Delhi District Court
The vs The on 17 April, 2008
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IN THE COURT OF SHRI SANJAY GARG : POLC : V : KARKARDOOMA:
DELHI.
DID No. 3/2004
B E T W E E N
The Workman Shri Sunil Bhardwaj S/o Shri M.D. Bhardwaj, R/o B95, Ganesh
Nagar, Tilak Nagar, Delhi110018.
A N D
The Management of M/s. 1) Ross Controls India Pvt. Ltd. Plot No.113, Ambattur
Industrial Estatem Chennai 600058 through its Managing Director Shri A.K.
Banerjee. 2) Ross Controls Pvt. Ltd. B95, Ganesh Nagar, Tilak Nagar, Delhi
110018 (Sub Branch).
DATE OF INSTITUTION : 16.01.04
DATE OF CONCLUDING ARGUMENTS : 16.04.08
DATE OF AWARD : 17.04.08
A W A R D
By this order I shall dispose of claim filed by the workman U/S 10(4)
(A) of I.D. Act.
2. The facts as alleged by the workman in his statement of claim are
that he was employed with the management as a Sales Manager (North) w.e.f.
1.10.2000 and was initially getting a salary of Rs.13,000/. He was functioning as a resident sales representative of the management from his residence. He worked continuously for three years from 1.10.000 till 30.11.03. He worked with utmost honesty and diligence and was instrumental in improving the sales of the management in northern region substantially. He never gave a cause of 2 complaint to the management during the period he worked with them. He was shocked to receive his termination letter dt. 16.11.03 effective from 30.11.03. Neither any retrenchment compensation nor one month notice was paid to him by the management. It is stated that order of the termination dt. 16.11.03 is in violation of Section 25 F of the I.D. Act.
It is stated that management has employed one Sh. Yashpal Sethia in his place at the instance of Sh. A.K. Banrjee who is doing the same work and duties as were performed by him. It is stated that management has violated Section 25 G and H of the Industrial Disputes Act. It is stated that all the functions performed by workman was clerical in nature. His main duty was to obtain orders from the customers, execute the orders receive payments, deposit the payments in the account of the company with the bank, to collect sales tax declaration forms from the customers and furnish the same to the management. The workman has prayed to be reinstated with continuity of service and paid all consequential benefits.
3. The management contested the claim and filed written statement taking preliminary objection that claimant as Sales Manager was not mainly and substantially performing duties as are mentioned in the definition of 'Workman' U/s 2 (S) of the I.D. Act. On merits it is stated claimant was performing managerial, supervisory and administrative nature of duties for looking after and managing the sales of the management for North India. Claimant used to interact with clients of the management, negotiate with the clients and take decision which had an effect of binding the management. His work required intelligence, creativeness and imagination. It is denied that the claimant worked 3 with utmost honesty and diligence and was instrumental in improving the sales of the management in the Northern Region. It is stated that as a sales manager performance of the claimant remains dismal and did not show any improvement despite repeated advises from the higher management. It is stated that his acts were not compatible to his responsibilities and he had not visiting the customers. Claimant was provided with every infrastructure in the sales office to discharge his duties and responsibilities effectively but he hardly used the infrastructure facilities and was infact bidding time. It is stated that after his appointment claimant was not able to find even one single large customer for the products of the management. The claimant did not justify the amount spent by management by way of his salary and other overheads of sales office. To cut down the said expense management was constrained to wind up the sales office at Delhi on 31.12.02 and claimant was asked to function from his residence w.e.f. 01.1.03. The working of the claimant showed no improvement. The higher management on numerous occasions advised the claimant to effectively interact with the customers and have focus on his work but had no effect. Despite the warnings and ultimatum given by the management to the workman his performance and business of the management did not improve as such management was constrained to terminate services of the claimant vide letter dt. 16.11.03.
4. Workman filed rejoinder reiterating the submissions made by him in his statement of claim and denying the averments made by management in its written statement.
5. On 27.4.05 from the pleading of the parties, the following issues for trial were framed:
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(1)Whether the claimant falls within the definition of 'workman' as enshrined U/s 2 (s) of I.D. Act?
(2) Whether the services of the workman were terminated illegally?OPM (3) Relief in terms of reference.
6. In evidence workman tendered his affidavit Ex. WW1/A and relied upon documents Ex.WW1/1 to Ex.WW1/9. Management examined its Director Sh. A.K. Banerjee as MW1. He filed affidavit Ex. MW1/A and relied upon documents Ex.MW1/1 to Ex. MW1/27.
7. Heard the arguments of Sh. Amit Sharma Ld. AR for the workman and Sh. Jitesh Pandey Ld. AR for the management. Perused the case file carefully. My issuevise findings are as follows:
ISSUE NO.1
8. The Ld. AR for the workman submitted that he was working in clerical capacity and he had no decision making power or power to exercise discretion, tact or supervision. It is submitted that work of the claimant was purely clerical and he is a workman within the definition U/s 2 (s) of the I.D. Act. On the other hand Ld. AR for the management contended that workman himself has admitted to be working as a Sales Manager and while working as such claimant has all sort of discretion to his disposal and his job involved tact and supervision.
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9. Section 2 (s) of the Industrial Disputes Act, 1947 defines the '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 to that dispute, but does not include any such person
(i) who is subject to the Air Force Act, 1950 (45of 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 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.6
10. The definition of workman has been elaborately discussed in Union 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.
(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;
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(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
(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 8 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 one 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 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."
11. Similarly, in Anand Regional Cooperative Oil Seedsgrowers Union Ltd. Vs. Shaileshkumar Harshadbhai Shah 2006 III LLJ 767, the Apex 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 13 to 17 as under:
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.9
(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 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: 10
"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 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."
15. In Tata Sons Ltd. Vs. S. Bandyopadhyay & Anr. 2004 LLR 506. Our High Court while dealing with the case of Deputy Manager (Engineering) and observed in paragraphs 7 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 11 duties could not be termed as 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 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)."
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 12 of the other types of work mentioned in the definition. The documentary evidence on 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 non manual work.
12. During his cross examination workman (WW1) has stated that he was operating from his residence from Delhi and on instructions of the company he has purchased computer, fax machine, office stationery for his operations. WW1 has stated during his cross that he used to interact through Emails and fax machine with the Managing Director and with the customers. WW1 has further stated that he was not planning his daily schedule and the Managing Director used to instruct him on day to day basis for his schedule. Regarding his nature of job workman stated during his cross that he used to collect the order, Cforms and cheques. WW1 further stated during his cross that he had no power to negotiate the price of the product and he used to strictly quote the price as per instructions from the Head Office.
13. 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 appointment of the job performed are relevant and needs consideration. Ex.WW1/1 is the appointment letter filed by workman on record. It also comprises the terms and condition of his employment. As is apparent from the terms and conditions of the claimant, he was required to manage the marketing and other related operations in Northern India for the management. 13 Sub Clause 1 to 4 of Section 2 (s) of the I.D. Act provides the persons which are not got covered in the definition of workman. Sub clause 4 excludes a person who is working in supervisory capacity and does functions mainly of a managerial in nature. In Anand Regional Cooperative Oil Seedsgrowers Union Ltd. Vs. Shaileshkumar Harshadbhai Shah 2006 III LLJ 767, Apex Court has observed that supervision contemplates direction and control. An undue importance need not be given for the designation of employee or the name assigned, the class to which he belongs as needed to be asked as to what are the primary duties he performs. For the said purpose it is necessary to prove that there were some workers working under him whose work is required to be supervised. In view of the observations of the Apex Court in my opinion designation of supervisor pre suposes that the person has some subordinates whose work he is required to supervise as part of his duties. Admittedly in this case claimant has no subordinates or work force working under him. It is an admitted case of the management that he used to work all alone in Delhi. Thereby job profile of the claimant cannot said to be covered under Sub Clause 4 of Section 2 (s) of I.D. Act.
14. Sub Clause 3 excludes an employee who is working mainly in a managerial or administrative capacity. In order to take an employee out of the definition of 'workman' it is necessary to show that he is employed in fact and in substance mainly in a managerial or administrative capacity. The words 'Managerial' or 'Administrative Capacity' are not defined in the Act, therefore have to be interpreted in their ordinary sense. In order to be in a position of the management it is not necessary that the employee should be at the top of the hierarchy or that he should have absolute power in any respect. It is not even necessary that individual should be in the sole control of the orgnisation or a 14 department of that orgnaisation.
The nature of the business done by the management is found mentioned in the letter of appointment, as follows:
a) The products are highly specialised items.
b) The identity and needs of ROSS's customers are not generally known in the industry.
c) ROSS has a proprietary interest in the identity of its customers and its customers list.
d) Documentation and information regarding Employer's methods of production, invention Patents, sales pricing costs, and the specialised requirements of ROSS's customers are highly Confidential trade secrets.
15. Regarding the working hours of the claimant it is mentioned in the appointment letter that claimant shall be required to work such hours as are needed to effectively perform the duties assigned to him. It is further mentioned that the claimant is required to treat all information and documentation of management as well as its clients with utmost confidentiality, and ensure its safekeeping. The above mentioned characters throws light on the job which worker was required to do. It is apparent from the circumstances that the nature of job been done by workman was highly technical and also involved elements of confidentiality to great extent. As per terms and conditions of employment claimant was required to manage the marketing and other related operations of Northern India of the management and he was having reporting responsibilities to the Managing Director of the management. The designation of Sales Manager and the terms and conditions of his employment shows that the job which claimant was performing also required creativity to great extent. To promote 15 sales of highly technical products needs a technically sound sales man and also involves creativity.
16. Ld. AR for the workman has drawn my attention to various documents Ex.MW1/D1 to D9 which are email messages sent by Managing Director, Mr. Banerjee to the claimant. Ld. AR for the workman urged that these documents shows that claimant had no power to negotiate the price and he used to arrange taxis, boarding and lodging for the management and used to collect C forms and sending it to the head office. Ld. AR for the workman submitted that the nature of job being done by claimant brings him squarely under definition of 'workman' as defined U/s 2(s) of I.D. Act. No doubt it is apparent from the above mentioned documents that claimant used to arrange taxis, boarding and lodging for the management and used to do other menial jobs for the management, but in view of the various facts and circumstances discussed above it is clear from the record that these works were incidental to his main job which was clearly managerial and administrative in nature involving lot of skill, technicality and creativity. All these characters involved with job of the claimant, takes him out of the definition of workman. Keeping in view the facts and circumstances discussed above I am nurturing no doubt in my mind that the dominant purpose of employment of workman was managerial and administrative in nature. Accordingly this issue is decided against the workman and in favour of the management.
ISSUE NO.2
17. Since the claimant is not held to be 'workman', in view of findings on issue no.1 this issue is also decided in favour of the management and against the workman.
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ISSUE NO.3
18. In view of the findings on issue no.1 and 2 the workman is not entitled to any relief as claimed by him. Reference is answered accordingly.
19. 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 : 17.4.2008 ( SANJAY GARG )
PRESIDING OFFICER :
LABOUR COURTV:
DELHI.