Delhi District Court
This Reference Dated 22.12.2 vs Lt. Governor on 16 April, 2010
BEFORE THE COURT OF SH A.S. JAYACHANDRA
PO : LABOUR COURT : KKD : DELHI
DATE OF REFERENCE : 22.12.2000
FIRST DATE BEFORE THIS PO : 20.04.2009
ARGUMENTS CONCLUDED ON : 18.03.2010
AWARD DATED : 16.04.2010
ID No. 17/09/01
Unique case no. 02402C001857200C
IN THE MATTER OF :
M/s K.G. Khosla Compressors Ltd.
2/1, D.B. Gupta Road, Paharganj
New Delhi -55
Now known as :
M/s Kirloskar Pneumatic Co. Ltd.
No. 1, Hadapsar Indl. Estate
Pune-411013 ...........Management
versus
Sh. S.K. Saluja
C-35, DDA Flat, Old Rajinder Nagar
(Opp. Ganga Ram Hospital)
New Delhi-60 ................Workman
AWARD
The entire file was received under a special order of transfer
passed by the Secretary Labour dated 19.03.2009 in F.25(54)/2008-
transfer-Lab.-144-48.
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1. This reference dated 22.12.2000, was received from the
government vide No. F.24 (4292)/2000-Lab. 43588-92 is as under :
Whether the termination of services of Sh. S.K. Saluja, by
the management is illegal and/or unjustified and if so, to what
relief is he entitled and what directions are necessary in this
respect ?
2. CASE OF THE WORKMAN : The workman pleaded that he
joined the management on 17.11.1975, as a fitter. He had clean
service record. His last drawn salary was Rs. 4,720/- p.m.
Management was dealing with manufacturing and service of
compressors, which was later taken over by Kirloskar group. The new
management wanted to retrench the workmen. It resorted to strong
arm tactics and forced the workman to leave the company without
compensation. Management also pressed upon the workman to
resign, workman refused. The workman received a letter dated
06.06.2000, on 07.06.2000, intimating his termination w.e.f.
09.06.2000. According to him, he was not taken on duty on
10.06.2000, whereas the juniors were still in the employment. The
management has not issued any notice or pay in lieu of notice.
Workman sent a demand letter dated 09.06.2000. Hence, he has
sought for reinstatement along with back wages on the ground that he
remained unemployed despite best efforts.
3. CASE OF THE MANAGEMENT : The management contends that
the claimant is not a 'workman' in view of Section 2(s) of the ID Act.
The management closed its entire business in Delhi. No industrial
dispute is maintainable. On the merits, it contended that the workman
who joined as a fitter, was working as Service Engineer when he was
discharged from the employment and was drawing a salary more than
Rs. 1,600/- per month. M/s Kirloskar took over the co. in the year
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1994-95. It denied having resorted to strong arm tactics. The
management never asked the workman to resign. In terms of the
appointment letter, the services of the workman since were not
required, the claimant was relieved from the employment w.e.f.
09.06.2000, and that he was offered one month pay as notice pay.
Workman refused to take the letter, hence, it was sent by registered
post. The workman never reported to duty on 10.06.2000,
management further denied that there were 800 workmen on their roll.
It claimed that the workman was working in the office. The conciliation
was suitably replied. Workman is gainfully employed. Management
contends that there is no illegality in the removal. It prays for
dismissal of the claim. Rejoinder is filed by the workman reiterating
that he is a 'workman' for the purposes of ID Act.
4. ISSUES : Based on the pleadings, my Ld. Predecessor had
framed the following issues on 13.01.2003 :
a) Whether the workman is not a 'workman' ?
b) Whether the management has closed its entire business
operation in Delhi office where the claimant was employed ?
c) As per the terms of reference.
5. EVIDENCE : To prove their respective stand, one witness
each is examined on both the sides. The arguments were heard.
Written arguments were also filed by the workman .
6. CONTENTIONS : During the course of arguments, the AR
for the workman had submitted that the workman joined as a fitter on
17.11.1975 and he was removed on 09.06.2000. According to him,
there is no evidence to show that the workman was doing the
supervisory job. The evidence is very clear according to the workman,
that he falls under the category of workman. The removal of the
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workman is assailed as opposed to Section 25-N of the ID Act.
7. The management on the other hand argued that the workman
joined as a fitter in the year 1975 and later he was promoted in the
year 1995 as an Assistant Service Engineer and at the time of
cessation, he was Service Engineer. Therefore, he is not a workman
at all. Further, it submits that no reinstatement can be ordered in this
case since the management has closed its DBG Road office at Delhi.
There is no illegality in the order of removal as the discharge order is
completely in harmony with the appointment letter. Therefore, the
management had prayed for dismissal of the claim.
8. RULINGS URGED BY EITHER SIDE : The AR for the workman
had filed the following rulings :
a) 1997 - II LLJ 255 Mathur Aviation v/s Lt. Governor, Delhi & Ors. to
urge that even a pilot is considered as a workman ;
b) 1953 - II - LLJ 334 Ford Motor Co. of India Ltd. v/s Ford Motors
Staff Union holding that the test to decide a workman is made clear in
this ruling ;
c) 2008-1-LLJ 367 Amarsey Damodar v/s Rashtriya Cotton Kamgar
General Union & Anr. to urge that the termination without complying
Section 25-F is bad in law ;
d) 2007 Lab. IC/3553 : Workmen ITPO v/s Management, ITPO to
urge that the mere notice given by the management that the workman
may collect the dues would not be treated as compliance of Section
25-F of the ID Act ;
e) 2007 - Lab. IC 1756 Mrs. Naresh Sharma v/s Secretary General,
Indian Red Cross Society & Ors. to urge that the workman is entitled
for back wages ;
f) 2005 - Lab. IC 1325 M/s Oswal Agro Furane Ltd. and Anr.
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enumerating that the settlement of closure should be within scope of
Section 2(p) and Section 18(3) of the ID Act ;
g) 2008 Lab. IC 3220 Ravi Dutt & Ors. v/s State of HP & Ors. to urge
that receipt of lump-sum compensation received by workman would
preclude them from enforcing their rights has to be rejected.
Apart from the above, the workman had also culled out several
rulings in the lengthy written arguments filed by him which I have gone
through. In the ruling of VLT Cargo Movers Pvt. Ltd. v/s Sh. Ajit Kumar
S. Puri 2009 (1) LLJ 709, the Bombay High Court held that the objection
of employer regarding the status has to be made out by the employer.
In the ruling of S.K. Verma v/s Mahesh Chandra, 1983 (4) SCC 214, the
Hon' Supreme Court held that even the Development Officer is a
workman within the meaning of Section 2(s) of the ID Act. The
question is whether the claimant had any authority to bind the
management by his independent wisdom and actions. In Ved Prakash
Gupta v/s Delton Cables India Ltd. 1984 (II) SCC 569, the Hon'
Supreme Court while laying down the test had held that a claimant
who had no powers to appoint or dismiss any workman and the
substantial duty being that of a Security Officer at the gate had no
managerial or supervisory powers. In DP Maheshwari v/s Delhi
Administration LLJ 1983 Page 425, it is held that when a claimant was
not discharging supervisory functions, itself is a strong circumstance to
hold that he was discharging duties of clerical nature. If the Labour
Court had drawn such an inference, it would have been well justified in
doing so. The employees occasionally deputed on important mission
are to be looked from the main duties alloted to such a claimant. In All
India Reserve Bank Employees Association v/s RBI, 1966 AIR SC 305, it
is held that that are only two circumstances in which a person ceases
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to be a workman. If he draws wages in excess of Rs. 500/- per month
or if he performs managerial function by reason of a power vested in
him.
On the other hand, management relied on the following rulings :
a) The Management of Sonepat Co-operative Sugar Mills v/s Ajay
Singh 2005 LLR 309 to urge that merely, because an employee had not
been performing the managerial or supervisory duties would not ipso-
facto mean to be a workman. In that case, the respondent was a legal
Assistant ;
b) T.N. Vishakantaiah v/s Management of Mysore Petro Ltd. 2005 LLR 162 Kar. to urge that in arriving at the conclusion whether the workman is covered U/s 2(S) of the ID Act, the nomenclature attached to designation should not blur the mind of the court. In that case, the claimant was a Junior Engineer ;
c) District Red Cross Society v/s Babita Arora & Ors. LLR 2007 1125 of the Hon' SC to urge that where only a unit or undertaking is closed down which has no functional integrality with other units or undertakings, the provisions of Section 25-FFF ID Act, will get attracted and the workmen are only entitled to compensation as provided therein ;
d) Haryana Urban Development Authority v/s Om Pal 2007 LLR 582 SC wherein it is held that under the discretionary powers U/s 11A of the ID Act, relief of reinstatement with full back wages should not be granted automatically ;
e) Orissa FDC v/s PO Labour Court, 2005 LLR 763 Ori. wherein it is held that a Stenographer can not be equated with ordinary workman ;
f) General Manager Haryana Roadways v/s Rudan Singh 2005 LLR 849 SC where the Hon' Supreme Court held that Labour Court holding 6/18 termination as violation of Section 25-F of ID Act, entire back wages is not the thumb rule. Several other factors like length of service etc. are to be considered ;
g) Allahabad Jal Sansthan v/s Daya Shankar Rai 2005 LLR 534 SC wherein the Hon' Supreme Court had held that full back wages as a result of reinstatement is to be seen through the passage of time where a need has arisen to develop pragmatic approach '
h) Kishan Lal v/s GNCT of Delhi 2007 LLR 976 Del. wherein our Hon' High Court held that considering the long gap, facts and circumstances of each case, relief is to be moulded and it is no longer a matter of right available to the workman to claim and receive relief of reinstatement with full back wages ;
i) K. H. Pandhi v/s PO Labour Court 2004 LLR 409 Del. where our Hon' High Court had held that designation is no consequence and primary duties of the employee are to be taken into consideration to determine whether the employee is a workman or not ;
j) MP State Electricity Board v/s Smt. Jarina Bee 2003 LLR 848 SC where it is held that a sum of Rs. 80,000/- is awarded as back wages and full back wages is not the natural consequence ;
k) A.N. Shukul v/s Philips India 2009 LLR 1179 Del. wherein our Hon' High Court held that award of damages does not arise in that case as there was no wrongful termination. The said judgment is delivered in the original suit where a question arose with regard to an employee who was working as Manager Group - VI and Branch Head ;
l) State of Rajasthan v/s Ganeshi Lal, 2008 LLR 770 SC wherein it is held that reliance on the decisions without looking into the factual background is impermissible ;
m) The Managing Director NEKSRTC v/s Shivayanamath 2004 LLR 91 7/18 Kar. wherein it is held that observations made by a court in a judgment is to be considered in the background of the facts and circumstances of particular case ;
n) Tata Sons Ltd. v/s S. Bandopadhaya and Anr. 2004 LLR 506 Del. wherein our Hon' High Court held that an employee engaged in senior position like Deputy Manager and being highly qualified can not claim to have a status of a workman under Section 2(S) of the ID Act ;
o) TP Srivastava v/s National Tobacco Co. FLR 1991 (63) SC 672, wherein it is held that a salesman can not be treated as a workman however, an amount of three years salary is awarded as compensation in that case by the Hon' Supreme Court ;
p) M/s E. Hill and Co. v/s State of UP 2002 LLR 1073 wherein it is held that after closure, employee's agitation with regard to earlier transfer becomes infructuous ;
q) Garrison Engineers v/s Narender Singh, 2007 (8) SCALE 368 wherein the matter was remitted to the labour court regarding the applicability of the Act, since the management contended that it is not an industry ;
r) Ram Ashrey Singh & Anr. v/s Ram Bux Singh 2003 LLR 415 SC is relied to urge that lack of aptitude of employee, likelihood of absence in sincerity of work, are to be considered in fixing the back wages ;
s) NTPC v/s Jawahar Lal 2007 LLR 788 SC wherein it is held that when an employee is gainfully employed only reinstatement is maintained and no back wages.
I have gone through the above rulings. It is well settled law that nomenclature of a post is immaterial. The list of duties are to be looked into. The precedents can not be the sole factor without considering the evidence and facts of each case. The grant of back 8/18 wages is settled as a matter of pure discretion and not as a rule. In the present case, the evidence and the facts proved or disproved are considered in the light of the rulings of our HOn' High Court and the Hon' Supreme Court. The rulings of other High Courts are only of persuasive value.
9. With the above contentions on either side and in the context of the applicable rulings on the hand and with the available oral and documentary evidence concerning the present case, I am to answer the issues as under.
10. ISSUE NUMBER 1 : Workman contends that he continues to be a workman and he was never doing any supervisory job. The AR for the management submits that the evidence is replete with many admissions on the part of the workman that he was doing supervisory job or managerial in nature. I had looked into the evidence. WW 1 had stated in his affidavit at Ex. WW 1/A that he joined on 17.11.1975 as a fitter. He used to repair the compressors at outstation. Nobody was working under him and not even a helper. He further stated that he had no powers to sanction one paisa on behalf of the co. Further, he stated that he had no power to appoint or to take disciplinary action against any workman. I am restricting myself from the evidence only with regard to the relevant portion of the evidence concerning issue number 1. In the cross-examination, I find that he admits that he was working as a Service Engineer and the last drawn salary was Rs. 4,800/-. He also admits that he was covered under ESI, PF and LTC. He admitted that DJ Kumar and Het Ram, were the Managers who used to assist him and other Service Engineers. Further, he volunteered to say that they used to send them for field work. He further admitted that he used to represent the co. in respect of the complaints regarding the 9/18 products of the co. It is further elicited in the cross-examination itself that no Assistant used to accompany the claimant and that the claimant used to work with his own hands. He further admitted that he used to commit on behalf of the management for replacement of parts but had no power to commit on behalf of the management. He further at one stages had stated that he used to do the job along with the helpers deputed by the customers. Further, he admits that co. had trusted him and the value of compressors used to be Rs. 50/- Lacs which he used to handle.
11. I have carefully gone through the evidence. The AR for the management strenuously argued that since the workman was a Service Engineer with a salary of Rs. 4,800/- per month and used to commit on behalf of the co. and further having been assisted by three Managers, he can not be treated as a workman. In the evidence of the management witness, Mool Chand Sharma, it is found in the examination in chief that the workman was independently representing the management in the northern region of India and he was doing the job of supervisation of installation of compressors. He was assisted by Shyam Babu Sharma, Assistant Foreman ; D.J. Kumar and Het Ram, Managers. According to him, the workman was handling the compressors which value was more than Rs. 50/- Lacs. Therefore, he is not a workman. This witness was also cross-examined by the workman. It is found in the cross-examination that DJ Kumar and Het Ram, were seniors to the workman. The outstation expenses of the claimant and that of the team used to be approved by the management. MW 1 further admits that the workman Saluja, had no powers to sanction any amount. He further made it clear that MW 1 has no document to establish that the claimant Saluja, had been 10/18 assisted by any juniors or subordinate in any installation work.
12. With the above evidence, the following points emerge glaringly on record :
a) though the workman had stated that he was handling the compressors and the installation thereof being assisted by Het Ram and DJ Kumar, the cross-examination of MW 1 shows that the Het Ram and DJ Kumar, were seniors to the workman. Furthermore, I find that the workman had volunteered to say that these were the persons who used to send him on the field work ;
b) the management which contended that the workman was doing supervisory work which entails him the managerial or supervisory powers has not produced any documents to vindicate their stand. It should be borne in mind that it is the duty of the management to establish this fact by cogent and positive evidence ;
c) though the workman had admitted that he was handling the compressors with valued more than Rs. 50/- Lacs and that he used to commit on behalf of the management, it can not be forgotten that such commitment done was only with regard to replacement of parts. As a service personnel deputed by the co. it was naturally a duty casted upon him and just because he makes an assurance to replace the parts, he can not be called a supervisor and or holding management powers ;
d) the deposition of the workman that he had no monetary powers or the powers to sanction leave or appointment is not refuted in the cross-examination ;
e) on the other hand from the cross-examination of MW 1, it is made clear that Mr. Saluja, had no powers to sanction any amount on behalf of the co.11/18
f) the evidence of MW 1 is also clear that Saluja, was taking advise from the seniors.
13. Suffice it to say, from the evidence available on record, I do not find any material to hold that the workman was doing only the supervisory/managerial job in nature. The contention of the management that he was Incharge of the entire North Region is not proved by any documentary evidence. Further, even if he was deputed outside, it was for the service and installation work with no powers in him either monetary or to act independently to take some binding decisions which affected the management. The management had not filed any documentary evidence nor the version of MW 1 in the chief is corroborated by believable cogent evidence. Therefore, I have no hesitation to hold that the claimant falls under the definition of workman as found in Section 2(s) of the ID Act.
14. ISSUE NUMBER 2 : The workman deposed in his chief that he worked with the management. He has not stated as to where he was placed. However, he has relied on some documentary evidence. Ex. WW 1/1 is the original appointment letter issued by Kalkaji Compressors Work owned by KG Khosla & Co. This is dated 25.11.1975. Ex. WW 1 /2 is again a letter addressed to Saluja, the workman by the present management showing that he was a service Engineer attached to Delhi branch. The address of DBG Road is not found. However, Ex. WW 1/3 the demand notice sent by the workman establishes the address of the management as at DB Gupta Road, Delhi.
15. It is the contention of the management that the office of the management is closed down. At para 7 of the WS, it is contended that the Delhi office of the management wherein the claimant was working 12/18 stands closed and no employee is working in that office. It is the onus on the part of the management to prove this pleading. In the evidence of Mool Chand Sharma, MW 1 at para 11 of his affidavit had contended that the claimant was employed and working till his relieving at Pahar Ganj, New Delhi Office. It was a rented premises owned by Punjab National Bank. Management closed its office and surrendered the premises. He has also produced Ex. MW 1 /4 as the documentary evidence. The said document shows that the management Kirloskar Pneumatic Co. Ltd. handing over peaceful and vacant possession of the first floor of the PNB building which was rented out to them earlier.
16. I have gone through the cross-examination of this witness. In the cross-examination, there is nothing to demolish the say of the MW 1 as having surrendered the office premises. On the other hand, it is affirmed in the cross-examination that the management had to vacate as the landlord PNB was putting lot of pressure and filed a case. There is no suggestion to MW 1 that after evicting from the premises, the management is functioning from some other place. In the evidence of WW 1 also, it is stated that the management is functioning from Majusha Building, Nehru Place, Delhi-19. The say of this workman is not corroborated by any independent witness or by documentary evidence. Therefore, the contention of the management that it has closed down its operation from the premises is proved on record.
17. ISSUE NUMBER 3 (TERMS OF REFERENCE) : Now I am to look into the legality or otherwise of the termination of services of the workman. The workman contends that he was terminated illegally. Ex. WW 1 /2 is the termination letter. I find from the termination letter that according to the service rules and regulations of the co. and further in accordance with the conditions of the appointment of the 13/18 claimant, the management decided to dispense with the services of the workman w.e.f. 09.06.2000. As such Ex. WW 1 /2 speaks of the offer of the management of the statutory requirements of one month salary to the workman. Workman was advised to hand over the official charge and all belongings. He was also advised to collect the full and final dues.
18. In the demand letter at Ex. WW 1/3, workman made it clear that the termination is misconceived and that he was not aware of the rules of the co. According to him, mere dispensation of service, is illegal and that no notice or notice pay is given to him.
19. MW 1 justifying the action of the management testified that no stigma was casted upon the workman and that the relieving order by letter dated 06.06.2000, offered one month pay to him. Further, MW 1 stated that the workman refused to accept the relieving order and the same was sent by registered post.
20. The contention of the management is that the workman was relieved without any stigma and further in accordance with the appointment letter, he was relieved.
21. It is to be kept in mind that the workman was appointed w.e.f. 17.11.1975 and he worked till 09.06.2000, as per Ex. WW 1/1 and 1/3. These documents are not in dispute. Section 25-F of ID Act, makes it very clear that 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 the workman was given one months notice in writing indicating the reasons for retrenchment and after the expiry of notice period or the workman has been paid in lieu of one month notice. Further, it is mandated that the workman must be paid the retrenchment compensation equal to 15 days average pay 14/18 for every completed year of service or any part thereof in excess of six months. Further, such notice in the prescribed manner must have been served on the appropriate government.
22. The evidence led by the management does not show that it has complied the provisions of Section 25-F of the ID Act. The contention of the AR from the management that the order of relieving is in accordance with the terms of appointment can not be allowed in view of Section 25- F of the ID Act. Therefore, the relieving of the workman sans stigma can not be treated as legal and justifiable.
23. The ruling of our Hon' High Court in Parmod Kumar and another Vs. Presiding Officer and another, 123, DLT 509, DB, has held at para 11 as under:-
'Para 11. In a number of matters, this court has also examined the same issue and it has been repeatedly held that where a long period has lapsed since the date of termination, compensation should be paid in lieu of reinstatement and back wages. Reference in this regard may be made to the judgments in the cases of Murari Lal Sharma Vs. Nehru Yuva Kendra Sangathan, 96 (2002) DLT 412 (DB) and K. H. Pandhi Vs. The Presiding Officer, Addl. Labour court and another, 110 (2004) DLT 101 and Pal Singh Vs. NTPC Ltd. 96 (2002) DLT 877. In the given context of the case, I find that the reinstatement can not be ordered for the reason of the management having closed down its office and further considering the long gap of delay. I find from the cross-examination of the workman that workman admits in Delhi the Service Engineers are only employed at Desh Bandhu Gupta Road, which is closed down. There is further admission that he was nowhere connected to the office at Manjusha Building and his work was only restricted to DBG Road office, Delhi. Further, it was argued that the 15/18 retirement age of the workman is 58 years and he was to retire by 2011. Considering this aspect also, this court can not order for reinstatement.
24. Coming back to the question of granting of back wages, I am to consider the rival contentions. It was urged by the management that no back wages can be granted since the granting of back wages is only a matter of discretion. In Secretary State of Karnataka v/s Uma Devi 2006 (4) SCALE 197, it is held that in the interest of justice, a lumpsum amount may be directed to be paid as compensation in lieu of reinstatement with back wages. It is well settled that the grant of back wages is only a matter of discretion and that the court may award compensation in lieu of reinstatement. Each case is to be considered on its own merits. In the LPA 85/09, Kamla v/s Management of Social Welfare, DD 02.04.2009, our High Court had granted reinstatement with 50 % back wages on the ground that Section 25-F of the ID Act, was not followed by the management. However, from the close reading of all the rulings relied by the workman, it is very clear that the grant of back wages is purely the matter of discretion to be decided on various factors and each case is to be weighed in its own basis and merits of the case.
25. In this case, the contentions of the management is that the workman had admitted in the cross-examination that there is an admission by the workman (cross-examination dated 15.02.2006, before my Ld. Predecessor) that he tried for alternate employment but could not get the same. He applied for employment to M/s Equator Tours and Travels, however, he did not remember the name of other names where he applied might be 3-4 companies. He further admits that M/s Equator Tours and Travels had a different nature of work than 16/18 what he worked but he worked there to stave off hunger.
26. It is not out of place to mention that the management wanted me to enforce a settlement which was alleged to have endorsed by the senior counsel who appeared for the workman earlier in this case. However, the application of the management was dismissed by me by an order dated 19.08.2009. The workman had got the matter transferred under a special notification after having denied a settlement alleged to have entered into the presence of a senior counsel and the management contended that it had brought the agreed amount of Rs. 1,48,780/- towards full and final settlement of all the claims of the workman.
27. In the peculiar context of the present case, I find that the proper relief that can be granted is compensation in lieu of reinstatement and back wages. The workman had joined in the month of November, 1975 and worked till 09.06.2000. I find a lump-sum of Rs. 2,50,000/- (RUPEES TWO LAC FIFTY THOUSAND ONLY) will be the proper and adequate compensation payable in this case towards damages, the retrenchment compensation, gratuity and back wages payable to the workman by the management. Consequently, I pass the following award :
AWARD The termination of the services of the workman is held as illegal and unjustified. Consequently the management is directed to pay a lump-sum of Rs. 2,50,000/- (RUPEES TWO LAC FIFTY THOUSAND ONLY) as compensation payable to the workman towards all the legal benefits.
The amount be paid to the workman within 30 days after publication of the award failing which the management shall pay the 17/18 same along with interest @ 18 % p.a. from the date of award till realisation.
Reference is answered accordingly.
Let requisite number of copies of this award be sent to the appropriate government for publication.
File be consigned to record room.
16th April, 2010 (A.S. JAYACHANDRA) PO : LABOUR COURT - XVII, DELHI 18/18