Bombay High Court: A petition was filed challenging an order passed by the Labor Court wherein it was held that the petitioner is not an ‘employee’ within the meaning of Maharashtra Recognition of Trade Unions and Prevention of Unfair Labor Practices Act, 1971 (‘MRTU and PULP Act’). A single-judge bench of Sandeep V. Marne, J. upheld the impugned orders and held that the petitioner did not qualify as a sales promotion employee under the Sales Promotion Employees (Conditions of Service) Act, 1976 (SPE Act), nor as a workman under the Industrial Disputes Act as the petitioner’s role primarily involved supervising salesmen and ensuring the achievement of sales targets, therefore, while he contributed to sales promotion indirectly through supervision, his duties did not align with direct sales promotion activities as defined under the SPE Act.
Background:
Cadbury India Ltd., the respondent, appointed the petitioner as a Sales Officer and was subsequently promoted to Senior Sales Executive. As per the petitioner, despite his designation, he performed various field jobs and was not involved in supervisory, administrative, or managerial nature of work. He also stated that he worked independently and reported to his superior officers. Therefore, he claimed to be a ‘workman’ as per Section 2(s) of the Industrial Disputes Act, 1947 (‘ID Act’), and consequently an ‘employee’ as per Section 3(5) of the MRTU and PULP Act. The petitioner’s main claim was about his status as a ‘Sales Promotion Employee’ within the meaning of Sales Promotion Employees (Conditions of Service), Act 1976 (SPE Act).
After Cadbury found certain irregularities in the area assigned to the petitioner, he was withdrawn from that area and was not called for participation in any enquiry nor was given any new assignment. His services were terminated, which as per the petitioner was without following the statutory provisions and without show cause notice or enquiry.
Aggrieved by this, the petitioner filed a complaint in the Labor Court challenging the termination wherein it was held that the complaint was not maintainable as he was not an employee within the meaning of the MRTU and PULP Act. The petitioner was unsuccessful in challenging this order before the Industrial Court as well. Thus, the present petition was filed.
The counsel on behalf of the petitioner stated that the findings of both the above-mentioned Courts that the petitioner was engaged in a supervisory capacity were perverse since he had given mere assistance to Purple Champions who were engaged by the distributors and that they are not employees of Cadbury.
The counsel on behalf of respondent contended that the petitioner was repeatedly involved in intellectual and policy work and that he was essentially supervising the activity of sales of Cadbury’s products. He further contended that the petitioner was handling a team of Purple Champions and that he could not be treated as a ‘workman’ or ‘employee’.
Analysis and Decision:
The Court analyzed the order passed by the Labor Court and stated that the petitioner did not raise a plea before the Labor Court to state that he was a ‘sales promotion employee’ and instead attempted to prove that he was a ‘workman’ under Section 2 (s) of the ID Act. Further, the Court noted that the definition of ‘employee’ under Section 3 (5) of the MRTU and PULP Act came to be amended by the Maharashtra Act by adding ‘sales promotion employee’ in the definition. Thus, every ‘sales promotion employee’ as defined under the SPE Act automatically became an ‘employee’ within the meaning of the MRTU and PULP Act.
The Court stated that the term ‘employee’ came to be amended to redress its analogous position and include ‘sales promotion employees’ in the definition as well so as to enable them to maintain a complaint under the MRTU and PULP Act. Thus, the legal position as stated by the Court was that even though a Sales Promotion Employee does not fit into the definition of the term ‘workman’, he is still treated as an employee under the MRTU and PULP Act which provides “twin benefits” of protection under the ID Act as well as the MRTU and PULP Act.
Further, the Court also referred to a notification issued by the Central Government notifying that the provisions of the SPE Act shall apply to various industries including ‘Biscuits and Confectionaries’ which is why Section 3 of the SPE Act would also apply to Cadbury.
After considering all the documents and evidence placed on record to describe the nature of the petitioner’s duties, the Court held that the petitioner himself was not selling or canvassing the sale of products of Cadbury since there was ample evidence on record to show that the petitioner’s main role was to ensure that targeted sales are achieved through salesmen appointed by the distributors. The Court also stated that the petitioner’s occasional visit to the shops/outlets did not mean that his predominant duty was to carry out direct sales activities and that he was mainly supervising these activities.
While reiterating the Supreme Court’s decision in Burmah Shell Oil Storage and Distribution Company of India Ltd. v. The Burma Shell Management Staff Association 1970 (3) SCC 378, the Court held that it is only when a person is involved in canvassing and obtaining orders by holding demonstration or suggesting the best use of the product, that such person can be held to not be engaged in a supervisory capacity. Thus, the Court found no evidence in the present case to suggest that the primary duty of the petitioner was to canvass the products of Cadbury.
The Court noted that the petitioner was merely supervising other salesmen, who were carrying out the activities of sales and promotions of Cadbury’s products. Further, the Court said that merely because a manager or supervisor supervises the activities of persons who are not direct employees of an establishment, it cannot mean that he ceases to be employed in a supervisory capacity. Therefore, the real test for determining supervisory nature of duties is not whether persons on whom supervision is exercised are employees of the establishment or not, but the nature of duties attached to the job. Thus, the Court held that the petitioner performed supervisory duties while working as Senior Sales Executive with Cadbury and that he does not fit into the definition of ‘sales promotion employee’ within the meaning of Section 2 (d) of the SPE Act.
The Court held that the the petitioner was neither a ‘workman’ within the meaning of Section 2(s) of the I.D. Act nor a ‘sales promotion employee’ within the meaning of Section 2(d) of the SPE Act and therefore, not an ‘employee’ within the meaning of Section 3(5) of the MRTU and PULP Act. Thus, there was no patent error in the orders passed by the Labor and Industrial Court which is why the writ petition failed and was accordingly dismissed.
[Jobi Joseph v. Cadbury India Ltd., 2024 SCC OnLine Bom 1193, Decided on 26-04-2024]
Advocates who appeared in this case :
For Petitioner — Sr. Advocate Sanjay Singhvi, Advocate Rahil Fazelbhoy
For Respondent — Advocate Dhananjay J. Bhanage
