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Employees' State Insurance Corporation, Chandigarh v. Oswal Woollen Mills, Ltd., Ludhiana
Comprehensive Summary — Full Bench Opinion on Scope of "Employee" under S.2(9), Employees' State Insurance Act, 1948
Factual and Procedural Background
The Full Bench considered whether a person employed casually in a factory or establishment falls within the definition of "employee" in S.2(9) of the Employees' State Insurance Act, 1948. Four appeals raising the same question were heard together.
The principal factual matrix described concerns Employees' State Insurance Corporation, Chandigarh v. Oswal Woollen Mills Ltd. (First Appeal from Order No. 451 of 1978). The respondent mill had challenged a Corporation notice requiring deposit of contributions (both employer's and employees' shares) in respect of certain casual labourers engaged for the construction and maintenance of factory premises. Payments to those casual workers were recorded under "building repairs and factory construction." The mill contended those payments were not wages to employees and hence not liable to ESI contributions. The Corporation maintained that casual labourers were employees within the Act and contributions were due. The Employees' Insurance Court followed a Division Bench judgment in Employees' State Insurance Corporation, Chandigarh v. Onkar Nath Gupta and held the casual workers were not covered; the Corporation appealed and the Full Bench admitted the case for hearing in view of apparent conflicting authority within the Court.
Legal Issues Presented
- Whether a person employed casually in a factory or establishment falls within the definition of "employee" under S.2(9) of the Employees' State Insurance Act, 1948.
Arguments of the Parties
Appellant (Employees' State Insurance Corporation)
- The casual labourers engaged by the respondent mill are "employees" within the meaning of S.2(9) of the Act and thus both employer's and employees' contributions are payable.
- Broad statutory language, subsequent amendments (Act 44 of 1966) and other provisions of the Act demonstrate legislative intent to cover persons employed even temporarily or casually.
Respondent (Oswal Woollen Mills Ltd. and associated respondents)
- The amounts paid to casual labourers for building repairs and factory construction were not wages paid to "employees" and thus the mill is not liable for contributions in respect of those persons.
- Counsel for respondents (Sri Bhagirath Dass) advanced a distinction between persons employed "in the work of the factory" and those employed merely "for the work of the factory," arguing casual employees employed for the latter should fall outside the Act's definition. He conceded, however, that a casual employee employed for the work of the factory and regular employees employed for the work for the factory would be within the Act.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Employees' State Insurance Corporation, Chandigarh v. Oswal Woollen Mills Ltd. (First Appeal from Order No. 451 of 1978) | The factual case in which casual labourers for building repairs were held by the lower court to be outside the Act. | Serves as the primary factual context for the Full Bench's consideration; the Full Bench resolved the legal question against the lower court's conclusion. |
| Employees' State Insurance Corporation, Chandigarh v. Onkar Nath Gupta [(1975) 77 P.L.R. 79] | A Division Bench decision which had previously held, by passing observation and limited reasoning, that casual workers were not covered; used by the lower court. | The Full Bench found the Onkar Nath Gupta paragraph on casual workers to be inadequately reasoned, based on an inapt householder analogy, and overruled that part of the decision. |
| Employees' State Insurance Corporation v. A.L. Puri [(1971) 73 P.L.R. 178] | Held that whether a worker is permanent, temporary or casual may not be relevant to coverage under the Act. | Cited as authority supporting that casual/temporary nature does not exclude coverage; noted that the Onkar Nath Gupta decision did not consider this authority. |
| Andhra Pradesh State Electricity Board v. Employees' State Insurance Corporation [1976-II L.L.N. 444] | High Court view that casual employees fall within the Act's definition. | Adopted as supportive precedent; the Full Bench noted it takes the same view in favour of inclusion of casual employees. |
| Employees' State Insurance Corporation, Bangalore v. Davangere Cotton Mills Ltd. [1977-I L.L.N. 443] | Division Bench held casually employed persons came within S.2(9). | Relied upon as supporting authority; later reaffirmed by the Karnataka Full Bench cited below. |
| Regional Director, Employees' State Insurance Corporation, Bangalore v. Suvarna Saw Mills [1979-II L.L.N. 512] | Full Bench of Karnataka reaffirming that casual employees are within the definition. | Used to show consistent High Court authority in favour of inclusion of casual employees. |
| Employees' State Insurance Corporation, Bombay v. Raman (Chittur Harihar Iyer) [1957-I L.L.J. 267] | Adopted a restricted view of the original definition and held certain administrative staff located in the same compound were not covered. | Noted as an example of a restrictive approach; the Court observed Act 44 of 1966 was enacted to remove such restrictive readings in relation to administrative employees. |
| Dharangadhra Chemical Works Ltd. v. State of Saurashtra [A.I.R. 1957 S.C. 264] | Contains observations on the distinction between work "of" a factory and work "for" a factory in the context of the Industrial Disputes Act's definition of "workman". | The Court held those observations arise in a different statute (Industrial Disputes Act) and are not directly applicable to the wider language of S.2(9) of the ESI Act. |
| Laurence Arthur Adamson v. Melbourne & Metropolitan Board of Works [A.I.R. 1929 P.C. 181] | Principle that definitions from a different enactment are not helpful and may be dangerous to import. | Followed as high authority for the rule that definitions in other statutes should not be used to construe S.2(9) where language is different. |
| Jainarayan Ramkisan v. Motiram Gangaram [A.I.R. 1949 Nag. 34] | Followed the Adamson principle locally. | Noted as a subsequent case that applied the Adamson rule; used to reinforce the Court's stance against reliance on other statutes' definitions. |
| Nagpur Electric Light & Power Co. Ltd. v. Regional Director, Employees' State Insurance Corporation [A.I.R. 1967 S.C. 1364] | Comparison showing the ESI Act's definition of "employee" is wider than "worker" under the Factories Act; the ESI Act extends to employees mentioned in S.2(9)(i) even if working outside the factory. | Quoted to demonstrate that the ESI Act was deliberately framed in wider terms and supports including employees working outside factory premises. |
| State of Uttar Pradesh v. M.P. Singh [A.I.R. 1960 S.C. 569] | Used in Nagpur Electric to show the Factories Act does not extend to field workers. | Referenced indirectly via Nagpur Electric to support the proposition that definitions and objects of different statutes differ and cannot be equated. |
| Employees' State Insurance Corporation, Madras v. Gnanambikai Mills Ltd. [1973-II L.L.N. 303] | Held the Act was not intended to apply to casual employees. | Noted and distinguished; the Full Bench found the matter was not adequately canvassed in that judgment and respectfully dissented from the Madras view. |
| Employees' State Insurance Corporation v. Sri Sakthi Textiles (Pvt.) Ltd., Pollachi [1974-II L.L.N. 346] | Madras Court again adopting the view that casual employees are not covered. | Noted among Madras authorities the Full Bench declined to follow, preferring the contrary holdings of other High Courts and this Court's Division Bench decisions. |
| Employees' State Insurance Corporation v. K. Ramchandran [1977-II L.L.J. 214] | Another Madras decision taking the restrictive view on casual employees. | Noted but distinguished as inadequately reasoned in comparison to contrary authorities. |
| Thiagarajan Chettiar v. Employees' State Insurance Corporation, Madurai [A.I.R. 1963 Mad. 261] | Held gardeners, building workers, office attenders, watchmen of a textile mill were employees under the Act for provident fund obligations. | Cited in support of the proposition that persons doing incidental or collateral functions (gardeners, building workers, watchmen) fall within the Act. |
| Royal Talkies, Hyderabad v. Employees' State Insurance Corporation [1978-II L.L.N. 268] | Expressed that the Act's benefits belong to employees and should be construed widely; held persons employed for running car park, cycle-stand or canteen incidental to a cinema were "employees" under the Act. | Quoted as a final court authority supporting a broad, protective construction of the Act and extension of coverage to incidental/collateral workers; relied upon to justify inclusion of casual workers doing similar incidental tasks. |
Court's Reasoning and Analysis
The Full Bench's reasoning proceeds from statutory construction and an examination of relevant provisions and amendments, supported by comparative authority as follows:
- Textual analysis of S.2(9): The Court emphasized the wide language of S.2(9) which defines "employee" to include any person "employed for wages in or in connection with the work of a factory or establishment" and, by clause (i), expressly extends coverage to work that is incidental, preliminary or connected with the work of the factory. The Court stressed that the language was deliberately expansive so as not to confine "employee" to persons engaged only in the central work of the factory.
- Mode of engagement: Clauses (ii) and (iii) of S.2(9) were highlighted as widening the definition to encompass persons employed through intermediaries, on the premises under supervision, and those whose services are temporarily lent or let on hire — including temporary lending — thereby covering varied modes of engagement.
- Effect of amendment (Act 44 of 1966): The Court noted the insertion in clause (iii) (and related text) explicitly brought within the definition persons employed for administration, purchase of raw materials, distribution or sale of products, thus countering narrower readings that excluded administrative or marketing-related workers.
- Other statutory provisions: Sections 38 and 39(4) were relied upon to show that the Act contemplates contributions even where an employee is employed for part of a week or under multiple employers in the same week — implying coverage of part-time and casual employment. Sub‑section (3) of the explanation to S.42 was also cited as visualizing contributions for wages paid to an employee for a portion of a week.
- Beneficent and social purpose: The Court characterized the Act as "beneficent" social legislation (social engineering) intended to secure sickness, maternity, disablement and medical benefits for employees and their dependants. This social orientation, the Court said, requires liberal construction in favour of workers.
- Rejection of analogies to other statutes: The Court refused to import distinctions drawn under other statutes (e.g., the Industrial Disputes Act, the Factories Act, Employees' Provident Funds Act) because their definitions are differently worded and therefore not in pari materia. Citing Laurence Adamson and its domestic application, the Court underlined the danger of construing S.2(9) by analogy to differently worded enactments.
- Treatment of precedents: The Court reviewed conflicting authorities. It accepted and followed the reasoning in A.L. Puri, Andhra Pradesh State Electricity Board, Karnataka decisions (Davangere Cotton Mills; Suvarna Saw Mills) and Royal Talkies and Thiagarajan Chettiar as supporting inclusion of casual and incidental workers. It found the Madras decisions (Gnanambikai Mills, Sri Sakthi Textiles, K. Ramchandran) inadequately reasoned and declined to follow them. The Division Bench decision in Onkar Nath Gupta was singled out as having insufficient analysis on the point and relying on an inapt householder analogy; that portion was overruled.
- Logical and policy consistency: The Court addressed the respondent's supposed distinction between a casual employee "in the work of the factory" and one "for the work of the factory," rejecting it as illogical and inconsistent with the Act's protective purpose. It illustrated the absurdity by reference to two workers doing the same job — one regular and one casual — and the inconsistency that would result if the casual worker were excluded.
- Application to the facts: Having decided the legal issue in the affirmative, the Court applied the statutory construction to the facts: persons engaged in building repairs, carpenters, whitewashing and similar tasks were performing work incidental to or in connection with the factory's work and therefore fall within the definition of "employee" under S.2(9).
Holding and Implications
CORE HOLDING: THE QUESTION IS ANSWERED IN THE AFFIRMATIVE — EVEN A PERSON CASUALLY EMPLOYED IN A FACTORY OR ESTABLISHMENT IS WITHIN THE AMBIT OF S.2(9) OF THE EMPLOYEES' STATE INSURANCE ACT, 1948.
Direct Consequences for the Parties
- The appeals by the Employees' State Insurance Corporation are allowed.
- Persons casually employed for building repairs, carpenters, whitewashing and analogous tasks for the factories/establishments in question are "employees" within S.2(9) and contributions (employer's and employees' shares) are due accordingly.
- The Full Bench explicitly overruled the aspect of the Division Bench judgment in Employees' State Insurance Corporation, Chandigarh v. Onkar Nath Gupta that held casual workers outside the Act.
- Because of conflict of authority on the point, the Court directed that the parties bear their own costs.
Broader Legal Implications Noted by the Court
- The decision clarifies that the ESI Act's definition of "employee" must be interpreted broadly to include regular, temporary and casual workers, including those engaged in work incidental or preliminary to the factory's functions and those engaged outside the factory premises where the work is connected with the factory.
- The Court emphasized the inadvisability of relying on narrower definitions from other statutes (e.g., Industrial Disputes Act, Factories Act, Provident Funds Act) because the language and objects of those statutes differ materially from the ESI Act; consequently, precedents based on differently worded definitions are of limited application.
Note: This summary is confined strictly to the facts, reasoning and rulings as contained in the provided opinion and does not add or infer information beyond that text.
S.S Sandhawalia, C.J:— Whether a person employed casually in a factory or an establishment is within the ambit of the definition of an “employee” as laid in S. 2, Sub-sec. (9) of the Employees' State Insurance Act? — is the somewhat meaningful question which has necessitated its consideration by the Full Bench.
2. Learned counsel for the parties are agreed that in essence the answer to the aforesaid question would govern all these four appeals which will be disposed of by this single judgment.
3. To provide the necessary matrix of facts for the legal issue, it suffices to advert briefly to those in Employees' State Insurance Corporation, Chandigarh v. Oswal Woollen Mills, Ltd., Ludhiana [First Appeal from Order No. 451 of 1978]. The respondent-mill had moved an application before the Employees' Insurance Court challenging a notice by the Employees' State Insurance Corporation (hereinafter called the Corporation) requiring them to deposit certain sums of money as contribution both of the employer and the employees. The material item pertains to persons who, according to the respondent-mill were casual labourers employed only for the construction and maintenance of the premises of its factory. Payments to these casual employees had been made under the head “building repairs and factory construction.” The stand of the respondent-mill was that the amounts so paid to casual labourers were not wages paid to employees and, therefore, they were not liable to pay any contribution with regard thereto. The firm stand of the appellant-Corporation, on the other hand, was that these casual labourers were also employees within the meaning of the Act, and, therefore, the respondent-mill was liable, both for the employees' share and the employer's share therefor. The Court below, after noticing some conflict of authority chose to follow the Division Bench judgment in Employees' State Insurance Corporation, Chandigarh v. Onkar Nath Gupta [(1915) 77 P.L.R 79], and held that these casual workers were not covered by the statutory provisions. The Corporation has come up by way of appeal and at the motion stage the case was admitted to a hearing by the Full Bench in view of an apparent conflict of authority within this Court itself.
4. As would be evident from the formulation of the legal question, at the very outset, one must inevitably first turn to the relevant provision of the statute and for facility of reference, S. 2 (9) of the Employees' State Insurance Act, 1948, (hereinafter called the Act), may be read:
“2. (9) ‘employee’ means any person employed for wages in or in connexion with the work of a factory or establishment to which this Act applies and—
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;
(and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of the factory or establishment, but does not include) — …”
Now a bare look at the aforesaid provision would make manifest the anxiety of the Legislature to couch the definition in such wide ranging terms so as to bring within its ambit all persons employed in the factory or establishment, both with regard to the nature of the work as also the mode or manner in which the employment has been brought about. What first deserves to be highlighted is that an “employee” is not confined merely to a person engaged for the work of the factory or establishment, alone, Cl. (i) designedly extends this to work which may be merely incidental or preliminary and even merely connected therewith. The wide amplitude of the language is significant. This would at once negative and set at rest any argument that the employment must necessarily be related directly to the actual work of the factory or establishment as such.
5. Again whilst Cl. (i) deliberately extends the scope and nature of the work, Cls. (ii) and (iii) give an equally wider amplitude to the mode and manner of the engagement of such an employee. It calls for notice that whilst Cl. (i) covers the case of a direct employee by the employer, Cl. (ii) goes further to say that such a person may equally be employed through a variety of middlemen. Even the persons so engaged would be within the ambit of the term “employee”. Perhaps to remove all doubts Cl. (iii) goes further to bring within its wing persons lent for employment or hired out to the principal employer, though actually they may be the employees of another. Not only this, it calls for pointed mention that this lending or letting on hire of services may even be entirely temporary.
6. Even though the intent of Legislature in originally framing the aforesaid definition is perhaps itself evident enough, yet a sharper edge has been given thereto by the following insertion made in Cl. (iii) by the Act 44 of 1966:
“… and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory of establishment ….”
Though it is not always possible to fathom the motivation of the Legislature, it would call for pointed notice that the Division Bench of the Bombay High Court in Employees' State Insurance Corporation, Bombay v. Raman (Chittur Harihar Iyer) [1957-I L.L.J 267], took a restricted view of the original definition while holding than a person working as a general assistant and doing clerical and typing work in the administrative office of the management, even though located in the same compound of the factory, was not covered by the definition of an “employee.” To take away the effect of this judgment or similar views and to leave no manner of doubt as to the intention of the Legislature to brook any limitations on the definition, Act 44 of 1966, was enacted whereby now it has been specifically provided that all persons employed on any work connected with the administration of the factory or establishment any part, department, or branch thereof, or with the purchase of raw material or distribution or sale of its products, which would include marketing elsewhere and far beyond the factory premises, would also be within the ambit of the definition of “employee.”
7. However, S. 2 (9) of the Act does not stand in isolation and other provisions of the Act equally are a pointer to the same direction. Section 38 lays a mandate that all employees of the factories or establishments to which the Act applies shall be insured in the manner provided by this Act. The succeeding S. 39 of the Act, with regard to the contributions then meaningfully has the following Sub-sec. (4):
“The contributions payable in respect of each week shall ordinarily fall due on the last day of the week, and where an employee is employed for part of the week, or is employed under two or more employers during the same week, the contributions shall fall due on such days as may be specified in the regulations.”
8. This again would indicate that contributions are enjoined for an employee who is employed even for a part of a week or is employed under two or more employers during the same week. If employment for a part of a week is envisaged, it is obvious that this may well be even for a day and that inevitably would mean casual employment. Turning now to S. 42 of the Act, Sub-sec. (3) of the explanation thereto, again makes reference of the payment of wages to an employee for a portion of the week and visualizes the employers' and the employees' contributions with regard thereto. This appears to be yet another indication of even minuscule employment being within the ambit of the statute.
9. Again, in construing the relevant provisions, one cannot lose sight of the fact that the Employees' State Insurance Act is a beneficent piece of legislation directly intended to further the interest and welfare of the employees of factories and establishments. Indeed it would come within the class of legislation which has been conveniently termed as “social engineering.” The object plainly is to provide cover for the risk and hazards of employment to all persons who may come within its ambit. It may be highlighted that even a casual employee may be equally and perhaps more exposed to the hazards of employment in a particular factory or establishment. Today it needs no great erudition to hold that the provisions of such like beneficent legislation have to be construed liberally and in favour of the workers and employees. Not only is this clear as a canon of a construction, but, on the specific provisions of this very Act, the final Court has taken an identical view in the following terms in Royal Talkies, Hyderabad v. Employees' State Insurance Corporation [1978-II L.L.N 268], in Para. 5, at page 272:
“… The benefits belong to the employees and are intended to embrace as extensive a circle as is feasible. In short, the social orientation, protective purpose and human coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammatical nicety.”
10. It would thus appear from the above that irrespective of principle or precedent, the language of S. 2 (9) of the Act (after amendment) itself is of such wide-ranging amplitude that the intention of the Legislature to bring in employees of all kinds — whether regular, temporary or casual — within its scope seems to be manifest. This is further buttressed by the aforereferred provisions of Ss. 38. 39 (4) and Sub-sec. (3) of the explanation to S. 42 of the Act.
11. Sri Bhagirath Dass, the learned counsel for the respondents in First Appeal from Order No. 451 of 1979, had chosen to build his argument primarily on the finesse, nuances or the thin line of distinction between a person employed in the work of the factory as against merely the work for the factory. Reliance in this context was placed on Dharangadhra Chemical Works, Ltd. v. State of Saurashtra [A.I.R 1957 S.C 264].
12. It is plain that the aforesaid argument draws its inspiration from some passing observations made by their Lordships in Dharangadhra Chemical, Works, Ltd. case [A.I.R 1957 S.C 264] (vide supra). Now, apart from the fact that the alleged line of distinction between the work of the factory and the work for the factory is so hairthin, as to be indecipherable at certain points, it must be pointly noticed that these considerations arose only with regard to the specific definition of a workman under the Industrial Disputes Act, 1947. Therein S. 2 (s) is in the following terms:
“‘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 expressed or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connexion 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 (46 of 1950), or the Air Force Act, 1950 (46 of 1950), or the Navy (Discipline) Act, 1934 (34 of 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 Rs. 500 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.”
13. Now the great and significant difference between the language of the aforequoted definition and that of an “employee” under the Act which we are called upon to construe is too patent to call for any long dissertation. It suffices to mention that whereas under the Act, any work, even incidental or preliminary or connected with the work of the factory or establishment is within the ambit of the definition, such wide ranging language is conspicuous by its absence in the definition of the “workman” under the Industrial Disputes Act, 1947. The difference in the language of S. 2 (9) of the Act and that of S. 2 (s) of the industrial Disputes Act, is so significant that any further elaboration would be wasteful. The language of the two definitions being far from pari materia is in fact so divergent that to draw any analogy betwixt the two, both from the provisions of the statute itself or from precedents interpreting the definition of the Industrial Disputes Act, 1947, would be merely inviting pit-falls. It is a hallowed rule of construction that in construing statute, the definitions from an altogether different enactment are not helpful and indeed dangerous to advert to and the more so, where their language is plainly and significantly different. It has been so held on the high authority of Laurence Arthur Adamson v. Melbourne & Metropolitan Board of Works [A.I.R 1929 P.C 181], which has been unreservedly followed in Jainarayan Ramkisan v. Motiram Gangaram [A.I.R 1949 Nag. 34].
14. Now, what has been said in the context of the Industrial Disputes Act, 1947, applies with the same, if not with the greater degree of force, to the definitions in other industrial laws. Therefore, it suffices to notice that the definition of a “worker” under S. 2(1) of the Factories Act, 1948, and of an “employee” under S. 2 (f) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, can again not be termed as in pari materia with the definition of employee under S. 2 (9) of the Act which we are called upon to construe. Indeed in Nagpur Electric Light and Power Company, Ltd. v. Regional Director, Employees' State Insurance Corporation [A.I.R 1967 S.C 1364], their Lordships had an occasion to compare the definition of the “employee” under the Act, and that of the “worker” under the Factories Act, 1948, and it was observed as follows:
“It is to be seen that the definition of an employee in the Employees' State Insurance Act is wider than that of a worker in the Factories Act. The object of the Factories Act is to secure the health, safety, welfare, proper working hours, leave and other benefits for workers employed in factories. The benefit of this Act does not extend to field workers working outside the factory. See State of Uttar Pradesh v. M.P Singh (A.I.R 1960 S.C 569]. The object of the Employees' State Insurance Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents' benefits to their dependants. The benefits of this Act extend, inter alia, to the employees mentioned in S. 2 (9) (i) whether working inside the factory or establishment or elsewhere.”
Therefore, it appears to me as totally wasteful to advert to authorities with regard to the definition of a “worker” or “workman” or “employee” under the innumerable other statutes. For this basic reason, it is unnecessary to even advert to or distinguish judgments construing the definitions couched in different language in various other statutes to which counsel had made reference by way of analogy.
15. The aforementioned contention of Sri Bhagirath Dass also deserves to be refuted from another angle. The learned counsel had very fairly conceded that even a casual employee employed for the work of the factory is within the ambit of the definition of “employee” under S. 2 (9) of the Act. With great candour he also conceded that regular employees of the factory or establishment, who are employed merely for the work for the factory, would also come within the ambit of an “employee” under the Act. The sole distinction which he wished to draw was that a casual employee who is employed not for the work of the factory or the establishment, but merely the work for the factory or establishment is not within the ambit of the definition of an “employee” under the Act. It was in this context that the learned counsel had attempted to highlight, what according to him was the difference betwixt the work of the factory or establishment as against the work for the factory or establishment. For example, in a textile factory a person employed in the actual weaving of the cloth would be one employed in the work of the factory whilst regular employees for the security or the maintenance of the factory compound would be doing work for the factory.
16. The fallacy of the aforesaid argument appears to be obvious. Once it is held and even has been fairly conceded that a regular employee when doing work for the factory is within the ambit of the definition, it does not stand to reason that a casual employee doing identical work would fall outside thereof. One can visualize at the same time two employees jointly doing the same job, one of them being a regular employee of the factory or the establishment and the other a casual employee, the nature of the work being for the factory and not of the factory. Supposing an accident takes place resulting in injuries to both the employees during the course of employment, it would plainly be illogical to hold that the beneficent provisions of the Act should be available to the regular employee, but the casual employee would be disentitled thereto. Merely she temporary or the permanent nature of the employment in my view cannot make any difference about the applicability of the Act to persons employed for identical work. The beneficent provisions are plainly envisaged to protect both the regular and casual employees in such a situation, indeed when frontally faced with this situation, Sri Bhagirath Dass with his usual inimitable candour stated that any answer to this situation was beyond him, but that according to him, was the state of the existing law. I am unable to agree to an interpretation, which, when tested tends to violate the basic canons of logic.
17. Whilst the matter thus seems to be reasonably clear, both on the language of the statute as also on principle, it equally has the weight of authority behind it. Turning inevitably first to the judgment of this Court, it was held by the Division Bench in Employees' State Insurance Corporation v. A.L Puri [(1971) 73 P.L.R 178], that the consideration whether the worker is either permanent or temporary or casual may not be of any relevance in the context whether such an employee would come under the definition of this very Act. A well reasoned judgment of the Andhra Pradesh High Court in Andhra Pradesh State Electricity Board v. Employees' State Insurance Corporation [1976-II L.L.N 444], has again, taken the same view. A Division Bench judgment of the Karnataka High Court in Employees' State Insurance Corporation, Bangalore v. Davangere Cotton Mills, Ltd. [1977-I L.L.N 443], categorically held that persons casually employed came within the ambit of the definition under S. 2 (9) of the Act. This view was sought to be challenged and on a reconsideration of the whole matter, the Full Bench of the Karnataka High Court in Regional Director, Employees' State Insurance Corporation, Bangalore v. Suvarna Saw Mills [1979-II L.L.N 512], has reaffirmed its earlier stand. It is thus evident that the weight of authority is clearly in support of the view that casual employees are as much within the scope of the Act as regular ones.
18. In fairness to the learned counsel for the respondents, their reliance on the judgments of the Madras High Court must be noticed. It was first in Employees' State Insurance Corporation, Madras v. Gnanambikai Mills, Ltd. [1973-II L.L.N 303], that it was observed that the Act was not intended to apply to casual employees. Reference to the judgment therein would indicate that the matter was not adequately canvassed before the Bench either on principle or precedent. Indeed not a single judgment has been referred to. The same view has been later taken in the said Court in Employees' State Insurance Corporation v. Sri Sakthi Textiles (Private) Ltd. Pollachi [1974-II L.L.N 346] and Employees' State Insurance Corporation v. K. Ramchandran [1977-II L.L.J 214]. It is unnecessary to analyze and distinguish these authorities individually because it has been adequately so done in the judgments of the Andhra Pradesh and Karnataka High Courts which have been earlier referred to. For the reasons recorded therein, I am inclined to adopt the same view and would respectfully dissent from the Madras stance in the same vein.
19. Coming, however, to the Division Bench judgment of this Court in Employees' State Insurance Corporation, Chandigarh v. Onkar Nath Gupta [(1975) 77 P.L.R 79], the reconsideration of which had particularly necessitated the consideration by a larger Bench. It may be noticed at the outset that the matter does not seem to have been adequately debated before their Lordships. Reference to the judgment would indicate that the major part of it was devoted to amounts paid as stipends to learners, rewards to employees, and those paid to various persons for loading and unloading of goods. Generally on facts the view of the learned single Judge was upheld by the Letters Patent Bench. However, in a single paragraph (Para. 5 of the report) (the meaningful issue now before us) was summarily disposed of. It is evident that neither any authority was apparently cited or considered nor was the issue examined on principle. Even the earlier. Division Bench judgment of this Court in Employees' State Insurance Corporation v. A.L Puri [(1971) 73 P.L.R 178] (vide supra), was neither cited nor considered by the bench. Far from adverting to the wide ranging language of S. 2 (9) of the Act even a reference thereto has not been made in the whole of the judgment. Apart from the consideration of the peculiar facts, the basic reason which seems to have weighed worth the Bench was as follows:
“… It is a matter of common knowledge that house owners engage persons who carry out annual repairs and white-washing, etc., without becoming the employees of the former….”
With great respect, the fallacy herein is obvious. A mere house-holder cannot be equated with a factory or establishment to which alone provisions of the Act apply. The contractual or quasi-contractual relationship of the master or the house owner with a house help has no analogy or relevance to the precise statutory definition of the “employee” under the Act with regard to either factories or establishments to which the provisions of the Act may be extended with the larger purpose of ensuring him against the hazards of such employment. With great respect, therefore, I hold that the passing observations in the said judgment can no longer hold water in face of the provisions of the statute, on principle, and on the weight of precedent which has been referred to in detail in the earlier part of the judgment. I hold that on this specific point the judgment does not lay down the law correctly and has to be unhesitatingly overruled.
20. To conclude it must be held that even a person casually employed in a factory or establishment is within the ambit of the definition spelled out in S. 2 (9) of the Act. The answer to the question posed at the outset is hereby returned in the affirmative.
2. Adverting now to the facts of the individual cases, it may be pointedly noticed that once the considerations of casual or regular employment are out of the way, then persons engaged for making building repairs to the factory, etc., would plainly enough be performing a work which is incidental to or in connexion with the work of the factory and, therefore, would come squarely within the ambit of the definition of an “employee.” What is said in their context would apply equally and perhaps with greater force to persons employed as carpenters and those for white washing the factory. In fact, as was noticed in the very beginning, once the legal issue is settled the facts of all the four cases bring the employees within the wide net cast by the statute. Learned counsel for the respondents indeed did not make any serious issue of this fact. Reference in this connexion may be made to the Division Bench judgment in Thiagarajan Chettiar v. Employees' State Insurance Corporation, Madurai [A.I.R 1963 Mad. 261). Therein it was held that even gardeners, building workers, office attenders, watchmen, etc., of a textile mill were employees within the meaning of the Act so as to oblige the employer to contribute towards the provident fund. Even more far reaching are the observations in the judgment of the final Court in Royal Talkies, Hyderabad case [1976-II L.L.N 268 (vide supra). Therein even with regard to persons employed for the purposes of running a car park, a cycle-stand or a canteen entirely incidental or collateral to the running of a cinema, were held to be “employees” within the meaning of the Act and the cinema-owner was held liable as the principal employer for their contributions. Consequently it follows that the appellant-Corporation here is on wholly firm ground and all the four appeals, therefore, must succeed and are hereby allowed. In view of some conflict of present on the point, we leave the parties to bear their own costs.
22. K.S Tiwana, J.:— I agree.
23. Harbans Lal, J.:— I agree.
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