2024 (10) TMI 1122 - SC - Indian Laws

Reinstatement of employees and paymnet of compensation in lieu of back wages - employee falls under the definition of workman as given in section 2(s) of the Industrial Disputes Act, 1947 or not - HELD THAT - It is pertinent to point 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 industry by bringing about the existence of harmony and cordial relationship between the parties. As per Section 2(s) of the I.D. Act, 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. In this legal backdrop, let us first examine, whether the employee falls within the definition of workman . During the course of examination, the employee deposed as W.W.1 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. According to M.W.1- Senior Manager of the management, the employee was an executive of the management and the management appointed two Junior Engineers and their works were being supervised by the said employee The law is well settled that the determinative factor for workman covered under section 2(s) of the I.D. Act, is the principal duties and functions performed by an employee in the establishment and not merely the designation of his post. 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 I.D. Act. In the present case, there is no specific document adduced relating to the actual work and functions performed by the employee. In the absence of any concrete material to demonstrate the nature of duties discharged by the employee, the employment orders issued by the management will have to be taken into consideration and as per the same, the employee was appointed as Junior Engineer and was promoted as Assistant Engineer, on the administrative side - the employee is not a workman as defined under section 2(s) and is not covered by the provisions of the I.D. Act. In view of the same, 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), is liable to be set aside. Grant of reinstatement of the employee in service and payment of compensation in lieu of back wages by the Labour Court - HELD THAT - There is no violation of procedure on the part of the management in terminating the services of the employee. The employee is not a workman as covered under section 2(s) and hence, the provisions of the I.D. Act do not apply to him. Resultantly, the contention of the learned senior counsel for the employee qua violation of section 25F coupled with sections 25G and 25H of the I.D. Act, ordering reinstatement with full back wages as normal rule, etc., cannot be countenanced. Though it is agreed with the principles laid down in the citations relied on by the learned counsel for the employee, they do not come to rescue the employee as the facts of the same are distinguishable. Thus, there are no 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 and hence, the same does not call for any interference. 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 I.D. Act set aside - 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, is affirmed - the Appeal filed by the employee stands dismissed and the Appeal filed by the management stands allowed.

Summary

Issues Involved:

1. Whether the employee qualifies as a "workman" under Section 2(s) of the Industrial Disputes Act, 1947.
2. Legality of the employee's termination and entitlement to reinstatement and compensation.

Issue-wise Detailed Analysis:

1. Qualification as a "Workman":

The primary issue was whether the employee fell within the definition of "workman" under Section 2(s) of the Industrial Disputes Act, 1947. The employee argued that he was a "workman" as he performed duties that did not fall into a managerial or supervisory category. The management contended that the employee was in a supervisory role, drawing a salary above the statutory limit for a "workman" at the time of termination, and thus did not qualify under the Act. The court noted that the determinative factor for being classified as a "workman" is the nature of duties performed, not the job title. The employee admitted to supervising two junior engineers, which aligned with the management's claim. The court concluded that the employee was not a "workman" as he performed supervisory duties and earned above the pre-amendment salary threshold of Rs.1,600/- per month at the time of termination. Therefore, the High Court's confirmation of the Labour Court's finding that the employee was a "workman" was set aside.

2. Legality of Termination and Entitlement to Reinstatement and Compensation:

The employee contended that his termination was illegal as it was done without following due process, and he sought reinstatement with back wages. The management argued that the termination was in accordance with the terms of employment, which allowed termination with one month's notice or salary in lieu thereof. The court found that the employee was terminated with one month's salary in lieu of notice, as per the employment contract, which the employee accepted and encashed. Therefore, there was no procedural violation in the termination process. Since the employee was not a "workman," the provisions of the Industrial Disputes Act did not apply, negating claims for reinstatement and back wages. The court upheld the High Court's decision to set aside the Labour Court's award of reinstatement and compensation, finding no illegality or infirmity in the High Court's order.

Conclusion:

The appeal filed by the employee was dismissed, and the appeal filed by the management was allowed. The court set aside the High Court's finding that the employee was a "workman" and affirmed the decision to overturn the Labour Court's award of reinstatement and compensation. There was no order as to costs, and any pending applications were disposed of.