1. Dispute regarding the status of promoted officers as workmen under the Industrial Disputes Act and the validity of imposed training and service conditions. (Para 1 , 2 , 4 )
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1965 Supreme(SC) 403
SUPREME COURT OF INDIA
P.B. Gajendragadkar, C.J.I., K.N. Wanchoo, M. Hidayatulla, V. Ramaswami, P. Satyanarayana Raju, JJ.
Syndicate Bank Limited - Appellant
Versus
Workmen - Respondent
Civil Appeal No. 312 of 1965
Decided On : 19-11-1965
Important Points
The status of a "workman" is determined by actual duties and salary, not designation. If a promoted officer continues to perform non-managerial duties and earns below the statutory limit, they remain a workman and cannot be forced to waive statutory protections as a condition for promotion.
Subject
Labour Law - Industrial Disputes
Act Referred
Headnote
(A) Industrial Disputes Act, 1947 - Section 2(s) - Definition of "workman" - Determination of status of officers - Nature of duties vs. designation - A person is a workman unless employed mainly in a managerial or administrative capacity, or in a supervisory capacity drawing wages exceeding Rs. 500 per month or exercising functions mainly of a managerial nature - Mere designation as an officer is not conclusive; the court must look to the actual nature of duties assigned to the person (Paras 7, 8, 9).
(B) Promotion and Conditions of Service - Imposition of condition that a workman must agree to be governed by employer rules and cease to be a workman upon promotion - If the promoted officer continues to be a "workman" based on the nature of duties and salary, such a condition is not justified (Paras 10, 11).
(C) Training and Probation - Imposition of a training period in addition to a probationary period upon promotion - Where a promoted officer continues to be a workman, a further period of training is not justified, although a reasonable period of probation remains permissible (Paras 12, 13).
Facts of the case:
An employer promoted employees to a specific officer rank subject to two conditions: a twelve-month training period as an officer-trainee and an agreement to be governed by the employer's rules, thereby ceasing to be workmen. The employees challenged these conditions, leading to a dispute over whether officers of that rank were "workmen" under the relevant industrial law.
Findings of Court:
The court found that officers of the rank in question, particularly those serving in specific clerical/supervisory roles and drawing wages up to Rs. 500 per month, were workmen. Since they did not perform mainly managerial or administrative functions, the employer was not justified in requiring them to waive their status as workmen for promotion. Additionally, while a reasonable probation period is acceptable, an additional twelve-month training period is unjustified for those who remain workmen.
Issues: Whether the employer was justified in requiring workmen to agree to be governed by internal rules as a condition for promotion to a specific officer rank, and whether a twelve-month training period in addition to probation was justified.
Ratio Decidendi: The status of an employee as a "workman" is determined by the actual nature of their duties and salary rather than their designation. If a promoted officer's duties remain supervisory or clerical and their salary is below the statutory threshold, they remain a "workman," and the employer cannot impose conditions that strip them of their statutory protections.
Result: Appeal partly allowed.
(B) Promotion and Conditions of Service - Imposition of condition that a workman must agree to be governed by employer rules and cease to be a workman upon promotion - If the promoted officer continues to be a "workman" based on the nature of duties and salary, such a condition is not justified (Paras 10, 11).
(C) Training and Probation - Imposition of a training period in addition to a probationary period upon promotion - Where a promoted officer continues to be a workman, a further period of training is not justified, although a reasonable period of probation remains permissible (Paras 12, 13).
Facts of the case:
An employer promoted employees to a specific officer rank subject to two conditions: a twelve-month training period as an officer-trainee and an agreement to be governed by the employer's rules, thereby ceasing to be workmen. The employees challenged these conditions, leading to a dispute over whether officers of that rank were "workmen" under the relevant industrial law.
Findings of Court:
The court found that officers of the rank in question, particularly those serving in specific clerical/supervisory roles and drawing wages up to Rs. 500 per month, were workmen. Since they did not perform mainly managerial or administrative functions, the employer was not justified in requiring them to waive their status as workmen for promotion. Additionally, while a reasonable probation period is acceptable, an additional twelve-month training period is unjustified for those who remain workmen.
Issues: Whether the employer was justified in requiring workmen to agree to be governed by internal rules as a condition for promotion to a specific officer rank, and whether a twelve-month training period in addition to probation was justified.
Ratio Decidendi: The status of an employee as a "workman" is determined by the actual nature of their duties and salary rather than their designation. If a promoted officer's duties remain supervisory or clerical and their salary is below the statutory threshold, they remain a "workman," and the employer cannot impose conditions that strip them of their statutory protections.
Result: Appeal partly allowed.
Legal Category Hierarchy
Advocates Appeared:
For the Appellant :M.C. Setalvad, Senior Advocate (Madan Mohan Kshtriya and R. Vasudev Pillai, Advocates.
For the Respondents:M.K. Ramamurthi, R.K. Garg and S.C. Agarwala, Advocates Ramamurthi and Co.
For the Appellant :M.C. Setalvad, Senior Advocate (Madan Mohan Kshtriya and R. Vasudev Pillai, Advocates.
For the Respondents:M.K. Ramamurthi, R.K. Garg and S.C. Agarwala, Advocates Ramamurthi and Co.
Table of Contents
2. Whether the status of officers was implicit in the reference and if the bank could mandate officer-specific rules and training for promoted workmen. (Para 5 , 6 )
3. Designation is not conclusive of status; the nature of duties determines whether an employee is mainly managerial or administrative, thus excluding them from being a workman. (Para 7 , 8 , 9 )
4. Status as a workman depends on actual duties—excluding those mainly in managerial/administrative roles or supervisors exceeding the statutory wage limit or exercising managerial functions. (Para 7 , 9 , 11 )
5. Appeal partly allowed; training is unjustified for those remaining workmen, but reasonable probation is permissible; bank rules apply only to non-workmen. (Para 11 , 12 , 13 , 14 )
6. How is the status of a workman determined when an employee holds an officer designation?
The mere designation is not conclusive. The court must look at the actual nature of the duties assigned to the person to decide if they are employed mainly in a managerial or administrative capacity. (Para 7 , 9 )
7. When is a supervisory employee excluded from the definition of a workman under the Industrial Disputes Act?
A person in a supervisory capacity is not a workman if they draw wages exceeding five hundred rupees per month or exercise functions mainly of a managerial nature by the nature of their duties or vested powers. (Para 7 )
8. Can an employer impose training and probation on a workman promoted to an officer rank who remains a workman?
A further period of training in addition to probation is unjustified for a promoted workman who continues to be a workman, although the employer may still impose a reasonable period of probation. (Para 12 , 13 )
9. Is the question of an employee's status as a workman implicit in a reference regarding the justification of service conditions?
Yes, because if the employees were assumed to be non-workmen, the employer would be justified in prescribing conditions of service and the matter would not be referable under the Act. (Para 6 )
JUDGMENT :
K.N. Wanchoo, J.
This is an appeal by special leave from the award of the Industrial Tribunal in Mysore at Bangalore. There was a dispute between the appellant Bank and its employees with respect to C rank officers which was referred by the Central Government to the Tribunal with reference to two matters. in these terms:
(1) Whether the Canara Industrial and Banking Syndicate Limited Udipi is justified in imposing the condition that only such of those workmen would be considered for appointment as officer-trainee and promotion to probationary C rank officers who agree to be governed by the rules of the bank applicable to such officers in respect to scale of pay and other conditions of service? If not, to what relief are such workmen entitled?
(2) Whether the bank is justified in imposing the condition of twelve months training as officer-trainee before appointment as C rank officer in addition to the probation prescribed after the appointment as a C rank officer? If not, to what relief are the workmen entitled?
It appears that after the award of the All-India Industrial Tribunal (Bank Disputes) Bombay (popularly known as the Sastry award), the appellant issued a circular on November 29, 1954. This became necessary in order to implement that award. Further in that award it was observed that though accountants in many banks might be officers there would be cases where incumbents of such posts, though going under the dignified designation of accountants were in reality only senior clerks doing higher type of clerical work Involving an element of supervision over other clerks as part of their duties. The award therefore provided that in such cases where accountants could properly be regarded as workmen a minimum allowance as fixed for sub-accountants would equally apply to them. Consequently when the appellant decided to implement the award it wrote letters to its accountants to enquire whether they would like to be considered as clerks or as officers It was also stated in the circular that the appellant considered the accountant to be an officer. It is not clear where exactly the post of C rank officer was created. But it appears that in June 1957 there was a dispute between the appellant and its workmen with respect to one Ranganath Pai, who was a probationary C rank officer and that dispute was settled in conciliation and Pai was reinstated in the bank's service.
2. On February 1, 1958, a circular was issued by the appellant announcing new scales of pay after merger of special pay. In this circular three kinds of officers were mentioned, namely, (i) A rank officers, (ii) B rank officers and (iii) C rank officers. The scale of pay of C rank officers as fixed in this circular was from Rs. 125 to Rs. 341 with a span of twentyfour years and various increments at various stages and an efficiency-bar. Dispute seems to have arisen between the appellant and its workmen on the question whether C rank officers were workmen or not, and an award was made by the Presiding Officer, Labour Court (Central), Ahmedabad with respect to one Rao who was then working as an accountant and drawing the pay of a C rank officer. The question raised was whether an accountant working as C rank officer was a workman or not, and the Labour Court decided on a consideration of the duties of Rao who was working as an accountant that even though Rao might be designated as a C rank officer, his duties showed that he was a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 14 of 1947, (hereinafter referred to as "the Act"). Rao was ordered to be restored to his grade as C rank officer and an accountant. This award seems to have become final as apparently no appeal was taken from it.
3. Then in April 1962 another circular was issued revising pay-scales of officers of A, B and C ranks. These scales consisted of consolidated pay including what was formerly basic pay and dearness allowance and for C rank officers the grade was fixed from Rs
