Co-operative Society Employees Entitled To Benefits Under Labour Welfare Legislations Like Minimum Wages Act, Maternity Benefit Act: Kerala HC

Justice Murali Purushothaman stated that the Kerala Co-operative Societies Act deals with conditions of service of the employees within Society such as post creation, qualification for appointment, method of appointment, payment of salary, promotion and retirement. Meanwhile, labour legislation deals with welfare and social security measures not encompassed under the Kerala Co-operative Societies Act and Rules.

“The employees of the Co-operative Societies are entitled to the benefits of the said labour legislations (Kerala Shops and Commercial Establishments Act, 1960, the Minimum Wages Act, 1948, the Maternity Benefit Act, 1961 and the Festival Holidays Act). The Kerala Co-operative Societies Act and Rules do not exclude the operation and applicability of the aforesaid labour laws to Co-operative Societies and the petitioner is bound to comply with the provisions of the said labour enactments.”

Background

The Petitioner is a Co-operative Hospital Society registered under the Kerala Co-operative Societies Act, 1969. The Society is providing medical treatment at reasonable rates and a ten per cent discount on the cost of medicines.

The Assistant Labour Commissioner issued an inspection note to the Society to assess its compliance with labour legislations including the Kerala Shops and Commercial Establishments Act, 1960, the Minimum Wages Act, 1948, the Maternity Benefit Act, 1961 and the Kerala Industrial Establishments (National and Festival Holidays) Act, 1958. Without considering the reply filed by the Society, another notice was issued directing the Society to furnish records concerning welfare labour legislations and proof for exemptions from the scope of those legislations. Aggrieved by the inspection note and subsequent order, the Co-operative Hospital Society approached the High Court.

The Society contended that the labour commissioner lacks jurisdiction to conduct inspection and stated that employees of the Society were covered under the Kerala Co-operative Societies Act and directives of the Registrar of Co-operative Societies. It was also argued that the Society was only bound by the Kerala Co-operative Societies Act and the jurisdiction of the authorities under labour laws was ousted. It was also argued that the 'Co-operative Society' listed under Entry 32 of the State List in Schedule VII comes under the jurisdiction of the State Government.

Court Findings

On the applicability of labour legislation to cooperative societies, the Court referred to Kanayannur Service Coop. Society Ltd. v. Sarakutty (1987) where it was held that authorities under the Payment of Wages Act had jurisdiction to decide the question of payment of wages of employees of Co-operative Societies notwithstanding the Kerala Co-operative Societies Act. Referring to Edathua Service Co-operative Bank Ltd v. Authority(1984), Sherthallai Taluk Co-op Land Mortgage Bank Ltd. v. Deputy Labour Commissioner (1990), it was held that Kerala Payment of Subsistence Allowance Act, 1972 will override Kerala Co-operative Societies Act.

In Kottayam Dist. Co-operative Hospital Society Ltd. v Regional Provident Fund Commissioner, Kottayam and Another (2014), the Court held that the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 being a central law has an overriding effect over Kerala Co-operative Societies Act. The Court also referred to Annamma K.A v. Secretary, Cochin Co- operative Society Ltd (2018) to state that both the Kerala Co-operative Societies Act and the Industrial Disputes Act provide concurrent jurisdictions for the resolution of disputes.

The Court held that Co-operative Societies were not exempted from the purview of the Kerala Shops and Commercial Establishments Act as per the decisions in Assistant Labour Officer v. Kadungallur Service Co- operative Bank Ltd (1980), Anandan v Assistant Labour Officer (2012). It said, “Thus, irrespective of the societal activity, be it commercial, industrial, trading or banking, every Cooperative Society fits within the wider definition of 'establishment' in Section 2 (4) of the Kerala Shops and Commercial Establishments Act which includes an establishment in which the persons employed are mainly engaged in office work”

The Court stated that Society was bound by provisions of the Minimum Wages Act, 1948 and private hospitals or co-operative societies were not given any exemptions.

Similarly, the Court held that the Maternity Benefits Act applies to all shops and establishments relying upon Noorul Islam Educational Trust v. Assistant Labour Officer and Another (2008), Centre for Professional and Advanced Studies, School of Medical Education v. Abhitha Karun and Ors. (2022). “The petitioner being a Society and a hospital would answer the definition of 'establishment' under the Maternity Benefits Act”, stated the Court. It also referred to a government notification dated 1972 whereby the Maternity Benefits Act was made applicable to establishments under the Kerala Shops and Commercial Establishments Act.

Similarly, the Court held that the Kerala Industrial Establishment (National and Festival Holidays) Act, 1958 enacted to provide national and festival holidays to industrial establishments applied to Co-operative Societies. It referred to a government notification of 2014 by which establishments under the Kerala Shops and Commercial Establishments Act would be governed under the Festivals Act.

Further, the court held that the Kerala Co-operative Societies Act, being a welfare legislation, does not automatically render other social security legislations inapplicable. It stated that social security legislation should be construed liberally and favourably to ensure that employees of Co-operative Societies also benefit from labour legislations.

The Court added that the Kerala Co-operative Societies Act and Rules do not exclude the applicability of other labour welfare legislations to the employees of the Co-operative Societies.

Accordingly, the writ petition was dismissed.

Counsel for Petitioner: Advocate A Rajeswari

Counsel for Respondents: Government Pleader Justin Jacob

Citation: 2024 LiveLaw Ker 268

Case Title: Cherplassery Co-Operative Hospital Ltd v State of Kerala

Case Number: WP(C) NO. 32291 OF 2014

Click here to read/download Judgment