1. Employment termination dispute — Determination of status as workman under Section 2(s), Industrial Disputes Act, 1947 — Challenge to termination based on contractual notice period. (Para 2 , 4 )
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2024 Supreme(SC) 955
SUPREME COURT OF INDIA
PANKAJ MITHAL, R. MAHADEVAN, JJ.
Lenin Kumar Ray – Appellant
Versus
M/s. Express Publications (Madurai) Ltd. – Respondent
Civil Appeal No. 11709 of 2024 (Arising Out of SLP (C) No. 5660 of 2023)
WITH
The Management, M/s. Express Publications (Madurai) Ltd. – Appellant
Versus
Lenin Kumar Ray – Respondent
Civil Appeal No. 11710 of 2024 (Arising Out of SLP (C) No. 12876 of 2024)
Decided On : 21-10-2024
Advocates appeared:
For the Petitioner(s): Mr. Fidel Sebastian, Adv. Ms. Anupradha Singh, Adv. Mr. Rishi Nandy, Adv. Mr. Shakti Vardhan, Adv. Ms. Amiy Shukla, AOR Ms. Sheena Taqui, Adv. Ms. Akansaha Saini, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR
For the Respondent(s): Ms. Sheena Taqui, Adv. Ms. Akansha Saini, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR Mr. Sanjoy Ghose, Sr. Adv. Mr. Fidel Sebastian, Adv. Mr. Zulfiker Ali P. S, AOR Mr. Rishi Nandy, Adv. Mr. Mohit Garg, Adv.
For the Petitioner(s): Mr. Fidel Sebastian, Adv. Ms. Anupradha Singh, Adv. Mr. Rishi Nandy, Adv. Mr. Shakti Vardhan, Adv. Ms. Amiy Shukla, AOR Ms. Sheena Taqui, Adv. Ms. Akansaha Saini, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR
For the Respondent(s): Ms. Sheena Taqui, Adv. Ms. Akansha Saini, Adv. Mr. Shiv Vinayak Gupta, Adv. Mrs. Bina Gupta, AOR Mr. Sanjoy Ghose, Sr. Adv. Mr. Fidel Sebastian, Adv. Mr. Zulfiker Ali P. S, AOR Mr. Rishi Nandy, Adv. Mr. Mohit Garg, Adv.
The court established that the classification of an employee as a 'workman' depends on the nature of their duties rather than their job title or designation.
Headnote:
Employment - Workman - Industrial Disputes Act, 1947 - Section 2(s) - The court interpreted the definition of 'workman' under the I.D. Act, emphasizing the nature of duties over designation, leading to the conclusion that the employee did not qualify as a 'workman' due to his supervisory role and salary exceeding the threshold.
Fact of the Case:
The employee, initially appointed as Junior Engineer, was terminated without proper procedure. The Labour Court ruled in his favor, but the High Court partially overturned this, leading to appeals from both parties.
Finding of the Court:
The court found that the employee's role was supervisory and his salary exceeded the threshold for 'workman' status under the I.D. Act, thus he was not entitled to reinstatement or back wages.
Issues: Whether the employee qualifies as a 'workman' under section 2(s) of the I.D. Act and if the termination was lawful.
Ratio Decidendi: The definition of 'workman' hinges on the nature of duties performed, not merely on job title, and the employee's supervisory role disqualified him from this status.
Result: The appeal by the employee is dismissed, and the appeal by the management is allowed.
Legal Category Hierarchy
Table of Contents
2. Employee claims workman status and illegal termination — Management contends supervisory role and salary exceeding statutory limits preclude workman status. (Para 5 , 6 , 7 , 8 )
3. Employee's admission of supervising juniors and salary exceeding the pre-amendment threshold excludes him from workman status; termination complied with contractual notice requirements. (Para 12 , 14 , 16 , 17 )
4. Workman status under Section 2(s), Industrial Disputes Act, 1947, depends on principal duties and salary thresholds, not designation; contractual termination via salary in lieu of notice is valid. (Para 11 , 15 )
5. Appeal by employee dismissed and appeal by management allowed — Finding of workman status set aside and award for reinstatement and compensation vacated. (Para 18 , 19 )
6. How is workman status determined under Section 2(s) of the Industrial Disputes Act, 1947?
Workman status is determined by the principal nature of duties and functions performed by the employee rather than the designation of the post. The onus of proving the nature of employment rests on the person claiming to be a workman. (Para 11 , 15 , 16 )
7. Does supervising other employees automatically exclude a person from being a workman?
Not automatically, but if an employee is employed in a supervisory capacity and draws wages exceeding the statutory limit—Rs. 1,600 per month before the 2010 amendment or Rs. 10,000 after—they are excluded from the definition of a workman. (Para 11 , 16 )
8. Is termination of service valid if one month's salary is paid in lieu of notice as per the employment contract?
Yes, if the appointment letter provides for termination via notice or salary in lieu thereof, and the management complies with this provision, there is no procedural violation of law in terminating the services. (Para 13 , 17 )
JUDGMENT :
R. MAHADEVAN, J.
1. Leave granted.
2. These two appeals arise from an order dated 04.04.2022 passed by the High Court of Orissa at Cuttack1 [Hereinafter shortly referred to as “the High Court”] in Writ Petition (Civil) No. 2083 of 2011, whereby, the High Court partly allowed the said writ petition filed by M/s. Express Publications (Madurai) Ltd.2 [For short “the management”] challenging the award dated 22.09.2010 passed by the Labour Court, Bhubaneswar3 [Hereinafter shortly referred to as “the Labour Court”] in I.D. Case No. 27 of 2007. By the impugned order, the High Court set aside the award of the Labour Court to the extent that the employee is to be reinstated and to be paid compensation of Rs.75,000/- in lieu of back wages, while upholding the finding of the Labour Court that the employee falls under the definition of “workman” as given in section 2(s) of the Industrial Disputes Act, 1947.4 [For short “the I.D. Act”]
3. Feeling aggrieved and being dissatisfied with the respective portion of the impugned order of the High Court, both the parties have preferred the instant appeals.
4. A few facts which are necessary for disposal of both the appeals, are as follows: The management is 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)5 [For short “E&C”] by the management on 07.06.1997 and was subsequently, confirmed in the said post on 13.07.1998. He was thereafter promoted to the post of Assistant Engineer (E&C) with effect from 01.05.2000 and was regularised in the said post with effect from 01.05.2001. While so, he was relieved from service on 08.10.2003, by paying a sum of Rs.6,995.65 towards one month salary in lieu of notice. Aggrieved by the same, he approached the Labour authorities, who referred the matter for conciliation. After failure of the conciliation and based on the opinion of the appropriate authority that an industrial dispute exists between the parties, a reference was made, which culminated in I.D. Case No. 27 of 2007, in which, the Labour Court passed an award on 22.09.2010, reinstating the employee in service along with compensation of Rs.75,000/- in lieu of back wages, after having held that the employee was a “workman” in terms of section 2(s) of the I.D. Act. Challenging the same, the management filed the aforesaid writ petition, which was partly allowed by the High Court, in the terms as already stated in paragraph 2 supra. Therefore, the present Civil Appeals by both the parties.
5. The learned senior counsel appearing for the employee contended that the employee falls within the ambit of “workman” as per section 2(s) of the Act; he was terminated by the management without any reason; he was not given any opportunity before such termination nor there was any contract of service that his services will be terminated on 08.10.2003 and thus, there was a clear violation of provision of law in terminating the services of the employee. Taking note of the same, the Labour Court rightly passed the award in setting aside such illegal termination and directing the management to reinstate the employee in service. Without properly appreciating the same, the High Court set aside the part of the award viz. direction to the management to reinstate the employee in service with payment of lumpsum compensation in lieu of back wages, by the order impugned herein, which will have to be set aside.
6. Drawing our attention to the judgments of this Court compiled in the form of typed set of papers, the learned senior counsel for the employee made the following submissions:
(i) In Industrial Law, interpreted and applied in the perspective of Part IV of the Constitution, the benefit of reasonable doubt on law and facts, if there be such doubt, must go to the weaker section, Labour. [K.C.P. Employees Association v. K.C.P. Ltd., (1978) 2 SCC 42]
