Glaxo Laboratories (India), Ltd. v. State Of Kerala

1. The petitioner is a manufacturer and distributor of drugs, pharmaceuticals, food products and laboratory chemicals. Medical representatives are employed by the petitioner for the purpose of canvassing sale of products. One T.L Kuriakose was a medical representative of the petitioner-company. Being a medical representative he was required to call on doctors, hospitals, stockists, chemists, druggists and to take efforts to canvass, promote and push sales of the company's products. In exercise of the powers and discretion vested in the petitioner-company under the terms of appointment, the petitioner used to transfer the medical representatives from one centre to another. In February 1980, while K uriakose was working as medical representative at Calicut was transferred to Bijapur in the State of Karnataka. Kuriakose wanted to remain in the home State. So he applied to review the transfer order; but his application was rejected and he was informed that in the event of not joining duty at Bijapur, it would be treated as disobedience of lawful orders of the petitioner-company. Kuriakose did not join duty at Bijapur and consequently a chargesheet was issued to Kuriakose and he was charged with misconduct and wilful disobedience of the lawful order of the petitioner. An enquiry ensued which culminated in the dismissal of Kuriakose from service. A reference was made to the second respondent, the Industrial Tribunal, Calicut, by Government of Kerala, under Industrial Disputes Act. Preliminary objections were raised before the Industrial Tribunal. Petitioner contended that Kuriakose was not a workman as defined in S. 2(s) of the Industrial Disputes Act, 1947. However, the second respondent held that Kuriakose was a workman as defined under the Industrial Disputes Act. This preliminary finding (exhibit P 10) is challenged in these proceedings.

2. The term “workman” has been defined in S. 2(s) of the Industrial Disputes Act, 1947. It underwent amendments in 1956 and 1982 and as per the 1982 Amendment the definition of “workman” is as follows:

“(s) ‘workman’ means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such persons 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 Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (4 of 1950), or the Navy Act, 1957 (62 of 1957); 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 one thousand six 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.”

In the 1982 Amendment not much change was introduced; but the word “operational” was included in the first part of the definition. So also in the case of persons employed in a supervisory capacity the ceiling of wages was increased from Rs. 500 to Rs. 1600 per mensem under S. 2(s)(iv) of the Act.

3. The question as to whether a medical representative, a sales representative or employees of similar nature are workmen coming under the definition of S. 2(s) of the Industrial Disputes Act came up for consideration before the Supreme Court in various decisions. The fact that Kuriakose was only a medical representative is not disputed. In the original petition it is alleged that the duties of Kuriakose was to call on doctors, hospitals, stockists, chemists and druggists and to explain to them the efficacy of the petitioner's products and to promote sales of the company's products.

4. The third respondent association in its counter-affidavit stated that the main work of a medical representative was to canvass and thereby promote sale and also to do clerical work incidental thereto. From the pleadings in the original petition, which are not denied by the third respondent-association, it is clear that the duty of the medical representative is to promote sales by canvassing orders. Medical representatives are not expected to do any clerical or manual work and if at all they are doing any such work it is only incidental to the main functions of canvassing and promoting sales. Their work is not technical in nature, merely for the reason that they acquired knowledge about the efficacy on chemical products of various pharmaceutical products and pass on this information to the customers in a bid to promote sale of these products. The sales representative in effect is not effecting sale of the products, but they only canvass for sale. They convince the customers about the quality of the goods.

5. In one of the earliest decisions of the Supreme Court in May and Baker (India), Ltd. v. Their workmen [1961—II L.L.J 94], the Supreme Court considered whether a representative in a pharmaceutical concern would come within the definition of “workman” under the Industrial Disputes Act of 1956. The Supreme Court held that:

“the designation of the employee was not of great moment and what was of importance was the nature of his duties. If the nature of the duties is manual or clerical, then the person must be held to be a workman. On the other hand if manual or clerical work is only a small part of the duties of the person concerned and incidental to his main work which is not manual or clerical, then such a person would not be a workman It has, therefore, to be seen in each case from the nature of the duties whether a person employed is a workman or not, under the definition of that word…”

The Supreme Court explained that the duties of a person employed by a pharmaceutical concern as a representative for canvassing orders consisted mainly of canvassing and any clerical or manual work that he had to do was incidental to his main work of canvassing and could not take more than a small fraction of the time for which he had to work and he would not fall within the definition of “workman.” The above decision was followed in various other decisions. In Burmah-Shell Company v. Burmah-Shell Management Staff Association, (1970) 3 SCC 378 : [AIR. 1971 S.C 922], the question came up for consideration was whether a sales engineering representative was a workman. The Supreme Court held that a person cannot be assumed to be a workman on the ground that he does not come within the 4 exceptions in S. 2(s). The specification of the four types of work in the definition in S. 2(s) is obviously intended to lay down that an employee is to become a workman only if he is employed to do work of one of those types, while there may be employees who, not doing any such work, would be out of the scope of the word “workman” without having resort to the exceptions. So the Supreme Court explaining the term “workmen” as it stood then held that for an employee in an industry to be a workman under S. 2(s) of the Industrial Disputes Act, it is manifest that he must be employed to do skilled or unskilled manual, clerical or technical or supervisory work. If the work done by an employee is not of such a nature, he would not be a workman. From the above decision it is clear that the Supreme Court lays emphasis on the nature of the work of the employee and if the employee was not doing any such work as defined in S. 2(s) he would not be a workman. The decision in Burmah-Shell case (vide supra), lays down the manner in which the definition of “workman” is to be applied.

6. In J and J Dechane Distributors v. State of Kerala [1975 — II L.L.N 353], a Division Bench of this Court considered this question and held that a medical representative is not a workman as defined in the Industrial Disputes Act. It was held that his main work was to do canvassing for the purpose of promoting sales of petitioner's products and, therefore, his work was neither manual, clerical, technical or supervisory and hence he was not a workman as defined in the Act. Reliance was placed on the decisions of the Supreme Court in Burmah-Shell case, (1970) 3 SCC 378 : [A.I.R 1971 S.C 922] (vide supra) and D.S Nagaraj v. Labour Officer, Kurnool [1973— I L.L.N 161].

7. Question similar in nature was also considered by the Supreme Court in Arkal Govind Raj Rao v. Ciba Geigy of India, Ltd. [1985 — II L.L.N 270]. The employee was an assistant designated as group leader and was looking after the work of two other members of the group and had to ensure that work attached to group is completed in time. The employee was also preparing bank reconciliation statements and other administrative work like indent for printer stationery and directing other clerks to note some documents and report to him. The employee was categorised as covenanted contractual staff cadre. The management contended that the employee is not a workman as he performs some supervisory and administrative duties and that he was categorised as covenanted contractual staff cadre. The Labour Court held that the employee was not a workman. The Supreme Court held that, in Para. 6, at page 272:

“Where an employee has multifarious duties and a question is raised whether he is a workman or someone other than a workman, the Court must find out what are the primary and basic duties of the person concerned and if he is incidentally asked to do some other work, may not necessarily be in tune with the basic duties these additional duties cannot change the character and status of the person concerned. In other words, the dominant purpose of employment must be first taken into consideration and the gloss of some additional duties must be rejected while determining the status and character of the person…”

The Supreme Court also observed that the high sounding nomenclatures adopted in describing clerks and assistants could hardly elevate them to the rank of an officer and they are not only to inflate the ego of the employer but primarily for avoiding the application of the Act.

8. In Miss A. Sundarambal v. Government of Goa, Daman and Diu [1988— II L.L.N 608], the Supreme Court considered whether a teacher in an educational institution would come within the definition of workman. In this decision also the Supreme Court explained that in order to be a workman a person should be employed in an industry for hire or reward in skilled or unskilled, manual, supervisory, technical or clerical work and such person should fall under any one of the four exempted clauses mentioned in S. 2(S). The Court further held in Para. 10, at page 612;

“… Teachers employed by educational institution cannot be called ‘workmen’ within the meaning of S. 2(5) of the Act, irrespective of the tact whether such institutions are imparting primary, secondary, graduate or post-graduate education. Imparting of education which is the main function of the teacher cannot be considered a skilled or unskilled manual work or supervisory work or technical work or clerical work. It is a noble mission or a noble vocation. A teacher educates children, he moulds their character, builds up their personality and makes them fit to become responsible citizens. Children grow under the care of teachers. The clerical work done by teachers is only incidental to the principal work of teaching…”

9. In D.P Maheswari v. Delhi Administration [1984—I L.L.N 1], the Labour Court held that the claimant was mainly employed for clerical duties and that the evidence fell short of proving that the claimant was, in fact, discharging mainly administrative or supervisory duties. The management took the matter before the High Court under Art. 226 of the Constitution and the Single Judge of the High Court quashed the order of the Labour Court and it was later affirmed by the Division Bench of the High Court. The Supreme Court held that the High Court was not justified in interfering with the order of the Labour Court and the evidence in that case indicated that the employee was discharging duties of clerical nature.

10. The next case referred to was S.K Verma v. Mahesh Chandra [1983—II L.L.N 637]. In this case the Supreme Court considered the question whether a Development Officer in the Life Insurance Corporation of India would come within the definition of workman under S. 2(s) of the Industrial Disputes Act. The Supreme Court held in Para 8, at page 643:

“… His principal duty appears to be to organise and develop the business of the Corporation in the area allotted to him and for that purpose to recruit active and reliable agents, to train them to canvass new business and to render post-sale services to policyholders. He is expected to assit and inspire the agents. Even so he has not the authority to appoint agents or to take disciplinary action against them. He does nut even supervise the work of the agents though he is required to train them and assist them. He is to be the ‘friend, philosopher and guide’ of the agents working within his jurisdiction and no more. He is expected to stimulate and excite the agents to work, while exercising no administrative control over them. The agents are not his subordinates. In fact, it is admitted that he has no subordinate staff working under him. It is thus clear that the Development Officer cannot by any stretch of imagination be said to be engaged in any administrative or managerial work…”

On the basis of the above reasoning the Supreme Court held that Development Officer of Life Insurance Corporation is a workman.

11. The respondents' counsel drew my attention to an observation made by the Supreme Court in this judgment in Para. 4, at page 640, which is to the following effect:

“… The words ‘any skilled or unskilled manual, supervisory, technical or clerical work’ are not intended to limit or narrow the amplitude of the definition of ‘workman’; on the other hand they indicate and emphasise the broad sweep of the definition which is designed to cover all manner of persons employed in au industry, irrespective of whether they are engaged in skilled work or unskilled work, manual work, supervisory work, technical work or clerical work. Quite obviously the broad intention is to take in the entire ‘labour force’ and exclude the ‘managerial force.’ That, of course, is as it should be.”

Relying on this observation it was contended that the categorisation made in the definition is of no consequence and the view of the Supreme Court is that the entire labour force should come within the definition of word “workman.” I am unable to agree with this contention. By the above quoted observation, I do not think that there is a discernible shift in emphasis given in the various other decisions of the Supreme Court. Nuances of the language used by the Judges are to be understood in the light of the facts and circumstances of the case. From that decision it is clear that Development Officers were generally placed on par with the subordinates and clerical staff. The observations made in S.K Verma case (vide supra), cannot be taken to be contrary to the dictum laid down in May and Baker (India), Ltd. v. Their workmen [1961 — II L.L.J 94] (vide supra) and Burmah-Shell Company v. Burmah-Shell Management, (1970) 3 SCC 378 : [A.I.R 1971 S.C 922] (vide supra), wherein it was clearly held that the specification of the four types of work in the definition in S. 2(s) obviously is intended to lay down that the employee is to become a workman only if he is employed to do the work of one of those types and employees who are not doing any such work, would be out of the scope of the word “workman.”

12. A Division Bench of Bombay High Court in S.G Pharmaceuticals, Division of Ambalal Sarabhai Enterprises v. V.D Padamwar [1989 — II L.L.N 833], held that medical representative whose main and substantial work is to do canvassing for promoting sales is not a workman within the meaning of S. 2(s) of the Act. Reference was made to the observations of the Supreme Court made in S.K Verma case [1983—II L.L.N 637] (vide supra), and the Division Bench was of the view that the said decisions had not prescribed different approach considering the view taken by the Supreme Court even after that decision.

13. This Court had occasion to consider the question whether a travelling salesman in the Consumer Products Division is a workman or not in a decision in N.J Joseph v. Labour Court Court [1987 (1) K.L.T 66]. This Court held:

“The designation of the employee is not of great moment. If the nature of the duties is manual or clerical then the person must be held to be a workman. On the other hand, if manual or clerical work is only a small part of the duties of the person concerned and incidental to his main work which is not manual or clerical then such a person would not be a workman.”

Thus the finding of the Tribunal that the travelling salesman is not a workman was upheld.

14. My attention was drawn to a decision of a Single Judge of Karnataka High Court in A. Ram Mohan v. Labour Court, Bangalore [1989 — I L.L N, 913]. In this case the learned Judge relying on the observations made in S.K Verma case [1983 — II L.L.N 637] (vide supra), held that an employee working as a sales promotion representative of a pharmaceutical concern would come within the definition of workman in S. 2 (s) of the Industrial Disputes Act. The learned Judge based his finding on the conclusion that by the decision in S.K Verma case (vide supra), the entire labour force engaged in an industry except the managerial and such of the supervisory force falling within the exception expressly indicated in the definition itself would fall within the definition of the word “workman.” I am unable to persuade myself to accept the reasoning adopted by the learned Judge.

15. In a recent decision of the Supreme Court in T.P Srivastava v. M/S National Tobacco Co. Of India Limited., Ltd. [1992—I L.L.N 13], the Supreme Court held that the nature of the work of a salesman is canvassing and promoting sales of products of the company and that he is not doing any skilled, manual or clerical work and the supervising work of other local salesman is only part of his work incidental to his main work of canvassing and promotion in the area of his operation. Relying on J and J Dechane v. State of Kerala [1975 — II L.L.N 353] (vide supra), D.S Nagaraj v. Labour Officer [1973 — I L.L.N 161] (vide supra), and Burmah-Shell v. Burmah-Shell Management, (1970) 3 SCC 378 : [A.I.R 1971 S.C 922] (vide supra), it was held that the sales promotion employee is not a workman.

16. Another contention raised by the petitioner is that the Tribunal went wrong in holding that Sales Promotion Employees (Conditions of Service) Act, 1976, has application to the case. This contention of the petitioner is also to be accepted. The petitioner contends that under S. 2(d) of the above Act Sri Kuriakose cannot be held to be a workman as his salary was] above Rs. 750, Only such sales promotion employees who are governed by the provisions of the Sales Promotion Employees (Conditions of Service) Act, 1976, would be governed by the provisions of the Industrial Disputes Act and only in respect of such employees a reference could be made by the Government. Therefore, exhibits P 9 and P 10 orders passed by the Tribunal are not correct.

17. From the various dicta laid down by Courts it is clear that sales/medical representatives, by virtue of their nature of work will not come within the definition of “workman” defined under the Industrial Disputes Act, 1947. The various duties performed by them in discharge of their official work do not come within any of the categories of manual, skilled, unskilled, technical, operational, clerical or supervisory work for hire or reward. If at all they do any such work it is not as part their main work, which is promotion of sales of the employer's products. The general observations made by the Supreme Court in S.K Verma case [1983 — II L.L.N 637] (vide supra), that the entire “labour force” excluding the “managerial force” will come within the ambit of definition “workman” is to be understood in the light of the facts of that case, and despite that the law remains the same that sales/medical representative is not a “workman” under the Industrial Disputes Act and that was why the Sales Promotion Employees (Conditions of Service) Act, 1976, was enacted.

18. Therefore, I hold that the finding of the Tribunal that the employee is a workman is incorrect and I quash the orders passed by the second respondent, dated 10 September, 1985 and 1 October, 1986, exhibits P9 and P 10 in Industrial Dispute No. 9 of 1982. In view of this finding the reference under the Industrial Disputes Act does not arise.

19. The original petition is allowed. The parties to bear their costs.