Delhi District Court
Between The vs The on 28 August, 2019
IN THE COURT OF SH. RAMESH KUMARII, PRESIDING
OFFICER LABOUR COURT, ROUSE AVENUE COURT COMPLEX,
D.D.U. MARG, NEW DELHI
LID No. 869/2016
Date of institution 15.10.2016
Date of Award 28.08.2019
BETWEEN THE WORKMAN
Sh. Aseem Khanna, S/o Sh. Kailash Nath Khanna, Aged about 40 years,
C/o. Rashtriya General Mazdoor Union (Regd.), B239, Karampura,
New Delhi15.
AND
THE MANAGEMENT OF
M/s United Saloon Agency Pvt. Ltd., 28, Shopping Centre, Karampura,
New Delhi15.
AWARD
1 By this award, I shall dispose off the statement of claim filed by the
workman under section 2 (A) (2) of the Industrial Disputes Act, 1947 against
the management.
2 Brief facts as stated by the claimant in his statement of claim are that
he was working with the management at the post of 'Sales Man' since
22.03.2012and his last drawn salary was Rs.43,000/ per month. He used to work sincerely, honestly and his service record was well satisfactory and he never gave any chance of complaint to the management but the despite that the management did not issue any appointment letter to him. It is further stated that the workman used to demand to pay his incentive for the year 2014 which was of Rs.1,10,000/ and mobile expenses, leave encashment, LID No.869/16 1/14 yearly increment etc. but the management never provided the same, rather the management got annoyed and started to get rid of the workman. It is further stated that on 04.09.2015, when the workman has demanded his earned wages for the month of August 2015 and aforesaid incentive amount, the management did not pay the same, rather terminated his services on 04.09.2015 illegally without any rhyme or reason, without giving any show cause notice and without conducting any domestic enquiry. It is further stated that thereafter, the workman had filed a complaint before the Asstt. Labour Commissioner, Nimri, New Delhi, upon which the Labour Inspector had visited the establishment of the management and requested the management to take the workman back in service and also to pay his unpaid wages and dues, but the management neither reinstated the workman nor paid his unpaid wages. It is further stated that the management had violated the provision of section 25 F and 25 G of the Industrial Disputes Act, 1947, hence the termination of services of the workman is illegal and unjustified and liable to be set aside. It is further stated that the workman had sent a demand notice to the management on 23.11.2015 which was duly served, but the management neither sent any reply, nor reinstated the workman in service. It is further stated that the workman had also filed his statement of claim before the Asstt. Labour Commissioner, Nimari Colony, New Delhi against the management for reinstatement in service with full back wages but the management did not appear before the labour office and as such the Conciliation Officer gave his failure report and the workman has filed the present case directly before the labour court for proper adjudication. It is further stated that the workman searched the job at many places, but he could not find any work, so he is unemployed since the date of illegal termination LID No.869/16 2/14 and he wants to join duty with the management on the same post with full back wages. It is, therefore, prayed that this Court may kindly be pleased to pass an award of reinstatement of workman in service with full back wages with all other consequential benefits in favour of the workman and against the management.
3 The management has contested the present case and filed its written statement thereby taking various preliminary inter alia that the alleged claimant does not fall within the definition of section 2 (s) of the Industrial Disputes Act, 1947 as he was employed with the management as a Area Sales Manager. The alleged workman was appointed on the post of Area Sales Manager in terms of appointment letter dated 22.03.2012 with annual CTC of Rs.4.20 lacs and under the said employment on the said managerial post he was expected to achieve the given target of the sales for which he was also entitled for sale linked performance bonus of 3% of total value of sales made over and his employment was governed as per his appointment letter dated 22.03.2012 and not under the Industrial Disputes Act, 1947. It is further stated that the applicant being on the managerial post was also sent for training to Dubai and twice to Thailand and the applicant could not achieve his targeted sales after getting the increment in June 2013 and the said sales goes on decreasing every day by day and even the applicant had started malpractices to achieve the targeted sales by booking the fictitious sales and making the supplies under the same but no payment of the same was collected, due to which the management was put to multiple losses. It is further stated that the applicant on the spiritual grounds keep away himself from its duties and responsibilities for days which affected the business working of the management which compelled the management to exercise LID No.869/16 3/14 their powers of termination under their employment contract in terms of their appointment letter dated 22.03.2012 and as such the applicant was terminated by the management in terms of appointment letter dated 10.12.2015 for which the management was well within their rights and the termination of applicant does not fall within the ambit of the Industrial Disputes Act, 1947. It is further stated that even the alleged workman had not only put the management into losses by booking sales without the payment thereof and even after leaving the management, he joined the competitor of the management namely, M/s Tekno Derm Mediequip Pvt. Ltd. And not only this, he even used the technical know how and even used the brand of the management to benefit them. It is further stated that the management is having the brand in the name of Golden Handshake registered which was used by him for the said company and in that manner he had not flouted his own employment agreement with the management but he had also violated the law of the land. It is further stated that no cause of action had ever arisen in favour of the applicant to file the present claim as the applicant was terminated under the terms of the employment contract as spelled out in the appointment letter dated 22.03.2012 which was acknowledged by the applicant but was concealed by him from this court. As far as merits are concerned, it is denied that the alleged workman was working with the management on the post of Sales Man, rather it is submitted that he was appointed on the post of Area Sales Manager. It is also denied that the management did not issue any appointment letter to the workman or that the workman used to work sincerely, honestly and his service record was well satisfactory or that he did not give any chance of complaint to the management. It is further submitted that the applicant was LID No.869/16 4/14 not performing its duties as he was bound to perform as he is not able to achieve the target so given to him. It is reiterated that the applicant was on the managerial post under whom several other employees are working and his monthly remuneration is being paid by bank transfer for which pay slips are also issued to the applicant. It is further denied that the management had violated the provisions of section 25 F and 25 G of the I.D. Act, 1947 or that the alleged workman was illegally terminated on 04.09.2015. All other averments of the statement of claim of the claimant are denied word by word and ultimately it is prayed that the claim of the applicant is liable to be dismissed and may kindly be dismissed against the management. 4 The claimant filed rejoinder wherein he denied all the averments of the written statement and reiterated and reaffirmed the facts of the statement of claim as correct and it is prayed that an award may kindly be passed in favour of the workman in terms of the prayer made by him in the statement of claim.
5 After the completion of pleadings, the following issues were framed by my Ld. Predecessor vide order dated 26.07.2017: 1 Whether the claimant is is not a workman as per definition of workman u/s 2 (F) of the Industrial Disputes Act, 1947? OPM/OPW 2 Whether the workman is entitled to reinstatement alongwith back wages? OPW 3 Whether the workman is entitled to earned wages for the month of August and 3 days of the September 2015? OPW 4 Whether the workman is entitled to any incentive LID No.869/16 5/14 amount of Rs. One Lac Ten Thousand? OPW 6 After framing up of the issues, the matter was fixed for claimant's evidence. The workman examined himself as WW1 in support of his claim and relied upon documents i.e. complaint dated 23.11.2015 filed before Asstt. Labour Commissioner is Ex.WW1/1, carbon copy of demand notice dated 23.11.2015 is Ex.WW1/2, acknowledgment is Ex.WW1/3, carbon copy of claim filed before Conciliation Officer is Ex.WW1/4 and failure report dated 26.08.2016 of the Conciliation Officer is Ex.WW1/5. 7 The workman did not examine any other witness and W.E. was closed on 29.05.2019. Thereafter, opportunity was given to the management to lead its evidence, but the management did not lead any evidence and ultimately, M.E. was closed vide order dated 17.07.2019. Thereafter, matter was fixed for final arguments.
8 During the course of arguments, Ld. Authorized Representative of the management submitted that the workman in his cross examination admitted that he was working with the management as a Manager. He further submitted that in appointment letter of the workman the designation of the workman is also mentioned as Area Sales Manager and the workman has admitted that he had received the appointment letter. He further submitted that it is not the case of the workman here that his designation was mainly of Manager but his work was of managerial/clerical.
9 On the other hand, Ld. Authorized Representative of the claimant has argued and submitted that the submission of Ld. AR for management that designation of the claimant was of Manager but his work was mainly of managerial/clerical is having no force as the claimant in his statement of claim has stated that he was working with the management at the post of LID No.869/16 6/14 Sales Man and it is the management who took defence in its written statement that the claimant was employed with it at the post of Area Sales Manager. He further submitted that though the workman admitted that he was working with the management in managerial capacity and also that the management had issued appointment letter to him but the nature of work of the workman has not been specified in the appointment letter. It is his further arguments that there are catena of judgments of the Hon'ble Apex Court in which it has been held that a mere designation is not sufficient and the test is the nature of duties and not the designation.
10 Record perused. On perusal of record, my issuewise findings are as follows: ISSUE NO.1 11 The onus to prove issue no.1 has been conferred by my Ld. Predecessor upon the workman as well as the management. As per the averment of the claimant, he was working with the management at the post of Sales Man. On the other hand the defence of the management is that the claimant is not covered under the definition of 'workman' as defined u/s 2
(s) of the Act as he was employed by the management at the post of Area Sales Manager.
12 The definition of a 'workman' is defined under section 2 (s) of the Industrial Disputes Act, 1947 Act which reads as under: "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 expressed or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has LID No.869/16 7/14 led to that dispute, but does not include any such person i who is subject to Air Force, 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 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."
13 Coming now to the evidence part. The workman in his cross examination has deposed that he was working with Visge Beauty and Health Care Pvt. Ltd. as Area Sales Manager before joining the present management. He further deposed that he had submitted his resume with the present management at the time of joining his service there and he had submitted the same much prior to joining the present management which is Ex.WW1/X1 bearing his signature at point A. He further admitted as correct that he was working with the present management in managerial capacity and also that his salary package was Rs.4,20,000/ per annum. He further denied the suggestion that he was bound with the terms and conditions of his appointment.
14 In order to prove that the claimant is not a 'workman' within the definition of section 2 (s) of the I.D. Act, the management has relied upon certain documents i.e. resume Ex.WW1/X1 and appointment letter Ex.WW1/X2. It is the arguments of Ld. Authorized Representative of the management that the claimant was working with the management in managerial capacity and as such he does not fall within the definition of section 2 (s) of the Industrial Disputes Act, 1947. On the other hand, it is the LID No.869/16 8/14 arguments of Ld. Authorized Representative of the workman that though the workman admitted that he was working with the management in managerial capacity and he also admitted that the management had issued appointment letter to him but the nature of work of the workman has not been specified in the appointment letter. It is his further arguments that a mere designation is not sufficient and the test is the nature of duties and not the designation. 15 This court is in complete agreement with the arguments of Ld. AR for workman. The Hon'ble Apex Court has held in catena of judgments that in such cases what has to be looked by the courts is the nature of duties/work assigned to the claimant and not the mere designation. The court has to see whether the claimant was employed in a supervisory capacity or that his duties, powers and functions were mainly of managerial or supervisory in nature.
16 In the judgment titled as Anand Bajar Patrika (Pvt) Ltd. Vs. The Workmen, 1970 (3) SCC 248, it was inter alia held that: "the question, whether a person is employed in a supervisory capacity or on clerical work depends upon whether the main and principal duties carried out by him are those of a supervisory character, or of a nature carried out by a clerk."
17 Simultaneously in the judgment titled S.K. Maini Vs. Carona Sahu Co.Ltd. & Ors., 1994: Supreme Court Cases (L&S): Page 776, it was inter alia held that: "Industrial Dispute Act.1947 - Section 2 (s) "Workman is an employee who is doing more than one duty and functions, whether or not, a workman and the test is the nature of duties and not the designation."
18 Further, in the judgment titled as Yogender Kumar Vs. B.R. Kohli & Co., 106 (2003) DLT 232, it was inter alia held by the Hon'ble High Court of Delhi LID No.869/16 9/14 that: "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. Such question is required to be determined with reference to the facts and circumstances of the case and material on record and it is not possible to lay down any straitjacket formula which can decide the dispute as to the real nature of duties and functions performed by an employee in all cases. When an employee is required to do more than on kind of work it becomes necessary to determine under which classification under section 2 (s) the employee will fall for the purpose of deciding whether he comes within the definition of workman or goes out of it. The designation of an employee is not of much importance and what is important is the nature of duties being performed by the employee. The determinative factor is the main duties of the employee concerned and not some works incidentally done. Viewed from this angle, if the employee is mainly doing supervisory work but incidentally or for a fraction of time also does some manual or clerical work, the employee should be held to be doing supervisory work. Conversely, if the main work is of manual, clerical or of technical nature, the mere fact that some supervisory or other work is also done by the employee incidentally or only a small fraction of working time is devoted to some supervisory works, the employee will come within the purview of 'workmen' as defined in section 2 (s) of the I.D. Act."
19 A perusal of appointment letter Ex.WW1/X2 reveals that the nature of duties of the workman has not been defined therein and only his designation is mentioned as Area Sales Manager. The management has not filed any document on record to prove that the management has given powers to the LID No.869/16 10/14 claimant to supervise its employees. The management has also not filed any document on record to prove as to how many employees were working under the claimant. The management has also not proved on record that the management had given any managerial powers to the claimant during the course of his employment. Therefore, this court is of the opinion that a mere designation is not sufficient to keep the claimant out from the purview of section 2 (s) of the Industrial Disputes Act. Accordingly, keeping in view all these facts and also keeping in view aforesaid law points, it is clear that the claimant was not discharging his duties in managerial capacity and as such it is held that the claimant is squarely covered within the definition of section 2
(s) of the Industrial Disputes Act, 1947. Issue no.1 is decided in favour of the workman and against the management.
ISSUE NO. 2, 3 & 420 The onus to prove all these issues was upon the claimant and he was required to prove that he is entitled to reinstatement along with back wages and also entitled to earned wages for the month of August and 3 days of September 2015 and also entitled to incentive amount of Rs.1,10,000/. The claim of the workman is that his services were illegally and/or unjustifiably by the management on 04.09.2015 when he demanded his incentive and legal facilities. On the other hand, it is the defence of the management in written statement that the services of the workman were terminated in terms of appointment letter dated 22.03.2012.
21 No suggestion has been put to the workman by the management to the extent that the services of the workman were not terminated by the management illegally. The management has also not proved that the management was put to multiple losses by the workman by not achieving his LID No.869/16 11/14 targeted sales. The management has also not conducted any enquiry against the malpractices of the workman to achieve his targeted sales. The management has also not proved that the workman used the brand of the management namely Golden Handshake for other company M/s Tekno Derm Mediequip Pvt. Ltd. The management could not prove that the services of the workman were terminated in terms of appointment letter Ex.WW1/X2. Therefore, from all these facts, it is clear that the services of the workman were terminated by the management illegally and/or unjustifiably when he demanded his incentive and legal facilities.
22 As far as issue no.3 and 4 are concerned, since no record pertaining to the workman has been produced by the management, nor there is any cross examination of the workman by the management to the extent that the workman is not entitled to earned wages for the month of August and 3 days of September 2015 or that he is not entitled to any incentive amount of Rs.1,10,000/, therefore, issue no. 3 and 4 are also decided in favour of the workman and against the management.
23 Further, the workman has also made a prayer in statement of claim that he is unemployed since the date of termination of duty and as such the management be directed to reinstate him in service with full back wages including benefits of continuity of service and all other consequential benefits alongwith his earned wages for the month of August and 3 days of September 2015 and incentive amount of Rs.1,10,000/. However, this court is of the opinion that since both the parties have lost faith in each other, reinstatement of the workman in service would not be in the interest of both the parties and the compensation in lieu of reinstatement would be a better option. Further, much time has elapsed since the date of termination of LID No.869/16 12/14 services of the workman, therefore, it cannot be presumed that the workman would remain idle for such a long period.
24 This court finds support from the judgment of the Hon'ble Supreme Court of India in case titled Employers, Management of central P & D Inst. Ltd Vs. Union of India & Another, AIR 2005 Supreme Court 633 wherein it was held that: "it is not always mandatory to order reinstatement after holding the termination illegal and instead compensation can be granted by the court."
25 Similar views were expressed by the Hon'ble Delhi High Court in case titled as Indian Hydraulic Industries Pvt. Ltd Vs Krishan Devi and Bhagwati Devi & Ors. ILR (2007) I Delhi 219 wherein it was held that: "even if the termination of a person is held illegal, Labour Court is not supposed to direct reinstatement along with full back wages and the relief can be moulded according to the facts and circumstances of each case and the Labour Court can allow compensation to the workman instead of reinstatement and back wages."
26 Coming now to the aspect of compensation. The workman claimed that his last drawn salary was Rs.43,000/ per month. The management did not dispute this fact in its written statement. Accordingly, the last drawn salary of the workman is deemed to be as Rs.43,000/ per month. The length of service of the workman is about 2 and a half years. The present case is pending since 2016. Therefore, keeping in view all these facts and also keeping in view of the aforesaid law points, this court deems it appropriate to grant a lump sum compensation to the workman in lieu of his reinstatement, LID No.869/16 13/14 incentive and earned wages. Accordingly, this court grants a lump sum compensation of Rs. 3,00,000/ (Rupees Three Lacs only) to the workman in lieu of his reinstatement, back wages, earned wages, incentive and all other consequential benefits. The amount of compensation shall be paid to the workman by the management within one month from the date when this award becomes enforceable failing which the amount shall carry an interest @ 9% p.a. from the date it becomes due till the time it is realized. Issue no.2 is also decided in favour of the workman and against the management. 27 The statement of claim of the workman under section 2 (A) (2) of the Industrial Disputes Act, 1947 is disposed off accordingly. 28 A copy of this award be sent to the Deputy Labour Commissioner, Government of NCT of Delhi of Distt./Area concerned for publication as per rules and judicial file be consigned to Record Room as per rules.
PRONOUNCED IN OPEN (RAMESH KUMARII) COURT ON 28.08.2019 PRESIDING OFFICER:LABOUR COURT ROUSE AVENUE COURT COMPLEX NEW DELHI Digitally signed by RAMESH RAMESH KUMAR KUMAR Date:
2019.08.29 13:20:59 -0800 LID No.869/16 14/14