2022 Supreme(Del) 2176

IN THE HIGH COURT OF DELHI AT NEW DELHI
GAURANG KANTH, J.
Food Corporation Of India – Appellant
Versus
Govt.Of India & Ors. - Respondents
W.P.(C) 2084 of 1988
Decided on : 12-12-2022

Assistant Managers employed by the Food Corporation of India who are employed mainly in a managerial or administrative capacity and draw wages exceeding ten thousand rupees per mensem are not “workmen” within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, and are therefore not entitled to the benefits and protections available to workmen under the Act.

Headnote:

INDUSTRIAL DISPUTE - SELECTION GRADE - WORKMEN - MANAGERIAL CAPACITY - INDUSTRIAL DISPUTES ACT, 1947 - SECTION 2(S) - FOOD CORPORATION OF INDIA (STAFF) REGULATIONS, 1971 - CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL, NEW DELHI - WHETHER ASSISTANT MANAGERS ARE WORKMEN WITHIN THE MEANING OF SECTION 2(S) OF THE INDUSTRIAL DISPUTES ACT, 1947 - WHETHER THEY ARE ENTITLED TO SELECTION GRADE.

Fact of the Case:

The dispute arose out of a reference made by the Central Government to the Central Government Industrial Tribunal, New Delhi, under Section 10(1)(d) of the Industrial Disputes Act, 1947 (ID Act), for adjudication of four disputes between the Food Corporation of India (FCI) and its employees represented by the Food Corporation of India Employees' Union. The four disputes were: (i) payment of night allowance to Chowkidar and other staff employed at night; (ii) introduction of selection grade for Category II, III, and IV employees; (iii) payment of arrears of House Rent Allowance on revised scales from 01.11.1973; and (iv) restoration of pre-emergency godown norms. The Tribunal decided three out of the four disputes in favor of the employees, including the introduction of selection grade for Category II, III, and IV employees, and payment of arrears of House Rent Allowance on revised scales from 01.11.1973. The FCI challenged the Tribunal's award in the High Court of Delhi, which dismissed the petition. The FCI then appealed to the Division Bench of the High Court, which set aside the Single Judge's order and remanded the matter back to the High Court for fresh adjudication. The Supreme Court upheld the Division Bench's order and directed the FCI to pay a cost of Rs.50,000/- to the Union. During the pendency of the writ petition, the parties resolved most of the issues, leaving only the question of whether Assistant Managers could be treated as Workmen for the purposes of the ID Act and, if so, whether they were entitled to selection grade from 01.11.1971.

Finding of the Court:

The High Court held that Category II Assistant Managers were not “workmen” within the meaning of Section 2(s) of the ID Act and hence the Industrial Tribunal had no jurisdiction to issue any directions qua their service conditions. The Court found that the dominant nature of the work of the Category II Assistant Managers was managerial in nature and that the Tribunal had erred in its finding that “Assistant Manager Depot” was a workman. The Court also held that the Tribunal's direction for the grant of the selection grade to the Category-II employees of the FCI Management was liable to be set aside.

Issues: 1. Whether Assistant Managers are “workmen” within the meaning of Section 2(s) of the Industrial Disputes Act, 1947? 2. Whether Assistant Managers are entitled to selection grade from 01.11.1971?

Ratio Decidendi: 1. The definition of “workman” under Section 2(s) of the ID Act includes any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, but excludes persons who are employed mainly in a managerial or administrative capacity or who, being employed in a supervisory capacity, draw wages exceeding ten thousand rupees per mensem or exercise functions mainly of a managerial nature. 2. In determining whether an employee is a “workman” within the meaning of Section 2(s) of the ID Act, the Court must consider the primary and basic duties of the employee and whether those duties are managerial or administrative in nature. If the employee's duties are mainly managerial or administrative, then the employee is not a “workman”, even if the employee also performs some manual, unskilled, skilled, technical, operational, or clerical work. 3. In the present case, the Court found that the Category II Assistant Managers were employed mainly in a managerial or administrative capacity and that their duties were primarily managerial in nature. The Court also found that the Assistant Managers drew wages exceeding ten thousand rupees per mensem and exercised functions mainly of a managerial nature. Therefore, the Court held that the Assistant Managers were not “workmen” within the meaning of Section 2(s) of the ID Act and that the Tribunal had no jurisdiction to issue any directions qua their service conditions.

Final Decision: The High Court set aside the Tribunal's award insofar as it related to the grant of selection grade to the Category-II employees of the FCI Management. The Court also upheld the parties' settlement of the other disputes and set aside the Tribunal's directions that were inconsistent with the settlement.