“The employee, having supervisory duties and drawing a salary exceeding the statutory limit, does not qualify as a ‘workman’ under the Industrial Disputes Act,” said the Supreme Court.
In a significant judgment delivered on October 21, 2024, the Supreme Court of India in Lenin Kumar Ray vs. Express Publications (Madurai) Ltd. (Civil Appeal No. arising out of SLP (C) No. 5660 of 2023) ruled that the appellant, Lenin Kumar Ray, did not qualify as a “workman” under the Industrial Disputes Act, 1947 (I.D. Act), thereby dismissing his appeal for reinstatement. The case also involved a cross-appeal by the employer, Express Publications (Madurai) Ltd., challenging the earlier decision of the High Court of Orissa, which had partially upheld the Labour Court’s ruling.
Background of the Case
Lenin Kumar Ray, an Assistant Engineer (Electronics and Communication), had been employed by Express Publications (Madurai) Ltd. (the management) since 1997. Initially appointed as a Junior Engineer, he was promoted to Assistant Engineer in 2000. On October 8, 2003, Ray was relieved from service without any prior notice, sparking a legal dispute that led to conciliation efforts, followed by arbitration at the Labour Court.
The Labour Court in Bhubaneswar ruled in favor of Ray, declaring him a “workman” under Section 2(s) of the I.D. Act and ordered his reinstatement with compensation. Dissatisfied with this ruling, the management approached the Orissa High Court, which partly overturned the decision by denying reinstatement but upholding the status of the employee as a “workman.”
Both parties then approached the Supreme Court, Ray seeking reinstatement and the management challenging his classification as a “workman.”
Key Legal Issues
1. Definition of ‘Workman’ Under the I.D. Act:
The crux of the case was whether Ray qualified as a “workman” under Section 2(s) of the Industrial Disputes Act, 1947. As per the Act, a “workman” is a person employed to do manual, technical, clerical, or supervisory work, but excludes those in managerial positions or drawing wages above a certain threshold. The management argued that Ray, being in a supervisory role and earning above the statutory wage limit, did not meet the criteria of a “workman.”
2. Legality of Termination:
Ray claimed his termination was illegal as it violated the provisions of the I.D. Act, including Sections 25F, 25G, and 25H, which relate to retrenchment, seniority, and re-employment of retrenched workers.
3. Reinstatement and Compensation:
The employee sought reinstatement along with full back wages, arguing that his termination lacked due process, while the management contended that it had duly followed contractual terms by paying Ray one month’s salary in lieu of notice.
Observations and Findings
Supervisory Role and Salary Beyond the Limit:
The Supreme Court, comprising Justices Pankaj Mithal and R. Mahadevan, carefully examined Ray’s job responsibilities and salary. The Court emphasized that the key factor in determining “workman” status is the nature of duties performed, rather than the designation alone. The Court observed that Ray’s supervisory role, managing two junior engineers, and his salary exceeding the pre-amended statutory cap of Rs.1,600 disqualified him from being considered a workman under Section 2(s) of the I.D. Act.
Quote from the Judgment:
“The determinative factor for ‘workman’ is the principal duties and functions performed by an employee, and in this case, the employee’s supervisory duties clearly take him outside the ambit of ‘workman’,” the Court stated, thereby siding with the management’s interpretation.
No Violation of Procedure:
The Court further held that the management had followed the contractual obligations by paying Ray one month’s salary in lieu of notice. The acceptance and encashment of this amount by Ray implied that there was no procedural violation in his termination.
Decision of the Court
The Supreme Court set aside the High Court’s finding that Lenin Kumar Ray was a “workman” under the I.D. Act. It also upheld the High Court’s decision to reject Ray’s reinstatement and the payment of Rs. 75,000 compensation in lieu of back wages as ordered by the Labour Court. The Court concluded that since Ray was not a workman, the provisions of the I.D. Act did not apply to his case, and thus, his termination was valid.
Case Details:
– Case Title: Lenin Kumar Ray vs. Express Publications (Madurai) Ltd.
– Civil Appeal No.: SLP (C) No. 5660 of 2023
– Bench: Justice Pankaj Mithal and Justice R. Mahadevan
Parties Involved:
– Appellant in Civil Appeal No. 5660 of 2023: Lenin Kumar Ray
– Respondent in Civil Appeal No. 5660 of 2023: Express Publications (Madurai) Ltd.
– Appellant in Civil Appeal No. 12876 of 2024: Express Publications (Madurai) Ltd.
– Respondent in Civil Appeal No. 12876 of 2024: Lenin Kumar Ray
Advocates:
– For the Employee (Appellant in CA 5660/2023): Senior Counsel representing Lenin Kumar Ray
– For the Management (Appellant in CA 12876/2024): Senior Counsel representing Express Publications (Madurai) Ltd.
