IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED; 27.09.2011 CORAM; THE HONOURABLE MR.JUSTICE T.RAJA W.P.NO.22418 OF 2003 The Management of M/s Matheson Bosanquet Enterprises Ltd., Belmont, Coonoor 643 101 The Nilgiris ..Petitioner vs 1.The Presiding Officer Labour Court Coimbatore 2.R.Suresh Shankar ..Respondents Writ Petition is filed under Article 226 of the Constitution of India praying for issuance of a writ of Certiorari to call for the records from the file of the 1st respondent herein in I.D.No.243 of 1999 and to quash the award dated 9.1.2003. for petitioner :Mr.S.Jayaraman for respondents :Mr.Y.Prakash (for R2) R1-Court O R D E R Aggrieved by the award passed by the Labour Court, Coimbatore, the petitioner management has filed the present Writ Petition assailing the correctness of the award passed in I.D.No.243/1999 dated 9.1.2003 wherein the Labour Court has held that the second respondent was a workman under the Industrial Disputes Act and the petitioner Management herein has not followed the legal requirements as contemplated under the Act. Further, it has been held that the termination by giving three months' notice is erroneous and on that basis, the order of termination of the second respondent was set aside with the direction to reinstate him with backwages along with continuity of service. https://hcservices.ecourts.gov.in/hcservices/ (2) The learned counsel appearing for the petitioner submitted as under: (i) The petitioner was a Company rendering services to various establishments inclusive of coffee and tea estates in Nilgiris. Whileaso, the second respondent was appointed as a Probationary Clerk in the Accounts Department with the consolidated salary of Rs.2,300/- per month. Before his appointment, he was also selected after holding a proper interview and he was also kept under probation for a period of one year and thereafter, by order dated 9.11.2003 his services was confirmed with effect from 01.11.1993 and he was also placed in Grade II Step 8. Again by order dated 07.2.1997, he was promoted to the Junior Management Cadre-8 in the Accounts Department with effect from 1.1.1997 by fixing a consolidated salary of Rs.2,400/- per month in the scale of Rs.1200-200-2800-255-4600. The second respondent was also given a fixed D.A.of Rs.200/- per month. He was also permitted to avail the loan facilities and other benefits provided for the Junior Management Cadre. On that basis, when he purchased a vehicle, loan was sanctioned under Ex.M.13. This shows that the second respondent has availed a loan facility which is available to the employees only under the Officers cadre. (ii) When the matter stood as above, on account of reorganisation made in the Company in the wake of M/s Hope Plantations going out of the management of the petitioner, several employees were rendered surplus. Only in view of surplus staff caused by the reorganisation of the petitioner's company, the petitioner management terminated the services of the second respondent by exercising the right under the contract of employment dated 7.2.97 by paying three months' notice pay of Rs.16,800/-. The second respondent, aggrieved by the said order, raised an Industrial Dispute in I.D.No.243/99, on the file of the first respondent-Labour Court, Coimbatore. In his Claim Petition he has stated that the management has illegally retrenched him in total violation of Section 25F of the Industrial Disputes Act. The further allegation made in the Claim Petition by the second respondent is that the junior officers numbering 8, who were juniors to him, were retained and the second respondent was not employed in the managerial cadre. But the Labour Court, overlooking the material facts that the second respondent was initially appointed as a Probationary Clerk by order dated 16.10.1992 on a salary of Rs.2,300/- and he was confirmed by order dated 9.11.1993 and subsequently, he was promoted by order dated 7.2.1997 to the Junior Management Cadre on a consolidated salary of Rs.2,400/-, erroneously held that the second respondent was an employee. (iii)The Labour Court failed to consider the vital aspect that the second respondent has availed the vehicle loan which is permissible to the managerial staff. The second respondent's https://hcservices.ecourts.gov.in/hcservices/ application and the permission granted by the petitioner maangement, which were marked as Exs.M.13 and M.14, clearly show that the second respondent has availed of the loan facilities that were available to the employees in the Officer's cadre. Even that important material evidence was also overlooked. Therefore, it was argued that the reasoning given by the Labour Court holding that the second respondent was an employee is basically against the material evidence, namely, Exs.M.13 and M.14, which clearly shows that the second respondent by availing the loan facilities as an employee in the Officers' Cadre, had wrongly approached the Labour Court by raising the Industrial Dispute. Therefore, the learned counsel for the petitioner prays that the said award is liable to be set aside. 3. (i) In reply, the learned counsel appearing for the second respondent stated that though the second respondent was accorded a glorified label and designation of the Junior Officer at the time of termination of his services, he never discharged at any time duties of Supervisory, Administrative or of managerial nature. His main duties were preparation of vouchers and posting of accounts in the respective ledgers of the customers allotted to him as well as the preparation of trial balances and submission of the same to his higher officers for scrutiny and their approval of the same. The learned counsel further stated that the second respondent is only a workman rendering the services of speciliased clerical nature. Therefore, the order of termination passed by paying three months' pay in lieu of notice as per the terms of the appointment letter dated 7.2.1987 is liable to be set aside. (ii)The learned counsel for the second respondent further focussed on the issue of want of notice and absence of opportunities before passing the order of termination. By calling the second respondent's termination as retrenchment of service, the learned counsel attempted to justify his argument by stating that retaining the junior officers who are juniors to the second respondent in this category and terminating the service of the second respondent alone as his service was rendered surplus, is invalid in law. On this basis, the learned counsel further stated that the retrenchment effected by the petitioner management on the second respondent is void-ab-initio and therefore, the Labour Court has rightly struck down the termination order and such a reasoned award does not call for interference by this Court. 4. Heard the learned counsel for the respective parties. 5.(i)The second respondent was selected after proper interview and thereafter, he was appointed as a Probationary Clerk in the Accounts Department on a consolidated salary of Rs.2,300/- per month on 16.10.1992. He was also placed on probation for a https://hcservices.ecourts.gov.in/hcservices/ period of one year. On completion of his one year probation period, by order dated 9.11.2003, he was confirmed as a permanent staff with effect from 1.11.1993 and thereupon, he was placed in Grade II Step 8. Again the second respondent was promoted to the post of Junior Management Cadre 8 by another order dated 7.2.1997 with effect from 1.1.1997 by fixing the consolidated salary of Rs.2,400/- per month in the scale of Rs.1200-200-2800-225-4600/- He was also given a fixed D.A.of Rs.200/- per month. While he was serving in the Junior Management Cadre-8, he was also permitted to avail the loan facilities and other benefits provided for the Junior Management Cadre. Whileso, by order dated 3.6.1997 his pay scale was revised with effect from 1.4.1997 by fixing of Rs.2,700/- per month in the cadre of Rs.1500-200-2700-300-5700/-. While he was serving in the Junior Management Cadre, the petitioner management had undergone reorganisation because M/s Hope Plantations was going out of the petitioner management. On account of reorganisation due to the outgoing of M/s Hope Plantations from the management of the petitioner, many staff working in the petitioner management were rendered jobless. As a result, the petitioner management terminated the services of the second respondent by exercising the right under the contract of employment dated 7.2.1997 by paying three months' notice pay of Rs.16,800/- to the second respondent. (ii) In view of the abovesaid admitted position, it has to be seen whether the second respondent was employed as a workman or not so as to bring him under the ambit of the Industrial Disputes Act, 1947. The first appointment dated 16.10.1992 shows that he was appointed on probation for a period of one year from the date of joining as a Probationary Clerk in Accounts Department on a consolidated salary of Rs.2,300/- per month. The said order states that he is subject to transfer to any Department, office or branches of the Company. Another letter dated 9.11.1993 shows that he was confirmed as a permanent staff of the petitioner company with effect from 1.11.1993 by placing him in Grade II step 8 from 9.11.1993. One more order dated 7.2.1997 issued by the petitioner company shows that he was promoted in the Official Management Cadre with effect from 1.1.1997 and he was also paid a consolidated salary of Rs.2,400/- in the scale of pay of Rs.1,200- 200-2800-225-4600. Clause 10 of the said order dated 7.2.1997 states that his services can be terminated by three months' notice on either side. It is necessary to see who is a "workman" as defined under Section 2(s) of the Industrial Disputes Act, 1947. As per the amendment substituted by the Industrial Disputes (Amendment) Act, 2010 (24 of 2010), Section 2(s) of the Industrial Disputes Act, 1947 is extracted hereunder: (s)"workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work https://hcservices.ecourts.gov.in/hcservices/ for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person- (i)who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957(62 of 1957); or (ii)who is employed in the police service or as an officer or other employee of a prison; or (iii)who is employed mainly in a managerial or administrative capacity; or (iv)who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees 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." A careful reading of the abovesaid definition clearly shows the term "workman" includes 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, who, being employed in a supervisory capacity, draws wages exceeding Rs.10,000/-. (iii) In the light of the said definition, if I look at the case of the second respondent, though the second respondent was employed to do the supervisor work in the petitioner management, he was drawing Rs.2,700/- per month in the cadre of Rs.1,500-200- 2,700-300-5,700. This has been admitted by the petitioner in paragraph 4 of the affidavit filed in support of the writ petition. The relevant portion in the said para 4 of the affidavit is as follows: "Thereafter by order dated 3-6-97, his pay scale was revised with effect from 1-4-1997 and it was fixed at Rs.2,700/- per month in the grade of Rs.1500-200-2700-300-5700." In section 2(s)(iv) of the Industrial Disputes Act, "ten thousand rupees" is substituted by section 2(ii) of the Industrial Disputes https://hcservices.ecourts.gov.in/hcservices/ (Amendment) Act, 2010 (Act 24 of 2010) for "one thousand six hundred rupees" with effect from 15.9.2010. By virtue of the said substitution of "ten thousand rupees" for "one thousand six hundred rupees", as per Section 2(s)(iv), a workman, who being employed in a supervisory capacity, drawing wages exceeding ten thousand rupees per mensem, does not come within the definition of "workman". But, in the present case, though the second respondent was employed to do the supervisor work, his pay scale was fixed at Rs.2,700/- per month in the grade of Rs.1500-200-2700-300-5700. Since the said payscale fixed at Rs.2,700/- per month in the grade of Rs.1500-200-2700-300-5700, does not exceed "ten thousand rupees", the second respondent is coming within the ambit of definition of "workman" as per section 2(s). (iv) Moreover, the substitution by Act 24 of 2010 has taken place with effect from 15.9.2010 which is only during the pendency of the writ petition. Therefore, the second respondent is entitled to have the benefit of the said amendment and thus, he comes within the definition of workman. (v) The Labour Court, Coimbatore after going through the entire evidence produced by both sides was of the view that the second respondent was neither given any authority to issue any cheque nor given power to make payment of salary. Further, on evidence, the Labour Court has come to the conclusion that the second respondent was not incharge of administrative or supervisory work in the petitioner management. He was involved only in preparing vouchers, maintenance of registers alone. Whileso, he has to be brought only under Section 2(a) of the I.D.Act. After giving the finding that the second respondent at the time of disengagement was serving only as a workman on the ground that the second respondent was found surplus employee, even after terminating his services, the very same petitioner management has refilled the post by employing one Mr.Ganesamoorthy. Therefore, the Labour Court has correctly come to the conclusion that the termination of the second respondent was made on account of the surplus staff caused by reorganisation of the Company cannot be legally acceptable. On that basis, it was found that the petitioner management has committed violation of section 25F of the I.D.Act. Because admittedly in the present case, while retrenching the second respondent, none of the conditions mentioned under Section 25F of the I.D.Act was complied with. Therefore, the award of the Labour Court directing reinstatement of the second respondent with backwages does not warrant interference. 6. Accordingly, the writ petition fails and stands dismissed. The order of stay made absolute is hereby vacated. Consequently, the entire amount of backwages awarded by the Labour Court, deposited in a nationalised bank is entitled to be https://hcservices.ecourts.gov.in/hcservices/ withdrawn by the second respondent by moving an application before the Labour Court, Coimbatore. No costs. sal Sd/- Deputy Registrar //True Copy// Sub Asst. Registrar To 1.The Presiding Officer Labour Court Coimbatore 2.The Section Officer, VR Section, High Court, Madras. + 1 cc to Mr. S. Jayaraman, Advocate SR No.60535 + 1 cc to Mr. Y. Prakash, Advocate SR No.60181 KSI(CO) SR/9.11.2011 order in W.P.NO.22418/2003 https://hcservices.ecourts.gov.in/hcservices/