Case: S.K.Maini Vs. Carona Sahu Co.

3. The appellant Shri S. K. Maini was working as the Shop Manager/Incharge of the respondent-Company M/s Carona Sahu Company Limited. On an allegation of misconduct against the appellant, a domestic enquiry was caused by the respondent-Company and by order dated March 12, 1981 the service of the appellant was terminated. On September 28, 1981, Government of Punjab referred the following dispute for adjudication to the Labour Court, Jalandhar : "Whether the termination of service of Shri S. K. Maini is justified and in order ? If not, to what relief and amount of compensation is he entitled ?"4. Before the Labour Court a preliminary objection was raised by the respondent-Company as to the maintainability of the said reference by contending that Shri S. K. Maini was not a workman within the definition of Section 2(s) of the Industrial Disputes Act, 1947 because being a Shop Manager/In-charge of the shop, he had been discharging mainly managerial and administrative functions and had been supervising the works of other employees subordinate to him for running the said shop and even if he was a Supervisor at the relevant time, Shri S. K. Maini was drawing a salary of more than Rs. 500 per month. Hence, he could not be held to be a workman under the Industrial Disputes Act. Accordingly, the reference was not maintainable and Shri Maini was not entitled to get any relief from the Labour Court5. The Labour Court, Jalandhar, inter alia came to the finding that although Shri Maini was a Shop Manager/In-charge of the shop but his duties were mainly clerical and he had no independent authority to appoint or discharge the employees and to charge-sheet them and his functions could not be held mainly to be supervisory or managerial. Accordingly, Shri Maini was a workman under the Industrial Disputes Act. The Labour Court also came to the finding that the domestic enquiry was not properly conducted against him and reasonable opportunity to defend in the domestic enquiry was not given to Shri Maini by not allowing Shri Maini to be represented by a lawyer. The Labour Court also held that the Enquiring Officer Shri Iqbal Singh was the Standing Counsel of the respondent-Company for disciplinary action to be taken against the employees of the Company. The said Iqbal Singh, an Advocate, used to be engaged to contest the claims of the workmen concerned of the company in various legal proceedings. Such Standing Counsel was likely to have a bias in favour of the Company which was his master and consequently prejudice against the employee concerned. It should, therefore, be held that he lacked impartiality and objectivity to judge the case of the workman concerned. Accordingly, the finding recorded by such officer against Shri Maini was not fair and proper. It may be noted here that the Labour Court refused to grant permission to the management to prove the case of the Company of a bona fide action before the Labour Court by leading independent evidence on the ground that such opportunity would tantamount to permitting the management to improve upon its evidence already adduced and the same was bound to cause harassment to the workman concerned. In that view of the matter, the Labour Court directed for reinstatement of Shri Maini with full back wages6. As aforesaid, the respondent-Company challenged the validity of such award of the Labour Court before the Punjab and Haryana High Court. The learned Single Judge of the Punjab and Haryana High Court inter alia came to the finding after analysing the powers and responsibilities of Shri Maini as Shop Manager/In-charge and the evidence on record, that the predominant duties of Shri Maini were administrative or managerial and to some extent supervisory in nature. It was also held by the learned Single Judge that the power to employ or dismiss or even initiate disciplinary action was not the sole criterion to decide the true nature of duties of a Manager or Administrator. Such test was relevant to determine whether the duties were supervisory in nature. The learned Judge was of the view that although some of the duties like maintaining accounts, filling certain pro formas were clerical in nature, but the major job of the employee concerned was administrative or managerial. Accordingly, the employee was not workman under Section 2(s) of the Industrial Disputes Act. The learned Judge further held that denial of the assistance of a lawyer to Shri Maini had not vitiated the domestic enquiry and the Labour Court had gone wrong in holding that the Enquiring Officer being a Standing Counsel of the Company had a prejudice against the employee and he had bias in favour of the Company. The learned Judge further held that the duties and interest of an employee of the management by holding an enquiry against another employee do not clash and it was well known that one of the employees in the department would hold enquiry against the delinquent employee. It was further held by the learned Single Judge that Shri Maini never raised any objection against the appointment of the said Enquiring Officer who was an Advocate. Accordingly, Shri Maini should not have been permitted to contend that the Enquiring Officer could not have held the enquiry with objectivity and with impartiality. The learned Single Judge further held that the Labour Court was not right in denying the management to lead evidence on the ground that such opportunity would amount to filling the lacuna in evidence adduced before the Enquiring Officer. The learned Judge held that the management was entitled to lead evidence before the Labour Court in support of the impugned order of termination in case the enquiry was held vitiated on any ground. For the above reasons, the writ petition was allowed by the learned Judge and the award of the Labour Court dated September 21, 1981 was set aside. The appellant thereafter preferred the Letters Patent Appeal against the said judgment of the learned Single Judge but the said appeal was dismissed in limine. A special leave petition before this Court was filed by the appellant petitioner against the order of dismissal of the Letters Patent Appeal and leave has been granted to such leave petition

Court's reasoning:
After giving our careful consideration to the facts and circumstances of the case and the submissions made by the learned counsel for the parties, it appears to us that whether or not an employee is a workman under Section 2(s) of the Industrial Disputes Act is required to be determined with reference to his principal nature of duties and functions. Such question is required to be determined with reference to the facts and circumstances of the case and materials on record and it is not possible to lay down any strait-jacket formula which can decide the dispute as to the real nature of duties and functions being performed by an employee in all cases. When an employee is employed to do the types of work enumerated in the definition of workman under Section 2(s), there is hardly any difficulty in treating him as a workman under the appropriate classification but in the complexity of industrial or commercial organisations quite a large number of employees are often required to do more than one kind of work. In such cases, it becomes necessary to determine under which classification the employee will fall for the purpose of deciding whether he comes within the definition of workman or goes out of it. In this connection, reference may be made to the decision of this Court in Burmah Shell Oil Storage and Distribution Co. of India Ltd. v. Burmah Shell Management Staff Assn. In All India Reserve Bank Employeess Assn. v. Reserve Bank of India it has been held by this Court that the word supervise and its derivatives are not words of precise import and must often be construed in the light of context, for unless controlled, they cover an easily simple oversight and direction as manual work coupled with the power of inspection and superintendence of the manual work of others. It has been rightly contended by both the learned counsel that the designation of an employee is not of much importance and what is important is the nature of duties being performed by the employee. The determinative factor is the main duties of the employee concerned and not some works incidentally done. In other words, what is, in substance, the work which employee does or what in substance he is employed to do. Viewed from this angle, if the employee is mainly doing supervisory work but incidentally or for a fraction of time also does some manual or clerical work, the employee should be held to be doing supervisory works. Conversely, if the main work is of manual, clerical or of technical nature, the mere fact that some supervisory or other work is also done by the employee incidentally or only a small fraction of working time is devoted to some supervisory works, the employee will come within the purview of workman as Section 2(s) of the Industrial Disputes Act10. In Mcleod and Co. v. Sixth Industrial Tribunal, W.B. 1958 AIR(Cal) 273) P. B. Mukharji, J. of the Calcutta High Court as the learned Chief Justice then was, observed that whether a person was a workman within the definition of the Industrial Disputes Act would be the very foundation of the jurisdiction of the Industrial Tribunal. The court further observed that in order to determine the categories of service indicated by the use of different words like supervisory, managerial and administrative, it was not necessary to import the notions of one into the interpretation of the other. The words such as supervisory, managerial and administrative are advisedly loose expressions with no rigid frontiers and too much subtlety should not be used in trying to precisely define where supervision ends and management begins or administration starts. For that would be theoretical and not practical. It has to be broadly interpreted from a common sense point of view where tests will be simple both in theory and in their application. The learned Judge further observed that a supervisor need not be a manager or an administrator and a supervisor can be a workman so long as he did not exceed the monetary limitation indicated in the section and a supervisor irrespective of his salary is not a workman who has to discharge function mainly of managerial nature by reasons of the duties attached to his office or of the powers vested in him. The aforesaid decision of the Calcutta High Court was noted with approval by this Court in National Engineering Industries Ltd. v. Shri Kishan Bhageria11. It may be noted in this connection that in view of the amendment of Section 2(s) enlarging the ambit of the classification of various types of workmen except managerial force, entire labour force has been included within the definition of workman under Section 2(s) as has been indicated by this Court in S. K. Verma v. Mahesh Chandra . But if the principal function is of supervisory nature, the employee concerned will not be workman only if he draws a particular quantum of salary at the relevant time as indicated in Section 2(s). In the instant case, it, however, appears to us that Shri Maini as Manager/In-charge of the shop was made responsible and liable to make good such amount of credit whether such sale on credit had been made by him or by any other member of the staff in employment under him with or without his knowledge. Under the terms and conditions of service, he was asked to take charge of the shop to which his service was transferred. Mr. Maini, under the terms and conditions of service, was required to be held responsible and liable for any loss suffered by the Company due to deterioration of the quality of the stock or any part thereof and loss of any of the other articles lying in the shop caused by reason of any act of negligence and/or omission to take any precaution by the employees. Mr. Maini was also required to notify the Company by trunk call and/or telegram not later than three hours after the discovery in the said shop of any fire, theft, burglary, loot or arson. He was required to investigate into the matter immediately and get the cause and amount of loss established by local authorities. Mr. Maini as in-charge of the shop was required to keep and maintain proper accounts approved by the Company indicating the exact amount to be paid from the receipts from the respective staff. Under Clause XIII of the terms and conditions of the service, Mr. Maini would remain fully responsible to the Company for damages or loss caused by acts or commission of the loss of the employees of the shop. Under Clause XV of the terms and conditions of service, the shop in-charge was required to keep himself fully conversant with all the regulations in force which may come into force from time to time with regard to Octroi, Sales Tax and Shops and Commercial Establishments Act and/or any other local regulation applicable to the shop. Clause XXI indicates that non-compliance with any of the local or State Acts or Central Acts would be viewed seriously and Manager would be held responsible for any fine/penalty imposed and/or prosecution launched against the Company. It also appears that in the event of a salesman being absent, the shop in-charge is empowered to appoint temporary helper for the said period to work as acting salesman. Similarly, in the event of helper being absent, the shop manager is also empowered to appoint part-time sweeper and to entrust the work of a helper to a sweeper. Such functions, in our view, appear to be administrative and managerial. By virtue of his being in-charge of the shop, he was the principal officer-in-charge of the management of the shop. We therefore find justification in the finding of the High Court that the principal function of the appellant was of administrative and managerial nature. It is true that he himself was also required to do some works of clerical nature but it appears to us that by and large Shri Maini being in-charge of the management of the shop had been principally discharging the administrative and managerial work. A manager or an administrative officer is generally invested with the power of supervision in contradistinction to the stereotype work of a clerk. This Court in Lloyds Bank Ltd. v. Panna Lal Gupta has indicated that a manager or administrator generally occupies a position of command or decision and is authorised to act in certain matters within the limits of his authority without the sanction of his superior. In the instant case within the authority indicated in the terms and conditions of his service, Shri Maini was authorised to take decisions in the matter of temporary appointments and in taking all reasonable steps incidental to the proper running of the shop. Precisely for the said reason, Shri. Maini had signed the statutory forms as an employer. It should be borne in mind that an employee discharging managerial duties and functions may not, as a matter of course, be invested with the power of appointment and discharge of other employees. It is not unlikely that in a big set-up such power is not invested to a local manager but such power is given to some superior officers also in the management cadre at divisional or regional level. The unit in a local shop may not be large but management of such small unit may fulfil the requirements and incidences of managerial functions. On a close scrutiny of the nature of duties and functions of the Shop Manager with reference to the admitted terms and conditions of service of Shri Main in, it appears to us that the High Court was justified in holding that the appellant was not a workman under Section 2(s) of the Industrial Disputes Act. In the aforesaid facts, it is not necessary to go into the question as to whether or not domestic enquiry had been properly conducted or the Enquiring Officer had acted with bias. It is also not necessary to decide for the purpose of the disposal of the appeal as to whether or not the Company was entitled to lead fresh evidence in support of the domestic enquiry before the Labour Court.The appeal is, therefore, dismissed without, however, any order as to costWe therefore find justification in the finding of the High Court that the principal function of the appellant was of administrative and managerial nature. It is true that he himself was also required to do some works of clerical nature but it appears to us that by and large Shri Maini being in-charge of the management of the shop had been principally discharging the administrative and managerial work. A manager or an administrative officer is generally invested with the power of supervision in contradistinction to the stereotype work of a clerk. This Court in Lloyds Bank Ltd. v. Panna Lal Gupta has indicated that a manager or administrator generally occupies a position of command or decision and is authorised to act in certain matters within the limits of his authority without the sanction of his superior. In the instant case within the authority indicated in the terms and conditions of his service, Shri Maini was authorised to take decisions in the matter of temporary appointments and in taking all reasonable steps incidental to the proper running of the shop. Precisely for the said reason, Shri. Maini had signed the statutory forms as an employer. It should be borne in mind that an employee discharging managerial duties and functions may not, as a matter of course, be invested with the power of appointment and discharge of other employees. It is not unlikely that in a big set-up such power is not invested to a local manager but such power is given to some superior officers also in the management cadre at divisional or regional level. The unit in a local shop may not be large but management of such small unit may fulfil the requirements and incidences of managerial functions. On a close scrutiny of the nature of duties and functions of the Shop Manager with reference to the admitted terms and conditions of service of Shri Main in, it appears to us that the High Court was justified in holding that the appellant was not a workman under Section 2(s) of the Industrial Disputes Act. In the aforesaid facts, it is not necessary to go into the question as to whether or not domestic enquiry had been properly conducted or the Enquiring Officer had acted with bias. It is also not necessary to decide for the purpose of the disposal of the appeal as to whether or not the Company was entitled to lead fresh evidence in support of the domestic enquiry before the Labour Court.