Cooperative Societies Are Not Excluded From Applicability Of Labour Laws; Its Employees Are Entitled To Benefits Of Labour Legislations: Kerala HC

The Kerala High Court held that the Kerala Cooperative Societies Act and Rules do not exclude the operation and applicability of the labour laws to cooperative societies and its employees are entitled to the benefits of labour legislations.

The Court held thus in a writ petition filed by Cherplassery Co-operative Hospital Ltd., a cooperative hospital society registered under the provisions of the Kerala Co-operative Societies Act, 1969.

A Single Bench of Justice Murali Purushothaman observed, “The employees of the Co-operative Societies are entitled to the benefits of the said labour legislations. 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.”

The question to be considered before the Bench was whether the provisions of the Kerala Industrial Establishment (National and Festival Holidays) Act, 1958 (Festival Holidays Act) would apply to the petitioner Co-operative Society.

The Festival Holidays Act has been enacted to provide for the grant of national and festival holidays to persons employed in industrial establishments in the Kerala State.

Advocate A. Rajeswari represented the petitioner while Government Pleader Justin Jacob represented the respondents.

Facts of the Case -

The petitioner society had an approved staff strength of 29 and 19 permanent employees and 44 employees were engaged on a contract basis. The society was providing medical treatment at reasonable rates to patients apart from providing 10% discount on the cost of medicines. The Assistant Labour Officer (ALO) conducted an inspection in the society regarding compliance of the provisions of the 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, and issued an inspection note.

The petitioner submitted reply stating that its employees are covered under the provisions of the Kerala Cooperative Societies Act and the ALO has no jurisdiction to conduct inspection or issue directions. Therefore, the petitioner filed the petition to quash the inspection notes and declare that it was bound to comply only with the provisions of Kerala Cooperative Societies Act, Rules, and instruction issued thereunder in respect of its employees and to direct ALO not to take any coercive action.

The High Court after hearing the contentions of the counsel noted, “No doubt, the Co-operative Societies Act deals with the conditions of service of the employees of the Society like creation of posts, qualification for appointment, method of appointment, payment of salary, promotion, retirement, etc. However, the provisions of the Kerala Shops and Commercial Establishments Act, 1960, the Minimum Wages Act, 1948, the Maternity Benefit Act, 1961 and the Festival Holidays Act, deal with enforcement and inspection of various welfare and social security measures for employees which are not essentially covered by the provisions of the Kerala Co-operative Societies Act and Rules.”

The Court added that all these enactments operate in different fields with different purposes and objectives, although there may be incidental trenching.

“The fact that the conditions of service of employees of Co-operative Societies are governed by the Co-operative Societies Act, will not make the provisions of the aforesaid labour legislations inapplicable to Co-operative Societies. Undoubtedly, the Kerala Co-operative Societies Act is a welfare legislation. 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 are social security legislations”, it said.

The Court further noted that as per the settled law, when social security legislations are being interpreted, it always has to be interpreted liberally with a beneficial interpretation.

Accordingly, the High Court dismissed the writ petition.

Cause Title- Cherplassery Co-operative Hospital Ltd. v. State of Kerala (Neutral Citation: 2024:KER:31367)

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