Person At Managerial Or Supervisory Role Is Not 'Workman' Under ID Act, Karnataka High Court Sets Aside Relief Granted By Labour Court

The High Court of Karnataka single bench of Mrs Justice K.S Hemalekha held that persons carrying managerial and supervisory responsibilities do not fall within the scope of 'workman', as defined under Section 2(s) of the Industrial Disputes Act. Once it is determined that the person is not a 'workman' under the Act, the labour court does not have jurisdiction to adjudicate whether their termination was proper or not.

Brief Facts:

Smt. N. Bhuvaneshwari (“Applicant”) was employed as an 'Executive Secretary' at Ambuthirtha Power Pvt. Ltd. (“Ambuthirtha”). She raised a dispute with the labour court after her employment was terminated at Ambuthirtha. The question before the labour court was whether she would be a 'workman' within the scope of Section 2(s) of the Industrial Disputes Act (“ID Act) and what relief she would be entitled to. The labour court held in favour of the Applicant, qualifying her under the definition of 'workman', and directing Ambuthirtha to pay Rs. 5,00,000/- as compensation to her. Additionally, Ambuthirtha was directed to reinstate her and continue her service, along with benefits like back wages.

Thereafter, the Applicant filed a writ petition in the High Court of Karnataka (“High Court”), contending that the labour court did not provide a suitable relief and that the compensation should have been higher. Ambuthirtha also filed a writ petition in the High Court against the ruling of the labour court. Both writ petitions were clubbed and heard together by the High Court.

Contentions put forth by Ambuthritha:

Ambuthirtha challenged the classification of the Applicant as a 'workman' under Section 2(s) of the ID Act. It asserted that the Applicant's role as an 'Executive Secretary' was predominantly managerial and supervisory, as evidenced by her extensive experience spanning 17 years, her educational qualifications, and her substantial monthly salary exceeding Rs. 30,000/-. Further, her termination process followed company protocols, including a three-month notice period and an exit interview where the Applicant indicated no desire to return. Regarding the compensation awarded by the labour court, Ambuthirtha stated that the decision was flawed because it overlooked evidence indicating the Applicant's poor performance, particularly in coordinating travel plans for the Managing Director, which caused inconvenience.

Contentions put forth by the Applicant:

The Applicant argued that despite the management's assertion that her role as an Executive Secretary entailed managerial and supervisory duties, her job primarily involved tasks typical of a clerical position. Further, the labour court failed to exercise its discretion appropriately under Section 11A of the ID Act. She argued that given the court's finding of illegal termination and potential victimization by the management, it should have exercised its discretion in favour of providing suitable relief to remedy the situation.

Observations by the High Court:

At the outset, the High Court perused the definition of 'workman' under section 2(s) of the ID Act. The analysis of the section was broken down into three parts:

“(i) Any person (including an apprentice) employed in an 'industry' to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward;

(ii) It includes something more in what the term primarily denotes and this part, it defines the person who has been dismissed, discharged, or retrenched in connection with an industrial dispute; and

(iii) This part specifically excludes the categories of person specified in Clause-i to iv of this Sub- Section.”

The High Court also noted the exceptions to this section under subclauses (iii) and (iv). The exceptions encompass individuals engaged in managerial or administrative roles, or those in supervisory positions earning wages surpassing Rs. 10,000 per month. This applies to individuals whose job responsibilities primarily involve managerial duties or are supervisory.

From the appointment letter and the Applicant's resume, it was evident that her responsibilities included assisting the Chairman, Managing Director, and Director in their day-to-day tasks. It included managing their travel arrangements, ensuring timely payment of bills related to travel expenses, updating schedules, and adhering to established company policies and procedures. The High Court noted that despite her designation as 'Executive Secretary', the Applicant's duties were more akin to managerial and supervisory roles rather than clerical work.

Moreover, the High Court observed the Applicant had an extensive experience of 17 years in secretarial assistance before joining the company, which undoubtedly influenced her appointment. The documents provided delineated her managerial and supervisory responsibilities, particularly in maintaining records for the Managing Director and the Chairman. The High Court concluded that the duties performed by the Applicant aligned more closely with those of a manager, rather than fitting within the scope of a 'workman' as defined under Section 2(s) of the ID Act.

Regarding the termination of the Applicant's employment, the High Court emphasized that the question of whether the termination was proper or not is not within the purview of the labour court. The crucial factor is the Applicant's classification as a 'workman,' which she failed to establish convincingly.

Consequently, Ambuthirtha's writ petition was allowed, and the order passed by the labour court was set aside.

Case Title: Smt. N. Bhuvaneshwari vs The Management of M/s Ambuthirtha Power Pvt. Ltd.

Case No.: Writ Petition No. 49982/2018 (L-TER) C/W Writ Petition No.6531/2019 (L-RES)

Advocate for the Petitioner: Party-in-Person

Advocate for the Respondent: Sri C.K. Surahmanya for Sri B.C. Prabhakar

Citation: 2024 LiveLaw (Kar) 198

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