1. Employee’s services terminated by notice — Industrial dispute raised over validity of termination — Status as workman under Section 2(s), Industrial Disputes Act. (Para 1 , 2 )
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2000 Supreme(SC) 1690
SUPREME COURT OF INDIA
B.N.Kirpal : Brijesh Kumar : U.C.Banerjee
Birla Corporation Limited
Versus
Rajeshwar Mahato
Case No. : 4482 of 1998
Date of Decision : 10/31/00
Under Section 2(s) of the Industrial Disputes Act, 1947, an employee employed mainly in a managerial or administrative capacity is not a 'workman', regardless of whether their wages are below the threshold prescribed for employees in a supervisory capacity.
Headnote:(A) Industrial Disputes Act, 1947 - Section 2(s) - Definition of "workman" - Person employed mainly in a managerial or administrative capacity - Exclusion from definition - If a person is employed mainly in a managerial or administrative capacity, they are not regarded as a "workman" under Section 2(s)(iii) - The wage limit prescribed for persons in a supervisory capacity under Section 2(s)(iv) is distinct from the exclusion based on managerial or administrative functions - If the Tribunal arrives at a finding that the functions performed were mainly of a managerial or administrative nature, such finding cannot be ignored solely because the employee's wages are below the statutory threshold for supervisory staff. (Paras 9, 10, 11 and 12)
(B) Writ Jurisdiction - Scope of interference - High Court cannot set aside the finding of a Tribunal regarding the nature of an employee's duties unless such finding is frivolous or without evidence - Ignoring the basis of the Tribunal's decision regarding the functional nature of the role and focusing only on wage limits constitutes an error in law. (Para 12)
Facts of the case:
The services of an employee were terminated. A dispute arose regarding the validity of the termination, focusing on whether the employee qualified as a "workman". The Tribunal, after evaluating evidence, found that the employee's duties were mainly managerial and administrative in nature and thus he was not a "workman". The High Court set aside this finding, ruling that since the employee's salary was below the limit prescribed by a State amendment for supervisory staff, he should be regarded as a "workman", without addressing the finding regarding his managerial duties.
Findings of Court:
The High Court erred by overlooking the specific finding of the Tribunal that the respondent worked in a managerial or administrative capacity. The wage limit under Section 2(s)(iv) applies to supervisory staff, but does not override the exclusion of those employed mainly in a managerial or administrative capacity under Section 2(s)(iii).
Issues: Whether an employee found to be functioning mainly in a managerial or administrative capacity can be classified as a "workman" on the basis of drawing wages below the threshold set for supervisory employees.
Ratio Decidendi: Under Section 2(s) of the Industrial Disputes Act, the exclusion of a person from the definition of "workman" depends on whether they are employed mainly in a managerial or administrative capacity. This is a separate criterion from the wage-based exclusion for those in a supervisory capacity. A finding by the Tribunal that an employee's role is primarily managerial or administrative precludes them from being a "workman", regardless of their salary.
Result: Decision of the High Court set aside and the writ petition dismissed.
Legal Category Hierarchy
- labour and industrial law
- statutory interpretation
- practice and procedure
Table of Contents
2. Employer: Respondent was not a workman, being in supervisory/managerial role. Employee: Claimed workman status to challenge termination. (Para 3 , 4 )
3. Tribunal’s unchallenged finding that employee worked mainly in managerial/administrative capacity excludes workman status per Section 2(s)(iii). (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 )
4. Under Section 2(s)(iii), an employee employed mainly in managerial/administrative capacity is not a workman, regardless of wage threshold. (Para 9 , 10 , 11 , 12 )
5. High Court’s order set aside; writ petition dismissed. Employer’s ex-gratia payment offer of rupees two lakhs to be honoured. (Para 12 , 13 , 14 )
6. Who is excluded from the definition of ‘workman’ under Section 2(s)(iii) of the Industrial Disputes Act, 1947?
Any person employed mainly in a managerial or administrative capacity is excluded from the definition of ‘workman’ under Section 2(s)(iii). (Para 9 , 10 , 11 )
7. Can a State amendment raising the wage threshold for supervisory employees affect the finding of workman status based on managerial capacity?
No. The wage threshold amendment applies only to sub-clause (iv) for supervisory staff; it does not alter the exclusion under sub-clause (iii) for managerial/administrative employees. (Para 10 , 12 )
8. What is the effect of a tribunal’s unchallenged finding on the nature of an employee’s duties in judicial review?
Unless the finding is perverse or based on no evidence, the High Court cannot set aside the tribunal’s award by ignoring that finding and relying solely on other grounds. (Para 7 , 8 , 12 )
JUDGMENT
B.N.KIRPAL, J.
(1) THE respondent No. I was an employee of the appellant Corporation. By notice dated 1/9/1985, respondent No. 1s services were terminated by giving him one months notice.
(2) INDUSTRIAL dispute was raised and the two questions which were adjudicated by the Tribunal were: (1) Whether termination of services of the respondent was valid? and (2) What relief was he entitled to?
(3) IT was contended by the appellant before the Tribunal that respondent No. 1 was not workman within the meaning of that expression occurring in Section 2(s) of the Industrial Disputes Act, 1947. The case of the appellant was that respondent No. 1 was in charge of one of three shifts of the work in the mill.
(4) IT was not in dispute that at the time of the termination of services of respondent No. 1 he was receiving Rs. 1185.00 per month by way of salary. The Tribunal recorded the evidence as well as took into consideration documentary evidence which were produced by the parties. On the basis of the evidence which was adduced before it, the Tribunal observed that:
"THE main duties of shri Rajeshwar Mahato were both supervisory and administrative in nature. In the instant case Shri Mahatos functions were mainly of a managerial nature. He had; control as well as supervision over the work of the jute mill workers working under him."
(5) THE Tribunal then referred to the evidence both oral and documentary. It dealt4 with the evidence of the O. P. W. 1 Jawahar Dubey and also with Exhibits G and G/I and observed that the said evidence and the Exhibit show that the respondent was a Preparing Assistant. While stating that the Tribunal would not go merely on the basis of the designation attached to an employee, and it was concerned with finding out as to what were the main duties performed by him, the Tribunal then referred to the evidence of the respondent himself as well as the other evidence and first observed that the respondent was really a supervisory staff and then ultimately it came to the conclusion that:
"FROM the above, it is clear that Shri Rajeshwar Mahato functioned in a managerial or administrative capacity also. In the light of the above discussion I hold that Shri Rajeshwar Mahato was not a workman. This point is decided accordingly."
(6) HAVING come to the aforesaid conclusion the Tribunal held that the Government Order of Reference was not maintainable in law.
(7) THE decision of the Tribunal was challenged by respondent No. 1 by filing a petition under Article 226 of the Constitution before the High Court. The single Judge of the High Court referred to the definition of the word "workman" according to Section 2(s) of the Industrial Disputes Act, 1947. It also took note of the fact that the said definition had been amended and in place of Rs. 500.00 the figure of rs. 1600.00 had been substituted in relation to persons working in the supervisory capacity. This amendment was a State Amendment and the single Judge held that the State amendment would be applicable and as the respondent was drawing less than Rs. 1600.00 per month he had to be regarded as workman.
(8) THE single Judge did not make any observation with regard to the finding of the Tribunal to the effect that the respondent was mainly working in a managerial or administrative capacity. In appeal, the Division Bench also, while upholding the decision of the single Judge did not make any observation with regard to the basis of the decision of the Tribunal, namely, that the respondent was not a workman inasmuch as he was mainly carrying on the duties which were administrative or managerial in nature.
(9) SECTION 2(s) of the Industrial Disputes Act reads as under:
"(S) workman means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be e
