Understanding Labor vs. Workmen Laws for Skilled Employees Under the Shop Act in Rajasthan

Hi, we are registered under the Shop Act in Rajasthan with an employee strength of around 18. I wish to understand the difference between labor and workmen. Are there any separate laws for non-labor employees under the Shop Act, as we are an IT company and our manpower is skilled? Can we apply workmen laws under the Shop Act? I am looking for guidance on the same. The purpose is to aggregate educated manpower from the labor class in terms of following compliances. Our consultant is telling us to follow labor laws whereas our team is skilled. Thanks in advance.

Dear Deepa,

"Difference between labor and workman"

"Labor" and "workman" are nouns indicating the same person whose services are hired. The slight difference is that a laborer may be self-employed, whereas a workman is employed by someone else regularly, subject to their control and supervision. If you carefully review the definition of the term "employee" under Section 2(5) of the Rajasthan Shops and Commercial Establishments Act, 1958, you will find the qualifying phrase "a person wholly or principally employed in, or in connection with any establishment." Every IT/ITES establishment falls under the respective State Shops and Establishments Act where it operates. Therefore, anyone employed therein wholly or principally, or in connection with the establishment, is considered an employee. Hence, it is not appropriate to create your own classification of such employees, such as educated, manual labor, or unskilled. Please adhere to the guidelines provided by your consultant.

Please let me know if you need any further assistance.

Best regards,
[Your Name]

Are sales promotion employees considered workmen?

This sentence can be improved for clarity and correctness: "Are sales promotion employees considered workmen?"

Sales Promotion Employees and Workmen Status

The Labour Court denies that sales promotion employees, i.e., Medical Representatives, are workmen since they are not engaged in any clerical, manual, or any other type of work. Also, as per the latest judgment of the Jabalpur High Court in 2018, Sales Promotion Executives are not considered workmen.

Sales Promotion Employees and the Industrial Disputes Act

Originally, sales promotion employees were not considered "workmen" as per the Industrial Disputes Act, 1947, following the Supreme Court judgment in the case of May and Baker (India) Limited and their Workmen (1961-II-LLJ, p. 94). The court ruled that individuals engaged in sales promotion did not fall within the definition of "workman" under the Industrial Disputes Act, 1947. Consequently, they had no protection regarding job security and other benefits under that Act, leading the Labour Court to refuse relief to them.

This situation led to the enactment of the Sales Promotion Employees (Conditions of Service) Act, 1976 (11 of 1976). The Act included a provision to apply the Industrial Disputes Act to individual disputes as follows: The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen within the meaning of that Act. For the purposes of any proceeding under that Act in relation to an industrial dispute, a sales promotion employee shall be deemed to include one who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge, or retrenchment led to that dispute.

Sales Promotion Employees (SPEs) were invoking the jurisdiction of the Industrial Disputes Act. However, the Madhya Pradesh High Court in Novartis India Ltd. Vs. Vipin Shrivastava and others in WA No.75/2017, by order dated 11.10.2018, reiterated the earlier position that medical representatives or sales representatives in a pharmaceutical company cannot be treated as workmen within the meaning of Section 2(s) of the Industrial Disputes Act. Recently, in Vimal vs. Abbott Healthcare Pvt. Ltd., decided on 4 March 2020, it was held that Sales Promotion Employees won't be considered workmen as per the Industrial Disputes Act, 1947, and upheld the order passed by the Labour Court.

The basic premise is that the Industrial Disputes Act excludes coverage for persons employed in managerial and administrative work and those drawing wages exceeding the wage limit. The High Court held that sales promotion work cannot be categorized as manual or clerical work as it requires knowledge of the product, its uses, and persuasive skills. SPEs may not control any subordinates, but they are masters of the work assigned to them. The manner of performing the job is solely at their discretion. The management's interest is that the Medical Representative should achieve the sales target. The supervisory capacity must be examined, considering manual, unskilled, skilled, and clerical work, and the person performing such work is a workman. Even if they do not supervise anyone, they are masters of their own affairs, reporting to management only regarding sales quantification. Therefore, a Medical Representative cannot be treated as a workman within the meaning of Section 2(s) of the Industrial Disputes Act.

For those not covered by the Industrial Disputes Act, their only recourse is to avail of civil remedies as per the Specific Relief Act, 1963.