1. Employee working as branch manager challenged dismissal order in an industrial dispute proceeding after allegations of negligence involving counterfeit currency were raised during their service period. (Para 1 , 2 )
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2026 Supreme(Online)(Ker) 68060
IN THE HIGH COURT OF KERALA AT ERNAKULAM
Shoba Annamma Eapen, J
Devendran S. – Appellant
Versus
Managing Director, Muthoot Finance Limited – Respondent
WP(C) NO. 38245 OF 2018
Important Points
The Labour Court lacks jurisdiction to adjudicate a dispute on its merits once it is determined that the employee does not fall within the definition of 'workman' under Section 2(s) of the Industrial Disputes Act, 1947; any such decision is a nullity.
Subject
Labour Law - Industrial Disputes
Act Referred
Headnote
(A) Industrial Disputes Act, 1947 - Section 2(s) - Definition of 'workman' - Employee appointed as Branch Manager with subordinates including Cashier, Accountant, and Assistant Manager - Dominant nature of duties is managerial and administrative - Such person falls outside the definition of 'workman' under Section 2(s) (Paras 8 and 9).
(B) Jurisdiction of Labour Court - Once the Labour Court finds that a petitioner is not a 'workman' within the meaning of the Industrial Disputes Act, its jurisdiction is ousted - Adjudicating the matter on merits after such finding renders the order a nullity (Para 10).
Facts of the case:
The petitioner, who served as a Branch Manager, was dismissed from service by the first respondent after an incident involving counterfeit currency notes. He challenged the dismissal before the Labour Court, Kollam. The Labour Court held that the petitioner did not qualify as a 'workman' under the Industrial Disputes Act but proceeded to decide the case on its merits, upholding the dismissal. The petitioner then approached the High Court via a writ petition challenging the award.
Findings of Court:
The court found that the petitioner, acting as a Branch Manager with other staff under him, was employed in a managerial capacity and therefore did not fall under the definition of 'workman' as per Section 2(s) of the Industrial Disputes Act. Consequently, the Labour Court lacked the jurisdiction to decide the case on merits after determining the petitioner's status.
Issues: Whether the petitioner was a 'workman' under Section 2(s) of the Industrial Disputes Act and whether the Labour Court had the jurisdiction to rule on the merits of the case after finding the petitioner was not a workman.
Ratio Decidendi: The court ruled that the dominant nature of the work determines the status of a 'workman'; since the petitioner was a Branch Manager, he was excluded from the Act. Furthermore, any order passed by a court without jurisdiction is a nullity.
Result: Impugned award set aside insofar as it relates to findings on merits, except for the finding that the petitioner is not a workman.
(B) Jurisdiction of Labour Court - Once the Labour Court finds that a petitioner is not a 'workman' within the meaning of the Industrial Disputes Act, its jurisdiction is ousted - Adjudicating the matter on merits after such finding renders the order a nullity (Para 10).
Facts of the case:
The petitioner, who served as a Branch Manager, was dismissed from service by the first respondent after an incident involving counterfeit currency notes. He challenged the dismissal before the Labour Court, Kollam. The Labour Court held that the petitioner did not qualify as a 'workman' under the Industrial Disputes Act but proceeded to decide the case on its merits, upholding the dismissal. The petitioner then approached the High Court via a writ petition challenging the award.
Findings of Court:
The court found that the petitioner, acting as a Branch Manager with other staff under him, was employed in a managerial capacity and therefore did not fall under the definition of 'workman' as per Section 2(s) of the Industrial Disputes Act. Consequently, the Labour Court lacked the jurisdiction to decide the case on merits after determining the petitioner's status.
Issues: Whether the petitioner was a 'workman' under Section 2(s) of the Industrial Disputes Act and whether the Labour Court had the jurisdiction to rule on the merits of the case after finding the petitioner was not a workman.
Ratio Decidendi: The court ruled that the dominant nature of the work determines the status of a 'workman'; since the petitioner was a Branch Manager, he was excluded from the Act. Furthermore, any order passed by a court without jurisdiction is a nullity.
Result: Impugned award set aside insofar as it relates to findings on merits, except for the finding that the petitioner is not a workman.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: Gopakumar R. Thaliyal, M.S. Vijayachandra Ababu
For the Respondents: M. Gopi Krishnan Nambiar, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham, E.K. Nandakumar (Sr.)
For the Appellants/Petitioners: Gopakumar R. Thaliyal, M.S. Vijayachandra Ababu
For the Respondents: M. Gopi Krishnan Nambiar, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham, E.K. Nandakumar (Sr.)
Table of Contents
2. Management argued petitioner was not a workman due to their managerial capacity; employee contended they performed clerical duties and claimed violation of principles of natural justice. (Para 3 , 6 , 7 )
3. The court observed that branch managers performing managerial or supervisory functions with powers to delegate or supervise do not fall within the definition of a workman. (Para 8 , 9 )
4. Once a Labour Court determines that an individual is not a workman under the applicable statute, it lacks jurisdiction to adjudicate the merits of the dispute. (Para 10 )
5. The High Court set aside the Labour Court's findings on the merits of the case while affirming the finding on the status of the petitioner as not being a workman. (Para 10 )
6. Does a Branch Manager in an establishment qualify as a workman under the Industrial Disputes Act?
No. A person employed mainly in a managerial, administrative, or high-level supervisory capacity does not fall within the definition of a workman under Section 2(s) of the Industrial Disputes Act. (Para 8 , 9 )
7. Can a Labour Court decide the merits of a dispute after concluding the claimant is not a workman?
No. When a Labour Court finds that the claimant is not a workman, its jurisdiction to adjudicate the dispute is ousted; any further findings on the merits are considered null and void. (Para 10 )
8. Who bears the burden of proving that an employee meets the definition of a workman?
The onus of proving that an employee performs duties qualifying them as a workman under the Industrial Disputes Act rests upon the person claiming that status. (Para 8 )
JUDGMENT
This writ petition has been filed by the employee of the first respondent, challenging the impugned award dated 31.05.2018 in ID No. 34 of 2013 passed by the Labour Court, Kollam, refusing to interfere with his dismissal from service.
2. The petitioner entered the service of the first respondent in 1998 as a Clerk. During his service, he held various positions, including Accountant and Assistant Manager, at different branches. In 2008, he was promoted and posted as Branch Manager in Poovar branch and continued there for 3½ years. During this period, the said branch got two awards; viz., state level no.1 in gold loans during 2010-2011 and district performance records up to 2011. The total business during this period was around 17.05 Crores. According to him, he acted as a clerk in executing the orders and directions of the management and had no control over the administration or decision- making in business transactions. Thereafter, he was transferred to Nellimoodu branch on 02.07.2011 as Branch Manager. While so, one Sri.Viji introduced one Sri.Girish, a financier, as regular and prompt customer having a gold loan outstanding of ₹40,00,000/-. On 28.07.2011, Sri.Girish V.K. came to the branch for releasing gold after remitting ₹50,000/-. The petitioner released the gold on being satisfied that there were hundred notes of ₹500/- denominations. However, it was later found that the bundle containing 500 notes were counterfeit notes. Immediately, an FIR was lodged before the Judicial First Class Magistrate Court, Neyyattinkara, incorporating the petitioner as the fourth accused. On 25.08.2011, he was suspended from service. Thereafter, he submitted a detailed explanation dated 05.09.2011, requesting to reinstate him in service. However, on 30.03.2012, as per Ext.P3 order, he was dismissed from service alleging that the disciplinary authority informed that it is not fair to retain the petitioner in the company. According to the petitioner, there was violation of principles of natural justice in dismissing him from service after having completed 14 years of service in the establishment. Therefore, he approached the Conciliation Officer as per letter dated 30.07.2012 to resolve the dispute and since the matter was not settled, he raised an industrial dispute, which was taken up by the Labour Court, Kollam, as ID No.34 of 2013. In ID No. 34 of 2013, he sought to set aside the order of dismissal from service issued by the first respondent management and to direct the first respondent management to reinstate him in service with continuity of service, back wages and all attendant benefits.
3. The first respondent management filed a written statement, mainly contending that the petition was not maintainable, as the petitioner did not fall within the definition of “workman” under the Industrial Disputes Act (for short, “the ID Act”). It was further contended that the petitioner had admitted that he was a manager of the management and the question of maintainability has to be decided first. According to the first respondent management, the Branch Manager concerned oversees the entire day-to-day administration of the branch and is empowered to take decisions at the branch level. The Branch Manager is solely responsible for the functioning of the branch, exercises control over the staff and makes decisions relating to gold loans and other business activities of the branch, subject to the policy decisions of the corporate-level management. It was also contended that the Zonal Office, Regional Office and other corporate offices are having their own functions and charges at respective levels; and the Branch Manager is responsible to ensure and ascertain that money loaded into strong room vaults should not contain counterfeit notes. It was also pointed out that a fake note detector was provided in the branch; and the cashier, who received the hundred notes of ₹500/- denomination, raised a suspicion over the notes as the notes were slightly t
