Case Law Details
Lenin Kumar Ray Vs Express Publications (Madurai) LTD (Supreme Court of India)
Supreme Court of India recently addressed the complexities surrounding employment status in the context of the Industrial Disputes Act (I.D. Act) in the case of Lenin Kumar Ray Vs Express Publications (Madurai) Ltd. The court’s decision highlights the onus of proof resting on the individual claiming the status of a “workman” under Section 2(s) of the I.D. Act, following appeals from a previous order by the High Court of Orissa.
The background of this case revolves around an appeal against a High Court decision dated April 4, 2022, which partly upheld a Labour Court award from September 22, 2010. The Labour Court had directed the reinstatement of Ray, an employee of Express Publications, and awarded him compensation for back wages after determining that he qualified as a “workman” under the I.D. Act. However, the High Court modified the award, particularly denying reinstatement and reducing the compensation to ₹75,000.
Factual Background
Lenin Kumar Ray joined Express Publications on June 7, 1997, as a Junior Engineer in Electronics and Communication. Over time, he was promoted to Assistant Engineer, a position confirmed by management in 2001. Ray’s employment ended on October 8, 2003, when he was relieved after receiving one month’s salary in lieu of notice. This termination prompted Ray to seek recourse through the Labour Court, which ruled in his favor, leading to the subsequent appeals by both parties.
The Supreme Court’s ruling focused on the criteria defining a “workman” under the I.D. Act, specifically the nature of employment and the duties performed by the employee. The court examined the roles and responsibilities Ray held and whether his designation as Assistant Engineer qualified him under the “workman” definition stipulated in the I.D. Act.
Arguments from Both Sides
Ray’s counsel contended that his termination was unlawful, claiming he was not given proper notice or reason for his dismissal. They emphasized that he had been performing tasks typical of a workman rather than a managerial role. The Labour Court had noted that designations should not dictate the classification of an employee but rather the nature of the work they performed.
Conversely, the management argued that Ray’s role was indeed supervisory and he was drawing a salary exceeding the threshold to be classified as a “workman” as per the I.D. Act. They asserted that the decision to terminate Ray was justified based on operational requirements, and all legal procedures were duly followed, including the payment of one month’s salary in lieu of notice.
Supreme Court’s Findings
In its judgment, the Supreme Court reiterated that the burden of proof rests with the employee asserting the workman status. It acknowledged the need for clarity on employment roles within the purview of the I.D. Act. The court highlighted that the determination of workman status should focus on the nature of work performed, rather than the job title held.
The court’s analysis led to the conclusion that Ray must demonstrate his claim to workman status adequately. The judgment emphasized that if an employee is classified as a “workman,” they are entitled to protection under the I.D. Act, which includes provisions against unjust termination. However, if it is established that an employee functions in a supervisory capacity with compensation exceeding the defined threshold, they may not qualify for such protections.
Impact and Implications
This ruling has significant implications for employees in similar situations, as it reinforces the importance of clearly understanding one’s employment classification and the associated legal rights. It serves as a caution for both employees and employers regarding the legal intricacies of employment contracts, particularly concerning termination procedures and the nature of job responsibilities.
Furthermore, the decision highlights the importance of adhering to legal standards when classifying roles and responsibilities within an organization. For employers, it underscores the necessity of maintaining clear records and justifications for employment decisions, especially terminations.
Conclusion
The Supreme Court’s ruling in the Lenin Kumar Ray Vs Express Publications case provides a crucial interpretation of the I.D. Act, particularly regarding the classification of employees as “workmen.” As the legal landscape around employment rights continues to evolve, this case serves as a landmark judgment that underscores the balance of power between employers and employees, affirming the need for fair treatment and adherence to legal protocols in employment relations.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Leave granted.
2. These two appeals arise from an order dated 04.04.2022 passed by the High Court of Orissa at Cuttack1 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) Ltd2 challenging the award dated 22.09.2010 passed by the Labour Court, Bhubaneswar3 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, 19474.
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 , New Indian Express having its publication unit at Bhubaneswar. The employee was initially appointed as Junior Engineer (Electronics and Communication)5 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, Labour6;
ii. Concurrent findings of facts rendered by the Courts below cannot be interfered with by the writ Court7;
iii. The determining factor for a person to be qualified as “workman” as defined under section 2(s) of the I.D. Act is the nature of work done by him and not merely on the designation of his post8. Whether or not an employee is a “workman” under section 2(s) of the I.D. Act is required to be determined with reference to his principal nature of duties and functions; and the designation of an employee is not of much importance and what is important is the nature of duties being performed by the employee9;
iv. Merely having a junior does not make an employee a supervisor or managerial cadre10; and
v. In cases of wrongful / illegal termination of service, reinstatement with continuity of service and back wages is the normal rule11; and since the order of termination is void ab initio, the workman is entitled to full back wages12.
By making the above submissions, the learned counsel prayed to allow the appeal filed by the employee and dismiss the appeal filed by the management and consequently, direct the management to reinstate the employee in service with full back wages.
7. It is the submission of the learned senior counsel for the management that the employee was discharging his duties initially as Junior Engineer (E&C) in group 3 (Admn) and thereafter as Assistant Engineer (E&C) in group 2A (Admn); the nature of the work performed by him was in the supervisory capacity; and his total emolument in the post of Assistant Engineer (E&C) as on 01.05.2001 was Rs.6805.45; and he was terminated from service on 08.10.2003 as his service was no longer required for the management. While so, he does not qualify to be a “workman” within the meaning of section 2(s) of the I.D. Act. It is further contended by the learned counsel that at the time of termination of the employee i.e., on 08.10.2003, the statutory requirement for a person to be classified as a “workman” in the I.D. Act was a salary of not exceeding Rs.1,600/- per month. However, the High Court proceeded to apply Amendment Act 24 of 2010 which came into force with effect from 15.09.2010, wherein, the statutory requirement for a person employed in the supervisory capacity to be qualified as a “workman” was a salary of not exceeding Rs.10,000/- per month, and erroneously upheld the finding of the Labour Court that the employee was a “workman” as defined under section 2(s) of the I.D. Act. Therefore, the learned counsel sought to allow the appeal filed by the management, by setting aside the order of the High Court to that extent.
8. Continuing further, the learned senior counsel for the management submitted that the employee was appointed as Junior Engineer (E&C) in Group 3 (Admn) with a monthly pay of Rs.4761.75 by the management on 07.06.1997 and clause 14 of the appointment letter clearly indicated that after confirmation, the termination of service would require one month notice period or one month salary in lieu of notice by either of the parties. That apart, the employee was given promotion to the post of Assistant Engineer (E&C) on 25.05.2000 and his services as Asst. Engineer (E&C) in group 2A (Admn) were regularized with effect from 01.05.2001 with a total pay of Rs.6,805.45 per month; and it was categorically stated in the confirmation letter dated 30.04.2001 that all other terms and conditions mentioned in the Appointment Order dated 07.06.1997 shall continue to apply. In the light of the rules of the company and the terms of the employment orders, the management relieved the employee from duty by paying one month salary in lieu of notice on 08.10.2003, which was accepted and also encashed by the employee. Hence, there is no procedural violation of law on the part of the management in terminating the services of the employee. Thus, according to the learned counsel, the order of the High Court setting aside the award of the Labour Court to the extent of reinstating the employee with compensation in lieu of back wages, requires no interference by this Court.
9. We have given due consideration to the submissions made by the learned senior counsel appearing for both parties and carefully perused the materials on record.
10. At the outset, it is pertinent to point out that the Industrial Disputes Act, 1947, was enacted by the legislature to settle the industrial disputes. It was brought with the object to ensure social justice to both the employers and employees and advance the progress of industry by bringing about the existence of harmony and cordial relationship between the parties.
11. Section 2(s) of the I.D. Act defines “workman”, which is quoted below for ready reference:
“2(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 express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person—
i. who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950) or the Navy Act, 1957 (62 of 1957); or
ii. who is employed in the police service or as an officer or other employee of a prison; or
iii. who is employed mainly in a managerial or administrative capacity; or
iv. who, being employed in a supervisory capacity, draws wages exceeding [ten thousand rupees]13 per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.”
As per the above provision, a person to be qualified as a “workman” has to do any work of manual, unskilled, skilled, technical, operational, clerical or supervisory in nature. But, the latter part of the section excludes four classes of employees including a person employed in a supervisory capacity drawing wages exceeding Rs.10,000/- after amendment (Rs.1,600/- before amendment) per month or exercises functions mainly of a managerial nature. In this legal backdrop, let us first examine, whether the employee falls within the definition of “workman”.
12. According to the employee, he comes within the meaning of “workman” as given in section 2(s) of the I.D. Act and the management without following the legal procedure, relieved him from service abruptly and hence, the same is illegal termination. On the other hand, it was the case of the management that the nature of the duties and functions performed by the employee was in the supervisory capacity and he was drawing a salary of above Rs.1,600/- and therefore, he does not belong to the category of “workmen”. To prove their respective claims, the employee and the Senior Manager of the management were examined as W.W.1 and M.W.1; and Exts.W1 to W5 and Exts.A to D were marked before the Labour Court.
13. Evidently, the employee was appointed as Junior Engineer (E&C) with effect from 07.06.1997 under Group 3 (Admn) with a salary of Rs.4761.75 per month. Clause 14 of the appointment order issued by the management makes it clear that after confirmation of the job, the termination of service will be by one month’s notice or one month’s salary in lieu of notice by either side. It is not in dispute that the posting of the employee in the cadre of Junior Engineer was confirmed with effect from 07.06.1998 vide letter dated 13.07.1998. As per the letter dated 25.05.2000 of the management, the employee was promoted as Assistant Engineer (E&C) in Group 2A (Admn) with effect from 01.05.2000 and his revised salary was Rs.6008.79 per month. The services of the employee as Assistant Engineer were confirmed with effect from 01.05.2001 vide letter dated 30.04.2001 and it was categorically stated in the said letter that all other terms and conditions mentioned in the appointment order dated 07.06.1997 shall continue to hold good. Vide letter dated 08.10.2003, it was informed that the services of the employee were no longer required by the management and hence, he was relieved from duty forthwith.
14. During the course of examination, the employee deposed as W.W.1 that he was not an executive cadre employee and there were senior officers to supervise and control his work. But, in the cross-examination, he asserted that he was supervising the work of two juniors who were working under him. According to M.W.1- Senior Manager of the management, the employee was an executive of the management and the management appointed two Junior Engineers and their works were being supervised by the said employee.
15. The law is well settled that the determinative factor for “workman” covered under section 2(s) of the I.D. Act, is the principal duties and functions performed by an employee in the establishment and not merely the designation of his post. Further, the onus of proving the nature of employment rests on the person claiming to be a “workman” within the definition of section 2(s) of the I.D. Act.
16. In the present case, there is no specific document adduced relating to the actual work and functions performed by the employee. In the absence of any concrete material to demonstrate the nature of duties discharged by the employee, the employment orders issued by the management will have to be taken into consideration and as per the same, the employee was appointed as Junior Engineer and was promoted as Assistant Engineer, on the administrative side. It is the evidence of M.W.1 that the employee was supervising the work of two junior Engineers, who were working under him, which was also admitted by the employee in his cross examination, as W.W.1. Even according to the employee, the nature of duties and functions discharged by him was of supervisory. As such, applying the pre-amended provision of section 2(s), since the employee was terminated from service on 08.10.2003 and was drawing salary of more than Rs.1,600/-, he does not come within the definition of “workman”. Therefore, we hold that the employee is not a “workman” as defined under section 2(s) and is not covered by the provisions of the I.D. Act. In view of the same, the order of the High Court upholding the finding of the Labour Court that the employee was a “workman” within the definition of post-amended section 2(s), is liable to be set aside.
17. As regards the grant of reinstatement of the employee in service and payment of compensation in lieu of back wages by the Labour Court, it appears to us that in terms of clause 14 of the appointment letter, the employee was required to be paid one month salary in lieu of notice. As is evident from the letter dated 08.10.2003 of the management, the employee was relieved from duty with effect from that date; and he was issued with a cheque bearing No.019345 for Rs.6995.85 drawn on UT1 Bank Ltd, Bhubaneswar, towards one month salary in lieu of notice, as per the rules of company and in terms of clause 14 of the appointment order issued by the management. It is an admitted fact that without any objection, the employee accepted the said cheque and encashed the same. Hence, there is no violation of procedure on the part of the management in terminating the services of the employee. As already held above, the employee is not a “workman” as covered under section 2(s) and hence, the provisions of the I.D. Act do not apply to him. Resultantly, the contention of the learned senior counsel for the employee qua violation of section 25F coupled with sections 25G and 25H of the I.D. Act, ordering reinstatement with full back wages as normal rule, etc., cannot be countenanced by us. Though we are in agreement with the principles laid down in the citations relied on by the learned counsel for the employee, they do not come to rescue the employee as the facts of the same are distinguishable. Thus, we do not find any infirmity or illegality in the order of the High Court setting aside the award of the Labour Court which directed reinstatement of the employee along with payment of compensation in lieu of back wages and hence, the same does not call for any interference by us.
18. In the light of the foregoing findings, we set aside the order of the High Court confirming the finding of the Labour Court to the extent that the employee was a “workman” within the meaning of section 2(s) of the I.D. Act; and we affirm the same, insofar as setting aside the award of the Labour Court to reinstate the employee in service and pay compensation of Rs.75,000/- in lieu of back wages.
19. Accordingly, the Appeal filed by the employee stands dismissed and the Appeal filed by the management stands allowed. There is no order as to costs. Pending application(s), if any, shall stand disposed of.
Notes:
1 Hereinafter shortly referred to as “the High Court”
2 For short, “the management”
3 Hereinafter shortly referred to as “the Labour Court”
4 For short, “the I.D. Act”
5 For short, “E&C”
6 K.C.P. Employees Association v. K.C.P. Ltd (1978) 2 SCC 42
7 Southern Ispat Ltd v. State of Kerala, (2004) 4 SCC 68
8 Shard Kumar v. NCT of Delhi, (2002) 4 SCC 490
9 S.K.Maini v. Carona Sahu Co. Ltd, (1994) 3 SCC 510
10 Ananda Bazar Patrika (P) Ltd v. Workmen, (1970) 3 SCC 248
11 Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya, (2013) 10 SCC 324
12 Jasmer Singh v. State of Haryana, (2015) 4 SCC 458
13 Substituted by Act 24 of 2010, S.2, for “one thousand six hundred rupees” (w.e.f 15-09-2010)
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