Delhi High Court
Union Bank Of India vs Rakesh Kumar Vaid on 4 December, 2020
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Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:04.12.2020
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$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 10th November, 2020
Date of decision: 4th December, 2020
+ W.P.(C) 3269/2018 & CM APPLs. 10178/2019, 17218/2020
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
MUJAHID QASIM ..... Respondent
Through: Ms. Ayushi Jain, Advocate.
WITH
+ W.P.(C) 3286/2018 & CM APPLs. 10313/2019, 16861/2020
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
MOHAN SINGH ..... Respondent
Through: Ms. Ayushi Jain, Advocate.
WITH
+ W.P.(C) 3293/2018 & CM APPLs. 10312/2019, 16862/2020
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
DINESH KAPOOR ..... Respondent
Through: Ms. Ayushi Jain, Advocate.
WITH
+ W.P.(C) 3295/2018 & CM APPLs. 10179/2019, 16864/2020
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
MANOJ CHHETRI ..... Respondent
Through: Ms. Ayushi Jain, Advocate.
WITH
+ W.P.(C) 3296/2018 & CM APPL. 12923/2018
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
SECRETARY DELHI GENERAL WORKERS
UNION ..... Respondent
W.P.(C) 3269/2018 & connected matters Page 1 of 30
Signature Not Verified
Digitally Signed
By:PRATHIBA M SINGH
Signing Date:04.12.2020 16:12
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Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:04.12.2020
17:02:00
Through: Ms. Ayushi Jain, Advocate.
AND
+ W.P.(C) 3304/2018 & CM APPLs. 48637/2018, 10311/2019,
17219/2020
UNION BANK OF INDIA ..... Petitioner
Through: Mr. Rajat Arora, Advocate.
versus
RAKESH KUMAR VAID ..... Respondent
Through: Ms. Ayushi Jain, Advocate.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUDGMENT
Prathiba M. Singh, J.
1. The judgment is pronounced through video-conferencing.
2. All these petitions raise a common question - whether drivers, who
were serving various Executives in the erstwhile Corporation Bank, which is
now merged with the Union Bank of India (hereinafter, 'Petitioner/Bank'),
are employees of the Bank. And if so, whether they are entitled to
regularization. The Petitioner has filed these petitions challenging two sets of
orders.
3. In W.P(C) 3296/2018, the challenge is to the industrial award dated
29th November, 2017 passed by Central Government Industrial Tribunal
("CGIT") in ID No. 1/2014, wherein it was held that all the drivers/claimants
are 'Workmen' and that there is an employer-employee relationship between
the Bank and them. Accordingly, the Tribunal held that the demand of the
drivers for regularization of their service was both legal and valid and had
directed regularization of all these drivers.
4. A second set of awards were passed on the same date i.e. 29 th
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November, 2017 in complaints filed by the drivers, wherein the Tribunal held
that the termination of drivers from employment, is contrary to law and
therefore, they were directed to be reinstated in service. The challenge in the
other writ petitions is to the various awards passed directing regularization of
the Respondent-drivers.
Submissions
5. Mr. Rajat Arora, ld. counsel appearing for the Bank firstly takes this
Court to the terms of reference as set out in the impugned award in ID No.
1/2014. He submits that the terms of reference are as under:
"Whether the demand of the Delhi General
Workers' Union, D-195, Karampura, Shivaji Marg,
New Delhi-15, against the Chairman-cum-
Managing Director, Corporation Bank, H.O.
Mangla Devi Temple Road, F.B. No.38, Manglore-
575001 (Karnataka)/ General Manager,
Corporation Bank, Z.O. 16/10, Main Arya Samaj
Road, Karol Bagh, New pelhi-15 for regularization
of personal car drivers in the list enclosed at
Annexure 1 is just valid and legal? if so, to what
benefits the workmen are entitled to and what
directions are necessary in the matter?"
6. Ld. counsel submits that in paragraph 12 of the Award, the Tribunal
has rightly crystalized the issue as 'whether there is relationship of employer
and employee between the management and claimants'. However, according
to him, having done so, the Tribunal thereafter steers in a wrong path by
determining whether the drivers are 'Workmen' and thereafter based on this
finding, comes to a conclusion that that there is an employer-employee
relationship between them and the Bank. Mr. Arora points out that out of a
total of 19 drivers, who were part of the reference in ID No. 1/2014, the
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question before the Tribunal was only in respect of 10 of the drivers and
crucially only 4 drivers, who had filed the complaints challenging their
termination. This is because out of the 19 drivers, 3 were already regularized
and thus the Tribunal, clearly, notes that the issues were to be decided in
respect of only 10 drivers (para 24).
7. Ld. counsel submits that the manner in which the Tribunal considers
whether the drivers were 'Workmen' or not, is in effect framing of a wrong
question, which led to a wrong answer. He further submits that though the
employee may be a 'Workman' under the Act, it cannot be presumed that an
employer-employee relationship exists between said 'workman' and the
Management in question. The conclusion that they are 'Workmen' and hence
there is an employer-employee relationship between the parties is an incorrect
conclusion. Ld. counsel submits that the cars, which were being driven by the
drivers, were cars belonging to the Bank, which were given to Senior
Executives of the Bank. However, salaries were never paid to the drivers
directly by the Bank - the same were paid by the Executives, under whom the
drivers were working, and the Bank was merely "reimbursing" the same to
the said Executives. This is clear from the vouchers issued by the bank which
clearly mention that it is 'reimbursement of salary'
8. Mr. Arora submits that the Tribunal after noting the definition of
'Workman' under Section 2(s) of the Industrial Disputes Act 1947, framed
the wrong question of law and, thus, the award is faulty. The awards
challenged in W.Ps(C). 3269/2018, 3286/2018, 3295/2018, 3293/2018 and
3304/2018 though passed on the same date, primarily rely on the main award
in ID No. 1/2014 that the termination of the drivers has been held to be illegal
and back-wages have been directed to be paid by the Bank.
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9. Ld. counsel submits that the fact that the drivers were not the regular
employees of the Bank, is clear from various circumstances namely-
i. No provident fund was deposited
ii. No gratuity payment was made
iii. Drivers do not have any pension
iv. No appointment or termination letter was given
v. No conditions of service were specified at the time of
appointment
vi. The Bank did not have any disciplinary control over the drivers.
vii. Even at the stage of recruitment, no advertisement was given by
the Bank and no test was conducted and it was purely up to the
Executives to whom they wish to engage as drivers - the Executives
were merely entitled to a car and reimbursement of salary of drivers.
10. Thus, the Tribunal has clearly erred, in holding that the drivers are
employees of the Bank while giving direction for regularization as also in
setting aside the termination of the Respondent-drivers.
11. Mr. Arora, has cited two sets of judgments dealing with - firstly, the
test to determine the relationship between employer and employee and
secondly, as to under what circumstances the regularization of employees can
be done. He relies upon the judgment of Workmen of Nilgiri Cooperative
Market Society Ltd. v. State of Tamil Nadu & Ors. [AIR 2004 SC 1639] to
argue that there is no hard and fast rule to determine as to whether there is an
employer-employee relationship between the parties and the same would be
adjudicated in each case. Mr. Arora submits that the various factors that have
been set out in paragraph 38 of the judgment are merely illustrative. Further,
reliance is also placed by ld. Counsel on Ram Singh and Ors. v. Union
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Territory, Chandigarh & Ors. [(2004) 1 SCC 126], Balwant Rai Saluja v Air
India Ltd. [AIR 2015 SC 375], and the recent judgment in Sushilaben
Indravadan Gandhi & Anr. v. The New India Assurance Company Ltd. &
Ors. [Civil Appeal No. 2235 of 2020, Decided on 15th April, 2020]. The
submission of Mr. Arora on the basis of these three judgments is that 'control'
is not the sole test to determine the existence of an employer-employee
relationship. He submits that the Court ought to adopt a pragmatic approach
and various factors would have to be considered - for example as stated in
Balwant Rai Saluja (supra), whether the employee was in effect under the
direct control of the employer, after lifting of the corporate veil. Ld. counsel
submits that the question as to whether there is a contract for service or
contract of service would have to be determined, depending upon the nature
of service. He submits that if the service, that is provided by the employees,
is integral to the business of the employer, then it would be considered a
contract of service and if the service is not integral to business, and is only an
accessory, then it would be a contract for service. According to the Supreme
Court's judgment in Sushilaben Indravadan Gandhi (supra), the economic
reality of the relationship has to be considered, while determining the nature
of employment.
12. While connecting these judgements to the facts, Mr. Arora submits that
the Petitioner being a Bank, the primary function of the Petitioner is to deal
with the acceptance of deposits and issuance of loan and other lending
activities. The function performed by the drivers, who were employed for the
purpose of various executives of the Bank, is not essential or integral to the
functions of the Bank. Accordingly, he submits that this was only a contract
for service and the drivers cannot be considered employees of the Bank. He
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submits that due to wrong questions having been framed by the Labour Court,
a wrong conclusion has been arrived at.
13. Insofar as regularization is concerned, Mr. Arora submits that the
essential settled position is that regularization is an executive function, which
is to be performed by the Management. It is not the Court's duty to direct
regularization unless there is an unfair labour practice, which the Court sees
in a particular case. There are various circumstances to be considered such as
whether there are posts, whether such posts are needed to be created, as well
as the financial burden on the establishment. Without considering these
factors, regularization cannot be directed. Ld. counsel further submits that
unfair labour practices is an exceptional circumstance, where if a Court finds
that the Management is deliberately keeping the regular posts vacant and is
continuing to engage contractual workers, the same would be considered as a
relevant factor. Only under these circumstances, can regularization be
directed, in accordance with law.
14. Mr. Arora finally relies upon the judgment in Indian Drugs &
Pharmaceuticals Ltd. v. Workmen, Indian Drugs & Pharmaceuticals Ltd.
[(2007) 1 SCC 408] to argue that ad-hoc/daily wage employees cannot be
regularized as the creation and abolition of posts is settled as being an
executive function. If no vacant posts exist, the posts cannot be directed to be
created by the Court.
15. In conclusion, Mr. Arora has cited the following three judgments:
Postmaster General, Kolkata and ors. vs. Tutu Das (Dutta) [(2007) 5 SCC
317], UP Power Corporation Ltd. vs. Bijli Mazdoor Sangh [(2007) 5 SCC
755 and A. Uma Rani vs. Registrar, Cooperative Societies and Ors. [AIR
2004 SC 4504] to submit that in this fact scenario, the employer-employee
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relationship has not been established and thus the award deserves to be set
aside.
16. On the other hand, Ms. Aayushi Jain, ld. Counsel appearing on behalf
of the various employees, submits that the existence of an employee-employer
relationship is not to be determined on the basis of the designation given to
the employee, but rather on the nature of the duties performed by the
employee. She submits that the employees, herein, were not merely
performing the duties of a driver for a specific executive, but in fact were
engaged in performing various other functions on behalf of the Bank
including, for example, collecting cheques, collection of cash, collection of
packets and handing over of parcels. The said employees were also given
letters by the Bank confirming that they were employed by the Bank.
According to her, even the salary slips clearly show that the employees were
paid directly by the Bank. The language used in the cash payment
receipts/vouchers is that the employees are being paid a 'salary'.
17. Ms. Jain further submits that none of the employees were paid through
the executives, and in fact, the evidence of the management witness, at page
100 of the paper book, shows that the witness MW1 had admitted that there
were no documents to show that the Executive of the Bank had paid the driver.
The management witness has also confirmed that the post of peon-cum-driver
still exists in the Bank.
18. Ms. Jain, thereafter, refers to the order dated 6th April 2018, in which
it was specifically recorded that the Bank is willing to regularize the
workmen, subject to meeting of the requisite criteria as per the policy
guidelines. She heavily relies upon the fact that initially there were a total of
19 peon-cum-drivers, as set out in Annexure-1 of the claims statement. Out
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of the said 19, three have been admittedly regularized. The employees who
have not yet been absorbed are Mr. Mujahid Qasim, Mr. Mohan Singh, Mr.
Dinesh Kapoor, Mr. Rakesh Kumar and Mr. Manoj Chettri. She submits that
since there are only five workmen left, who have already worked for more
than ten years, their services deserve to be regularized in terms of the first
order passed by this Court.
19. Ms. Jain, ld. counsel, emphasizes upon the fact that as per the evidence
of MW1, Ms. Anjali Kumar, the Manager of Bank, the services of these
persons were engaged after proper approval, right till the headquarters. In fact,
the approvals were granted as per the requirements prescribed by the Bank
and decisions were also ratified duly by the Head Office of the Bank. She
thereafter submits that though the revision petitions have been filed by five
employees, she also represents the Trade Union, which, in turn, comprises of
all the other employees who have not been regularized. Out of the 19 drivers,
two employees have already passed away.
20. Ld. counsel also relies upon various documents issued by the bank
confirming that they were bank's drivers. For eg., page 90 of the paper book,
is a letter issued by the Bank to Mr. Mujahid Qasim, stating that he is the
Bank's driver. She further submits that the fact that these employees are direct
employees of the Bank is clear, as these workmen have worked under more
than one executive. According to her, whenever an executive is transferred,
the driver is not transferred. In her submission, this proves that the drivers
were not the personal employees of the executives, but rather were employees
of the Bank. She submits that applying the economic control and integration
test to determine the employer-employee relationship, the services of these
employees deserve to be regularized.
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21. Ms. Jain further relies upon various case laws. In the first place, Ms.
Jain relies upon Hussain Bhai v. Alath Factory Employees Union, AIR 1978
SC 1410, to canvass the proposition that the employer-employee relationship
can be established by various facts. The test of economic control as well as
the integration test can be applied to the facts of this case. She submits that as
held in Hussain (supra), if the employer has economic control over the
employee, that would be a good indication of the fact, to determine that the
employee is a direct employee of the employer, and not of the contractor. She
submits that any camouflage or make-believe methodology, that may be
adopted, ought not to be accepted by the Court.
22. She further submits that the drivers, in the present case, used to drive
the vehicles owned of the Bank and were being paid by the Bank. She submits
that if the Bank closes down, the drivers would remain unemployed as they
were not the personal drivers of the executives of the bank. She further
submits that the vouchers, placed on record, clearly show that the Bank was
reimbursing all their expenses. According to her, this question of fact, having
been established before the Labour Court, does not deserve to be revisited in
writ jurisdiction. She further submits that, applying the test of integration and
economic control, the Court ought to hold that these drivers are the employees
of the Bank itself. She relies upon these three judgments to support this
proposition:
● Hussain (Supra)
● India Literacy Board and ors. v. Veena Chaturvedi and ors.
(2005) 10 SCC 79
● Bank of Baroda v. Ghemarbhai Harjibhai Rabari, AIR 2005
SC 2799
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23. Insofar as similar drivers having been regularized and there being
availability of permanent posts, she submits that drivers are entitled to
regularization in light of the following judgments:
● State of Haryana v. Piara Singh (1992) AIR 2130
● Workmen of Bhurkunda Colliery of M/S Central Coalfields
Ltd. v. The Management of Bhurkunda Colliery of M/S Central
Coalfields Ltd, (2006) 3 SCC 297
● ONGC v. Krishan Gopal (2020) SCC Online SC 150
24. On the strength of these three judgments, she submits that, by virtue of
the Act being a beneficial legislation, in favour of the workmen, if there is a
dispute between the employer and workman, the Court ought to exercise its
powers in favour of the workman. For a Workman, the security of tenure is
essential, which can only happen by regularization. When sanctioned posts
exist, the non-regularization of few employees while others are being
regularized, would completely be arbitrary and contrary to the guidelines laid
down in ONGC (supra). She submits that despite the fact that in ONGC,
another two-judge bench's decision of the Supreme Court has been referred
to larger bench, the guidelines are very clear, meaning that whenever there is
unfairness being shown towards the Workman, and if the employer engages
in an unfair labour practice, the temporary or daily wage workers ought to be
regularized, as otherwise the same would be discriminatory in nature. She
further submits that whenever temporary workmen have worked for a long
duration, they ought to be regularized in their employment, so that they have
a security of tenure and service, rather than being on a tender hook.
25. Ms. Jain, ld. counsel submits on the basis of all these judgments, that
the Bank continues in its malafide / illegal conduct by challenging the Labour
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Court's awards. Also, the Workmen in these matters are completely destitute
as they do not have any employment, especially during the pandemic. Their
only livelihood was the job which they were performing at the Bank. She
further submits that despite interim orders passed by this Court, two of the
drivers were removed from service which has entailed the Workmen to file a
contempt petition before this Court. This, according to her, shows the
perpetuation of illegal and malafide conduct by the Bank.
26. Ms. Jain, ld. Counsel concludes by submitting that, for all these
reasons, the writ petitions filed by the Bank are liable to be dismissed, and the
employees ought to be taken back into service. She further submits that the
awards passed by the Tribunal should be upheld by this Court.
27. In rejoinder arguments, Mr. Arora, ld. counsel for the Bank, submits
that the designation of these persons is not important and the question that the
CGIT has framed, itself is a wrong question of law, i.e. as to whether they
were workmen or not? He submits that even if they were workmen, the
question that ought to have been framed is whether there existed an employer-
employee relationship. He submits that even if the employees in these cases
are workmen, that does not necessarily mean that they were employees of the
Bank.
28. His second submission is that the relief of regularization can only be
given if there is an "unfair labour practice". The said term is defined in the 5th
Schedule of the Industrial Dispute Act, 1947. There are no allegations or
findings to the effect that the Bank has indulged in any unfair labour practice.
Thus, the relief of regularization could not have been granted. On this point,
Ms. Jain, on the other hand, points out at that serial no.10 from this schedule
would apply in the present case.
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29. Mr. Arora thirdly submits that the documents relied upon by the
workmen, for e.g.- the letters given to the licensing authority for renewal of
license, or other such documents, would not by itself be sufficient to establish
an employer-employee relationship, inasmuch as these employees have not
been employed by the normal procedure of recruitment of the Bank. He
submits that the ONGC v. Petroleum Coal Labour Union (2015) 6 SCC 494
decision, that has been relied upon by the Tribunal, has in fact been referred
to a Larger Bench in the judgment of the Supreme Court ONGC v. Krishan
Gopal (2020) SCC Online SC 150. Thus, according to him, reliance upon
judgment of ONGC v. Petroleum Coal Labour Union (2015) 6 SCC 494 by
the Tribunal, may not be correct as it may not be good law anymore.
30. Mr. Arora finally concludes his rejoinder submissions by submitting
that the usual recruitment of the Bank is either done through advertisement or
through employment exchange. The Bank may be willing to consider the
employees for regularization, so long as the basic criteria of employment is
fulfilled. These were ad-hoc employees who were employed as drivers for the
personal usage of the Executives of the bank and are not "entitled" to
regularization.
Analysis and Findings
31. The short question is whether there exists an employer-employee
relationship between the Bank and all the Respondents who were employed
as drivers.
32. The case of the Union was that the drivers were appointed against
sanctioned posts, after obtaining approvals from the Head Office. They used
to work, not merely with the executives but would perform various other tasks
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including taking clearance from one branch to others, collection of Cheque
Books from one to another, carrying cash from one branch to another, taking
deliveries of gadgets such as computers and their accessories from one branch
to another, taking deliveries of the goods that were consigned to the respective
branches from different airlines, taking deliveries of TDS cheques from other
customers like the ministries, carrying cash against NSC/ deposits from post
office, and other sundry works.
33. The Union also claimed that the cleaning expenses, salaries, petrol
reimbursement etc. were given by the Bank. The Workmen then sought
regularization which was not acceded to by the Bank. Upon the demand of
regularization being raised by the Union, the Bank's attitude towards the
drivers completely changed.
34. The drivers had worked for more than 240 days in each calendar year
and some drivers were being selectively regularized. The Union representing
the drivers approached the CGIT, on the ground that the drivers are entitled
to be regularized from the date of initial appointment.
35. The Bank's case before the CGIT was that the drivers were the personal
car drivers of the Executives, and it further pleaded that recruitment is by a
proper process through the employment exchange only after the candidate
fulfils the eligibility criteria. Their submission was that ad-hoc drivers cannot
be given regularization as there is no master servant or employer-employee
relationship.
36. The Bank disputed the averments of the Union. It, however, admitted
that the expenses for maintenance, petrol and oil requirements, and
reimbursement of salaries was given by the Bank, as they were fulfilling the
needs of the higher-level officials in the Bank and were rendering services to
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them. The Union filed a large number of documents, including letters,
vouchers, logbooks etc. supporting its claim. Evidence was led before the
CGIT, both by the Workmen and as also the Management. The Workmen
exhibited all the documents including the vouchers for payment, voucher for
overtime, travel allowance voucher, letters regarding outdoor duty,
appointment letters, etc.
37. The witness on behalf of the Management confirmed that the bio-data
photograph, driving license, address proof etc. of the drivers was sent to the
Head Office of the Bank for ratification. The witness also confirmed that the
parameters for engaging drivers was issued by the Head Office. He also
admitted that logbooks are maintained, which show the activities conducted
by drivers. He further admitted that posts for peon-cum-drivers have also been
sanctioned. The witness, however, could not give the figures of personal
drivers absorbed by the Bank into its service. He confirmed that three of the
drivers were absorbed during the pendency of the dispute.
38. After perusing the pleadings and the evidence, the CGIT vide the
impugned order dated 29th November 2017, directed for regularization of the
services of the drivers. The findings of the CGIT in the impugned order are:
● The documents on record show that there is correspondence
between the AGM and the Chief Manager of the Bank, regarding
engagement of the drivers and verification of the drivers.
● Approval was sought for appointment of drivers from the Head
Office.
● Enhancement of salary for drivers is mentioned in a number of
letters.
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● Various expenses towards petrol, maintenance etc. was being
released by the Executives to the drivers.
● No post of personal driver exists in the Bank.
● The logbook of the vehicle, establishes the various activities
which the drivers were engaged in.
● Claims for regularization of service have been considered by
Board of Directors against the post of peon-cum-drivers.
● Drivers were also required to wear uniforms prescribed by the
Bank for which payment was also made by the Bank.
● Out of the 19 drivers, only 10 drivers are left for being
regularized. Many have already been regularized.
● When an Executive is either transferred or if they retire, the
driver continues to serve the new incumbent.
● The drivers were getting salary from Bank's kitty.
● The drivers were also doing other jobs assigned to them by the
Executives and hence cannot be termed as personal drivers of the
executives.
39. Thereafter CGIT analyzed the applicable case law and held that the
demand of the drivers for regularization is legal and valid. The operative
portion of the award reads as under: -
"32. In view of this, the reference is answered in
favor of the claimants and against the management
by holding that demand of the claimants for
regularization of their service is both legal and
valid. Services of the claimants herein, whose
names are mentioned in Annexure-I attached with
the statement of claim, are liable to be regularized.
The Award is passed accordingly. Let a copy of this
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Award be sent for publication as required under
Section 17 of the Act."
40. The submissions of both counsels are recorded in detail above. After
the conclusion of submissions, this Court had directed the ld. counsels to place
on record the details of actual number of drivers in respect of whom the writs
are to be decided inasmuch as there were several subsequent events which had
taken place including demise, non-traceable person etc. Accordingly,
affidavits were filed both by the Union and by the Bank. On 10 th November
2020, after perusing the affidavits filed, it was recorded as under:
"2. Both the parties have filed their respective lists
Workmen. After discussing the list with ld. counsels, it
is clear that the present petitions would now only
relate to 11 drivers as contained in the list filed by
the Union for the Workmen, instead of 19 drivers as
mentioned in the petitions. Some of the drivers are
not traceable, some have been permanently absorbed
and one driver has passed away.
3. It is also informed to the Court that out of the
11 drivers, Mr. Gangadhar Kushwaha, Mr. Ashok
Kumar, Mr. Rajesh Kumar S/o Shri Purushotam Das
and Mr. Narain Ram are working on temporary basis
with the Bank with four different executives.
xxx"
41. Thus, the present writ petitions would now be restricted to 11 drivers,
namely, Mr. Bachan Singh, Mr. Navin Kumar, Mr. Mujahid Qasim, Mr.
Rakesh Kumar Vaid, Mr. Manoj Chettri, Mr. Mohan Singh Rawat, Mr.
Dinesh Kapoor, Mr. Gangadhar Kushwaha, Mr. Ashok Kumar, Mr. Rajesh
Kumar and Mr. Narain Ram. During the pendency of industrial disputes, three
drivers, namely, Mr. Baldev, Mr. Babu Lal and Mr. Surinder Kumar have
been regularized by the Bank.
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42. Both sides have cited a large number of cases in support of their
respective arguments. The various tests to establish as to whether an
employer-employee relationship exists or not, are well settled. The same need
not be reiterated. The control test, the integration test etc. are also well
established. In Workmen of Nilgiri Coop. Mkt. Society Ltd. v. State of Tamil
Nadu and Ors., (2004) 3 SCC 514, the Supreme Court held that the control
test and organization are not the only factors set to be decisive. Various other
factors would have to be considered as well. The Court held that:
"38. The control test and the organization test,
therefore, are not the only factors which can be said
to decisive. With a view of elicit the answer, the
court is require to consider several factors which
would have a bearing on the result : (a) who is
appointing authority; (b) who is the pay master; (c)
who can dismiss; (d) how long alternative service
lasts; e) the extent of control and supervision; (f) the
nature of the job, e.g. whether, it is professional or
skilled work; (g) nature of establishment; (h) the
right to reject."
xxx"
43. In Ram Singh and Ors. v. Union Territory, Chandigarh and Ors.,
(2004) 1 SCC 126, the Supreme Court has held that the actual nature of the
relationship ought to be established before the Tribunal, as the same is a
question of fact. The Supreme Court further held that the integration test was
one of the relevant tests, and even though the formal employment is by an
independent contractor, management is not relieved of its liability. The Court
needs to discern as to whether the relationship is being camouflaged in any
manner.
44. In Balwant Rai Saluja v. Air India Ltd., AIR 2015 SC 375 canteen
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workers were held to be employees of the corporation and further factors to
determine the relationship, were laid down. The court held that:
"61. Thus, it can be concluded that the relevant
factors to be taken into consideration to establish
an employer-employee relationship would include,
inter alia, (i) who appoints the workers; (ii) who
pays the salary/remuneration; (iii) who has the
authority to dismiss; (iv) who can take disciplinary
action; (v) whether there is continuity of service;
and (vi) extent of control and supervision, i.e.
whether there exists complete control and
supervision. As regards, extent of control and
supervision, we have already taken note of the
observations in Bengal Nagpur Cotton Mills case
(supra), the International Airport Authority of India
case (supra) and the NALCO case (supra).
xxx"
45. In Hussainbhai, Calicut v. The Alath Factory Thezhilali Union,
Kozhikode and Ors., (1978) 4 SCC 257, the Supreme Court observed that the
enquiry is meant to discern the naked truth, though the arrangement on paper
maybe different.
46. In the recent decision in Sushilaben Indravadan Gandhi & Anr. v. The
New India Assurance Company Limited (SLP (Civil) No. 1170 of 2019), the
difference between an independent teacher and a regular teacher was
discussed in the context of the control test, however, the Supreme Court held
that the control test itself may not be sufficient to establish employer-
employee relationship. The Supreme Court observed:
"xxx
24. A conspectus of all the aforesaid judgments would
show that in a society which has moved away from
being a simple agrarian society to a complex modern
society in the computer age, the earlier simple test of
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control, whether or not actually exercised, has now
yielded more complex tests in order to decide complex
matters which would have factors both for and against
the contract being a contract of service as against a
contract for service. The early 'control of the
employer' test in the sense of controlling not just the
work that is given but the manner in which it is to be
done obviously breaks down when it comes to
professionals who may be employed. A variety of cases
come in between cases which are crystal clear - for
example, a master in a school who is employed like
other employees of the school and who gives music
lessons as part of his employment, as against an
independent professional piano player who gives
music lessons to persons who visit her premises.
Equally, a variety of cases arise between a ship's
master, a chauffeur and a staff reporter, as against a
ship's pilot, a taxi driver and a contributor to a
newspaper, in order to determine whether the person
employed could be said to be an employee or an
independent professional. The control test, after
moving away from actual control of when and how
work is to be performed to the right to exercise control,
is one in a series of factors which may lead to an
answer on the facts of a case slotting such case either
as a contract of service or a contract for service. The
test as to whether the person employed is integrated
into the employer's business or is a mere accessory
thereof is another important test in order to determine
on which side of the line the contract falls. The three-
tier test laid down by some of the English judgments,
namely, whether wage or other remuneration is paid
by the employer; whether there is a sufficient degree
of control by the employer and other factors would be
a test elastic enough to apply to a large variety of
cases. The test of who owns the assets with which the
work is to be done and/or who ultimately makes a
profit or a loss so that one may determine whether a
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business is being run for the employer or on one's own
account, is another important test when it comes to
work to be performed by independent contractors as
against piece-rated labourers. Also, the economic
reality test laid down by the U.S decisions and the test
of whether the employer has economic control over the
workers' subsistence, skill and continued employment
can also be applied when it comes to whether a
particular worker works for himself or for his
employer. The test laid down by the Privy Council in
Lee Ting Sang v. Chung Chi-Keung [1990] 2 A.C. 374,
namely, is the person who has engaged himself to
perform services performing them as a person in
business on his own account, is also an important test,
this time from the point of view of the person employed,
in order to arrive at the correct solution. No one test
of universal application can ever yield the correct
result. It is a conglomerate of all applicable tests taken
on the totality of the fact situation in a given case that
would ultimately yield, particularly in a complex
hybrid situation, whether the contract to be construed
is a contract of service or a contract for service.
Depending on the fact situation of each case, all the
aforesaid factors would not necessarily be relevant,
or, if relevant, be given the same weight. Ultimately,
the Court can only perform a balancing act weighing
all relevant factors which point in one direction as
against those which point in the opposite direction to
arrive at the correct conclusion on the facts of each
case.
25.Given the fact that this balancing process may often
not yield a clear result in hybrid situations, the context
in which a finding is to be made assumes great
importance. Thus, if the context is one of a beneficial
legislation being applied to weaker sections of society,
the balance tilts in favour of declaring the contract to
be one of service, as was done in Dharangadhara
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(supra), Birdhichand (supra), D.C.Dewan (supra),
Silver Jubilee (supra), Hussainbhai (supra), Shining
Tailors (supra), P.M. Patel (supra), and Indian Banks
(supra). On the other hand, where the context is that
of legislation other than beneficial legislation or only
in the realm of contract, and the context of that
legislation or contract would point in the direction of
the relationship being a contract for service then,
other things being equal, the context may then tilt the
balance in favour of the contract being construed to be
one which is for service.
xxx"
47. In Mudra Communications v. Ganesh Kumar and Ors., [W.P.(C)
4913/1997, decided on 21st April 2010], the Court discussed the judgment in
Punjab National Bank v. Ghulam Datsagir, (1978) ILLJ 312 SC where the
plea was that the workman was the personal driver of the Executive of the
Bank. In that case, the Delhi High Court had held that the workmen had failed
to prove that the control and supervision over his employment was with the
Bank and this was affirmed by the Supreme Court. In Bank of Baroda v.
Ghemarbhai Harjibhai Rabari, AIR 2005 SC 2799, the employee had
produced three vouchers to show that he had been paid sums of money
towards wages, and that the same was debited to the Bank. The Supreme
Court held that the driver was the Bank's employee. The court in Bank of
Baroda (supra) held:
"xxx
While there is no doubt in law that the burden of
proof that a claimant was in the employment of a
Management, primarily lies on the workman who
claims to be a workman. The degree of such proof
so required, would vary from case to case. In the
instant case, the workman has established the fact
which, of course, has not been denied by the bank,
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that he did work as a driver of the car belonging to
the bank during the relevant period which come to
more than 240 days of work. He has produced 3
vouchers which showed that he had been paid
certain sums of money towards his wages and the
said amount has been debited to the account of the
bank. As against this, as found by the fora below, no
evidence whatsoever has been adduced by the bank
to rebut even this piece of evidence produced by the
workman. It remained contented by filing a written
statement wherein it denied the claim of the
workman and took up a plea that the employment of
such drivers was under a scheme by which they are,
in reality, the employee of the Executive concerned
and not that of the bank; none was examined to
prove the scheme. No evidence was led to establish
that the vouchers produced by the workman were
either not genuine or did not pertain to the wages
paid to the workman. No explanation by way of
evidence was produced to show for what purpose
the workman's signatures were taken in the
Register maintained by the bank. In this factual
background, the question of workman further
proving his case does not arise because there was
no challenge at all to his evidence by way of rebuttal
by the bank.
.....
For the reasons stated above, we are of the
considered opinion that the respondent-workman in
this case has established his claim as held by the
tribunal, and we find no reason whatsoever to
interfere with the impugned order.
xxx"
However, in Mudra Communications (supra), a ld. Single Judge of this
Court cited the Bank of Baroda decision but refused to hold that the driver
was an employee of the Management, as no vouchers have been produced to
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show payment of salaries.
48. In the light of the above decisions, the factors which are to be
considered, to determine as to whether an employer- employee relationship
exists would inter alia, include:
(a) who is the appointing authority;
(b) who is the pay master;
(c) who can select and dismiss;
(d) how long does the alternative service last;
(e) the extent of control and supervision;
(f) the nature of the job, e.g., whether it is professional or skilled work;
(g) nature of the establishment;
(h) the right to reject;
(i) who can take disciplinary action;
(j) whether there is continuity of service;
(k) whether the person was fully integrated into the employer's concern
(integration test);
(l) who organizes the work, i.e., supplies tools and materials; and
(m) who exercises control on when and how the work is to be
performed.
49. An overall analysis of all the relevant judicial decisions, would show
that the facts herein, are similar to the facts of Bank of Baroda v. Ghemarbhai
Harjibhai Rabari (supra). In the said case, the Supreme Court was dealing
with a situation wherein, the employees had produced cogent evidence in the
form of vouchers to show that they worked as car drivers for the Bank. The
Supreme Court held that the employees had discharged their onus by
producing these vouchers and hence the award of the CGIT, reinstating the
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Workmen with full back wages, was upheld by the Supreme Court.
50. By applying the above tests, analyzing the case laws cited, and perusing
the documents on record, as also the findings of the CGIT, there is no doubt
that an employer-employee relationship exists between the Bank and the
drivers. This is clear from an analysis of the documents placed on record
which establishes the following facts:
(a) All Respondents were working as drivers with various
Executives of the Petitioner Bank.
(b) At the time of appointment, the biodata of the drivers was
submitted to the Bank, which was thereafter forwarded to the
personnel administrative division of the Bank, located in the Head
Office at Mangalore.
(c) The salary for the drivers was being reimbursed by the bank to
the Executives concerned, by means of vouchers.
(d) The drivers have served in the Bank for several years.
(e) The drivers did not merely work for the Executives, but also
did various other sundry jobs such as collection/delivery of
documents/packets/parcels/items/equipment from various locations
for the Bank.
(f) Expenses incurred by them were reimbursed by the Bank.
(g) The Bank has issued letters confirming the salaries earned by
the drivers.
(h) The Bank has facilitated the driving license being obtained by
the drivers, by issuing them certificates that they are working in the
Bank. The text of one such certificate is set out below: -
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"This is to certify that Sh. Naresh kumar, s/o Sh.
Daya ram is an employee of our bank. He is working
with us since last four years. As per our records he
is residing at D-5/103, Tisra Pusta, Vijay Colony,
new Usman Pur, Delhi-110053.
This certificate is issued in his specific request as he
has to produce for making driving license.
We confirm the same."
(i) The vouchers issued by the Bank for the monthly payments to
the drivers, mention the particulars as "amount drawn for
reimbursement of driver" or the "amount paid to the driver.
Reimbursed" @ page 120, 121 of the paper books "cash paid to
Surinder on account of car driver salary month of May 2006 by
AGM" @ page 124; etc.
(j) Copies of logbooks showing the details of travel of the car,
petrol consumed, purpose etc.
The above facts have been gleaned from the large number of documents
placed on record and cannot be disputed by the Bank.
51. The documents on record also show that the drivers have not been
exclusively used for the executives of the Bank but have also been serving the
Bank in various roles including picking up parcels, computers, running
errands, claiming reimbursements, taking delivery of cars and other sundry
jobs. Further, the Bank has given them letters and certificates, repeatedly
confirming that they are the drivers of the Bank for issuance of licenses and
for renewal of driving licenses. The initial appointment was also made after
confirmation with the Head Quarters of the Bank. Complete reimbursement
of salaries and well as expenses of the drivers has been given by the Bank. A
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logbook also has been maintained to supervise their day-to-day movements
and activities.
52. Therefore, irrespective of whichever test is applied, whether it be the
control test, or the integration test or any of the other tests, the above facts
clearly show that the functions performed by the drivers was integral to the
everyday working of the bank. The documents establish the existence of
employer-employee relationship and that the drivers were the employees of
the Bank. They were not retained through an independent contractor and that
is not even the case of the Bank. The Bank's case that the drivers were
exclusively working for Executives is also negated, as it has been proved, on
record, that the drivers would continue to remain in the same place
irrespective of the transfer or retirement of the Executive and they would be
placed under different Executives or the incumbent. The case of the Bank that
they were employees of the Executives is thus belied.
53. Hence, in view of the above facts and discussion, this Court has no
doubt that the drivers were the employees of the Bank.
54. Dealing with the question of regularization of the drivers in the Bank,
the bank itself was willing to regularise the employees as recorded in the order
dated 6th April 2018 which reads:
W.P.(C) 3269/2018 & CM No.12882/2018 (stay)
1. By impugned Award dated 29.11.2017 the
Industrial Adjudicator while allowing the complaint
under Section 33A of the Industrial Disputes Act,
1947 (in short "I.D. Act") filed by the respondent
directed his reinstatement with the petitioner Bank
observing that at the time of terminating his services
no approval as required under Section 33 of the I.D.
Act was obtained from the Court and termination
was illegal.
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2. Learned counsel for the petitioner submits that
the respondent was personal Driver of the
Executive/Manager of the petitioner Bank and there
was no relationship of employer and employee
between the parties. However, he submits that there
is a policy of regularisation of such personal
Drivers with the petitioner Bank as per the
policy/guidelines subject to meeting out the
requisite criteria.
3. On taking steps, issue notice to the respondent by
all permissible modes.
4. List on 19.11.2018. Meanwhile, no coercive steps
shall be taken against the petitioner till the next date
of hearing.
Even during oral arguments, Ld. Counsel for the bank has submitted that the
bank is willing to regularise, however, subject to certain conditions such as
fulfilment of eligibility criteria etc.,
55. The Supreme Court has recently considered the parameters for
regularization of employees in Oil and Natural Gas Corporation v. Krishan
Gopal (supra). The Court held:
"xxx
23. The following propositions would emerge upon
analysing the above decisions:
(i) Wide as they are, the powers of the Labour Court
and the Industrial Court cannot extend to a
direction to order regularisation, where such a
direction would in the context of public employment
offend the provisions contained in Article 14 of the
Constitution;
(ii) The statutory power of the Labour Court or
Industrial Court to grant relief to workmen
including the status of permanency continues to
exist in circumstances where the employer has
indulged in an unfair labour practice by not filling
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up permanent posts even though such posts are
available and by continuing to employ workmen as
temporary or daily wage employees despite their
performing the same work as regular workmen on
lower wages;
(iii) The power to create permanent or sanctioned
posts lies outside the judicial domain and where no
posts are available, a direction to grant
regularisation would be impermissible merely on
the basis of the number of years of service;
(iv) Where an employer has regularised similarly
situated workmen either in a scheme or otherwise,
it would be open to workmen who have been
deprived of the same benefit at par with the
workmen who have been regularised to make a
complaint before the Labour or Industrial Court,
since the deprivation of the benefit would amount to
a violation of Article 14; and
(v) In order to constitute an unfair labour practice
Under Section 2(ra) read with Item 10 of the Vth
Schedule of the ID Act, the employer should be
engaging workmen as badlis, temporaries or
casuals, and continuing them for years, with the
object of depriving them of the benefits payable to
permanent workmen.
xxx"
56. Thus, regularization is not to be directed in a mechanical manner. The
regularization of employees is the sole prerogative of the management. Unless
and until the employee has indulged in an unfair labour practice, temporary
or daily wage employees/ad-hoc employees cannot be regularized. The
exception to that is contained in paragraph 23 (iv) of the said judgment, where
the Supreme Court has held that if similarly situated workmen have been
regularized, then other workmen cannot be deprived of the same benefit. In
view of the fact that various drivers who were similarly situated have already
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been regularized by the Bank, not extending the same benefit to the 11 drivers,
to whom these petitions relate to, would be discriminatory in nature, and
violative of Article 14 of the Constitution.
57. For whatever reasons, the drivers who were similarly placed have
already been regularized and they as well as the others have rendered long
service. Each of the drivers, in these petitions, has been employed with the
Bank for at least 10 years. Considering the long duration of service and the
fact that they are clearly employees of the Bank, their services deserve to be
regularized in accordance with the judgment of the Supreme Court in Oil and
Natural Gas Corporation v. Krishan Gopal (supra).
58. Mr. Arora, ld. Counsel for the Bank, has raised a fine distinction in the
wording of the reference and the manner in which the CGIT considered the
documents in evidence, on record. The distinction between an "employee"
and a "workman" though existing in law, the conflation between the two by
the CGIT would not affect the final relief being granted in these cases, as the
facts show that there exists an employer-employee relationship.
59. Accordingly, the impugned order by the CGIT does not warrant any
interference. The reinstatement of the employees is upheld. It is directed that
the bank shall regularize the services of the 11 drivers whose names are
mentioned in the paragraph above (paragraph 41).
60. All writs and pending applications are dismissed in the above terms.
Necessary steps shall be taken by the Bank within 6 weeks.
PRATHIBA M. SINGH
JUDGE
DECEMBER 4, 2020
Rahul/Ak
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