TMI Blog1985 (9) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Messrs. P.M. Patel Sons and others as the leading group of cases, because the principal arguments on the several points arising in these cases were argued by learned counsel in those writ petitions. The petitioners are engaged in the manufacture and sale of beedis. The labour employed in the manufacture of beedis consists of different categories. At the factory, which constitutes the formal establishment. there is an administrative ant clerical staff, accountants, packers, checkers and bhattimen. The work of rolling the beedis itself is done by one or the other of different categories of workers. The work may be entrusted by the manufacturers directly to workers who prepare the beedis at home after obtaining a supply of the raw material consisting of tobacco, beedi leaves and thread from the manufacturers. Another category consists of workers employed by the manufacturers through contractors, and the manufacturers pass on the raw material to such workers for rolling the beedis in their dwelling houses, and there is, in a sense, a direct relationship between the manufacturers and those workers. m e third category of home workers are those to whom the work is entrusted by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th effect from May 31, 1977. This was followed by Notification No. GSR. 677 dated May 23, 1977 issued by the Central Government amending clause (b) of sub-paragraph 3 of paragraph 1 of the Employees' Provident Funds Scheme, 1952 (hereinafter referred to as the Scheme ) so as to bring the beedi industry within the province of that Scheme with effect from May 31, 1977. Closely thereafter, the Central Government Provident Funds Commissioner wrote to all the Regional Provident Funds Commissioners about the extension of the Scheme to the beedi industry with effect from June 1, 1977. By these writ petitions the petitioners challenge the constitutional validity of the Notifications dated May 17, 1977 and May 23, 1977 and the proceedings taken by the respondents against the petitioners for the purpose of enforcing the employees' Provident Funds Act and the Scheme so far as they relate to home workers. The petitioners also seek a corresponding declaration that the Employees' Deposit-Linked Insurance Scheme and the Employees' Family Pension Scheme framed under the Employees' Provident Funds Act are unenforceable in respect of the beedi industry. The principal grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity rejected, and that a log book or a wage card is issued to the home workers. In order to organise the conditions in which the beedi workers worked and to give them greater security of employment Parliament enacted the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 and the State Governments framed rules under that statute. The said Act applied to home workers, as is clear from the definition of employee in clause (f) of 8. 2 of that Act and provides for the application of certain labour laws. There is no dispute that pursuant to the impugned Notification dated May 17, 1977 the beedi industry has been brought within the scope of the Employees' Provident Funds Act and that the impugned Notification dated May 23, 1977 has made the Scheme applicable to the beedi industry. Clause (a) of sub-s. (3) of 8. 1 of the Employees' Provident Funds Act applies that Act to every establishment which is a factory engaged in any industry specified in Schedule I and in which twenty or more persons are employed. Admittedly, the factory belonging to the manufacturer is, therefore, drawn within the compass of the Employees' Provident Funds Act and the Scheme. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol the A work done by the servant not only in the matter of directing what work the servant was to do but also the manner in which he should do it. In passing, the Court referred to home workers employed by the Sattedars for making beedis in their respective homes, and the Court observed that they could not be regarded as persons employed by the manufacturer directly or through any agency. Thereafter, in Shri Birdhichand Sharma v. First Civil Judge, Nagpur and Others, [1961] 3 S.C.R. 161, this Court considered a case where the manufacturer had employed workmen in his beedi factory and who were at liberty to work at their homes, and the Court held that the conditions in which they worked made them workers within the meaning of clause (1) of s. 2 of the Factories Act. The significant feature of the judgement lies in the observation of the Court that in the case of the beedi industry the right of rejection of the beedis if they did not come up to the proper standard was evidence of the supervision and control exercised by the manufacturer. Noting that the nature and extent of supervision and control varied in different industries. the Court said :- Taking the nature of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g defective beedis. The law took a major shift in Silver Jubilee Tailoring House and others v. Chief Inspector of Shops and establishments and another [1974] 1 S.C.R. 747 , as to the criteria which determined the relationship of master and servant. Mathew, J., who spoke for the Court, reviewed the earlier decisions of this Court as well as some of the decisions rendered in England, and pointed out that the test of control as traditionally formulated was no longer treated as an exclusive test. He observed - It is exceedingly doubtful today whether the search for a formula in the nature of a single test to tell a contract of service from contract for service will serve any useful purpose. The most that profitably can be done is to examine all the factors that have been referred to in the cases on the topic. Clearly, not all of these factors would be relevant in all these cases or have the same weight in all cases. It is equally clear that no magic formula can be propounded which factors should in any case be treated as determining ones. The plain fact is that in a large number of cases, the court can only perform a balancing operation weighing up the factors which point in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer, and the latter has therefore liability to such contract labour. It is only when the contractor engages labour for or on his own behalf and supplies the finished product to the manufacturer that he will be the principal employer in relation to such labour and the manufacturer will not be responsible for implementing the provisions of the Act with regard A to such labour employed by the contractor. If the right of rejection rests with the manufacturer or trade mark holder, in such a case the contractor who will prepare beedis through the contract labour will find it difficult to establish that he is the independent contractor- In the context of the conditions and the circumstances set out earlier in which the home workers of a single manufacturer go about their work, including the receiving of raw material, rolling the beedis at home and delivering them to the manufacturer subject to the right of rejection there is sufficient evidence of the requisite degree of control and supervision for establishing the relationship of master and servant between the manufacturer and the home worker. It must be remembered that the work of rolling beedis is not of a sophisticated nature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinary meaning of the normal cessation of service by an act of the employer or of the worker. That a person may retire even before reaching any specified age is exemplified by cl. (b) of sub-para. (1) of Para. 69 which speaks of retirement on account of permanent and total incapacity for work due to bodily or mental infirmity . We may point out that in Delhi Cloth General Mills Co. Ltd., V. Workmen and others etc. [1969] 2 S-C-R. 307 , this Court has held that a gratuity scheme could be effective even if no age of superannuation was fixed. Learned counsel for the petitioners had referred us to Regional Provident Fund Commissioner, Andhra Pradesh v. Shri T.S. Hariharan [1971] Suppl. S.C.R. 305 , where this Court observed in respect of the Employees' Provident Funds Act:- The Act was brought on the statute book for providing for the institution of a provident fund for the employees in factories and other establishments. The basic purpose of providing for provident funds appears to be to make provision for the future of the industrial worker after his retirement or for his dependants in case of his early death. To achieve this ultimate object the Act is designed to cul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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