SATISH PLASTICS Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) AN employee is an employee (1) regardless of whether be has the liberty to work for the master at his own place (2) whether he has also the liberty to work for someone else and (3) the employee agrees to style it as a contract. Feeling aggrieved by this view a partnership firm engaged in the manufacture of nylon buttons on a small scale at Jamnagar has instituted the present petition under Article 226 of the Constitution of India in order to challenge the impugned order passed by the Regional Provident Fund Commissioner as per ANnexure C dated September J 1978 holding that the petitioner firm was liable to pay Provident Fund contributions and dues as per the Employees Provident Funds and Miscellaneous Provisions Act 1952 and the scheme. The view taken by the Regional Provident Fund Commissioner by the impugned order is that the Act is applicable to the factory of the petitioner from August 1966 onwards and that the petitioner firm is liable to pay the dues under the aforesaid Act from that date onwards as if the Act was applicable throu- ghout the period. According to the petitioner the Act was not applicable to the aforesaid factory run by the petitioner and that the demand was not warranted by the provisions of the Act.

(2.) IT is provided by sec. 1 (3) (a) of the Act that subject to the provisions contained in sec. 16 the Act applies to every establishment which is a factory engaged in any industry specified in Schedule I aid in which twenty or more persons are employed. There is no dispute that the factory is engaged in an industry specified in Schedule I. What is in dispute is whether twenty or more persons were employed at the material time. The statement at Annexure A produced along with the petition shows that nineteen workers were employed from 1966 onwards till Janu- ary 1968. Thus the number of workers employed was less than twenty. However in August 1966 it was discovered that the factory had also engaged one more person namely Shri Natverlal Tribhovandas as an Accountant. According to the Department Natverlal being an employee of the factory the number of employees employed in August 1966 had arisen to twenty and thus the Act became applicable from August 1966 onw- ards. This discovery was made in the course of inspection visits made by the Provident Fund Inspector in May and June 1973. That is why the petitioner firm was called upon to pay the dues. IT is common ground that if the conclusion reached by the Regional Provident Fund Commis- sioner that Shri Natverlal who was employed as an Accountant was considered to be an employee of the factory is unassailable the Act would become applicable from August 1966 onwards for a particular period. According to the petitioner firm the said Natverlal was not a regular employee of the petitioner firm at all. IT is the case of the petitioner that Natverlal was entrusted with the work of writing amounts on a contract basis. He had the option to the employment with some other employers as well. He had also the option to work at his own residence. IT is alleged that the Katcha books of account of the firm used to be sent to the residence of Natverlal who used to prepare pucca account books on the basis of the same. IT is the case of the petitioner firm that he was being paid Rs. 60.00 per month in connection with this work entrusted to him on contract basis. The Regional Provident Fund Commissioner has relied on a decision of this High Court in M/s Plaza Talkies Junagadh v. Shri R. K. Rastogi in Special Civil Application No. 1742 of 1976 rendered on 18/03/1926 J. B. Mehta and T. U. Mehta JJ. have taken the view that having regard to the definition of sec 2 (f) of the Act any person employed for wages for any kind of work in or in connection with the work of an establishment would fall within the definition of employee and that regardless of the place where he worked in connection with the employers establishment he would be an employee within the seating of the Act. In that case also the plea urged on behalf of the employer was that he was entrusted with the work of booking pictures on commission basis and that he did business at Bombay as disclosed by the record of the case. The Division Bench has taken the view that the fact that he was working at Bombay is immaterial though there is no elabor- rate discussion in regard to this aspect. Thus the question in a way has been concluded by the aforesaid decision and we are not shown any good reason to take a different view. The definition of employee conta- ined in sec. 2 (f) is wide enough to take within its sweep a person permitted to work at his own residence as well. Under the statutory definition even if a person is not wholly employed if he is principally employed in connection with the business of the shop he would be a person employed within the meaning of the statutory language. An employee has been defined to mean any person who is (1) employed for wages in any kind of works manual or otherwise (2) in or in connection with the work of an establishment and (3) who gets his wages directly on indirectly from the employer. The inclusive part of the definition makes it clear that even if the person concerned has been employed through a contract in or in connection with the work of establishments he would yet fall within the description of employee within the meaning of the Act. In order to answer the question some other questions have to be asked and answered viz. : (1) Was he doing the work for monetary payment ? (2) Was the work done by him the work of the establishment or had a nexus with such work? (3) Was the payment made wages in the sense of being remuneration for the physical or mental effort in connection with such work ? (4) Was the work such that it had to be tone as directed by the establishment or under its supervision and control to the extent tit supervision and control are possible having regard to the specialized nature of the work or the skill needed for its performance ? (5) Was the work of such a nature and character that ordinarily a master-servant relationship could exist and but for the agreement styling it as a contract common practice and commonsense would suggest a master-servant bond ? (6) Was the relation indicative of master-servant status in substance having regard to. the economic realities irrespective of the nome- noclature devised by the parties? (7) Was he required to do the work personally without the liberty to get it done through someone else? If these answers nod their heads a master-servant relationship can be spelled out with. safety and. certainty. Is such relationship any the less a master-servant relationship in case the person is allowed to work (1) at his own place and/or (2) at the hours his own choice and/or (3) for someone else? Certainly not. The reason is neither obscure nor far to seek. In private employment there is no legal. bar to work for someone else. Nor to doing the work else where. than. at the. masters place. Con- cept of flexible hours is also well known concept since many years. The paint may be illustrated. A Cashier employed during day time by a Che- mist is no less an employee of the master merely because after his day is over he works at another Chemists shop as Cashier at night. Thus a master-servant relationship exists and parties. cannot make it a different relationship by applying the label of contract. An employ called any other name remains employee forth juridical relationship does not depend on the nomenclature devised in order to defeat the law. And law will not countenance a slap in its face by its non-respecters choose to flout it by disingenuous and circuitous devices. If entry is prohibited it is prohibited regardless of whether one effects it through the front door or the back door. We are therefore of. the opinion that the Regional Provident Fund Commissioner was perfectly justified in negativing the plea that Natverlal was not an employee. within. the meaning of sec. 2(f) of the Act. The first contention urged on behalf of the petitioner firm must therefore be repelled.