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Synopsis

The Supreme Court recently emphasised that the determinative factor for “workman” covered under section 2(s) of the Industrial Disputes Act, is the principal duties and functions performed by an employee in the establishment and not merely the designation of his post. 

The apex court also underscored that further, the onus of proving the nature of employment rests on the person claiming to be a “workman” within the definition of section 2(s) of the ID Act. 

A bench of Justices Pankaj Mithal and R Mahadevan dismissed an appeal filed by one Lenin Kumar Ray against the Orissa High Court's judgment of April 4, 2022 which partly allowed a writ petition filed by M/s Express Publications (Madurai) Ltd challenging the award of September 22, 2010 passed by the Labour Court, Bhubaneswar.

The High Court had set aside the award of the Labour Court’s award regarding the employee’s reinstatement and compensation of Rs 75,000 in lieu of back wages. However, it upheld the Labour Court’s finding that the employee qualified as a "workman" under the definition in Section 2(s) of the Industrial Disputes Act, 1947. Both parties preferred appeals. 

The company was a newspaper establishment publishing a daily newspaper in English viz, New Indian Express having its publication unit at Bhubaneswar.

The employee was initially appointed as Junior Engineer (Electronics and Communication) by the company management on June 07, 1997 and was subsequently, confirmed in the said post on July 13, 1998. He was thereafter promoted to the post of Assistant Engineer (E&C) with effect from May 01, 2000 and was regularised in the said post with effect from May 01, 2001. He was, however, relieved from service on October 08, 2003, by paying a sum of Rs 6,995.65 towards one month salary in lieu of notice. 

After hearing the counsel for both sides, the bench pointed out that the Industrial Disputes Act, 1947, was enacted by the legislature to settle the industrial disputes. It was brought with the object to ensure social justice to both the employers and employees and advance the progress of the industry by bringing about the existence of harmony and cordial relationship between the parties, it noted. 

As per Section 2(s) of the ID Act, the bench noted a person to be qualified as a “workman” has to do any work of manual, unskilled, skilled, technical, operational, clerical or supervisory in nature. "But, the latter part of the section excludes four classes of employees including a person employed in a supervisory capacity drawing wages exceeding Rs 10,000 after amendment (Rs 1,600 before amendment) per month or exercises functions mainly of a managerial nature," the bench said.

In the case, the employee claimed that he came within the meaning of “workman” as given in section 2(s) of the ID Act and the management without following the legal procedure, relieved him from service abruptly and hence, the same was illegal termination. 

The management, on the other hand, claimed the nature of the duties and functions performed by the employee was in the supervisory capacity and he was drawing a salary of above Rs 1,600 and therefore, he did not belong to the category of “workman”. 

The bench noted that the employee was appointed as Junior Engineer with effect from June 07, 1997 under Group 3 (Admn) with a salary of Rs 4761.75 per month. He was promoted as Assistant Engineer with effect from May 01, 2000 and his revised salary was Rs 6008.79 per month. 

During the course of examination, the employee deposed that he was not an executive cadre employee and there were senior officers to supervise and control his work. But, in the cross-examination, he asserted that he was supervising the work of two juniors who were working under him. 

"Even according to the employee, the nature of duties and functions discharged by him was of supervisory. As such, applying the pre-amended provision of section 2(s), since the employee was terminated from service on October 08, 2003 and was drawing salary of more than Rs 1,600, he does not come within the definition of “workman”. Therefore, we hold that the employee is not a “workman” as defined under section 2(s) and is not covered by the provisions of the ID Act," the bench said.

The court thus set aside the order of the High Court upholding the finding of the Labour Court that the employee was a “workman” within the definition of post-amended section 2(s).

With regard to the grant of reinstatement of the employee in service and payment of compensation in lieu of back wages by the Labour Court, the court held that in terms of clause 14 of the appointment letter, the employee was required to be paid one month salary in lieu of notice. 

In this case, he was given one month's salary in lieu of notice and he accepted the cheque without objection, the court found.

"Hence, there is no violation of procedure on the part of the management in terminating the services of the employee. As already held, the employee is not a “workman” as covered under section 2(s) and hence, the provisions of the ID Act do not apply to him. Resultantly, the contention of the employee qua violation of section 25F coupled with sections 25G and 25H of the ID Act, ordering reinstatement with full back wages as normal rule, etc, cannot be countenanced by us," the bench said.

Thus, the bench did not find any infirmity or illegality in the order of the High Court setting aside the award of the Labour Court which directed reinstatement of the employee along with payment of compensation in lieu of back wages.

"We set aside the order of the High Court confirming the finding of the Labour Court to the extent that the employee was a “workman” within the meaning of section 2(s) of the ID Act; and we affirm the same, insofar as setting aside the award of the Labour Court to reinstate the employee in service and pay compensation of Rs 75,000 in lieu of back wages," the bench said, allowing the appeal of the management.

Case Title: The management, M/s. Express Publications (Madurai) Ltd. vs. Lenin Kumar Ray and connected matter