Delhi District Court
Workman Has Filed The Instant Statement ... vs A.P on 14 August, 2007
IN THE COURT OF SH. O.P. SAINI, PRESIDING OFFICER,
LABOUR COURT NO. VII, DELHI.
I.D. NO. : 342/2004
B E T W E E N
The workman Sh. Vinod Kumar Kapoor
S/o Sh. Jagdish Chander Kapoor
Shop No. 14, First Floor,
Main Market, Subhash Nagar,
New Delhi 110 027.
A N D
The Management of M/s :
(1) M/s Ansal Properties & Industries Ltd.
Through its Chairman, 115, Ansal Bhawan,
16, Kasturba Gandhi Marg, New Delhi 110 001.
(2) M/s Star Estates Management Ltd.
Through its Director, 115, Ansal Bhawan,
16, Kasturba Gandhi Marg, New Delhi 110 001.
A W A R D
1. Workman has filed the instant statement of claim
directly in the court U/s 10 (4A) of the Industrial Disputes Act
(hereinafter to be referred as the 'Act').
: 1 : (RC)
2. Brief facts of the case as made out from the record
are that the workman was employed as stenographer with
management number 1 vide letter dated 11.12.95 and he was put
on probation for a period of six months vide letter dated 3.1.96.
On completion of the probation, he was confirmed vide letter
dated 7.8.96. It is claimed that there was an internal
understanding between managements number 1 and 2, being
sister concerns, and the workman was taken in management
number 2 vide letter dated 1.5.2002 and was given designation
of Personal Assistant. It is claimed that he performed his duties
diligently with effect from 1.1.96 to 14.9.2004 and never gave
any chance of complain to the managements. No memo, show
cause notice, warning or chargesheet was ever issued to him.
He was given increments from time to time. It is alleged that in
2004 increments were given to all other employees but the same
were denied to the workman and when he demanded the same
vide letter dated 13.9.2004, managements got annoyed and
: 2 : (RC)
started finding out ways to victimize the workman. The
workman reported for duty on 13.9.2004 but he was not
allowed to sign the attendance register and was surprised to note
that he was terminated without any inquiry with effect from
14.9.2004. He was terminated orally without any retrenchment
compensation. He again went to the office on 16.9.2004 but
was turned out. It is alleged that termination of the workman is
illegal, unjustified and against the principles of natural justice
as neither any inquiry was conducted against him nor was he
paid retrenchment compensation. It is alleged that his
termination is in violation of section 25 F of the Act. It is
alleged that other workmen were also victimized by the
managements and they also got their rights through the court. It
is prayed that since the termination is illegal and unjustified, the
same may be set aside and the management may be directed to
reinstate him with all consequential benefits including continuity
of service and full back wages.
: 3 : (RC)
3. Managements contested the claim and filed their
written statement taking a preliminary objection that claimant
was employed by management number 2 as Personal Assistant
vide letter dated 1.5.2002 and he was performing supervisory,
managerial and confidential duties and, as such, he is not a
"workman" within the meaning of the Act. On merit, it is
claimed that managements number 1 and 2 are separate and
independent entities and they are not sister concerns. It is
claimed that the claimant resigned his services from
management number 1 vide letter dated 30.4.2002 and the same
was duly accepted. He took the employment with management
number 2 vide letter dated 1.5.2002. It is claimed that there is
no relationship between managements number 1 and 2 and, as
such, after his resignation, there is no relationship between the
workman and management number 1. However, it is claimed
that there were various shortcomings in the performance of the
: 4 : (RC)
claimant but the the managements took lenient view but
ultimately it lost faith and trust in him. The managements were
entitled to terminate his services without assigning any reason
and, as such, he was terminated vide letter dated 14.9.2004. It is
denied that the workman was entitled to any increment. It is
claimed that since the claimant was working in supervisory
capacity, he was not entitled to any retrenchment compensation.
However, his dues including salary for fourteen days, one
month pay in lieu of notice, gratuity and leave encashment were
sent to him by cheque through post which he declined to accept.
It is claimed that when he first resigned from management
number 1, all dues were paid to him to which he was entitled. It
is repeatedly claimed that since there is no relationship between
workman and management number 1 and he was working with
management number 2 in supervisory and managerial capacity
and has been terminated as per the contract of service, he is not
entitled to any relief and his claim may be dismissed.
: 5 : (RC)
4. Workman filed rejoinder to the written statement,
wherein he denied the allegations contained in the written
statement and reasserted the averments made in the statement of
claim.
5. On the pleadings of the parties, following issues
were settled for trial vide order dated 24.11.2005 :
I) Whether the workman is "workman" as defined
under the I.D. Act?
II) Whether the workman is not entitled to reinstatement
with all consequential benefits?
III) Relief.
6. In support of his case workman has examined
himself as WW1, and has placed on record his own affidavit
Ex.WW1/A, along with documents Ex.WW1/1 to 8.
7. On the other hand, management number 2 has
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examined Brigadier D.V. Malhotra as MW1, who has placed on
record his affidavit Ex.MW1/A, along with documents
Ex.MW1/1 to 7.
8. Management number 1 has examined Sh. P.K. Shah
as MW2, who has placed on record his affidavit Ex.MW2/A,
along with documents Ex.MW2/1 to 3.
9. I have heard the arguments at the bar and have
carefully gone through the file.
10. My findings on the issues are as under :
ISSUE NO.1 :
11. It is submitted by learned authorized representative
(Ld. AR) for workman/claimant that he was working in clerical
: 7 : (RC)
capacity. My attention has been invited to his appointment letter
wherein his appointment has been shown as Personal Assistant.
It is submitted that this position involves no decisionmaking
power or exercise of discretion, tact or supervision. It is
submitted that the work of the claimant/workman was purely
clerical and, as such, he is a "workman" within the meaning of
the Act.
12. On the other hand, managements have chosen not
to submit any arguments despite repeated opportunities granted
to them.
13. Section 2(s) of the Act, defines "workman" 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
: 8 : (RC)
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 that dispute, but
does not include any such person :
(i) who is subject to the Air Force
Act, 1950, or the Army Act, 1950, or the
Navy Act, 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 one thousand six hundred 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"
14. In an authority reported as G.M. Pillai Vs. A.P.
: 9 : (RC)
Lakhanikar & Ors. 1998 I CLR 281, Hon'ble Bombay High
Court while dealing with the question whether a person is a
"workman" or not, observed as under :
".....................................................................
......................................................................
In determining the question whether a person employed by the employer is workman under Section 2(s) of the Industrial Disputes Act or not, the Court has principally to see main or substantial work for which the employee has been employed and engaged to do. Neither the designation of the employee is decisive nor any incidental work that may be done or required to be done by such employee shall get him outside the purview of workman, if the principal job and the nature of employment of such employee is manual, technical or clerical. In hierarchy of employees, some sort of supervision by the employees over the employees of lower ladder without any control may not by itself be sufficient to bring that employee in the category of supervisor, yet if the principal job of that employee is to oversee the work of employees who are in the lower ladder of the hierarchy and he has some sort of independent discretion and judgment, obviously such employee would fall within the category of supervisor. Each case would depend on the nature of the duties : 10 : (RC) predominantly or primarily performed by such employee and whether such function was supervisory or not would have to be decided on facts keeping in mind correct principles. In John Joseph Khokar V. B.S. Bhadange & two others, 1997 II CLR 921. I observed, "where the employee possess the power of assigning duties and distribution of work such authority of employee may be indicative of his being supervisor doing supervision. In a broad sense supervisor is one who has authority over others : someone who superintends and direct others. An employee who in the interest of the employer has responsibility to directly control the work done by the other workers and if the work is not done correctly to guide them to do it correctly in accordance with norms shall certainly be a supervisor. A supervisory work may be contradistinguished from managerial and administrative work, and so also a supervisor from manager and administrator. Supervisor's predominant function is to see that work is done by workers under him in accordance with the norms laid down by the management : he has no power to take any disciplinary action......................................... ....................................................................."
15. Similarly, in another authority reported as Union : 11 : (RC) Carbide India Ltd. Vs. D. Samuel & Ors. 1998 II CLR 736, Hon'ble Bombay High Court observed in paragraphs 8 & 9 as under: "8. From a consideration of the aforesaid judgments a supervisor other than one who is not exercising either by nature of duties attached to the office or by reasons of powers vested in him functions mainly of a managerial nature must exercise supervisory functions and draw wages exceeding Rs.1,600/ per mensem. The laws as laid down, thus can be summarised as under : (1) Designation is not material but what is important is the nature of work.
(2) Find out the dominant purpose of employment and not any additional duties the employee may be performing.
(3) Can he bind that Company/employer to some kind of decisions on behalf of the Company/employer.
(4) Has the employee power to direct or oversee the work of his subordinates.
: 12 : (RC) (5) Has he power to sanction leave or recommend it; and (6) Has he the power to appoint, terminate or take disciplinary action against workmen.
From the judgments of this Court and the other High Court some of the tests apart from what the Apex Court has stated are :
(a) Whether the employee can examine the quality of work and whether such work is performed in satisfactory manner or not;
(b) Does the employee have powers of assigning duties and distribution of work;
(c) Can he indent material and distribute the same amongst the workmen;
(d) Even though he has no authority to grant leave does he have power to recommend leave;
(e) Are there persons working under him;
(f) Has he the power to supervise the work of men and not merely machines
(g) Does he mark the attendance of other employees;
: 13 : (RC)
(h) Does he write the confidential reports of his subordinates
9. These tests are not the only tests. There can be a situation where there may be other tests to indicate whether the person is doing supervisory work or not. However, what is material is to note is that a supervisor must be in a position to bind his employer in respect of the decisions that he has taken or in exercise of such power have control on them. It is true that this test to some extent may indicate functions which are managerial or administrative in nature. However, this was the test applied by a learned Single Judge of the Calcutta High Court in Mcleod & Co. (Supra) and approved by the Apex Court in National Engineering Industries Ltd. V. Shri Kishan Bhageria & Ors. AIR 1988 SC 329. The Apex Court therein noticed the distinction between expression 'supervisory', 'managerial' and 'administrative'. The Apex Court has also noted that these terms or expression cannot be put in a water tight compartment. However, the Apex Court has observed that on must always look into the main work and that must be found out from the main duties. A supervisor is one who could bind the company to take some kind of decision on behalf of the company. One who was reporting merely as to the affairs of the company and making assessment for : 14 : (RC) the purpose of reporting was not a supervisor. The Court therefore will have to bear in mind these tests while examining, as to what is the main work of an employee."
16. Similarly, in another authority reported as Anand Regional Coop. Oil Seedsgrowers Union Ltd. Vs. Shaileshkumar Harshadbhai Shah 2006 III LLJ 767, Hon'ble Supreme Court while dealing with the case of an employee working as Assistant Executive in the Quality Control Department of the management, in which the issue was whether the claimant was "workman" or not observed in paragraphs 11 to 17 as under: "11. In the disciplinary proceeding while asserting that he did not take part, the Respondent in his evidence stated that he was the Head of the Department and there was no officer superior to him except the Managing Director. To a query made, whether the employees named by him were under his control; he, however, stated that : 15 : (RC) as a senior he gives guidance. He, however, did not state that he was authorized to initiate any departmental proceedings against his subordinates.
12. Section 2(s) of the Act, defines "workman" 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 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 that dispute, but does not include any such person :
(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 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 : 16 : (RC)
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred 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. The ingredients of the definition of 'workman' must be considered having regard to the following factors:
(i) Any person employed to do any skilled or unskilled work, but does not include any such person employed in any industry for hire or reward.
(ii) There must exist a relationship of employer and employee.
(iii) The persons inter alia excluded are those who are employed mainly in a managerial or administrative capacity.
14. For determining the question as to whether a person employed in an industry is a workman or not; not only the nature of work performed by him but also terms of the appointment in the job performed are relevant considerations.
15. Supervision contemplates direction and control. While determining the nature of the work performed by an employee, the : 17 : (RC) essence of the matter should call for consideration. An undue importance need not be given for the designation of an employee, or the name assigned to, the class to which he belongs. What is needed to be asked is as to what are the primary duties he performs. For the said purpose, it is necessary to prove that there were some persons working under him whose work is required to be supervised. Being incharge of the Section alone and that too it being a small one and relating to quality control would not answer the test.
16. The precise question came up for consideration in Ananda Bazar Patrika (P) Ltd. vs. Workmen 1970 (3) SCC 248 :
1969IILLJ670 wherein it was held at p.671 of LLJ:
"The question, whether a person is employed in a supervisory capacity or on clerical work, in our opinion, 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. If a person is mainly doing supervisory work, but, incidentally or for a fraction of the time, also does some clerical work, it would have to be held that he is employed in supervisory capacity; and, conversely, if the main work done is of clerical nature, the mere fact that some supervisory duties are also carried out : 18 : (RC) incidentally or as a small fraction of the work done by him will not convert his employment as a clerk into one in supervisory capacity."
17. A person indisputably carries on supervisory work if he has power of control or supervision in regard to recruitment, promotion, etc. The work involves exercise of tact and independence."
17. Similarly, in another authority reported as Tata Sons Ltd. Vs. S. Bandyopadhyay & Anr. 2004 LLR 506.
Hon'ble Delhi High Court dealt with the case of Deputy Manager (Engineering) and observed in paragraphs 7,9,10,18 and 19 as under : "7. The question that arose in T.P. Srivastava vs. M/s National Tobacco Co. of India Ltd., 1991 LLR 813 (SC) : AIR 1991 SC 2294 was whether a Section Salesman was a workman or not. The Supreme Court discussed the nature of work of a Section Salesman and concluded that since his duties require an imaginative and creative mind, his duties could not be termed as : 19 : (RC) either manual, skilled, unskilled or clerical in nature. Consequently, it was held that such an employee cannot be termed as a workman. This is what the Supreme Court said in paragraph 3 of the Report :
"It is seen from the facts found that the appellant was employed to do canvassing and promoting sales for the company. The duties involve the suggesting of ways and means to improve the sales, a study of the type or status of the public to whom the product has to reach and a study of the market condition. He was also required to suggest about the publicity in markets and melas, advertisements including the need for posters, holders and cinema sides. These duties do require the imaginative and creative mind which could not be termed as either manual, skilled, unskilled or clerical in nature. The supervising work of the other local salesmen was part of his work considered by the Tribunal as only incidental to his main work of canvassing and promotion in the area of his operation. Such a person cannot be termed as a workman is also the ratio of the decision of this : 20 : (RC) Court in Nurmah Shell Oil Storage and Distribution Company Vs. Burmah Shell Management and Staff, AIR 1971 SC 922, D.S. Nagraj Vs. Labour Officer Karnal (1972) 42 FLR 440 (AP), J.J. Dechane Distributor Vs. State of kerla (1974) 2 Lab LJ 9 : (1974 Lab IC 379) (Kerala)."
9. Tata Risk Management Services is said to be a division of Tata Sons Ltd. and performs consultancy service in the field of risk management. While the exact nature of duties of the Respondent employee is not specifically available on record various documents filed before the learned Labour Court indicate the nature of work done by him and these document show that his work required imagination and creativity, as one would expect of a consultant.
10. What does the employee say about the nature of work done by him? He says in paragraph 3 of his statement of claim that he was employed with the Petitioner since 15th January, 1985 as a highly skilled workman. He was doing work with his own hands and he had no power to appoint or charge sheet any worker. He had no power to grant leave and could not take independent decisions. He was working on instructions from the management. He : 21 : (RC) repeats this in his affidavit by way of evidence and adds that he was performing duties like checking with his own hands machines, buildings, electrical installations and fire fighting equipments. In other words, his case was that he was a skilled manual worker.
18. None of these documents have been controverted by the employee and these really from the basis for determining the nature of duties performed by him. Even a cursory reading of these documents suggests that the employee was highly educated (as per his visiting card, he is a chartered engineer) and was certainly not doing any manual work as claimed by him. Manual work (or inspection) may have been incidental to his primary duties as a consultant in risk management, but that will not make him a workman for the purposes of the Act. The nature of work clearly involved a considerable amount of mental inputs related to creativity and imagination. It can hardly be said that the employee was someone doing manual work.
19. The word "skilled" as in Section 2(s) of the Act has to be construed ejusdem generis, as held in Adyanthava. So construed, it means skilled work, whether manual or nonmanual, which is of a genre of the other types of work mentioned in the definition. The documentary evidence on : 22 : (RC) record clearly shows that the work of the employee was that of a highly qualified and specialized consultant, in the field of risk management. By no stretch of imagination can he be called a skilled workman doing manual or nonmanual work.
18. Similarly, in another authority reported as Narsinha Anand Joshi Vs. Century Shipping & Ors. 1994 LLR 440 Hon'ble Bombay High Court dealt with the case of a technical officer and observed in paragraphs 7 to 9 as under : "7. I have carefully considered the evidence of the Technical Manager as well as the petitioneremployee. On careful consideration of the same it is clear that the petitioneremployee was not workman or a clerk. In fact, he was working in an administrative capacity. His job was not to do the filing of the papers himself but "he was responsible for ensuring proper filing of papers and maintenance of filing papers"
as is evident from the showcause notice given to him (which is Exh.'E' to the Writ Petition No. 3047 of 1988). It appears that the Labour Court has carefully scanned the entire evidence on record and only on a : 23 : (RC) careful appraisal of the same, arrived at a conclusion that the dominant nature of the duties of the petitioneremployee was administrative. I do not find any infirmity in the said finding which might justify interference by this Court in exercise of powers under Article 226 of the Constitution.
8. I have carefully perused the decision of the Supreme Court in S.K. Verma vs. Mahesh Chandra & Anr. AIR 1958 SC 130. In this case the Supreme Court while interpreting the definition of workman in Section 2(s) of the Act, has observed in no less clear terms that :
"Quite obviously the broad intention is to take in the entire "labour force" and exclude the "managerial force". That, of course, is as it should be."
9. The sole question for determination, in the present case, therefore is whether the petitioneremployee can be called a workman employed to do the clerical work or employed mainly in administrative capacity. The nature of work of the petitioneremployee, the various duties performed by him, his status and position in the company, his rankingall clearly go to show that he was employed mainly in the administrative capacity and : 24 : (RC) any work which can be termed as work of clerical nature done by him was only incidental to his employment in the administrative capacity. In that view of the matter, in my opinion, the Labour Court was justified in holding that the petitioner was not a workman and, hence, the reference was not maintainable. Writ petition No. 3047 of 1988 has, therefore, no merit and is dismissed."
19. Management has crossexamined the claimant in detail but in the entire crossexamination it has not been able to extract anything to hold that the claimant was working in supervisory/managerial capacity. Only a peon and clerk was working with him in the office of managing director of the company. There is no material on the file either in the cross examination of WW1 Sh. Vinod Kumar or in the statements of MW1 Brigadier D.V. Malhotra and MW2 Sh. P.K. Saha to show that the claimant was having any managerial, financial, discretionary or supervisory powers. In fact, there is absolutely no material to show that claimant was having any duties : 25 : (RC) whereby he was entitled to exercise discretion, supervision or tact in the performance of his duties. The law extracted above is quite clear in determining whether an employee is "workman"
within the meaning of Act or working in supervisory or managerial capacity. There is no material on the file to show that the claimant was a managerial or supervisory personnel.
He was admittedly a Personal Assistant and the duties of a Personal Assistant do not involve exercise of any discretion or tact in the exercise of his duties unless it is shown to be otherwise and in the instant case, there is no material on the file to conclude otherwise. Accordingly, the claimant is held to be a "workman". The issue is accordingly decided in favour of the workman and against the management.
ISSUES NO. 2 & 3 :
20. Both issues shall be disposed of together as they are interconnected.
: 26 : (RC)
21. It is submitted by Ld. AR for workman that both managements are same and that the workman was first employed with management number 1 as stenographer vide appointment letters dated 11.12.95 and 1.3.96, Ex.WW1/1 and 2 respectively and he was confirmed vide letter dated 7.8.96, Ex.WW1/3. It is claimed that later on his resignation was taken by the managements on 30.4.2002 and he was given fresh appointment letter dated 1.5.2002, Ex.WW1/4. It is claimed that since both managements are under the same ownership, the workman agreed to join management number 2 on the understanding that he would be given continuity of service with management number 2 but the same was denied to him and when the workman demanded the same, the managements got annoyed and this led to his termination. It is submitted that the termination of the workman is illegal and unjustified.
22. In the crossexamination, workman has admitted : 27 : (RC) that he tendered his resignation vide Ex.WW1/M1. He admitted that he was also paid full and final settlement amount of Rs.
59,792/. He also admitted that he did not complain to any authority against being coerced to tender his resignation. It is thus clear that the workman received an amount of about Rs.60,000/ on his termination from management number 1 and also did not complain to any authority against his resignation being obtained under coercion. At the same time, in management number 2 his post was that of Personal Assistant.
The post of Personal Assistant is apparently higher than that of stenographer and this can be seen from a bare perusal of appointment letters Ex.WW1/2 and 4. The pay scale of stenographer commenced with Rs.2,525/ per month whereas that of a Personal Assistant commenced with Rs.4,000/ per month. As such, the workman might have been induced on his own to join a higher post by tendering his resignation with management number 1. At the same time, since the position is : 28 : (RC) apparently different and involves different pay scale and different duties, there could not be any continuity in their service. For these reasons, I am unable to believe the version of the workman that he was in the employment of managements continuously since 11.12.95. Rather, his employment commences with management number 2 with effect from 1.5.2002 only in the capacity of Personal Assistant, though it is also a clerical job. Since the jobs carry different pay scale, duties and responsibilities, he cannot claim continuity from back date, that is, he cannot be given benefit of his past service.
23. Managements have admitted that no retrenchment compensation was paid to him at the time of his termination as the workman was not entitled to the same being in the supervisory and managerial capacity, which plea has already been negatived during the disposal of issue number 1.
: 29 : (RC)
24. Management was bound to comply with section 25 F of the Act as his termination amounts to retrenchment.
25. Section 2(oo) of the Act defines "retrenchment" as under: "'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not include
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf ; or (bb) termination of the service of the workman as a result of the nonrenewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill health."
: 30 : (RC)
26. In an authority reported as S.M. Nilajkar & Ors.
Vs. Telecom District Manager, Karnataka (2003) 4 SCC 27, Hon'ble Supreme Court dealt with the meaning of "retrenchment" and observed in paragraph 12 as under : "Retrenchment" in its ordinary connotation is discharge of labour as surplus though the business or work itself is continued. It is well settled by a catena of decisions that labour laws being beneficial pieces of legislation are to be interpreted in favour of the beneficiaries in case of doubt or where it is possible to take two views of a provision. It is also well settled that Parliament has employed the expression "the termination by the employer of the service of a workman for any reason whatsoever" while defining the term "retrenchment", which is suggestive of the legislative intent to assign the term "retrenchment" a meaning wider than what it is understood to have in common parlance. There are four exceptions carved out of the artificially extended meaning of the term "retrenchment", and therefore, termination of service of a workman so long as it is attributable to the act of the employer would fall within the meaning : 31 : (RC) of "retrenchment" dehors the reason for termination. To be excepted from within the meaning of "retrenchment" the termination of service must fall within one of the four excepted categories. A termination of service which does not fall within categories (a), (b), (bb) and (c) would fall within the meaning of "retrenchment".
27. Section 25 F of the Act, provides conditions to be complied with at the time of retrenchment of a workman and lays down as under : "No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' : 32 : (RC) average pay for every completed year of continuous service or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government for such authority as may be specified by the appropriate Government by notification in the Official Gazette"
28. Termination of the workman, which amounts to retrenchment, must be both legal as well as justified. In order to be legal, section 25 F of the Act must be complied with, that is, the workman must be given notice of one month or pay in lieu thereof along with retrenchment compensation at the rate of fifteen days' salary for each completed year of service. Not only this, workman also be given the reason as to why he is being retrenched. In this regard, it is instructive to quote an authority reported as Workmen of Subong Tea Estate (Indian Tea Employees' Union) and Subong Tea Estate and another, , (1964) I LLJ SC 333, wherein Hon'ble Supreme Court dealt : 33 : (RC) with the right of an employer to effect retrenchment for bonafide trade reasons and observed at page 338 as under: "................................................................. ................................................................... In dealing with the question of retrenchment in the light of the relevant provisions to which we have just referred, it is, however, necessary to bear in mind that the management can retrench its employees only for proper reasons. It is undoubtedly true that it is for the management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work involved in the industrial undertaking of any employer must always be left to be determined by the management in its discretion, and so, occasions may arise when the number of employees may exceed the reasonable and legitimate needs of the undertaking. In such a case, if any workmen become surplus, it would be open to the management to retrench them. Workmen may become surplus on the ground of rationalization or on the ground of economy reasonably and bona fide adopted by the management, or of other industrial or trade reasons. In all these cases, the management would be : 34 : (RC) justified in effecting retrenchment in its labour force. Thus, though the right of the management to effect retrenchment cannot normally be questioned, when a dispute arises before an industrial court in regard to the validity of any retrenchment, it would be necessary for industrial adjudication to consider whether the impugned retrenchment was justified for proper reasons. It would not be open to the management either capriciously or without any reason at all to say that it proposes to reduce its labour force for no rhyme or reason. This position cannot be seriously disputed."
29. Management has claimed that it has lost faith in the workman but no reason has been given either in the written statement or in the evidence of MW1 Brigadier D.V. Malhotra and MW2 Sh. P.K. Saha as to what for the management has lost faith in the workman. There is no material on the file to support such a view.
30. In view of the above discussion, the termination of : 35 : (RC) the workman is both illegal and unjustified and the same is set aside.
31. Now, the question is as to what relief, the workman is entitled? In an authority reported as The Workmen of M/s Firestone Tyre & Rubber Co. of India (Pvt.) Ltd. etc. vs. The Management & Ors. 1973 (1) SCC 813, Hon'ble Supreme Court in paragraph 32 sub paragraph 10 observed as under: "10. In a particular case, after setting aside the order of dismissal, whether a workman should be reinstated or paid compensation is, as held by this Court in The Management of Panitole Tea Estate Vs. The workmen (1971) 1 SCC 742 within the judicial decision of a Labour Court of Tribunal."
32. Similarly, in another authority reported as Nehru Yuva Kendra Sangathan Vs. Union of India & Ors. 2000 IV AD (Delhi) 709, Hon'ble Delhi High Court dealt with the : 36 : (RC) question of reinstatement and back wages and observed in paragraphs 27 and 28 as under : "27. We find from the decision of the Supreme Court rendered in the 1970s and 1980s that reinstatement with back wages was the norm in cases where the termination of the services of the workman was held inoperative. The decisions rendered in the 1990s, including the decision of the Constitution Bench in the Punjab Land Development and Reclamation Corporation Ltd., Chandigarh seem to suggest that compensation in lieu of reinstatement and back wages is now the norm. In any case, since we are bound to follow the decision of the Constitution Bench, we, therefore, conclude that reinstatement is not the inevitable consequence of quashing an order of termination; compensation can be awarded in lieu of reinstatement and back wages.
28. Considering the facts of this case, we are persuaded to award compensation in lieu of reinstatement and back wages to the workman ...................................................... ....................................................................."
: 37 : (RC) 33. Similarly, in another authority reported as M.L.
Binjolkar Vs. State of Madhya Pradesh, 2005 VI (S.C.) 413, Hon'ble Supreme Court observed in paragraph 7 as under : "................ Though the High Court has not specifically dealt with the question as to what would be the appropriate quantum, keeping in view the law laid down by this Court in various cases e.g. Hindustan Motors Ltd. Vs. Tapanj Kumar Bhattarcharya & Anr. (2002 (6) SCC 41), Rajendra Prasad Arya Vs. State of Bihar (200 (9) SCC 514), Sonepat Cooperative Sugar Mills Ltd. Vs. Ajit Singh (2005 (3) SCC 232), Haryana State Cooperative Land Development Bank Vs. Neelam (2005 (5) SCC 91), Manager, Reserve Bank of India, Bangalore Vs. S. Mani & Ors. (2005 (5) SCC 100) and Allahabad Jal Sansthan Vs. Daya Shankar Rai & Anr. (2005 (5) SCC 124), we do not find any scope for interference. The earlier view was that whenever there is interference with the order of termination or retirement, full back wages were the natural corollary. It has been laid down in the cases noted above that it would depend upon several factors and the court : 38 : (RC) has to weigh the pros and cons of each case and to take a pragmatic view. ........."
34. Similarly in another authority reported as U.P. State Brassware Corporation Limited and another Vs. Uday Narain Pandey, (2006) 1 SCC 479, Hon'ble Supreme Court observed in paragraph 56 as under:
56. A Division Bench of this Court in M.L. Binjolkar v. State of M.P. (2005) 6 SCC 224, referring to a large number of decisions, held: (SCC p. 228, para 6) "6 [7] ... The earlier view was that whenever there is interference with the order of termination or retirement, fullback wages were the natural corollary. It has been laid down in the cases noted above that it would depend upon several factors and the Court has to weigh the pros and cons of each case and to take a pragmatic view."
: 39 : (RC)
35. As such, the present position of law is that reinstatement is an exception whereas the payment of compensation is the rule.
36. In the instant case, the workman has worked with the management number 2 only with effect from 1.5.2002 to 14.11.2004. Apparently, this is a short tenure of service.
Management has alleged loss of faith in the workman, though the same has not been proved before me.
37. In these circumstances, reinstatement would not be an appropriate relief. Considering the tenure of service and the fact that workman has been terminated without any reason, I deem it proper that a compensation of Rs.75,000/ would serve the ends of justice. I, accordingly, grant compensation of Rs.75,000/ (Rupees Seventy Five Thousand only) to the workman to be paid by the management number 2 within one : 40 : (RC) month of the publication of the award, failing which interest at the rate of 10% (ten percent) would be payable by the management to the workman. The issues are accordingly, decided in favour of the workman and against the management number 2.
38. Award is passed in the above terms. Six copies of the award be sent to the appropriate government. File be consigned to record room.
Dated : 14.8.2007 (O.P. SAINI)
PRESIDING OFFICER, LABOUR
COURT NO. VII, DELHI.
: 41 : (RC)