THE TIME OF CEYLON LTD., Appellant, and THE NIDAHAS KARMIKA SAHA VELANDA SEVAKA

021-NLR-NLR-V-63-THE-TIME-OF-CEYLON-LTD.-Appellant-and-THE-NIDAHAS-KARMIKA-SAHA-VELANDA-SEVAKA-.pdf


126
Times of Ceylon Ltd. v. Nidahas
Karmika Saha Velanda Sevaka Vurthiya Samitiya
1060Present : T. S. Fernando, J.THE TIMES OF CEYLON LTD., Appellant, and THE NIDAHASKARMIKA SAHA VELANDA SEVAKA VURTHIYA SAMITIYA,Respondent
S. C. 6—Labour Tribunal Case 155 or 1959
In the matter of an appeal under Section 31 D (2) of the Industrial Disputes
Act, No. 43 of 1950
Industrial Disputes Act No. 43 of 1950, as amended by Act No. 62 of 1957—“ Work-man ”—Distinction between workman and independent contractor—Section
47.
The definition of “ workman ” in section 47 of the Industrial Disputes Actdoes not cover an independent contractor.
Z was a delivery peon who was under contract with a newspaper companyto deliver copies of that company’s newspapers to certain subscribers in Colombowho had paid subscriptions to the company for the newspapers (including thedelivery thereof). The contract imposed on Z the terms to be found in thefollowing clauses :—
“ (1) You Will be paid a commission of -/02£ cents for every copy delivered.
Failure to deliver a paper will result in your having to pay the value of thepaper.
* (1947) 48 N. L. B. 337.
* (1948) 50 N. L. B. 221.
T. S. FERNANDO, J-— Times of Ceylon Ltd. v. Nidahas
Karmika Saha Velanda Sevaka Vurthiya SamiUya
127
In cose you are unable to call for your papers this office must be notifiedor a substitute sent.
You will be held responsible for all delivery errors.
(5) You will collectManager.
your papers at the times stipulated
by the Circulation
Your Commission will be paid once a month.
Failure to call for copies for distribution, without due notice, or non-delivery of copies taken will result in the termination of your contract.”
Held, that, as the true relationship between Z and the company was oneapproximating that between a hirer and an independent contractor, Z was nota workman within the meaning of the Industrial Disputes Act.
Appeal under section 31 of the Industrial Disputes Act, No. 43 of1950.
H. V. Per era, Q.G., with L. E. J. Fernando, for the appellant.
S. P. Amarasingham, with F. X. J. Rasanayagam, for the applicant-respondent.
Cur. adv. vult.
August 31, 1960. T. S. Fernando, J.—
The sole question that arises on this appeal is whether a person whohas been described in the proceedings as a delivery peon who was undercontract with a newspaper company to deliver copies of that company’snewspapers to certain subscribers in Colombo who had paid subscriptionsto the company for the newspapers (including delivery thereof) is aworkman within the meaning of the Industrial Disputes Act, No. 43of 1950. The determination of this seemingly simple question has causedme a great deal of anxiety and the only consolation I can seek in thesituation in which I have found myself is the discovery that in the pastjudges who have had to decide whether a person is a workman or em-ployee or servant as defined in various statutes as distinguished from anindependent contractor have experienced difficulty and similar anxiety.
The question before me arises in the following circumstances. TheIndustrial Disputes (Amendment) Act, No. 62 of 1957, provides for theestablishment, for the purposes of the Industrial Disputes Act, No. 43of 1950, of Labour Tribunals, each such Tribunal consisting of oneperson. Applications to a Labour Tribunal for relief or redress in respect,inter alia, of the termination by an employer of' a workman’s serviceswere provided for by the Amendment Act which empowered the Tribunal,after inquiry, to make such order as may appear to the Tribunal to bejust and equitable. Subject to a right of appeal to the Supreme Courton a question of law, the order of a Labour Tribunal is declared to befinal and one that shall not be questioned in any court.—(see new sections3lA, 31B, 310, and 31D.)
12S
T. S. FER2?ANDO, J.—Times of Ceylon Ltd. v. Nidahas
JS.arm.ika Saha Velanda Sevaka Vurthiya Samitiya
Section 47 of the Industrial Disputes Act, No. 43 of 1950, as amendedby Act No. 62 of 1957, defines workman as meaning “ any person whohas entered into or works under a contract with an employer in anycapacity, whether the contract is expressed or implied, oral or in writing,and whether it is a contract of service or of apprenticeship, or a contractpersonally to execute any work or labour and includes any personordinarily employed under any such contract whether such person is or isnot in employment at any particular time and, for the purposes of anyproceedings under this Act in relation to any industrial dispute, asincluding any person whose services have been terminated.”
I have not been able to discover whether this definition has been takenover from legislation on a similar subject in any other country, but it maybe mentioned that learned counsel appearing for both parties to this appealhave addressed me on the footing that, according to the definition quotedabove, a person who is an independent contractor falls outside the cate-gory of workman. The Tribunal itself dealt with the application on theassumption that it would have had no jurisdiction to inquire into thecomplaint if the person concerned was an independent contractor. Inthe circumstances it is permissible to seek some guidance on the questionI have here to decide from decisions both in India and in England as tothe test or tests to be applied in determining whether a person is to beregarded as a workman or employee or servant as distinguished from anindependent contractor. The distinction between the two classes hasbeen broadly stated to be that, while in the case of the former there is acontract of service, in the case of the latter what comes into existence is acontract for services. In the case of Simmons v. Heath Laundry Co.,1Buckley D.J., discussing the meaning of the expression “ contract ofservice ”, stated :—
“ A servant ”, said Bramwell L.J. in Yewens v. Noakes 2, “ is a personsubject to the command of his master as to the manner in which heshall do his work ”. To distinguish between an independent contractorand a servant the test is, says Crompton J. in Sadler v. Henlock3,whether the employer retains the power of controlling bis work.
Again, in the case of Performing Right Society Ltd. v. Mitchell and Hooker 4Me Cardie J., dealing with a similar question, observed that “ it seemsreasonably clear that the final test, if there be a final test, and certainlythe test to be generally applied, lies in the nature and degree of detailedcontrol over the person alleged to be a servant. This circumstance is,of course, one only of several to be considered, but it is usually of vitalmportance ”.
The question of the distinction between a workman as defined in theIndustrial Disputes Act 1947 (of India) and an independent contractorcame up recently for consideration by the Supreme Court of India in *
*(1910) 1 K. B. 543 at 552.
(1880) 6 Q. B. D. at 532. j
3 4 E. d> B. at 578.
* (1924) 1 K.B. at 767.
T. 8. FERUASDO, J.— Times of Ceylon Ltd. v. Ntdahae129
Karmika Saha Velanda Sevaka Vurthiya Samitiya
D. C. Works Ltd. v. State of Saurashtra1, a esse which was well in the mifldof the Tribunal whose decision is now canvassed before me. In that case,the Supreme Oourt of India after considering many decisions, principallyof the English Courts, stated that “ the piinciple which emerges from theauthorities is that the prima facie test for the determination of therelationship between master and servant is the existence of the rightin the master to supervise and control the work done by the servant notonly in the matter of directing what work the servant is to do but alsothe manner in which he shall do his work, or, to borrow the words ofLord Uthwatt in Mersey Docks and Barbour Board v. Coggins and Griffith(Liverpool) Ltd.2, the proper test is whether or not the hirer had authorityto control the manner and execution of the act in question **. The Courtalso expressed the opinion that the correct method of approach indetermining the question would be to consider whether having regard to thenature of the work there was due control and supervision by the employerand adopted in this connection the observations of Fletcher-Moulton
J. in Simmons v. Heath Laundry Co. (supra) quoted below :—
“ The greater the amount of direct control exercised over the personrendering the services by the person contracting for them the strongerthe grounds for holding it to be a contract of service, and similarlythe greater the degree of independence of such control the greaterthe probability that the services rendered are of the nature of profes-sional services and that the contract is not one of service.”
With these observations as to the nature of the crucial test to be appliedserving as a guide, the task for the Tribunal was to apply the test to thefacts as found by it in order to determine whether the person concernedwas or was not a tvorkman within the meaning of the Act.
Let me now state the facts as found by the Tribunal :—
The delivery peon concerned (whom I shall hereinafter refer to asZubair, which is his name) was employed by the Times of Ceylon Ltd.,a company publishing newspapers, from about August 1954 till 21stMay 1956 as a temporary monthly paid employee. His work duringthat period was to deliver the evening edition of the Times on week daysand the Sunday edition of the same newspaper on Sundays to a section ofthe company’s subscribers who had contracted with the company fordelivery to them of these newspapers. He was paid a monthly salaryduring this period. On the 21st May 1956 Zubair’s period of temporaryemployment as a delivery peon on a monthly salary was terminated and
1 (1957) A. I. B. (S. C.) at 264.
* (1947) 1 A. C. at 23.
130
T. S. FERNANDO, J.—Times of Ceylon Ltd. v. Nidahae
Karmika Saha Velanda Sevaka Vurthiya Samitiya
hia connection with the company came from that day to be governedby a contract the terms of which are to be found in document Rl, thetext of which is reproduced below :—
21st May 1956
Mr. M. I. M. ZubairDelivery Peon
Dear Sir,
Please acknowledge receipt of this letter confirming your acceptanceof our terms for the contract to distribute our subscribers’ copiesin Colombo.
The terms are :—
You will be paid a commission of – /02£ cents for every copy
delivered.
Failure to deliver a paper will result in your having to pay the
value of the paper.
In case you are unable to call for your papers this office must be
notified or a substitute sent.
You will be held responsible for all delivery errors.
You will collect your papers at the times stipulated by the
Circulation Manager.
Your commission will be paid once a month.
Failure to call for copies for distribution, without due notice*
or non-delivery of copies taken will result in the termination
of your contract.
Yours faithfully
(Signed)
Circulation Manager.
The section of Colombo to be served by Zubair under this contractcovered a distance approximately of two miles and the number of sub-scribers involved in that section at the time Zubair’s services were ter-minated were 84 for the Evening Times and 94 for the Sunday Times.The times stipulated for collection of the papers were 2.30 p.m. on weekdays (for the Evening Times) and 4 a.m. on Sundays (for the SundayTimes).
Apart from the distribution of the Evening Times and the SundayTimes as provided for in the contract Rl, Zubair also undertook thedistribution to subscribers of a magazine called Rasavahini for whichwork he was paid at the rate of 2 cents per copy delivered and alsoworked on Saturdays on the job of packing newspapers and loadingsthe packages into the company’s vans. For this latter work he was paidby the company at the rate of 44 cents an hour.
T. S. FERNANDO, J.—Times of Ceylon Ltd. v. NidahasI3l
Karmika Saha Velanda Sevaka Vurthiya Samitiya
Zubair had bean unable to call for papers on certain days, but he appearsto have notified the company in time of his inability to attend with theresult that the company was able to effect delivery of the newspapersthrough the aid of certain persons who were in their employment asmonthly paid servants and who were described as reserve peons. OnSunday, 31st May 1959, however, Zubair failed to turn up to collect thecopies of the Sunday Times for distribution to the company’s subscribersand failed also to notify his inability to attend or to send a substitute.The Company thereupon terminated his contract-on the very next dayand claimed to be entitled to do so under clause 7 of Rl.
Zubair submitted to the Tribunal that his inability to turn up at theoffice on 31st May 1959 to collect the papers or to send a substitute toattend to the delivery of the papers was due to the fact that his wifequite unexpectedly developed labour pains on the night of the 30th/31stMay 1959 and gave birth to a child at 3.25 a.m. that day. The Tribunalaccepted Zubair’s explanation for his lapse as being true.
On these facts the Tribunal has found that the company varied theterms of employment of Zubair as a monthly paid employee to that ofan employee on a commission basis and, bearing in mind the test to beapplied in determining whether Zubair is a workman, that the manner inwhich he was to perform his duties was within the control of the company.Observing that Zubair’s duties were not confined to those set out inRl, but that it was within the company’s rights to stipulate the time,the number of houses to which the papers were to be delivered, what wasto be distributed apart from the newspapers and what work was to be doneon certain nights for which payments were made by the hour, the Tribunalwent on to hold that Zubair was under contract 'personally to execute workor labour and therefore was a workman and not an independent contractor.Holding the termination of his contract unjustified, the Tribunal orderedhis reinstatement in employment with payment of back-wages.
Learned counsel for the trade union that made the application to theTribunal for relief on behalf of Zubair submitted that the decision of theTribunal was a question of fact which is based upon sufficient evidenceand that in the circumstances no question of law arises. The point oflaw is formulated by the appellant in this way :•—The tribunal is autho-rised by law to grant relief or redress only in respect of the terminationby an employer of the services of a workman, and it cannot by wronglydetermining that a person is a workman exercise-a jurisdiction which itdoes not possess. The question of law has, in my opinion, been correctlyformulated in this case. The distinction between a workman and anindependent contractor can often be very fine and, if the Tribunal (thejudge of fact) has reached a finding one way or the other and has notmisdirected itself in so doing, the finding is not one which can be madethe subject of appeal.
132T. S FERNANDO, J.—Times of Ceylon Ltd. v. Nidahae
Karmika Saha Velanda Sevaka Vurthiya Samitiya
Although the learned judge who constituted the Tribunal in this casehas given sufficient indication in his order that he was aware of thetest or tests to be applied in determining whether Zubair was a workman,I am satisfied for the reasons I shall indicate below that in reaching thedecision appealed from he has misdirected himself in the application ofthe test or tests.
Bearing in mind that the ultimate test to be applied is whether thehirer had authority to control the manner and execution of the act inquestion or, to put it in the words to be found in the judgment of theSupreme Court of India, whether there exists in the master a right tosupervise and control the work done by the servant not only in the matterof directing what work the servant is to do but also the manner in whichhe shall do his work, it is undeniable that the act in question in thiscase or the work Zubair undertook to do was the distribution of the copiesof the two newspapers. That was the essence of the work he had agreedto do or, I should add, to get done. Attendance at the office at a timeto be stipulated by the company was merely incidental to this essentialpart of the contract although here again, it seems to me, the Tribunalwas in error when it held that the stipulation of the time of collection wasoutside the terms of the contract—see clause 5 of Rl.
The conclusion reached by the Tribunal that according to the termsof the contract Rl it is a contract personally to execute work or labouris opposed, in my opinion, to the ordinary interpretation of its terms.The essential purpose of the contract was to ensure the distribution ofthe newspapers to the subscribers, and the necessary inference fromits terms is that the essential work of distribution could have been effectedthrough agents or substitutes, at the option of Zubair himself. Thisinference is made clearer by the clause which permits Zubair to havethe copies of the newspapers even collected by an agent or substitute.There is nothing in this contract to prevent Zubair getting all the necessarywork done by an agent or substitute. Such a feature, it seems almostsuperfluous to add, is quite inconsistent with the relationship betweenmaster and servant or between workman and employer. Althoughthere is no specific mention of it in the order of the Tribunal, the uncon-tradicted evidence on behalf of the company was that Zubair was freeto distribute the newspapers through a substitute and that once thenewspapers are removed from the office, the company knows nothingabout the distributor’s movements and does not require a report fromhim in regard to the distribution. Not only in the terms of the writtencontract but even in such practices as had grown up in relation to itthere is nothing which would justify the finding that the company had■authority to control the manner of distribution. The circumstancethat some control may be said to have been retained by the companyto vary from time to time the actual number of subscribers to whomdelivery was to be effected was merely incidental and did not have theeffect of vesting any control, much less detailed control, over the manner
T. S. FERNANDO, J.—Times of Ceylon Ltd. v. Nidahas
LLarmika Saha Velanda Sevaka Vurthiya Samitiya
133
in which the most important and necessary part of the work, viz. thedistribution, was to be executed. It seems difficult to resist the con-elusion that the true relationship between Zubair and the company wasone approximating that between a hirer and an independent contractor.
There is one other matter which might usefully be mentioned at thisstage. The learned judge in his order states that part of the dutiesof Zubair included the distribution of the magazine Rasavahini whencalled upon to do so as well as to undertake the packing of newspapersand the loading of vans on Saturday nights. While, no doubt, Zubairperformed these services, it is relevant to bear in mind that these thingswere being done not in pursuance of any obligations under the contractRl, but purely on a voluntary basis as Zubair’s time was his own, andhe was free to accept or refuse that work unlike in the case of the deliveryof the copies of the Evening Times and the Sunday Times.
The conclusion I have come to on the evidence accepted by the Tribunalin this case is that Zubair was not obliged under the contract to comepersonally to the company’s office to accept delivery or to effect deliveryhimself. The whole and. not merely a part of the essential work under thecontract could have been done by an agent or substitute of Zubair.In view of this conclusion, I am compelled to hold that the questionwhether Zubair was a workman within the meaning of the IndustrialDisputes Act should have been answered by the Tribunal in the negative.If so, the Tribunal would have had no jurisdiction to make the orderrelating to reinstatement and payment of back wages.
Before disposing of this appeal I wish to observe that I cannot helpfeeling that, in drafting the contract in the terms contained in documentRl, the company had deliberately set out to transform the character of aworkman which Zubair appears to have held up to 21st May 1956 to thatof an independent contractor. Zubair is hardly likely to have realisedthe significance of the change effected, but my duty here is to interpretthe contract that existed on 31st May 1959 according to the relevantlaw, and the company becomes thereby entitled to the decision I havereached on this appeal. At the same time, is it too much to hope that,as no doubt is being entertained that the immediate lapse that broughtabout the termination of Zubair’s contract was occasioned by his wifegiving, birth to a baby at a time when his presence and assistance wasvital at his home, the company may find it possible, notwithstanding thislitigation, to renew its contract with this unfortunate man at an earlydate ?
I allow the appeal and quash the order of the Tribunal. The respondenttrade union must pay the costs of this appeal which, having regardto the apparent capacity to pay of the respective parties, I limit to asum of Rs. 105/-.
Appeal allowed.