but does not include any such person
- The change brought about by this Amendment was that the persons employed to do
‘supervisory’ and ‘technical’ work were also included in the definition for the first time by
this amendment, although those who were employed in a supervisory capacity were so
included in the definition provided their monthly wage did not exceed Rs. 500. The definition
of ‘workman’ was further amended by Amendment 46 of 1982 which was brought into force
w.e.f. 21.8.1984. It read as –
“(s) ‘workman’ means any person (including an apprentice) employed in any
industry to do any manual, unskilled, skilled, technical, operational, clerical or
supervisory work for hire or reward, whether the terms of employment be express or
implied, and for the purposes of any proceeding under this Act in relation to an
industrial dispute, includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute, but does not include any
such person … - The first change brought about by this amendment was that whereas earlier only those
who were doing unskilled or skilled manual work were included in the said definition, now
those who did any unskilled or skilled work, whether manual or not, came to be included in
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it. The second and the most important change that was brought about was that those persons
who were employed to do ‘operational’ work were also brought within the fold of the said
definition. - We are not referring to the other changes which the definition of ‘workman’
underwent, after its enactment in 1947 since they are not relevant for our purpose. - What is further necessary to remember is that the Amending Act 46 of 1982
simultaneously brought about a change in the definition of ‘wages’ under Section 2(rr) of the
ID Act and for the first time included the following in the said definition:
“(iv) any commission payable on the promotion of sales or business or both.” - It is also instructive to point out, in this connection that along with the change in the
definition of ‘wages,’ the definition of ‘industry’ under Section 2(j) has also been amended.
The relevant part of the amended definition reads as follows: - It will be seen that by the amended definition of ‘industry’, an activity relating to the
promotion of sales or business or both, carried on by any establishment is for the first time
sought to be brought within the said definition. However, the amended definition of
‘industry’ has not till date come into force. - In the light of the amended definitions of ‘workman’ and ‘wages’ and that of ‘industry’
which has not yet become operative, we may now refer to the decisions of this Court on the
subject. - A three-Judge Bench of this court in May & Baker (India) Ltd. v. Workmen [AIR
1967 SC 678] had to deal directly with the question as to whether the medical representative
of the company, who was discharged from service, was a workman under the ID Act and the
order of reinstatement passed by the Industrial Tribunal was, therefore, valid. The Court
referred to the undisputed nature of the duties of the employee and found that his main work
was that of canvassing sales. Any clerical or manual work that he had to do was incidental to
the said main work, and could not take more than a small fraction of the time for which he
had to work. In the circumstances, the Court held that the Tribunal’s conclusion that the
employee was a workman under the ID Act was incorrect. The Court also observed that the
Tribunal in that case seemed to have been led away by the fact that the employee had no
supervisory duties and had to work under the direction of his superior officers. The Court
held that this would not necessarily mean that the employee’s duties were mainly manual or
clerical. The Court held that from what the Tribunal had found, it was clear that the
employee’s duties were mainly neither clerical nor manual and, therefore, he was not a
workman. Hence the Court set aside the Tribunal’s direction for reinstating the employee. - It is thus obvious from the decision that the contention on behalf of the workman
before the Industrial Tribunal as well as before this Court was that the employee was doing
either manual or clerical work, and that not only he had no supervisory duties but he was
doing his work under the direction of his superiors and, therefore, he was a workman within
the meaning of the definition of workman as it stood then. The dispute in question had arisen
prior to 6.1.1956. The definition of ‘workman’ at the relevant time included only those
persons who were employed to do any skilled or unskilled manual or clerical work. Hence
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the relevant contention on behalf of the workman was negatived by this Court. An inference
from this decision is also possible, viz., that if the employee’s work was mainly manual or
clerical, he would have, even as the definition stood then, been covered by it. - The next decision is also of the same three-judge Bench in Western India Match Co.
Ltd. v. Workmen [AIR 1964 SC 472]. The dispute there was whether the workmen employed
by the sales-office of the company were entitled to production bonus as were those employed
in the factory and the factory-office. The incidental question which arose in this case was
whether the sales-office was entirely independent of the factory or was a department of the
one and the same unit of production, and whether inspectors, salesmen, and retail salesmen of
the sales-office were workmen within the meaning of the U.P. Industrial Disputes Act. The
‘workman’ was defined under that Act to mean “any person …to do any manual, supervisory,
technical or clerical work for hire or reward…” which definition was the same as under the
Central Act, viz. the ID Act. This dispute was referred by the State Government for
adjudication to the Industrial Tribunal on 18.8.1961. The Tribunal had accepted the evidence
of the workmen that the writing work of the inspectors, salesmen and retail salesmen took 75
per cent of the time. This Court accepted the said finding. On the question whether the salesoffice and the factory and factory-office formed one and the same unit of the industrial
establishment, the Court held that all those growing or making articles as well as those
transporting them and also those ultimately completing the process of bringing them to the
ultimate consumer, were engaged in the activity of producing wealth. It would, therefore, be
unreasonable to say that those who made the matches were ‘producing’ and those who ‘sold’
them were not. The functional integrity, interdependence or community of financial control
and management; community of manpower and of its control, recruitment and discipline; the
manner in which the employer has organised the different activities; whether he has treated
them as independent of one another or as interconnected and interdependent, are some of the
tests to find out whether the two units are parts of one and the same establishment. The Court
further held that the difference in the rules and practice in connection with their recruitment,
control and discipline, in the standing orders applicable to them, and in the maintenance of
their muster-rolls made no difference to the situation. So also the fact that the sales-office
was paying rent to the factory for the area occupied by it. It would thus appear that this
decision mainly turned on the nature of the work done by the said salesmen, viz. 75 per cent
clerical work. We have referred to the other aspect, viz., the integrality of the sales-office and
the other parts of the establishment to emphasise that sales is as much an essential part of an
undertaking which is established for the manufacture and sale of a product. It must be
mentioned that there is no reference in this decision to the earlier decision of the same Bench
in May & Baker case. - In Burmah Shell Oil Storage & Distribution Co. of India Ltd. v. Burmah Shell
Management Staff Assn. [AIR 1971 SC 922], the dispute, among others, was whether the
Sales Engineering Representatives and District Sales Representatives employed in the
company were workmen within the meaning of the ID Act. The dispute had arisen prior to
28.10.1967. The argument on behalf of the workmen was that the definition of the ‘workmen’
(which at the relevant time also included persons doing supervisory and technical work) was
all comprehensive and contemplated that all persons employed in an industry must necessarily
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fall in one or the other of the four classes mentioned in the main body of the definition, viz.,
those doing skilled or unskilled manual work, supervisory work, technical work or clerical
work, and consequently the court should proceed on the assumption that every person is a
workman unless he fell under one of the four exceptions to the definition. The Court rejected
this contention. The Court referred to its earlier decision in May & Baker case and pointed
out that the Court had held that since duties of the employee there were not mainly manual or
clerical the employee was not a workman. The Court also pointed out that although that
decision was based on the definition as it stood then, when the words ‘supervisory’ and
‘technical’ did not occur there, if every employee of an industry was to be a workman except
those mentioned in the four exceptions, the four classifications, viz., manual, supervisory,
technical and clerical need not have been mentioned in the definition, and the workman could
have been defined so as to include every person employed in an industry except where he was
covered by one of the exceptions. The specification of the four types of work, according to the
Court, was obviously intended to lay down that an employee was to be a workman only if he
was employed to do work of one of those types. There may be employees who do not do any
such work and hence would be out of the scope of the definition. The Court then gave an
example of such workman who would be outside the definition of workman even if he did not
fall in any of the exceptions. Coincidentally, the example given was that of a person
employed in canvassing sales of an industry. According to the Court, he may not be required
to do any paper work nor may he be required to have any technical knowledge. He may not
be supervising the work of any other employees, nor would he be doing any skilled or
unskilled manual work. Even if he is an employee of the industry, he would not be a workman
because the work for which he is employed is not covered by the four types mentioned in the
definition and not because he could be taken out of the definition being under one of the
exceptions. The Court then referred to a case where employees are employed to do work of
more than one of the types mentioned in the definition, and pointed out that in such cases the
principle was well-settled that a person must be held to be employed to do that work which is
the main work he is required to do, even though he may be incidentally doing several types of
work. Referring in this connection to the May & Baker case, the Court pointed out that in
that case, it was noticed that the employee’s duties were mainly neither clerical nor manual
although his duties did involve some clerical and manual work and hence he was held not to
be a workman. The Court then referred to the nature of the duties of Sales Engineering
Representatives and the District Sales Representatives with whom, among others, the Court
was concerned there. With regard to the Sales Engineering Representatives, the Court
approved of the finding of the Tribunal that he was not employed on a supervisory work, but
found fault with the Tribunal for not proceeding further to examine whether he was employed
on any other work of such a type that he could be brought within the definition of workman.
The Court then itself examined the said question. Since there was no suggestion at all that he
was employed on clerical or manual work, and all that was canvassed was that he was doing
technical work, the Court found that the amount of technical work that he did was of
ancilliary nature to his chief duty of promoting sales and giving advice. The mere fact that he
was required to have technical knowledge, for such a purpose, did not make his work
technical. According to the Court the work of advising and removing complaints so as to
promote sales remains outside the scope of technical work. Consequently, the Tribunal’s
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finding that the Sales Engineering Representative was a workman was set aside. Referring to
the District Sales Representatives, the Court held that they were not doing clerical work, and
that they were principally employed for the purpose of promoting sales of the company. Their
main work was canvassing and obtaining orders. In that connection, of course, they had to
carry on some correspondence, but that correspondence was incidental to the main work of
pushing sales of the company. In connection with promotion of sales, they had to make
recommendations for selection of agents and dealers; extension or curtailment of credit
facilities to agents, dealers and customers; investments of capital and revenue in the shape of
facilities at agent’s premises or retail outlets; and selection of suitable sites for retail outlets to
maximise sales and negotiations for terms of new sites. On these facts, the Court held that the
work that they were doing was neither manual nor clerical nor technical nor supervisory, and
further added that the work of canvassing and promoting sales could not be included in any of
the said four classifications and the decision given by the Tribunal that they were not
workmen was valid. - In S.K. Verma v. Mahesh Chandra [(1983) 4 SCC 214] the dispute was whether
Development Officers of the Life Insurance Corporation of India (LIC) were workmen. The
dispute arose on account of the dismissal of the appellant-Development Officer w.e.f.
8.2.1969. The court noticed that the change in the definition of workman brought about by
the Amending Act 36 of 1956 which, as stated above, added to the originally enacted
definition, two more categories of employees, viz., those doing ‘supervisory’ and ‘technical’
work. The three-Judge Bench of this Court did not refer to the earlier decisions in May &
Baker, WIMCO and Burmah Shell cases. The Bench only referred to the decision of this
Court in Workmen v. Indian Standards Institution [(1975) 2 SCC 847] where while
considering whether ISI was an ‘industry’ or not, it was held that since the ID Act was a
legislation intended to bring about peace and harmony between management and labour in an
‘industry,’ the test must be so applied as to give the widest possible connotation to the term
‘industry’ and, therefore, a broad and liberal and not a rigid and doctrinaire approach should
be adopted to determine whether a particular concern was an industry or not. The Court,
therefore, held that to decide the question whether the Development Officers in the LIC were
workmen or not, it should adopt pragmatic and not a pedantic approach and consider the
broad question as to on which side of the line the workman fell, viz., labour or management,
and then to consider whether there were any good reasons for moving them on from one side
to the other. The Court then noticed that the LIC Staff Regulations classified the staff into
four categories, viz., (i) Officers, (ii) Development Officers, (iii) Supervisors and Clerical
Staff, and (iv) Subordinate Staff. The Court pointed out that Development Officers were
classified separately both from Officers on the one hand and Supervisors and Clerical Staff on
the other and that they as well as Class III and Class IV staff other than Superintendents were
placed on par inasmuch as their appointing and disciplinary authority was the Divisional
Manager whereas that of Officers was Zonal Manager. The Court also referred to their scales
of pay and pointed out that the appellation ‘‘Development Officer’’ was no more than a
glorified designation. The Court then referred to the nature of duties of the Development
Officers and pointed out that a Development Officer was to be a whole-time employee and
that his operations were to be restricted to a defined area and that he was liable to be
transferred. He had no authority whatsoever to bind the Company in any way. His principal
130
duty appeared to be to organise and develop the business of the Corporation in the area
allotted to him, and for that purpose, to recruit active and reliable agents, to train them, to
canvass new business and to render post-sale services to policyholders. He was expected to
assist and inspire the agents. Even so, he had not the authority either to appoint them or to
take disciplinary action against them. He did not even supervise the work of the agents though
he was required to train them and assist them. He was to be a friend, philosopher and guide
of the agents working within his jurisdiction and no more. He was expected to “stimulate and
excite” the agents to work while exercising no administrative control over them. The agents
were not his subordinates. He had no subordinate staff working under him. The Court,
therefore, held that it was clear that the Development Officer could not by any stretch of
imagination be said to be engaged in any administrative or managerial work and, therefore, he
was a workman within the meaning of the ID Act. Accordingly, the order of the Industrial
Tribunal and the judgment of the High Court holding that he was not a workman were set
aside. As has been pointed out above, this decision did not refer to the earlier three decisions
in May & Baker, WIMCO and Burmah Shell cases, and obviously proceeded on the basis
that if an employee did not come within the four exceptions to the definition, he should be
held to be a workman. This basis was in terms considered and rejected in Burmah Shell case
by a Coordinate Bench of three Judges. Further no finding is given by the Court whether the
Development Officer was doing clerical or technical work. He was admittedly not doing
manual work. We may have, therefore, to treat this decision as per incuriam. - Ved Prakash Gupta v. Delton Cable India (P) Ltd. [(1984) 2 SCC 569] was decided
by the same three-Judge Bench which decided the S.K. Verma case [(1983) 4 SCC 214]. The
question there was whether the Security Inspector at the gate of the factory was a workman
within the meaning of the ID Act. The dispute had arisen on account of his dismissal from
service on 13.9.1979. The Court referred to the nature of duties performed by the employee
and found that a substantial part of the work of the employee consisted of looking after the
security of the factory and its property by deputing the watchmen working under him to work
at the factory gate or sending them to the watch-tower or around the factory or to accompany
visitors to the factory and making entries in the visitors register and also making entries
regarding the material entering in and going out of the premises of the factory. No written list
of duties was given to the employee. The appellant was also doing other items of work such
as signing identity cards of workmen, issuing some small items of stores like torch-cells to his
subordinate watchmen and filling up application forms of other workmen and counter-signing
them or recommending advances and loans or for promotion of his subordinates. He could not
appoint or dismiss any workmen or order any enquiry against any workmen. He was working
under the Security Officer and various other heads of departments of the management. He
was also performing the duties of chowkidar when one of the chowkidars left the place
temporarily for taking tea etc. He was also accompanying Accounts Branch people as a guard
whenever they carried money. On these facts, the Court held that the substantial duty of the
employee was that of a security inspector at the gate of the factory and it was neither
managerial nor supervisory in nature in the sense in which those terms were understood in
industrial law. The Court, therefore, held that he was a workman under the ID Act. This
decision also did not refer to the earlier decisions in May & Baker, WIMCO and Burmah
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Shell cases and instead followed the ratio of the earlier decision in S.K. Verma case. What is
further, the decision turned on the facts of the case. - In Arkal Govind Raj Rao v. Ciba Geigy of India Ltd. [(1995) 3 SCC 371], the
employee was first appointed as a Stenographer-cum Accountant and later as Assistant. His
services were terminated on 10.10.1982 which formed the subject-matter of an industrial
dispute. One of the preliminary points raised on behalf of the employer before the Labour
Court was whether he was a workman within the meaning of the ID Act. The Court accepted
the finding of the Labour Court that primarily the duties of the employee were of a clerical
nature and held that he was a workman. The Court also referred to the earlier decision in S.K.
Verma and Delton Cable [(1984) 2 SCC 569] cases. - A. Sundarambal v. Government of Goa, Daman & Diu [(1988) 4 SCC 42] was a
case of a teacher in a school conducted by a private society. Her services were terminated on
25.4.1975 which gave rise to the industrial dispute. Two questions raised were whether the
school was an industry and whether the teacher was a workman under the ID Act. We are not
concerned with the first question in this case. While answering the second question, the Court
considered the meaning of the words “skilled or unskilled, manual, supervisory, technical or
clerical work” in the definition of workman under the ID Act and held that if an employee is
not a person engaged in doing work falling in any of the said categories, he would not be a
workman at all even though he is employed in an industry. For this purpose, the Court relied
on May & Baker case, and further held that teachers employed by educational institutions
whether they are imparting primary, secondary, graduate or postgraduate education, cannot be
called workmen. Imparting of education which is the main function of a teacher cannot be
considered as unskilled or skilled, manual or supervisory or technical or clerical work. The
clerical work a teacher does is only incidental to his principal work of teaching. The Court
did not accept the suggestion that having regard to the object of the ID Act, all employees in
an industry except those falling under the four exceptions to the definition should be treated
as workmen. The Court held that to accept the said argument would render the words “to do
any skilled or unskilled manual, supervisory, technical or clerical work” meaningless. The
Court held that a liberal construction as suggested would have been possible only in the
absence of the said words. The Court, therefore, upheld the decision of the High Court that
the appellant was not a workman though the school was an industry. It is thus obvious from
this decision given as late as in 1988 that the Court reiterated the earlier decision in May &
Baker case and instead that before a person could qualify to be a workman within the
meaning of the ID Act, he had to satisfy that he did work of any of the four types mentioned
in the main body of the definition and that it was not enough that he did not fall within any of
the four exceptions in the definition. - A still later decision of a two-Judge Bench of this court in T.P. Srivastava v. National
Tobacco Co. of India Ltd. [(1992) 1 SCC 281] by referring to the decision in Burmah Shell
case has also reiterated the law laid down in May & Baker case. There the employee
concerned was a Section Salesman of the company whose services were terminated w.e.f.
12.7.1973. The Court held that in order to come within the definition of workman under the
ID Act the employee had to be employed to do the work of one of the types referred to in the
main body of the definition. The Court also referred to the Sales Promotion Employees
132
(Conditions of Service) Act, 1976 and pointed out that the provisions of that Act were not
made applicable to the employees of the company. The Court further pointed out that the
object of the said Act would show that persons employed for sales promotion normally would
not come within the definition of workman under the ID Act. The Court accordingly upheld
the decision of the Labour Court that the employee was not a workman within the meaning of
the ID Act. - The legal position that arises from the statutory provisions and from the aforesaid
survey of the decisions may now be summarised as follows. - Till 29.8.1956 the definition of workman under the ID Act was confined to skilled and
unskilled manual or clerical work and did not include the categories of persons who were
employed to do ‘supervisory’ and ‘technical’ work. The said categories came to be included
in the definition w.e.f. 29.8.1956 by virtue of the Amending Act 36 of 1956. It is, further, for
the first time that by virtue of the Amending Act 46 of 1982, the categories of workmen
employed to do ‘operational’ work came to be included in the definition. What is more, it is
by virtue of this amendment that for the first time those doing non-manual unskilled and
skilled work also came to be included in the definition with the result that the persons doing
skilled and unskilled work whether manual or otherwise, qualified to become workmen under
the ID Act. - The decision in May & Baker case was delivered when the definition did not include
either ‘technical’ or ‘supervisory’ or ‘operational’ categories of workmen. That is why the
contention on behalf of the workmen had to be based on the manual and clerical nature of the
work done by the sales representatives in that case. The Court had also, therefore, to decide
the category of the sales representatives with reference to whether the work done by him was
of a clerical or manual nature. The Court’s finding was that the canvassing for sale was
neither clerical nor manual, and the clerical work done by him formed a small fraction of his
work. Hence, the sales representative was not a workman. - In WIMCO case, the dispute had arisen on 18.8.1961 under the U.P. Industrial
Disputes Act and at the relevant time the definition of the workman in that Act was the same
as under the Central Act, i.e. the ID Act which had by virtue of the Amending Act 36 of 1956
added to the categories of workmen, those doing supervisory and technical work. However,
the argument advanced before the Court was not on the basis of the supervisory or technical
nature of the work done by the employees concerned, viz., inspectors, salesmen and retail
salesmen. The argument instead, both before the Industrial Tribunal and this Court was based
on the clerical work put in by them, which were found to be 75 per cent of their work. This
Court confirmed the finding of the Tribunal that the employees concerned were workmen
because 75 per cent of their time was devoted to the writing work. The incidental question
was whether the sales-office and the factory and the factory-office formed part of one and the
same industrial establishment or were independent of each other. The Court observed that it
would be unreasonable to say that those who were producing matches were workmen and
those who sold them were not. In other words, the Court did not hold that the work of selling
matches was as much as operational part of the industrial establishment as was that of
manufacturing.
133 - In Burmah Shell case, the workmen involved were Sales Engineering
Representatives and District Sales Representatives. The dispute had arisen on 28.10.1967
when the categories of workmen doing supervisory and technical work stood included in the
definition of workman. The Court found that the work done by the Sales Engineering
Representatives as well as District Sales Representatives was neither clerical nor supervisory
nor technical. An effort was made on behalf of the workmen to contend that the work of Sales
Engineering Representatives was technical. The Court repelled that contention by pointing out
that the amount of technical work that they did was ancillary to the chief work of promoting
sales and the mere fact that they possessed technical knowledge for such purpose, did not
make their work technical. The Court also found that advising and removing complaints so as
to promote sales remained outside the scope of the technical work. As regards the District
Sales Representatives, the argument was that their work was mainly of clerical nature which
was negatived by the Court by pointing out that the clerical work involved was incidental to
their main work of promoting sales. What is necessary further to remember in this case is that
the Court relied upon its earlier decision in May & Baker and pointed out that in order to
qualify to be a workman under the ID Act, a person concerned had to satisfy that he fell in
any of the four categories of manual, clerical, supervisory or technical workman. - We thus have three three-Judge Bench decisions which have taken the view that a
person to be qualified to be a workman must be doing the work which falls in any of the four
categories, viz., manual, clerical, supervisory or technical and two two-Judge Bench decisions
which have by referring to one or the other of the said three decisions have reiterated the said
law. As against this, we have three three-Judge Bench decisions which have without
reference to the decisions in May & Baker, WIMCO and Burmah Shell cases have taken the
other view which was expressly negatived, viz., if a person does not fall within the four
exceptions to the said definition he is a workman within the meaning of the ID Act. These
decisions are also based on the facts found in those cases. They have, therefore, to be
confined to those facts. Hence the position in law as it obtains today is that a person to be a
workman under the ID Act must be employed to do the work of any of the categories, viz.,
manual, unskilled, skilled, technical, operational, clerical or supervisory. It is not enough that
he is not covered by either of the four exceptions to the definition. We reiterate the said
interpretation. - What is further necessary to remember is that in none of the aforesaid decisions which
we have discussed above, the word ‘operational’ or the words ‘skilled’ and ‘unskilled’
independently of ‘manual’ fell for consideration as the amendment under which they were
introduced came into operation for the first time w.e.f. 21.8.1984 and the dispute involved in
aforesaid decisions were of the prior dates. - We may now refer to the relevant provisions of the Sales Promotion Employees
(Conditions of Service) Act, 1976 (the ‘SPE Act’) which came into force w.e.f. 6.3.1976 and
applied forthwith to every establishment engaged in pharmaceutical industry by virtue of its
Section 1(4). The definition of the Sales Promotion Employee in clause (d) of Section 2 of
the SPE Act as it was originally enacted reads as follows:
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“(d) ‘sales promotion employee’ means 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, and –
(i) who draws wages (being wages, not including any commission) not exceeding
seven hundred and fifty rupees per mensem; or
(ii) who had drawn wages (being wages, including commission) or commission
only, in either case, not exceeding nine thousand rupees in the aggregate in the twelve
months immediately preceding the months in which this Act applies to such
establishment and continues to draw such wages or commission in the aggregate, not
exceeding the amount aforesaid in a year.
but does not include any such person who is employed or engaged mainly in a
management or administrative capacity.” - It will be noticed that under the SPE Act, the sales promotion employee was firstly,
one who was engaged to do any work relating to promotion of sales or business or both, and
secondly, only such of them who drew wages not exceeding Rs. 750 per mensem (excluding
commission) or those who had drawn wages (including commission) or commission not
exceeding Rs. 9000 per annum whether they were doing supervisory work or not were
included in the said definition. The only nature/type of work which was excluded from the
said definition was that which was mainly in managerial or administrative capacity. - The SPE Act was amended by the Amending Act 48 of 1986 which came into force
w.e.f. 6.5.1987. By the said amendment, among others, the definition of sales promotion
employee was expanded so as to include all sales promotion employees without a ceiling on
their wages except those employed or engaged in a supervisory capacity drawing wages
exceeding Rs. 1600 per mensem and those employed or engaged mainly in managerial or
administrative capacity. - Section 6 of that Act made the Workmen Compensation Act, 1923, Industrial
Disputes Act, 1947, (the ID Act), Minimum Wages Act, 1948, Maternity Benefit Act, 1961,
Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972 applicable forthwith to the
medical representatives. Sub-section (2) of the said section while making the provisions of
the ID Act, as in force for the time being, applicable to the medical representatives stated as
follows:
“(2) The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force
for the time being, shall apply to, or in relation to, sales promotion employees as they
apply to, or in relation to, workmen within the meaning of the Act and for the
purposes of any proceeding under that Act in relation to an industrial dispute, a sales
promotion employee shall be deemed to include a sales promotion employee who has
been dismissed, discharged or retrenched in connection with, or as a consequence of,
that dispute or whose dismissal, discharge or retrenchment had led to that dispute.”
In other words, on and from 6.3.1976 the provisions of the ID Act became applicable to the
medical representatives depending upon their wages up to 6.5.1987 and without the limitation
on their wages thereafter and upon the capacity in which they were employed or engaged.
135 - It appears that the SPE Act was brought on the statute book, as the Statement of
Objects and Reasons accompanying the Bill shows, as a result of this Court’s judgment in
May & Baker case. The Committee of Petitions (Rajya Sabha) in its 13th Report submitted on
14.3.1972 had come to the conclusion that the ends of social justice would be met only by
suitably amending the definition of the term ‘workman’ in the ID Act in the manner that the
medical representatives were also covered by the definition of workman under the ID Act.
The Committee also felt that other workers engaged in sales promotion should similarly be
considered as workmen. The legislature, however, considered it more appropriate to have a
separate legislation for governing the conditions of services of the sale promotion employees
instead of amending the ID Act, and hence the SPE Act. - It also appears that Parliament has amended the definition of ‘industry’ by the
Amending Act 46 of 1982 to include, in the definition of industry in Section 2(j) of the ID
Act, among others, any activity relating to the promotion of sales or business, or both carried
on by any establishment. However, that amendment has not yet come into force. But the
amendment made by the very same Amending Act of 1982 to the definition of ‘workman’ in
Section 2(s) to include those employed to do ‘operational work,’ and to the definition of
‘wages’ in Section 2(rr) to include “any commission payable on the promotion of sales or
business or both” has come into force w.e.f. 21.8.1984. - It was contended by Shri Sharma, appearing for the workmen that the definition of
workmen under the ID Act includes all employees except those covered by the four
exceptions to the said definition. His second contention was that in any case, the medical
representatives perform duties of skilled and technical nature and, therefore, they are
workmen within the meaning of the said definition. We are afraid that both these contentions
are untenable in the light of the position of law discussed above. The first contention was
expressly negatived by two three-Judge Benches in May & Baker and Burmah Shell cases as
has been pointed out in detail above. As regards the second contention, it really consists of
two sub-contentions, viz., that the medical representatives are engaged in ‘skilled’ and
‘technical’ work. As regards the word ‘skilled,’ we are of the view that the connotation of the
said word in the context in which it is used, will not include the work of a sales promotion
employee such as the medical representative in the present case. 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 type 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. Hence the contention that the
medical representatives were employed to do skilled work within the meaning of the said
definition, has to be rejected. As regards the ‘technical’ nature of their work, it has been
expressly rejected by this Court in Burmah Shell case. Hence the contention has also to be
rejected. - Shri Napathe, the learned counsel appearing for the petitioner in WP No. 5259 of
1980 contended that inasmuch as the SPE Act, as it was originally enacted, made a distinction
between sales promotion employees drawing wages not exceeding Rs. 750 per mensem
(excluding commission) or Rs. 9000 per annum (including commission) and those drawing
wages above the said amounts, included not only the first category of employees in the said
136
definition, it was discriminatory as against those who fell in the second category and was
violative of Article 14 of the Constitution. According to him, the classification made had no
rational nexus with the object sought to be achieved by the enactment. We are afraid that this
argument is not tenable. The service conditions and their protection are not fundamental
rights. They are creatures either of statute or of the contract of employment. What service
conditions would be available to particular employees, whether they are liable to be varied,
and to what extent are matters governed either by the statute or the terms of the contract. The
legislature cannot be mandated to prescribe and secure particular service conditions to the
employees or to a particular set of employees. The service conditions and the extent of their
protection as well as the set of employees in respect of which they may be prescribed and
protected, are all matters to be left to the legislature. Hence when a legislation extends
protective umbrella to the employees of a particular class, it cannot be faulted so long as the
classification made is intelligible and has a rational nexus with the object sought to be
achieved. In the present case, the classification made between two categories of the sales
promotion employees, viz., those drawing wages up to a particular limit and those drawing
wages above it, is fairly intelligible. The object of the legislation further appears to be to give
protection of the service conditions to the weaker sections of the employees belonging to the
said category. The legislature at that particular time thought that it was not either necessary to
extend the said protection to all the employees belonging to the said category irrespective of
their income or that at that stage the circumstances including the conditions and the nature of
the employment and the sales business or operation did not warrant protection to the
economically stronger section of the said employees, and that economically weaker among
them alone needed the protection. Hence it cannot be said that the classification made of the
said employees on the basis of their income had no rational nexus with the object sought to be
achieved, viz., the protection of the weaker section of the said employees. The extension of
the protective umbrella could not as a matter of right, therefore, be demanded by those who
draw more wages. Even in the definition of the workman under the ID Act as well as under
the very SPE Act, the classification of those employed to do supervisory work has been made
on the basis of their monthly income although the work done by the two sections of the
workmen is the same, viz., supervisory and those drawing wages above the particular limit
have been excluded from the said definition. According to us, it is permissible to classify
workmen on the basis of their income although the work that they do is of the same nature.
The protective umbrella need not cover all the workmen doing the particular type of work. It
can extend to them in stages. At what stage which of the said section of the employees should
come under the said umbrella is a matter which should be left to the legislature which is the
best judge of the matter. We, therefore, do not see any merit in the contention. - We have already pointed out as to why the word ‘skilled’ would not include the kind
of work done by the sale promotion employees. For the very same reason, the word
‘operational’ would also not include the said work. To hold that everyone who is connected
with any operation of manufacturing or sales is a workmen would render the categorisation of
the different types of work mentioned in the main part of the definition meaningless and
redundant. The interpretation suggested would in effect mean that all employees of the
establishment other than those expressly excepted in the definition are workmen within the
meaning of the said definition. The interpretation was specifically rejected by this Court in
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May & Baker, WIMCO, Burmah Shell and A. Sundarambal cases. Although such an
interpretation was given in S.K. Verma, Delton Cables and Ciba Geigy cases the legislature
impliedly did not accept the said interpretation as is evident from the fact that instead of
amending the definition of ‘workman’ on the lines interpreted in the said latter cases, the
legislature added three specific categories, viz., unskilled, skilled and operational. The
‘unskilled,’ ‘skilled’ were divorced from ‘manual’ and were made independent categories. If
the interpretation suggested was accepted by the legislature, nothing would have been easier
than to amend the definition of ‘workman’ by stating that any person employed in connection
with any operation of the establishment other than those specifically expected is a workman.
It must further be recommended that the independent categories of ‘unskilled’, ‘skilled’ and
‘operational’ were added to the main part of the definition after the SPE Act was placed on
the statute book.
