1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1076 OF 2000 Shri. Inthru Noronha ..Petitioner. Vs. Colgate Palmolive (India) Ltd. & Ors. ..Respondents. .... Mr. N.M. Ganguli with Mr. K.G. Poojary for the Petitioner. Mr. J.P. Cama, Senior Advocate with Mr. G.S. Shetty i/b M/s. Crawford Bayley & Co. for the Respondents. .... CORAM : DR.D.Y.CHANDRACHUD, J. 19th January, 2005. ORAL JUDGMENT : 1. This Petition arises out of an order of the Industrial Court dismissing a complaint filed by the Petitioner complaining of unfair labour practice under Items 5, 9 and 10 of Schedule IV to the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (“the Act”). The Petitioner joined the service of a company known by the name of Ciba of India Limited (later known as Hindustan Ciba Geigy Limited) on 1st June, 1965 2 initially as a typist. He was then appointed as a Punch Operator. On 2nd March, 1990 he was promoted with effect from 1st January, 1990 to the post of an Assistant in the Executive cadre. The Petitioner was informed that as a result, with effect from the date of his promotion, his remuneration package would be as indicated in the contract of employment that was furnished to him; that in the matter of gratuity he would be governed by the scheme that was applicable to the executive staff and that he would become a member of the pension scheme applicable to the executive staff with effect from January 1990. The contract of employment provided that the Petitioner shall retire from service at the end of the month in which he would attain the age of superannuation of 58 years. 2. The oral hygiene business of Hindustan Ciba Geigy Limited was transferred to the First Respondent, Colgate Palmolive (India) Limited, from 1st October, 1994. The services of the Petitioner were accordingly transferred to the First Respondent and by a letter dated 24th September, 1994 he was informed that his services will not be 3 interrupted due to the transfer and that it would be ensured that the terms and conditions of service that were offered would be as then applicable in Hindustan Ciba Geigy Limited. On 17th May, 1995, the First Respondent informed the Petitioner that his salary and benefits were being revised from 1st April, 1995 in accordance with the wage structure of the company that was applicable to employees in the management cadre. The total emoluments of the Petitioner stood increased as a result to Rs.25,625/-. On 8th February, 1999 the First Respondent addressed a letter to the Petitioner informing him that under the superannuation rules he was due to retire on completing the age of 58 which in the case of the Petitioner was 25th February, 1999. 3. The Petitioner moved the Industrial Court in a complaint of unfair labour practices under Items 5, 9 and 10 of Schedule IV of the Act on 23rd March, 1999. The Petitioner claimed therein that the work which he was doing was of a clerical nature; that he was, therefore, for all intents and purposes a workman under Section 2(s) 4 of the Industrial Disputes Act, 1947 and hence, an 'employee' within the meaning of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. The material part of the complaint which would be relevant for the decision of this case was thus : “The Complainant submits that he is doing entirely clerical duty such as maintenance of leave records of sales personnel, maintenance of personal records of service personnel and follow up of payments from stockists etc. The Complainant submits that the Complainant has no authority whatsoever to commit the company for any purpose whatsoever. No staff is working under the Complainant nor the Complainant is supervising the work of any other person. The Complainant carries out his work as per instructions given to him by the Manager, Sales Administration.” 4. The grievance of the Petitioner was that despite the assurance which was furnished to him at the time of the transfer of his services, the conditions of service governing his employment were unilaterally changed by the First Respondent. The Petitioner admitted in his complaint that the retirement age for him was 58 years in Hindustan Ciba Geigy Limited where he was originally employed, whereas 5 according to him it was 60 years in the First Respondent. The Petitioner stated that he was furnished with an assurance that upon the taking over of the business of the erstwhile company in the Consumer Health Care Division, he would be governed by the conditions of service that would be applicable in his previous employment. In so far as the nature of his duties was concerned, the Petitioner then stated that he was working in the Sales Administration Department and was “looking after the work of Sales Administration of the company irrespective of the products”. The relief which was sought in the complaint was a direction to the First Respondent to permit the Petitioner to continue working in the company until he attained the age of 60 years on 28th February, 2001. 5. Evidence was adduced both on behalf of the Petitioner and on behalf of the First Respondent – Management. The First Respondent relied upon extensive documentary material in support of the contention that the Petitioner was not a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 and therefore, not 6 an employee within the meaning of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. By an order dated 31st January, 2000 the Industrial Court came to the conclusion that the Petitioner was not a workman and that, therefore, the Court did not have jurisdiction to entertain and try the complaint. The Industrial Court has also entered into the merits of the dispute in order to render a full, final and complete adjudication and has come to the conclusion that the assurance which was given to the Petitioner when his services were transferred to the First Respondent was a continuation of the existing service conditions that were applicable to the Petitioner in his erstwhile employment. The age of superannuation thereunder was 58 years. The Industrial Court has also found that other employees in the executive cadre of Hindustan Ciba Geigy Limited had been retired upon attaining the age of superannuation of 58 years. The complaint has on these findings been dismissed. 6. Counsel appearing on behalf of the Petitioner has urged two 7 submissions in support of the challenge to the order of the Industrial Court: (i) The duties that were assigned to the Petitioner on promotion as an Assistant in the executive cadre did not specify that he was employed in a managerial, administrative or supervisory capacity; (ii) that the dominant nature of the work that was performed by the Petitioner is clerical or operational and that consequently the finding of the Industrial Court was not based on evidence. Counsel submitted that in deciding the issue the nature of the work rendered by the employee ought to be considered and even if the Petitioner was carrying out work in a managerial or administrative capacity, he was not mainly involved in managerial or administrative work. The Petitioner, it was submitted, was not a part of the policy making team of the First Respondent These submissions will now have to be considered. 7. The jurisdiction of the Industrial Court under Section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 can inter alia be invoked by a union or an 8 employee where any person was engaged in or is engaging in an unfair labour practice. In view of the definition in Section 3(5), the expression “employee” has the meaning ascribed to it in Section 2(s) of the Industrial Disputes Act, 1947. In Section 2(s) the expression “workman” is defined as follows : “2(s) “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 (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 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.” 9 8. The essential attribute of a workman in Section 2(s) is that a person must be employed in an industry to do manual or unskilled, skilled, technical, operational, clerical or supervisory work. The definition excludes from its ambit four categories, the third being a person which is engaged in a managerial or administrative capacity and the fourth a person who is employed in a supervisory capacity drawing wages in excess of Rs.1,600/- per month or who exercises by the nature of the duties attached to his office or by reason of his powers functions mainly of a managerial nature. The interpretation that must be placed on the provisions of this Section is now settled by a decision of a Constitution Bench of the Supreme Court in H.R. Adyanthaya v. Sandoz (India) Ltd. . (1994 II CLR 552). The Supreme Court held that in order for a person to be a workman under the Industrial Disputes Act, 1947 he must be employed to do work of any of the specified categories viz. manual, unskilled, skilled, technical, operational, clerical or supervisory. In other words, it is not enough that a workman is not covered by either of the four exceptions to the definition. The Court held that the earlier decisions in S.K. Verma v. 10 Mahesh Chandra [(1983) 3 SCR 799] Ved Prakash Gupta v. Delton Cable India (P) Ltd. [(1984) 3 SCR 169] did not lay down the correct position in law. This principle is now settled in view of the judgment of the Constitution Bench. 9. Designations, it is trite law, are not conclusive in deciding as to whether an employee is a workman. The Court must essentially be guided by the nature of duties. An employee may be required to perform duties of a varied nature, some of which may not fall strictly within the category of those duties that are performed by a workman. The Court is then guided by the dominant nature of duties performed by the employee. In the present case, the Petitioner in his complaint of unfair labour practice set up the case that he was performing duties of a clerical nature. The Petitioner stepped into the witness box and in the course of his examination-in-chief stated that he was doing the work of filing and dispatching stationary to the Ciba sales force, scrutinizing and preparing a summary of monthly expenses, checking the follow up work of the regions, dispatching stationary to the sales 11 force, dispatching prize money statement to the sales force, preparing a summary of zonal data received from stockists, preparing details of sales force who had joined or resigned and updating the sales price list every month. The Petitioner stated that he was also attending to the follow up of cases filed by Ciba as directed by the Legal Department. 10. The cross examination of the Petitioner is material for the purposes of the present case, for in the course thereof the Petitioner inter alia deposed as follows : “ In the Ciba Co. I was promoted in the executive cadre w.e.f . 1.1.1990 and detailed letter of appointment was served upon me by Ciba Co. it is at Exh.U-22. In Ciba Co. the age of retirement for the typist is 60 years and in the post of typist the terms of service was applicable to me. While on promotion to executive cadre in Ciba Co. the age of retirement was 58 years and I had accepted the same. True to say that this is an annexure to letter dt.2.3.90 laying down detailed terms of my appointment at Exh. U-22. When I was taken as asstt. in executive cadre the term of my probation was of one year. On joining executive cadre there was change in my wage structure. Accordingly stipulated in the annexure. This structure is not applicable to non executive cadre.” (emphasis supplied). 12 The Petitioner then stated that he had been assigned the work of “Sales Administration follow up”. According to him the Manager – Sales Administration co-ordinated with the All India Field Force which was engaged in sales promotion and sales activity. He admitted that he along with three other employees was assisting the Manager- Sales Administration in his co-ordination activities and that during the course of every month, the company convened a meeting of Branch Managers and Regional Sales Managers at the head office to discuss business strategies and to take important business decisions. The Petitioner stated that he used to attend those meetings though he claimed that he did not participate thereat. The meetings, the Petitioner stated, were attended by Branch Managers and Personnel from the Sales Administration Department including himself for taking strategic decisions. 11. In so far as the evidence of the management is concerned, the Manager- Sales Administration deposed in support of the case of the company and stated that his principal duties were to co-ordinate in 13 the field of sales, various departments, to monitor the targets given to the field force and that for this purposes, he was assisted by four administrative officers including the Petitioner who was looking after the branch co-ordination work. The company's witness then stated that during every month Branch Managers meetings were held and all the four persons who were working in Sales Administration were invited to attend these meetings. The Petitioner was one of the participants. In these monthly meetings which were attended by Branch Managers, the Vice-President – Sales, Marketing Managers and Managers from the Manufacturing Department, discussions would take place on the performance of the Branch/Region; growth in the number of stockists or retail outlets, van accounts, outstanding dues from various parties, sales promotion and consumer promotion for the next period of two months. According to the company' s witness, the Petitioner was required to make presentations on issues of growth in accounts, stockists, van markets, outstanding dues from parties, pending legal matters and that he had to prepare minutes of issues which were discussed in the meeting. The nature of duties 14 discharged by the Petitioner included growth in the number of accounts, stockists, retail outlets and van accounts, outstanding dues of various parties, legal cases that were pending etc. The Petitioner was required to follow up with Branch Managers and Regional Managers on letters from the field staff “ on borrowings from the distributors”. The Manager- Sales Administration further deposed that the company has a performance appraisal system on a yearly basis which was carried out with reference to the objectives for the year that were given to each individual. Those objectives, he clarified, were based on the main functions of the individual and the appraisal form was signed by the employee concerned including the Petitioner. The witness then deposed that the legal work which was assigned to the Petitioner consisted of cases filed against “duplicate manufacturers” (presumably those who were selling spurious products.). The witness produced several documents including documents to show that the Petitioner was looking after the Ciba field force. The company, he stated, had no clerks as the job profile had been upgraded. The Petitioner, it was stated, was required to make 15 presentations in monthly meetings by discussing with Branch Managers, or as the case may be, Regional Sales Managers, for which he was required to bring back ups and summary charts for the purpose of discussion. The chart was based on information received by the Petitioner from Branches and Regional Offices. Through the weekly sales report the Petitioner would get information about the leave availed by the Ciba field staff. 12. The nature of the documentary material that was produced in the course of the proceedings before the Industrial Court would now merit consideration. Among the documents were the following : (i)An authorization dated 20th July, 1990 to the Petitioner, who is described therein as an executive in the Consumer Products Division to file a criminal case in the Court of the Metropolitan Magistrate under Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 read with the provisions of the Copyright Act; 16 (ii)Circulars of the First Respondent dated 3rd April, 1997, 16th July, 1997, 21st November, 1997, and 9th July, 1998 intimating allocation of sales administration work. The Petitioner was allocated sales administrative work for regions such as Bombay, Delhi and Lucknow, and the persons to whom the circulars were addressed were asked to get in touch with the Sales Administration personnel for any follow up work pertaining to the region; (iii)Copies of two purshis dated 27th November, 1998 filed before the Court of the Metropolitan Magistrate, 27th Court, Mulund, Mumbai recording that Hindustan Ciba Geigy Limited which was the complainant did not wish to proceed further with the criminal case which it was prayed may be discharged for want of prosecution; (iv)Status reports prepared and filed by the Petitioner on 15th October, 1998 and 15th December, 1998 setting out the status of cases filed by the First Respondent against manufacturers of spurious toothbrushes; 17 (v)A letter dated 23rd February, 1998 by the Petitioner for and on behalf of the First Respondent enclosing a cheque towards monthly expenses; (vi)A letter dated 24th February, 1997 to the Regional Manager of the First Respondent at Lucknow forwarding the updated leave records of the Ciba sales force for the region and recording that accumulated 140 days of privilege leave had been allowed as a special case. 13. Apart from the aforesaid documentary material, reliance has been placed before the Industrial Court on the performance assessment form that was filled out by the Petitioner as part of his annual appraisal during the period 1st January, 1997 to 31st December, 1997. The performance appraisal form sets out, with reference to the employment to the Petitioner, the key objectives which the company' s witness deposed were identified with the main 18 functions of the employee. While these functions were identified in the performance appraisal form, the Petitioner made a self appraisal with reference to these functions or duties that were assigned to him. An extract from the performance appraisal form would be material for the present purposes and is as follows : Employee I. NORONHA Title Executive – Sales Admn. Manager : V.KUMAR Title : Manager- Sales Admn. Objectives: Specify key performance objectives in order of importance with KPI's (i.e. - targets set/completion dates) and those related to BACP Assign a % weightage for BACP objectives (Min 2/Max 4) against the said objectives Individual' s comments on results achieved against each objective: Describe and complete a self assessment of results achieved against each individual objective 19 Employee I. NORONHA Title Executive – Sales Admn. 1. Verifying & settling of all Cibaca claims 2. Liquidation of Cibaca stocks with Ads 3. Correct leave position of Cibaca Sales force to be prepared 4. Communications of any Cibaca queries to be addressed 5. Average retail sales, state wise of Cibaca by SKU for 1995-96 to be provided 6. Analysis of performance reports 7. Follow-up and ensure completion of appraisals for Cibaca ... by end Feb 8. Follow-up of court cases against manufacturers of spurious Cibaca & Colgate toothbrushes 9. Follow-up with Mumbai Region Most of the claims verified & settled. Few are pending as they were received late/under dispute. Regular follow-up done with RMs./ Levis, Finance & Ads. All stocks with Ads liquidated by regular follow-up with Rms Leave records of sales personnel updated upto 31.3.97 and sent to HR and Regions All queries, claims etc. from Regions & Cibaca sales force attended & replied promptly Average Retail sales statement prepared for 1996 and handed over to V.Kumar Analysis done and report handed over to Mr. V. Kumar Completed by end February Attended court cases regularly and settled all cases in different courts (by out of court settlement) Ongoing process 20 14. On the basis of this evidence which has emerged on the record, it is clear that the Petitioner who had initially joined the services of Ciba as a typist on 1st June, 1965 and was later appointed as a Punch Operator was promoted to the executive cadre with effect from 1st January, 1990. From the deposition of the Petitioner, it is evident that (i) The Petitioner admitted that he was promoted to the executive cadre under a letter of appointment that was served upon him; (ii) The Petitioner admitted that the promotion was from a lower cadre to the executive cadre; (iii) On joining the executive cadre, there was a change in the wage structure and the Petitioner was aware that this structure is not applicable to the non-executive cadre; (iv) The Petitioner was aware of the fact that on his promotion to the executive cadre his age of superannuation would be 58 years; (v) The Petitioner admitted that he was carrying out duties related to sales administration and that the meetings that were attended every month by the Branch Managers and Personnel from the Sales Administration 21 Department, were to take strategic decisions. The documentary evidence which was adduced on behalf of the employer would demonstrate that the Petitioner was authorized to file criminal cases on behalf of the First Respondent and that the authorization specifically referred to him as being an executive. The Petitioner was allocated sales administration work in several regions including Mumbai, Lucknow and Delhi. The documentary material shows that he had in exercise of his authority filed a purshis before the Metropolitan Magistrate for the withdrawal of a criminal case instituted by the company; that he had prepared under his own signature status reports on cases that were filed by the First Respondent against manufacturers who were passing off spurious products as products of the company. The First Respondent had authority to sign for the company. Evidently one of his duties was the updation of leave records of the Ciba sales force and one of the documents on record includes a communication to the Regional Manager at Lucknow informing him that accumulation of more than 140 days' leave had been allowed as a special case. Apart from this material what is of 22 significance is the performance appraisal report of the Petitioner in which the Petitioner has himself made a self appraisal with reference to his own functions. These functions include verifying and settling of all Ciba claims, liquidation of Ciba stocks with authorized dealers, preparation of the leave position of the Ciba sales force, analysis of performance reports and follow up of court cases against manufacturers of spurious Ciba and Colgate tooth brushes. The Petitioner responded by stating that most of the claims have been verified and settled, that all stocks with authorized dealers have been liquidated by regular follow up, that leave records have been updated, that all queries and claims from the regions and sales force have been attended to and replied promptly and that he had attended to court cases