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Project on
Indian Banks Association v. Workmen of
Syndicate Bank
Submitted by
Dhruv Aghi
BBA.LL.B. (A), Roll No. 8
Batch 2010-15
Symbiosis Law School, NOIDA
Symbiosis International University, PUNE

Under the guidance of
Prof. Vikram Singh
Faculty in Charge for Labour and Industrial Law
Symbiosis Law School, NOIDA



I, Dhruv Aghi, student of Symbiosis Law School, Noida pursuing BBA.LLB.
(VII Semester), hereby declare that the Project of Labour and Industrial
Law is submitted by me in the line of partial fulfilment of course
objectives for the Labour and Industrial Law.

Date: October 1, 2014 Name: Dhruv Aghi



The project of Labour and Industrial Law is submitted to the Symbiosis
Law School, Noida as part of internal assessment based on my original
work carried out under the guidance of Prof. Vikram Singh. The
research work has not been submitted elsewhere for award of any

The material borrowed from other sources and incorporated in the thesis
has been duly acknowledged.
I understand that I myself could be held responsible and accountable for
plagiarism, if any, detected later on.

Signature of the candidate:- Dhruv Aghi



It is a great pleasure for me to put on records our appreciation and
gratitude towards Prof. Vikram Singh, our faculty (Project Guide) for
his valuable support and suggestions for the improvement and editing of
this project report and immense support and encouragement all through
the preparation of this report.
Last but not the least; I would like to thank all the persons who directly or
indirectly helped me in completing my project report.

Date: October 1, 2014 Name: Dhruv Aghi

During the twentieth century and that too mainly in the post
independence period a new branch of jurisprudence known as Industrial
Jurisprudence has developed in India. This branch of law, i.e., the labour
and industrial law, has modified the traditional law relating to master and
servant and had cut down the old theory of laissez-faire based upon the
'freedom of contract' to protect workmen against victimization and unfair
labour practices by the employer and to put an end to industrial disputes
by peaceful methods. The old age right of an employer to hire and fire his
workmen at his will has been subjected to many restraints. Industrial
Tribunals can extend an existing agreement or make a new one, or in
general create new rights and obligations or modify the old ones even
against the wishes of the employer or workmen or both. Moreover the
right of workers to participate in management has been given legislative
recognition. The departure from the old theories of law of contract and
law of master and servant has not only been in India but all over the
world. The industrial society everywhere has been moving during the
present century from contract to status and this status is politico-
economic juristic status.
Definition of Workman
Section 2(s) of the Industrial Dispute Act, 1947) gives the definition of
workman' which is reproduced below:-
"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 person 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-
1. who is subject to the Air Force Act, 1950, or the Army Act, 1950 or
the Navy Act, 1957,
2. who is employed in the police service or as an officer or employee
of a prison,
3. who is employed mainly in a managerial or administrative capacity;

4. 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.

The definition of workman as given in the Act is analyzed as under
1.Industry: The person must be employed in an industry within the
meaning of S.2(j)of I.D. Act, 1947.
2.Employer-employee relationship: The essential condition of a person
being a workman within the term of the definition is that he must be
employed in an industry, i.e., there must be employment of his by the
employer and there must be a relationship between the employer and him
as between employer and employee or master and servant. It is
necessary that a person to be a workman must be in a 'contract
o/service', and not contract for service.' Merely a contract to do some
work is not enough. An independent contractor is excluded from the
definition of workman as there does not exist the relationship of master
and servant in such a case. In other words an independent contractor is
not a workman. An independent contractor is not under the control of the
master. The element of control distinguishes an employee from an
independent contractor.
Case Analysis
Petitioner: Indian Banks Association
Respondent: Workmen of Syndicate Bank and Ors.
Whether the demands of the Commission Agents of as the case may be
Deposit Collectors Employed in the banks listed in the Annexure that they
are entitled to pay scales, allowances and other service conditions
available to regular clerical employees of those banks is justified? If not,
to what relief are the workmen concerned entitled and from which date?
Section 10 of the Banking Regulation Act.
"10. Prohibition of employment of managing agents and restrictions on
certain forms of employment:- (1) No banking company
(a) Shall employ or be managed by managing agent; or
(b) Shall employ or continue the employment of any person:
(i) Who is, or at any time has been adjudicated insolvent, or has
suspended payment of has compounded with his creditors, or who is, or
had been, convicted by a Criminal Court of an offence involving moral
turpitude; or
(ii) Whose remuneration or part of whose remuneration take the form of
commission or of a share in the profits of the company.
Section 2 (rr) of the Industrial Disputes Act
"2(rr) "wages" means all remuneration capable of being expressed in
terms of money, which would, it the terms of employment express or
implied, were fulfilled, be payable to a workman in respect of his
employment or of work done in such employment, and includes-
(i) such allowances (including dearness allowance) as the
workman is for the time being entitled to;
(ii) (ii) the value of any house accommodation, or of supply of
light, water, medical attendance or other amenity or of any
service or of any concessional supply of foodgrains or other
(iii) (iii) any travelling concession;
(iv) (iv) any commission payable on the promotion of sales or
business or both;
but does not include-
(a) any bonus;(b) any contribution paid or payable by the employer
to any pension fund or provident fund or for the benefit of the
workman under any
(b) law for the time being in force;
(c) (c) any gratuity payable on the termination of his service;"
points out that, under sub-clause (iv) of the above definition,
"wage" includes commission payable on promotion of sales or
business or both. He submitted that the commission which was
received by Deposit Collectors was promotion of the business of
the banks, viz., receiving deposits from on investors.
The court held that with regard to Section 2 (rr) of the industrial Disputes
Act, the commission received by Deposit Collectors is nothing else but
wage, which is dependent on the productivity. This commission is paid for
promoting the business of the various banks. The court rejected the
notion that banks have no control over the Deposit Collectors and even
though the Deposit Collectors are free to regulate their own hours of
work, that is because of the nature of the work itself. The court held that
it impossible to fix working hours for such Deposit Collectors because they
have to go to various depositors. This would have to be done at the
convenience of the depositors and at such times as required by the
depositors. If this is so, then no time can be fixed for such work.
However, there is control as the Deposit Collectors have to being the
collections and deposit the: same in the banks by the very next day. They
have to then fill in various forms, accounts, registers and pass books.
They also have to do such other clerical work as the bank may direct.
They are, therefore, accountable to the bank and under the control of the
The Court saw no force in the contention that Section 10 of the Banking
Regulations Act prevents employment of persons on commission basis.
The proviso to Section 10 makes it clear that commission can be paid to
persons who are not in regular employment Undoubtedly the Deposit
Collectors are not regular employees of the Bank, But they nevertheless
are workers within the meaning of the term as defined in the industrial
Disputes Act. There is clearly a relationship of master and servant
between the Deposit Collectors and the concerned Bank.
The Court Relied Upon Union of India & ors. v. K.V. Baby & Anr.
, wherein
it has been held that persons who are engaged on the basis of individual
contracts to work on commission basis cannot be equated with regular
employees doing similar work. It has been held that the mode of selection
and qualifications are not comparable with those of the employees, even
though the employees may be doing similar works. In the present case,
not only care the modes of selection and qualifications not comparable,
but even the work is not comparable. The work which the Deposit
Collectors do is completely different from the work which the regular
employees do. There was thus no question of absorption and there was

(1999) 1 LLJ 1290
also no question of the Deposit Collectors being paid the same pay scales,
allowances and tower service conditions of the regular employees of the
The Court held that Banks have introduced these Schemes because they
want to encourage the common man to make small and regular deposits.
As a result of such Schemes, the number of depositors have become
much larger and there is no doubt that such Schemes are continued
because the Banks find them remunerative. The Banks have large
collections through such Schemes.
The court pronounced that it found no substance in any of these Appeals
and hence dismissed the appeals.
In a recent case Bombay High Court Case, The Pachora Peoples Co-op.
Bank. Ltd. Vs. The Employees Provident Fund Organisation
, was whether
Pigmy Deposit Collectors were covered by the definition of employee u/s
2(f) of the Employees Provident Fund Act and were earning wages u/s 2
(b) of the Act. The Court held that Deposit Collectors were workers within
the meaning of the term as defined in the Industrial Disputes Act, 1947
and that, the work done by them was in tune with and traceable to the
business of the concerned Bank. It was held that Pygmy Deposit
Collectors were entitled to Provident Fund benefits. In coming to this
conclusion, the Bombay High Court relied upon Indian Banks Association
Vs. Workmen of Syndicate Bank and Ors. etc.
The position of law on the pertaining issue has been summarized in
Halsbury's Laws of England (Vol. 22, page 112, para 191) "Whether or
not, in any given cases, the relation of master and servant exists is a
question of fact; but in all cases the relation imports the existence of

power in the employer not only to direct what work the servant is to do
but also the manner in which the work is to be done; and until the
position is restated we may take it as the prima facie test for determining
the relationship between master and servant."


Alan Gladstone, Benjamin Aaron, T Verdier Sigeman INTERNATIONAL
LABOUR LAW REPORTS, Martinus Nijhoff Publishers, Volume 24, October,
2005, Page 199-200.