Designation Not Decisive: Supreme Court Clarifies Who Qualifies as ‘Workman’ Under Industrial Disputes Act

The Supreme Court of India has held that the mere incidental performance of supervisory work, or occasional manual or clerical duties by a supervisor, is not decisive in determining whether an employee is a “workman.” What matters is the dominant nature of the work or the main employment for which the employee is engaged, which alone decides whether a person falls within or outside the definition of “workman.”

A bench of Justices Prashant Kumar Mishra and N V Anjaria observed that in modern industrial organisations, employees are often required to perform a mix of duties. Employees of a particular category may be expected to carry out work that combines elements of supervision with clerical or manual tasks.

The court clarified that the correct test is a realistic assessment of the principal nature of work actually performed by the employee. Factors such as effective supervisory powers, independent exercise of authority, the power to issue commands, and control over subordinate staff are key indicators of a supervisory or managerial role.

However, the bench made it clear that the incidental presence of supervisory duties does not convert an employee into a supervisor. Even manual work may involve some level of supervision, but that alone cannot exclude an employee from the definition of a workman. What must be applied, the court said, is the acid test of the dominant nature of duties. A supervisor may perform clerical work related to his main job, but that does not change the primary character of the role.

Court further held that the designation or nomenclature given to an employee is not a guiding factor. What is relevant is the prominent and dominant nature of the work assigned by the employer and actually performed by the employee. The bench noted that designations are often crafted by management to suit its interests and to give posts high-sounding names such as manager, supervisor, or executive.

Emphasising this point, court said that when an employee, despite being so designated, substantially and essentially performs manual work without any supervisory authority, he cannot be treated as a supervisor. Such an employee would continue to fall within the definition of “workman” under Section 2(s) of the Industrial Disputes Act, since the essential nature of his duties is manual and non-supervisory, and he exercises no command over others.

The observations came while dealing with an appeal filed by Srinibas Goradia. The bench held that merely because the management described his post as “manager” in the front office, it would not automatically take him out of the category of workman, as he was not entrusted with any independent supervisory authority, except for duties incidental to manual work.

Goradia was appointed as a cashier in M/s Sai International Hotels Private Limited, Rayagada. After serving for about 12 to 13 years, his salary was abruptly stopped. He later received a letter dated November 9, 2018, informing him that his services stood terminated with effect from April 22, 2018, along with an offer of one month’s notice pay.

On his complaint, the Labour Court held that the dispute between the parties was an “industrial dispute” under Section 2(j) of the Industrial Disputes Act, that the hotel business was an “industry,” and that Goradia was a “workman” under Section 2(s) of the Act. The Labour Court also found that he had worked for more than 240 days in a year and was therefore in continuous service. Holding that his termination violated Section 25(F) of the Act, the Labour Court ordered his reinstatement with back wages.

The employer challenged this decision before the High Court, which set aside the Labour Court’s award dated April 16, 2022. The High Court took the view that Goradia was appointed as a manager or front office supervisor under the old management.

After examining the material on record, the Supreme Court found that Goradia was originally appointed as a cashier. While the management described him as a front office manager and even showed him as an executive on his identity card, the court held that these labels did not reflect the real nature of his duties. When the veil was lifted, it was evident that he did not perform any supervisory or authoritative work. The designation given to him, the bench said, was merely an eyewash.

Court noted that the evidence showed Goradia worked as a receptionist and handled hotel boys, but had no managerial or supervisory powers. He did not attend managerial meetings, had no authority to sanction leave, and did not supervise any person or department by virtue of independent authority.

Reiterating its position, the bench said that simply calling him a manager in the front office could not take him out of the definition of workman, as he was not entrusted with any real supervisory role, apart from duties incidental to manual work.

Applying the dominant nature test, court held that the principal duties assigned to Goradia and actually performed by him clearly conferred on him the status of a “workman” under Section 2(s) of the Industrial Disputes Act, 1947.

Finding that the High Court had committed a manifest error in holding otherwise, the Supreme Court restored and upheld the Labour Court’s award and directed compliance with its order within two weeks.

Case Title: Srinibas Goradia Vs Arvind Kumar Sahu & Ors

Bench: Justices Prashant Kumar Mishra and N V Anjaria