Industrial Dispute Act| Person Working in the Capacity of 'Consultant' Cannot Be Deemed 'Workman': Guj HC Quashes Reinstatement Order

Justice Sandeep Bhatt noted that the Respondent had raised an industrial dispute, inter alia, claiming that he was working with the Petitioner Company as a Technical Maintenance In-Charge while earning a salary of INR 9,000 per month. Thereafter, he alleged that he was terminated orally in 1997. Subsequently, the Labour Court ruled in his favour and ordered reinstatement and back wages.

Primarily, the Petitioner submitted that the Respondent did not fall within the definition of the term 'workman' in Sec 2(s) since he was employed as a Maintenance Consultant, receiving consultant fees and not a salary. Further, the Respondent had failed to produce any documentary evidence such as appointment letter, TDS statement, bills to bolster his contention.

The Petitioner also averred relevant documentary evidence was absent. Form 16A was produced to show that if the Respondent was a consultant then there was no need to deduct TDS. Further, the Labour Court had disregarded Form No. 26K which was produced by the Company to show that the tax was deducted from fees for professional or technical services.

Justice Bhatt firstly observed that the Respondent had admitted that he had no evidence with him to prove that he was working as a 'workman' in the Petitioner Company and that his salary was fixed at INR 9,000 per month. The Manager of the Company had stated that the Respondent was rendering services as a consultant raising his bills/ vouchers regularly and being paid through cheque. Per the Bench, there was 'ample evidence' to prove that the Respondent was employed as a technical consultant. Thus, Justice Bhatt held:

"It is pertinent to note that the learned Labour Court has committed gross error in holding that those documents are complicated and therefore, the learned Labour Court has also erred in giving findings that since TDS is deducted by the petitioner company and therefore, the respondent is workman, who is serving in the petitioner institute and in my opinion, this findings of the learned Labour Court is highly erroneous and against the settled proposition of law."

Lastly, the High Court affirmed that there was no evidence that the Respondent had been working for more than 240 days during the year preceding termination.

Consequently, the High Court struck down the award of the Labour Court.

Case No.: C/SCA/10741/2008

Case Title: SANTRAM SPINNERS LIMITED v/s BABUBHAI MAGANDAS PATEL

Citation: 2022 LiveLaw (Guj) 315

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