1. The question whether the provisions of the Payment of Gratuity Act, 1972 would apply to the Field Workers employed by the General Insurance Companies, and if so, whether such Field Workers are employees within the meaning of S. 2(e) of the Payment of Gratuity Act, 1972, falls for consideration in these three petitions. As the questions involved in the three petitions are identical, we propose to dispose of these petitions by common judgment and we will set out the facts in Writ Petition No. 2290 of 1982 to appreciate the submissions advanced at the bar.
2. Respondent No. 1 H. K. Khatau in Writ Petition No. 2290 of 1982 was originally employed by Vulcan Insurance Co. Ltd. on 15th February, 1965 on the Development side. The Development staff consisted of Field Officers and Field Workers, and their services were regulated by the Code of Conduct issued by the Company. The main functions of the Field Workers were (a) to recruit, train or direct and/or control the agency and/or field organisation; (b) to introduce, develop and/or service general insurance business in the area under the jurisdiction; and (c) to perform such other duties allotted to them connected with general insurance business which are not customarily entrusted to office staff. Respondent No. 1, as a Field Worker, had to canvass business by going from place to place to meet prospective customers for promoting the sales of insurance policy. Respondent No. 1 was also required to service the policies which he has sold to various customers. Respondent No. 1 was also required to collect the insurance premium and deposit in the office. Vulcan Insurance Companies nationalised in May 1971. The Government of India passed the General Insurance (Emergency Provisions) Act, 1971, and under the provisions of S. 3(3)(f) of the said Act it was provided that no insurer shall without the previous approval of the Central Government vary the terms and conditions of service of any employees employed by the Insurance Companies prior to the date of nationalisation. The Government of India also passed Act No. 57 of 1972 known as the General Insurance Business (Nationalisation) Act, 1972 and as per the provisions of S. 16 of this Act, the Vulcan Insurance Company was merged with the United India Insurance Co. under the scheme prepared on that day. The result of the merger scheme was that respondent No. 1 was treated as an employee of the petitioners United India Insurance Co. On 1st May, 1976 respondent No. 1 was designated as Field Worker. Respondent No. 1 tendered his resignation on 12th November, 1976 and it was duly accepted. Thereafter respondent No. 1 demanded the payment under the provisions of the Payment of Gratuity Act, 1972 and that being denied, presented an application under S. 4 of the Act before the Controlling Authority under the Payment of Gratuity Act and the Assistant Labour Commissioner (Central)-II Bombay, on 4th May, 1979 for award of gratuity as per the provisions of the Act and the Rules framed thereunder. Respondent No. 1 Claimed that he was employed from 15th February, 1965 till 1st November, 1976 by the petitioner Company and he is entitled to the amount of gratuity which the petitioners are declining to grant.
3. The petitioner Company filed written statement on 9th April, 1980 claiming that respondent No. 1 is not entitled to the advantage of the provisions of the Act and the Controlling Authority had no jurisdiction to entertain the application. It was claimed that the contract between respondent No. 1 and Vulcan Insurance Co. did not provide for payment of any gratuity on retirement or superannuation of an employee and the employment of respondent No. 1 in accordance with the merger scheme does not entitle respondent No. 1 to claim gratuity under the Act. It was also claimed that under S. 16(7) of the General Insurance Business (Nationalisation) Act, 1972, any scheme framed thereunder shall have the effect notwithstanding anything to the contrary contained in any other law and that would include the provisions of the Payment of Gratuity Act (hereinafter referred to as the Act). The contention is that as under para 17(1)(a) of the Nationalised Scheme, Field Workers were excluded from the grant of gratuity, it is not open for respondent No. 1 to claim the gratuity under the provisions of the Act. The petitioners also resisted the claim on the ground that respondent No. 1 is not an employee within the meaning of S. 2(e) of the Act. The petitioners and respondent No. 1 filed their affidavits in support of their respective claims, and the Controlling Authority after a careful consideration came to the conclusion, by order dated 22nd June, 1981, that the applicant comes within the purview of the Act and is therefore entitled to the gratuity. The amount of gratuity was determined at Rs. 1634.40, and accordingly the order was passed. The petitioners carried an appeal before the Appellate Authority under the Payment of Gratuity Act in accordance with the provisions of S. 7 sub-s. (7) of the Act, but the appeal was unsuccessful and the Appellate Authority dismissed the appeal confirming the order of the Competent Authority by judgment dated 20th March, 1982 and these orders are under challenge in the petitions filed by the Company.
4. Shri Chedha, learned counsel appearing for the petitioners, submitted that the application for grant of gratuity under the Act was not competent as respondent No. 1, who was employed initially by Vulcan Insurance Co., was not entitled to the grant of any such gratuity under the terms of service. It was also urged that under the scheme of merger framed under S. 16 of the General Insurance Business (Nationalisation) Act, 1972, the conditions of service of respondent No. 1 remained unchanged and as there was no provision for awarding gratuity on retirement or superannuation to an employee, the application of the respondent No. 1 was not competent. It is not possible to accept this submission. Respondent No. 1 filed the application claiming gratuity under the Act and the action was not for enforcing the contractual liability but for enforcing the statutory right conferred under the Act. Respondent No. 1 was not claiming that under the conditions of service he was entitled to the gratuity, but his claim was based upon the provisions of the Act. S. 14 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or in any instrument or contract having effect by virtue of any enactment under the Act. The sweep of this Section clearly provides that the right to claim gratuity by an employee under the provisions of this Act is not based on nay contract but a right which arises out of the provisions of the statute itself. The mere fact that there was no gratuity scheme in Vulcan Insurance Co. or the merger scheme did not provide for grant of gratuity is not sufficient to hold that the application of respondent No. 1 was not maintainable. The provisions made under the Act are in addition to the rights conferred on the employee under the conditions of service contained in any contract or any Act. As there was no provision under the conditions of service for grant of gratuity, respondent No. 1 is entitled to claim gratuity under the provisions of the Act, and in our judgment the authorities below were justified in holding that the contention of the petitioners that the application was incompetent on the ground that the conditions of service or the merger scheme did not provide for grant of gratuity was without any merit.
5. Shri Chedha then submitted, and in this submission he was joined by Shri Kothari, appearing on behalf of the petitioners in the other two petitions, that in view of the provisions of S. 16(7) of the General Insurance Business (Nationalisation) Act, 1972, and the scheme framed thereunder, respondent No. 1 was not entitled to claim any relief under the provisions of the Act. To appreciate the submission of the learned counsel, it is necessary to make reference to S. 16 of this Act which appears in Chapter V dealing with subject of scheme for reorganisation of General Insurance Business. Section 16(1) provides that if the Central Government is of the opinion that for more efficient carrying on of general insurance business it is necessary to do so, it may, by notification, frame one or more schemes providing for the matters set out under the section. The learned counsel referred to the matter set out in S. 16(1)(f) which reads as under :
'The continuance in the acquiring company of the services of all officers and other employees of the Indian insurance company which has ceased to exist by reason of the scheme, on the same terms and conditions which they were getting or, as the case may be, by which they were governed immediately before the commencement of the scheme; '
The reliance was also placed on sub-s. (7) of S. 16, which reads as follows :
'The provisions of this section and of any scheme framed under it shall have effect notwithstanding anything to the contrary contained in any other law or any agreement, award or other instrument for the time being in force.'
It is not in dispute that the scheme known as the General Insurance (Rationalisation of Pay Scales and Other Conditions of Service of Development Staff) Scheme, 1976 was framed under the provisions of S. 16(1)(f) of this Act. The scheme categories Development Staff in four categories and those are (1) Development Superintendents; (2) Inspectors Grade I; (3) Inspectors Grade II; and (4) Field Workers. Rule 17 of the scheme provides for payment of gratuity to the Development Superintendents. Inspectors Grade I and Inspectors Grade II on the termination of their employment. It was urged that under this scheme, the field workers were specifically excluded from the benefit of the payment of gratuity. The submission further is that as the scheme was framed under S. 16 of the General Insurance Business (Nationalisation) Act, 1972, the provisions of the Section and the Scheme framed thereunder shall have effect notwithstanding anything to the contrary contained in the Act. Shri Chedha points out that the General Insurance Business (Nationalisation) Act, 1972, came into force on September 20, 1972, while the Payment of Gratuity Act came into force on September 16, 1972, and therefore, the later Act, that is the General Insurance Business (Nationalisation) Act, would supersede the provisions of the Payment of Gratuity Act. It is not possible to accept the submission of the learned counsel. The reading of sub-s. (7) of S. 16 of the General Insurance Business (Nationalisation) Act indicates that if there is any clash of interest between the provisions of this Act and the Scheme framed thereunder with the provisions of any other Act, then the provisions of General Insurance Business (Nationalisation) Act and the Scheme thereunder would prevail. Therefore, it is necessary to ascertain whether there is a clash of interest when respondent No. 1 claims gratuity under the Act.
6. It is not dispute that though the nationalisation scheme covers the conditions of service of the Field Workers, it does not provide for the payment of gratuity to the Field Workers. The scheme is silent in regard to the payment of gratuity to the Field Workers and the reason is not far to see. Shri Chedha pointed out that it was the policy of the Insurance Company to phase out the category of Field Workers, as they were very lowly paid employees, and were not highly educated. The Insurance Companies decided to assimilate the employees belonging to the category of Field Workers in the grade of Inspectors Grade II provided their work and the output was found satisfactory. Those Field Workers, who were not found up to the mark were relieved from their employment within a period of about a year from the date of the Scheme coming into effect. It, therefore, appears that the nationalisation scheme framed by the Insurance Companies did not make any provision for grant of gratuity to the Field Workers as most of the Field Workers were either merged in the cadre of Inspectors Grade II or were relieved of their duties within a period of one year. As the nationalisation scheme is silent about payment of gratuity to the Field Workers, who obviously must be very few in number, it is impossible to conclude that what the scheme intended was to deprive them of the right to claim gratuity. Shri Chedha's submission that by conscious action the scheme provided for depriving the Field Workers, who were obviously the lowly paid employees, or the employees at the bottom of the ladder on the development side, from the grant of gratuity cannot be accepted. As the Insurance Companies had decided to abolish the post of Field Workers within a year of the scheme coming into operation, probably no provision was made in the scheme for payment of gratuity to such workers. It is impossible to assume that scheme which provides for payment of gratuity to other three categories of employees on the development side, deliberately intended to exclude workers at the bottom from advantage of gratuity. In our judgment, under the circumstances there is no clash of interest whatsoever between the right of the Field Workers to claim gratuity under the provisions of the Act and the provisions of S. 16 or the scheme framed thereunder. In out judgment, the conclusion recorded by the two authorities below that respondent No. 1 was entitled to claim gratuity under the provisions of the Act is in accordance with law and cannot be faulted with.
7. The next submission and the principal submission urged in support of the petition is that even assuming that respondent No. 1 is entitled to claim gratuity under the Act, still no relief could be granted because respondent No. 1 did not fall within the purview of definition of 'employee' under S. 2(e) of the Act. Section 2(e) reads as under :
''Employee' means any person (other than an apprentice) employed on wages, not exceeding one thousand rupees per mensem, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to do any skilled, semi-skilled or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, but does not include any such person who is employed in a managerial or administrative capacity, or who hold a civil post under the Central Government or a State Government, or who is subject to the Air Force Act, 1950, the Army Act, 1950, or the Navy Act, 1957.'
The learned counsel urged that the definition of 'employee' under the Act is analogous to the definition of 'workman' under S. 2(s) of the Industrial Disputes Act, 1947, and the scope and ambit of that definition has been construed by the Supreme Court and the conclusion recorded by the authorities below is contrary to the decision of the Supreme Court. S. 2(s) of the Industrial Disputes Act, defines 'workman' and reads as under :
''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 terms of employment be express or implied, and for the purpose 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 :
(i) who is subject to the Army Act, 1950, or the Air Force Act, 1950, or the Navy (Discipline) Act, 1934; or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.'
The comparison of the definition of 'workman' under the Industrial Disputes Act indicates that the expression 'employee' is more wider than that of the expression 'workman'. In the definition of 'employee' under the Act, not only skilled or unskilled but even semi-skilled workers are included. It is also necessary to note that between the expression 'skilled, semi-skilled' there is a comma and so also between the expression 'semi-skilled, or unskilled' there is a comma which is a departure from that contained in the definition of 'workman'. The authorities below recorded a conclusion that the expression 'employee' is wider than the expression 'workman' and a new category of workman like skilled workman, semi-skilled workman or unskilled workman has been recognised under the Act, and respondent No. 1 could be treated as either a skilled or semi-skilled worker. The learned counsel for the petitioners complained against the reasoning of the authorities below and submitted that in view of the decision of Supreme Court in Burma Shell Oil Storage & Distribution Co. of India v. Burmah Shell Management Staff Association : (1970)IILLJ590SC , the construction adopted by the authorities below is incorrect. The Supreme Court, while considering the scope or the ambit of expression 'workman' under the Industrial Disputes Act, observed (at p. 594) :
'For an employee in an industry to be workman under this definition, it is manifested that he must be employed to do skilled or unskilled manual work, supervisory work, technical work or clerical work. If the work done by an employee is not of such a nature, he would not be a workman.'
The Supreme Court did hold that the words 'skilled or unskilled' in the definition of expression 'workman' qualifies the words 'manual, supervisory, technical or clerical' and were not intended to convey any separate meaning apart from clarifying the four categories of the work. On behalf of respondent No. 1, it was urged that the decision of the Supreme Court cannot be made use of while construing the definition of 'employee' under the Act as there are distinct changes in the contents of the expression 'employee' and the Legislature has advisedly added the word' semi-skilled' and have inserted commas between the words 'skilled, semi-skilled, or unskilled. It was urged that this departure is indicative of the fact that the legislature desired to widen the ambit of the expression 'employee' than that of the expression 'workman' and desired to make available the benefits of the legislation to a large category of workers. The submission made on behalf of respondent No. 1 is quite attractive, but we need not record any finding on that aspect because in the present case we find that respondent No. 1 was performing manual or clerical work and would therefore come within the definition of employee and would be entitled to claim benefits of the Act.
8. The decision of the Supreme Court in case of Burmah Shell referred to hereinabove lays down that in determining whether the employees are covered by the definition of 'workman' one has to see what is the main or substantial work which they are employed to do. The Supreme Court while deciding the Burmah Shell case made reference to the earlier decision of the Supreme Court in May & Baker (India) Ltd. v. Their Workman : (1961)IILLJ94SC , wherein it was observed that the designation of the employee is not of great importance and that what is of importance is the nature of his duties. It further held that if the nature of the duties is manual or clerical then the person must be held to be a workman. It was also held that the principle is well settled that the workman must be held to be employed to do that work which is a main work he is required to do, even though he may be incidentally doing other type of work. In view of the dictum laid down by the Supreme Court while considering whether respondent No. 1 falls within the definition of 'employee' under the Act and was performing manual or clerical work in his employment, it is necessary to make reference to the conclusions recorded by the two authorities below on the material produced by the parties.
9. It was claimed by the petitioners that respondent No. 1 was employed for canvassing of general insurance business and his main work was to promote sale of Company's insurance policies and to canvass business by going from place to place to meet the prospective clients. To fulfil the object of obtaining insurance business respondent No. 1 was required to serve the policy holders, collect premium and in the event of any settlement of claim, assist the policy holders as per the procedure laid down by the Company. Respondent No. 1 was also required to maintain his own records for issuing policies, payment of premium etc. and his work was supervised by his seniors, Respondent No. 1 states that he had to sign daily in Attendance Book and his monthly pay was drawn on a common pay sheet and he was given not only the annual increment but also bonus and provident fund benefits. Shri Chedha and Shri Kothari submitted that canvassing for the sale of insurance policies or the sales promotion is a special kind of work and would not fall in any of the categories like manual, clerical, technical or supervisory as defined under the Act. Shri Kothari urged that the Field Workers are required to perform organising and developing work and that work, which is really the sale of insurance policy, is not the work which can be styled as manual or clerical. We are unable to accept this submission. The work which respondent No. 1 was required to perform is of visiting the customers at their houses and canvassing and doing business by selling the insurance policies. We are unable to appreciate how the work of respondent No. 1 of visiting the customers and selling insurance policies, collecting premium amount and depositing it in the office cannot be treated as a manual work. The manual work cannot be restricted only to those cases where a worker is required to carry out certain work by his hands. Take for instance, the work performed by the Sales-girls, who are required to visit several houses to sell the product. The work performed by the sales girls is undoubtedly of promoting the sale by effecting sales of the product of the Company which engages them. The work performed by such persons is certainly a manual work and we do not see any distinction between the case of a sales girl visiting the houses for selling the product of the Company and a Field Worker who is required to visit the houses of the customers for selling the insurance policies. It is obvious from the material on record that the Field Workers are lowly paid employees and are employed to travel over the town and contact various customers, and in our judgment, the work which they perform must be considered as a manual work. We also find that it is one of the duties of the Field Worker to collect the premium amount from the customers and to deposit it ultimately in the office, and we do not see any reason why the work of this nature performed by the Field Officers (workers ?) should not be treated as a clerical work. The learned counsel submitted that the work performed by the Field Workers, though partly may be a manual or clerical work, is not a principal work performed by them and as a dominant work done by them does not fall within the expression 'manual work' or 'clerical work' the Field Workers cannot be treated as employees under the Act. We are unable to persuade ourselves to this line or reasoning. In the case of Field Workers, their is no question of dominant work or an incidental work. The duties performed by the Field Workers are to visit the customs and to sell the insurance policies till maturity by attending on customers. In the performance of this work, there is nothing like dominant work or incidental work and merely because the Company claims that the Field Workers were employed to canvass business it is not sufficient to conclude that the work performed by the Field Workers is neither manual nor a clerical work. In our judgment, applying the test laid down by the Supreme Court in the case of Burmah Shell, there is no manner of doubt that respondent No. 1 was performing the manual work and the clerical work so as to entitle him to fall within the definition of employee under the Act.
10. Shri Chedha and Shri Kothari placed strong reliance upon the judgment of the Division Bench of this Court in Spl. Civil Appln. No. 1110 of 1970 Dinshaw Shapurji v. Divisional Manager, United India Fire & General Insurance Co. Ltd. to claim that the Field Worker would not fall within the expression of 'employee' under the Act. We have perused the judgment very closely and in our judgment, the reliance on the judgment in Variava's case is of no assistance to the petitioners. In Variava's case the employee was appointed to work as an agent of a Company carrying on business of general insurance and the terms and conditions of the appointment of the employee was for servicing unit which was opened at Nagpur. The service of the employee was terminated and the reference was made to the Industrial Tribunal under S. 10(1)(d) of the Industrial Disputes Act, to ascertain whether the action of the management in terminating the services of Variava was legal and justified. The Tribunal came to the conclusion that Variava was not a workman within the meaning of the term in S. 2(s) of the Industrial Disputes Act and the reference was not tenable. In the petition filed under Arts. 226 and 227 of the Constitution of India before the Division Bench, it was conceded on behalf of Variava that he was not claiming to be a workman on the ground the he did either skilled manual work or skilled clerical work. The claim of Variava to be treated as workman was restricted only to the claim that the work performed was either supervisory or technical. In view of the concession made before the Division Bench, the only question which fell for determination was whether as contended by the management the employee was covered by the expression in cl. (iii) as a person employed mainly in the managerial or administrative capacity. The Division Bench on the material before it, came to the conclusion that Variava was not a workman as he was not employed to do supervisory or technical work. We fail to appreciate how this decision would be of any assistance to the petitioners in the present case as the decision in Variava's case does not lay down any principle to the effect that the Field Workers are not performing manual or clerical work. The decision in Variava's case centered round only as to whether the employee was performing supervisory or technical work and on the material produced in that case, the finding was recorded against the employee. In our judgment, the decision in Variava's case is of no assistance in the present case.
11. Reliance was placed on the decision of the single Judge of the Madras High Court in Writ Petn. No. 184 of 1977 Oriental Fire and General Insurance Co. v. A. Shrinivas to claim that the Field Workers are not employees within the definition of S. 2(e) of the Act. It is true that the learned single Judge of the Madras High Court, on the material produced in that case, came to the conclusion that the main or substantive work performed by the employee being one of canvassing the insurance business and developing and promoting the business of the Company, the employee would not fall within the meaning of S. 2(e) of the Act. With respect to the learned single Judge, we are unable to find any reasons in the judgment which led to the conclusion that the employee was incidentally doing clerical work. It must be stated that it was not urged before the learned single Judge that the work performed by the Field Worker was really a manual work. The submission before the single Judge seems to have been restricted to the claim that the work done by the Field Worker was of a clerical nature. The learned Judge on the material produced felt that main or substantial work being of canvassing, some incidental clerical work done by Field Worker would not enable him to be designated as 'employee' under the Act. On the material produced in the present case we are satisfied that the work performed by respondent No. 1 was manual as well as clerical and therefore he is entitled to claim advantage of the provisions so Payment of Gratuity Act which is a beneficial legislation enacted to give assistance to the lowly paid employees.
12. Shri Kothari submitted that in the two petitions in which he is appearing, the employees had not specifically claimed in their application that they were doing manual or clerical work and therefore, in case we are inclined to take that view, we must remit the matter back to the authorities for giving a fresh opportunity to the petitioners to lead evidence to establish that the work carried out by the employees was neither manual nor clerical. We are unable to appreciate the submission that a fresh opportunity should be given to the petitioners to lead further evidence. It must be remembered that the application filed by an employee under S. 4 of the Act cannot be considered as a pleading in the suit and the claim of an employee cannot be defeated on technical grounds. Apart from this, we find that in a detailed written statement filed on behalf of the petitioners, it was specifically denied that the employee was not engaged to do any manual or clerical work. The petitioner Company had ample opportunity to lead evidence before the authorities and in fact did so. On the material produced before the authorities, if it becomes evident that the work performed by the employee was of a manual or clerical nature, then it is futile for the petitioners now to claim that they should be given a fresh opportunity to establish to the contrary. The material was produced by the parties before the authorities and it is for the Court to ascertain what was the nature of work from the duties performed by the employee. In our judgment, the claim advanced by Shri Kothari for remission of the matter for a fresh opportunity is without any merit and deserves to bee repelled.
13. A Faint submission was also advanced by Sri Kothari that the application was not maintainable as it was barred by limitation and the Act ad no application to the Insurance Companies. We find no merit in this contention advanced on behalf of the Company which is a nationalised one and which is fighting against the lowly paid employees for a small amount of gratuity awarded by the two authorities below. The authorities below very rightly condoned the delay, if any, on the part of the employee in filing the application and the discretion exercised by the authorities below and which we think very rightly exercised, cannot be disturbed in these proceedings under Art. 226 and 227 of the Constitution of India. The submission that Insurance Companies are not covered by the provisions of the Act is also without any substance as the Act specifically provides under S. 1(3)(b) that it shall apply to every establishment within the meaning of any law for the time being in force, in relation to the establishment employing ten or more persons. Shri Kothari could not deny that the petitioner company is an establishment employing more than ten persons. In our judgment, the defence raised by the petitioner Company to the application made by the employee is without any substance and the authorities below were justified in granting the applications and awarding the amount of gratuity to the employees.
14. In the result, all the three petitions fail and the rule in each of the petition is discharged. The petitioners in Special Civil Applications Nos. 2696 and 2697 of 1978 to pay the costs of respondent No. 1 in those petitions. There will be no order as to costs in Writ Petition No. 2290 of 1982 as respondent No. 1 has not appeared.
15. Respondent No. 1 in each petition is entitled to withdraw the amount deposited by petitioners in pursuance of the order passed by this Court at time of admission.