IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.: 1066 of 2005. Decided on: 19.06.2007. M/s. R.M. Minerals (P) Ltd. … Petitioner. Versus The Presiding Judge and Another. … Respondents. Coram: The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 Yes. For the petitioner: Mr. Anup Rattan, Advocate. For the Respondent No.2: Mr. R.D. Kaundal, Advocate. Rajiv Sharma, Judge: This petition arises out of the award dated 7.7.2005 passed by the Labour Court-cum-Industrial Tribunal, Dharamshala (camp at Una) in reference No. 86/2002. The brief facts which are necessary for the adjudication of this petition are that on the failure of the conciliation proceedings, the State Government had made the following reference to the Labour Court-cum-Industrial Tribunal, Dharamshala: “Whether the termination of the services of Shri M.C. Joshi son of Shri Kanshi Ram w.e.f. 28.11.2000 by the Management of M/s R.M. Minerals (P) Ltd., Whether reporters of local papers may be allowed to see the judgment? Yes. - 2 - Mehatpur, District Una, H.P. without following the provisions of the Industrial Disputes Act, 1947 is legal and justified? If not, what relief of service benefits and back wages the above workman is entitled to?” The respondent No.2 (hereinafter referred to as the workman for convenience sake) was appointed as a Clerk with the petitioner-company/employer on 1st April, 1998 on a consolidated salary of Rs. 3,500/- per month. He was subsequently designated as Personal Assistant on a consolidated salary of Rs. 6,550/-. He was terminated by the management of the petitioner-company on 28th November, 2000. He sent a demand notice to the management on 9.12.2000 and on the failure of the conciliation proceedings; the matter was referred to the Labour Court-cum- Industrial Tribunal as stated hereinabove. In sequel to the reference made, the workman had filed the statement of claim and the petitioner-company had also filed the reply to the same. The learned Labour Court-cum-Industrial Tribunal had answered the reference in the affirmative on 7.7.2005 directing the petitioner-company to reinstate the workman within a period of 90 days with 60% back wages along with interest @ 9%. He was also held entitled for a sum of Rs. 10,000/- as compensation and Rs. 3,000/- as litigation expenses along with arrears of pay at the revised rates from the date of his re- designation i.e. 1st February, 1999 till the date of his dis- engagement i.e. 28th November, 2000 retained by the petitioner- company as security. - 3 - Mr. Anup Rattan, Advocate appearing on behalf of the petitioner-company had strenuously argued that the award dated 7.7.2005 is not sustainable in the eyes of law. He also contended that the respondent was not a workman within the meaning of section 2 (s) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act). He had also submitted that the workman had abandoned his job and thus it was not a case of retrenchment. Mr. R.D. Kaundal had supported the award dated 7.7.2005 passed by the Labour Court-cum-Industrial Tribunal. I have heard the parties and perused the record. The picture which emerges from the pleadings of the parties is that the workman was appointed as Clerk on 1st April, 1998 and he was re-designated as Personal Assistant on 1.2.1999 on a consolidated salary of Rs. 6,550/-. He was terminated on 28.11.2000. The Court had summoned the record of Labour Court vide order dated 19th December, 2006. The workman had appeared as PW-1 before the Labour Court and categorically stated that he was engaged initially as Clerk and thereafter re-designated as Personal Assistant. The workman had categorically testified in his statement while appearing as PW-1 that he was discharging clerical duties such as typing, letter drafting, maintenance of registers, preparation and submission of returns, disbursement of salary and wages etc. The workman though admitted the contents of Ext.RX-3, but had stated in his statement that the same was signed by him under duress. - 4 - He had also stated that Ext.RX-4 was the out-come of undue pressure exerted by the Managing Director. Similar is his statement about Ext.RX-5. With regard to instructions, i.e. Ext. RX-6 and Ext.RX-7, he had stated that the same were issued by him at the instance of the Factory Manager. It is clear from the language of Ext. P-8, dated 20th February, 1999 that the workman had been re-designated as Personal Assistant with effect from 1st February, 1999. It will be apt to reproduce Ext.P-8, dated 20th February, 1999 in its entirety as under:- “REF: RMM/1998-99. 20th Feb., 99. Mr. M.C. Joshi, Clerk, Pers&Admn. Sir, The management is pleased to revise your monthly salary to Rs.6550/- as per the break-up given hereinunder:- Basic salary :Rs.6000/- H.R.A. :Rs.500/- C.S. :Rs.50/- Total :Rs.6550/- (Rs. six thousand five hundred fifty only) and you are redesignated as Personal Asstt. W.e.f. 1st Feb. 99. Please note that the increased salary will be kept as your security and shall be paid to you on demand or at the time of separation from the services of the company. All other terms and conditions of your services shall remain unchanged. Thanking you. Yours faithfully, For R.M.MINERALS P LTD. Sd/- MANAGER” - 5 - What duties the workman had to discharge had not been spelt vide Ext.P-8, dated 20th February, 1999 after re-designating him as Personal Assistant. Even the increased salary was to be kept as security and was to be paid on demand or at the time of separation from the services of the company. There is no documentary proof placed on record by the Management appointing the workman ever as Personal Manager. This Court has also perused Annexure P-5 which is the bio-data of the workman and no support can be taken by the management on the basis of the bio-data of the workman. Ex.P-6 and P-7 though signed by the workman are of no help to the management since it had failed to produce on record the copy of appointment letter issued in favour of the workman appointing him as Personal Manager. The fact of the matter is that the workman was appointed as Clerk and re-designated as Personal Assistant and had been discharging the duties of clerical nature. The management had failed to place on record any cogent and convincing evidence that the workman had been working in the supervisory or managerial capacity. Accordingly, the respondent No.2 is a workman under the provisions of section 2 (s) of the Act. The next question requiring consideration is: Whether the workman has been retrenched in accordance with law or not? The workman while appearing as PW-1 had stated that he proceeded on leave with effect from 3.11.2000 to 27.11.2000 and his leave was sanctioned as per letter Ex.P-3. The learned - 6 - Labour Court had verbatim quoted Ex.P-3 in the award. This statement of the workman was not controverted during the course of his examination. The Labour Court had come to the just conclusion that the workman was on authorized leave with effect from 3.11.2000 to 27.11.2000 and he did not absent himself from 6.11.2000 as claimed by the management. The Labour Court had rightly not believed the version of the management that Ex. RX-1 to RX-4 were issued to the workman. The Labour Court after disbelieving the version of the management as per Ex.RX-1 to RX-4 had come to the conclusion that the retrenchment of the workman had been in violation of the provisions of section 25-F of the Act. The learned Labour Court had also not accepted the plea of the management that the workman had abandoned his job after taking into consideration the entire evidence. The plea of abandonment raised by the management is a question of fact and is required to be proved which the management has failed to do so. Mr. Subhodh Kumar had appeared from the management side as RW-1. He had stated that Ex. RX-1 to RX-4 were issued to the workman to join the duties, but the workman did not join his duties. The management had also examined Sh. Parmodh Kumar as RW-2 who was working in the factory as Clerk since 1999. The workman in his cross-examination has denied the suggestion that he was assigned the duties of managerial nature. In the pay slip of the workman for the month of September with effect from 1st September, 1999 to 30th September, 1999, Ex. P-7 the designation - 7 - of the workman has been shown as Personal Assistant. In the abstract of attendance register Ex.RW-2/A the designation of the workman has been shown as Personal Assistant. The Labour Court on the basis of the material placed on record had come to the conclusion that the workman was never appointed as Personal Manager and was only discharging the duties of Personal Assistant. The Hon’ble Supreme Court has laid down the following tests whether the person will fall within the definition of section 2(s) of the Act or not on the basis of the wages paid to him or the nature of duties discharged by him: The Apex Court has held in a case between South Indian Bank, Ltd. and Chacko (A.R.), 1964-I LLJ 19 as under:- “This brings us to the last objection that on appointment as accountant, the respondent Chacko ceased to be a workman. Admittedly, the mere fact that he was designated as accountant would not take him out of the category of workman. This was recognized in Para. 332 of the Sastri award when it was said: “The categories of workmen known as head clerks, accountants, head cashiers, should prima facie have to be taken as workmen wherever they desire to be so treated but with this important proviso that the banks are at liberty to raise an industrial dispute about such classification wherever they feel that with reference to a particular branch and a particular office a person so designated is really entrusted with work of a - 8 - directional and controlling nature and perhaps even supervision of a higher type over ordinary supervisory agencies.” In Para. 167, where the case of accountants was specially dealt with, it was again said: “In several cases they will indisputably be officers. It is difficult to lay down a hard and fast rule in respect of them. An accountant oftentimes is the second officer in charge of branches, particularly where the branches are comparatively small. In big banks where there is a hierarchy of officers there may be a chief accountant, accountants and sub-accountants. In most of these cases the ‘accountants’ will probably be officers. There will however be incumbents of such posts, though going under the dignified designation of accountants who are in reality only senior clerks doing higher type of clerical work involving an element of supervision over other clerks as part of their duties. In such cases where they can properly be regarded as workmen the minimum allowances which we have fixed for sub-accountants would equally apply to them.” The labour court appears to have taken proper note of this distinction between accountants who are really officers and accountants who are merely senior clerks with supervisory duties and on a consideration of the evidence on the record as regards the duties actually performed by the respondent Chacko has come to the conclusion that he was merely a senior clerk, doing mainly clerical - 9 - duties, and going by the designation of accountant and was in reality a workman as defined in the Industrial Disputes Act and doing an element of supervisory work. The Apex Court has explained the term ‘supervisory work’ in a case between All India Reserve Bank Employees’ Association and another and Reserve Bank of India and another, 1965-II LLJ 175 while explaining the impression ‘workman’ as under:- “(s) ‘workman’ means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purpose of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connexion 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 Army Act, 1950, or the Air Force Act, 1950, or the Navy (Discipline) Act, 1934, 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 - 10 - (iv) who, being employed in a supervisory capacity, draws wages exceeding five 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.” Shri Chari contends that the exclusion of class II staff is based on a wrong construction of the above definition, particularly the definition of “workman”, and a misunderstanding of the duties of class II employees who have been wrongly classed as supervisors. He contends alternatively that as class II is filled by promotion from class III, the question could and should have been gone into in view of the principle enunciated in the Dimakuchi Tea Estate case [1958-II L.L.J. 500]. Shri Chari in support of his first argument points to the opening part of S.2(s) where it speaks of “any skilled or unskilled manual, supervisory, technical or clerical work” and contrasts it with the words of Cl.(iv) “being employed in a supervisory capacity” and submits that the difference in language is deliberate and is intended to distinguish supervisory work from plain supervision. According to him “supervisory work” denotes that the person works and supervises at the same time, whereas “supervisory capacity” denotes supervision but not work. Shri Chari divides supervision into two kinds: (a) supervision which is a part of labour, and - 11 - (b) supervision which is akin to managerial functions though it is not actually so. He submits that this division is clearly brought out in the definition of “workman” by the use of different expressions such as “work” and “capacity” for that a supervisor doing work enjoys the status of labour and a supervisor acting only in supervisory capacity enjoys the status of employer’s agent at the lowest level. In support of his contention Shri Chari has referred to the amendment of the National Labour Relations Act of the United States of America (commonly known as the Wagner Act) [(1935) 49 Stat. 449] by the Labour-Management Relations Act, 1947 (commonly known as the Taft-Hartley Act) [(1947) 61 Stat. 130], and the case of Packard Motor Company v. National Labour Relations Board [91 L. Ed. 1040], which preceded the amendment. The Packard Motor Company case arose under the Wagner Act and the question was whether foremen were entitled as a class to the rights of self- organization and collective bargaining under it. The benefits of the Wagner Act were conferred on employees which by S. 2 (3) included “any employee.” The company, however, sought to limit this wide definition which made foremen employees both at common law and in common acceptance, with the aid of the definition of “employer” in S. 2 (2) which said that the word included “any person acting in the interest of an employer directly or indirectly . . .” - 12 - The Supreme Court of the United States in holding that foremen were entitled to the protection of the Wagner Act held by majority that even those who acted for the employer in some matters including standing between the management and manual labour could have interests of their own when it came to fixation of wages, hours, seniority rights or working condition. Shri Chari suggests that the definition in the Industrial Disputes Act serves the same purpose when it makes a distinction between “work” and “capacity.” This ruling, of course, cannot be used in this context, though as we shall presently see, it probably furnishes the historical back-ground for the amendment in the United States and leads to the next limb of Sri Chari’s argument. The minority, speaking through Justice Mr. Douglas, made the following observation which puts the Packard Motor Company case of consideration. “Indeed, the problems of those in the supervisory categories of management did not seem to have been in the consciousness of the Congress . . . There is no phrase in the entire Act which is description of those doing supervisory work.” In this state of affairs it is futile to refer to this ruling any further, for to derive assistance from any of the two opinions savours of a priori deduction. The Packard Motor Company case [91 L. Ed. 1040] (vide supra) was decided in March 1947 and in the same year the Taft-Hartley Act was passed. - 13 - Section 2 of the latter Act defined employer to include “any person acting as agent of an employer, directly or indirectly . . . “ and the term employee was defined to exclude any individual employed as a supervisor. The term “supervisor” was defined to mean an individual “having authority, in the interest of the employer, to hire, transfer, suspend, lay off recall, promote, discharge, assign, reward, or discipline other employees or responsible to direct them, or to adjust their grievances, or effectively to recommend such action, if in connexion with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” Shri Chari suggests that the Industrial Disputes Act, recognizing the same difficulty, may be said to have adopted the same tests by making a distinction between “work” and “capacity”. According to him, these tests provide for that twilight area, where the operatives (to use a neutral term) seem to enjoy a dual capacity. The argument is extremely ingenious and the simile interesting, but it misses the realities of the amendment of the Industrial Disputes Act in 1956. The definition of “workman,” as it originally stood before the amendment in 1956 was as follows:- “2 (s) ‘workman’ means any person employed (including an apprentice) in any - 14 - industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in naval, military or air service of the Government.” The amending Act of 1956 introduced among the categories of persons already mentioned persons employed to do supervisory and technical work. So far the language of the earlier enactment was used. When, however, exceptions were engrafted, that language was departed from in Cl. (iv) partly because the draftsman followed the language of Cl. (iii) and partly because from persons employed on supervision work some are to be excluded because they draw wages exceeding Rs. 500 per month and some because they function mainly in a managerial capacity or have duties of the same character. But the unity between the opening part of the definition ad Cl. (iv) was expressly preserved by using the word “such” twice in the opening part. The words, which bind the two parts, are not- “but does not include any person.” They are’ “but does not include any such person” showing clearly that what is being excluded is a person who answers the description “employed to do supervisory work” and he is to be excluded because being employed in a “supervisory capacity” he draws wages exceeding Rs.500 per month or exercises functions of a particular character. The scheme of our Act is much simpler than that of the American statutes. No doubt like the - 15 - Taft-Hartley Act the amending Act of 1956 in our country was passed to equalize bargaining power and also to give the power of bargaining and invoking the Industrial Disputes Act to supervisory workmen, but it gave it only to some of the workmen employed on supervisory work. “Workman” here includes an employee employed as supervisor. There are only two circumstances in which such a person ceases to be a workman. Such a person is not a workman if he draws wages in excess of Rs.500 per month or if he performs managerial functions by reason of a power vested in him or by the nature of duties attached to his office. The person who ceases to be a workman is not a person who does not answer the description “employed to do supervisory work” but one who does answer that description. He goes out of the category of “workmen” on proof of the circumstances excluding him from the category. By the revision of salaries in such a way that the minimum emoluments equal to wages (as defined in the Act) of class II staff now exceed Rs.500 per month, the Reserve Bank intends to exclude them from the category of workmen and to render the Industrial Disputes Act inapplicable to them. Sri Palkivala frankly admitted that this step was taken so that this group might be taken away from the vortex of industrial disputes. But this position obviously did not exist when the scale was such that some at least of class II employees would have drawn wages below the mark. The reference in those circumstances was a valid reference and the national tribunal was not right in ignoring that class altogether. Further, the national tribunal was - 16 - not justified in holding that if at a future time an incumbent would draw wage in the time-scale in excess of Rs.500, the matter must be taken to be withdrawn from the jurisdiction of the Central Government to make a reference in respect of him and the national tribunal to be ousted of the jurisdiction to decide the dispute if referred. Supervisory staff drawing less than Rs.500 per month cannot be debarred from claiming that they should draw more than Rs.500 presently or at some future stage in their service. They can only be deprived of the benefits if they are non-workmen at the time they seek the protection of the Industrial Disputes Act. Sri Chari next contends that considering the duties of class II employees, it cannot be said that they are employed in a supervisory capacity at all and in elucidation of the meaning to be given to the words “supervisory” and “capacity” he has cited numerous dictionaries, Corpus Juris, etc., as to the meaning of the words “supervise,” “supervisor,” “supervising,” “supervision,” etc. The word “supervise” and its derivatives are not words of precise import and must often be construed in the light of the context, for unless controlled, they cover an easily simple oversight and direction as manual work coupled with a power of inspection and superintendence of the manual work of others. It is, therefore, necessary to see the full context in which the words occur and the words of our own Act are the surest guide. Viewed in this manner, we cannot overlook the import of the word ‘such’ which expressly links the exception to the main part. Unless this was done, it would have been possible - 17 - to argue that Cl.(iv) indicated something, which though not included in the main part, ought not by construction to be so included. By keeping the link it is clear to see that what is excluded is something which is already a part of the main provision.” The Constitution Bench in a case Syndicate Bank, Ltd. and Its workmen, 1966-II LLJ 194 has held that designation of a person is not conclusive of his status as an officer. Their Lordships of the Supreme Court have held as under:- “We are concerned in the present dispute with exemptions (iii) and (iv) of this definition. Under exemption (iii), a person who is employed mainly in a managerial or administrative capacity is not a