2006 (12) TMI 551 - SC - Indian Laws

Legal Assistant's Managerial Duties Disqualify 'Workman' Status

Muir Mills Unit of N.T.C.(U.P) Ltd. Versus Swayam Prakash Srivastava and Anr.

The Supreme Court held that the respondent, appointed as a Legal Assistant, did not qualify as a 'workman' under the U.P. Industrial Disputes Act due to ... - Issues Involved:1. Whether 'legal assistant' falls under the definition of workman under the Industrial Disputes ActRs.2. Whether the High Court failed to appreciate that the award was perverse inasmuch as it directed the reinstatement with backwages of a probationer whose services had been discontinued upon completion of the probationary period on account of unsatisfactory workRs.3. Whether the High Court failed to appreciate that respondent No.1 having worked as a probationer for just a year had enjoyed over 15 years of wages without having worked for the same and that in the facts and circumstances even if the termination was held to be illegal, these wages paid should have been held to be treated as compensation in lieu of reinstatementRs.Detailed Analysis:1. Definition of 'Workman':The Court examined whether the respondent, appointed as a Legal Assistant, qualified as a 'workman' under Section 2(z) of the U.P. Industrial Disputes Act, 1947, which is similar to Section 2(s) of the Industrial Disputes Act, 1947. The Court noted that the respondent's duties were supervisory in nature, including supervising court cases, preparing draft replies, and representing the mill in legal matters. Citing precedents such as Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh and A. Sundarambal v. Govt. of Goa, Daman and Diu, the Court held that the respondent did not fit the definition of a workman as his role involved managerial and supervisory functions. Thus, the respondent fell under exception (iv) of Section 2(z) of the U.P.I.D Act, 1947.2. Reinstatement with Backwages:The Court addressed whether the High Court erred in upholding the Labour Court's award of reinstatement with backwages. The Court reviewed the respondent's appointment and termination letters, which clearly stated that the respondent was on probation and could be discharged without notice if his performance was unsatisfactory. The Court cited P.N. Verma v. Sanjay Gandhi PGI of Medical Studies and State of Madhya Pradesh v. VK Chourasiya, which support the termination of a probationer for unsatisfactory performance, provided it is not stigmatic. The Court found no evidence that the termination was stigmatic or that the respondent was not given a fair assessment during his probation. The Labour Court's award was deemed perverse as it granted backwages without any finding on the respondent's gainful employment post-termination.3. Compensation in Lieu of Reinstatement:The Court considered whether the High Court failed to appreciate that the respondent, having worked only a year, had received wages for over 15 years without working. The Court noted that the mill had ceased operations and the respondent had already been compensated through interim wages. Citing MP State Electricity Board v. Jarina Bee (Smt), the Court held that payment of full backwages is not a natural consequence of setting aside an order of reinstatement. Given the mill's closure and the respondent's prolonged receipt of wages without work, the Court found it impractical to reinstate the respondent and concluded that the interim wages paid should be treated as compensation in lieu of reinstatement.Conclusion:The Supreme Court allowed the appeal, setting aside the Labour Court's award and the High Court's orders. The Court held that the respondent is not a workman under the Industrial Disputes Act and that the termination was not illegal. Consequently, no recovery certificate needs to be issued in favor of the respondent, and the salary already paid under court orders will not be recovered. The Court also granted the appellant the liberty to withdraw any unclaimed amounts deposited as future salary.