2022 (12) TMI 1238 - HC - Indian Laws

High Court rules consultant, not workman; burden of proof crucial in employment disputes

SANTRAM SPINNERS LIMITED Versus BABUBHAI MAGANDAS PATEL

The High Court held that the respondent was a consultant, not a workman, overturning the Labour Court's decision to reinstate with back wages. The ... Seeking re-instatement of the respondent – workman in service with continuity of service along with 20% backwages - workman within the meaning of Section 2(S) of the Industrial Dispute Act, 1947 - HELD THAT:- It is relevant to note that it is the case of the petitioner company in the statement of claim that he was working in Spinning Department of the Santram Spinners Ltd. - present petitioner as a Technical Maintenance In-charge and was earning Rs.9,000/- per month and the petitioner company has terminated his services on 18.04.1997 by oral order, without any genuine reason and without giving any notice or paying any salary towards notice as well as without following any required procedure for terminating his services. He has further pleaded in the statement of claim that he has issued notice to the petitioner company by registered post AD and the petitioner company has not responded to that notice. It is also relevant to note that in the written statement filed by the present petitioner before the learned Labour Court that the petitioner company has specifically disputed that the respondent company is not covered within the definition of workman with a view to Section 2(S) of the Industrial Dispute Act, 1947. The petitioner has successfully established its defence by producing cogent and convincing evidence in view of the vouchers, TDS certificate, etc., and has also proved its case by cross-examining the respondent workman and also examining the manager at Exh.16, therefore, in view of that the learned Labour Court has committed gross error in drawing adverse inference that the petitioner company has not produced attendance register or payment register before the learned Labour Court, therefore, adverse inference should be drawn by inferring that the respondent is working as a workman in the petitioner company, as pleaded by the respondent in the statement of claim, this finding is also perverse and erroneous and the citations, which are cited at Bar by the learned advocate for the petitioner, are helpful in the facts and circumstances of the present case. In view of the findings given by the learned Labour Court are found perverse, illegal and improper and the same is against the materials available on record, therefore, it is found that this is a fit case where the supervisory powers, under Article 227 of the Constitution of India are required to be exercised, by interfering in the impugned judgment and award passed by the learned Labour Court. Accordingly, if judgment and award passed by the learned Labour Court is required to be quashed and set aside, the ends of justice would be met. Petition allowed. Issues Involved:1. Determination of the respondent's status as a 'workman' under Section 2(S) of the Industrial Disputes Act, 1947.2. Burden of proof regarding the employer-employee relationship.3. Evaluation of documentary evidence and its credibility.4. Applicability of the B.I.R. Act and jurisdiction of the Labour Court.5. Entitlement to reinstatement and back wages.Issue-wise Detailed Analysis:1. Determination of the respondent's status as a 'workman' under Section 2(S) of the Industrial Disputes Act, 1947:The petitioner company contended that the respondent was a maintenance consultant paid consultancy fees and not a workman. The respondent claimed he was a Technical Maintenance In-charge earning Rs. 9,000 per month and was terminated orally. The Labour Court's decision to reinstate the respondent with back wages was challenged on the grounds that the respondent did not qualify as a workman under the Act.2. Burden of proof regarding the employer-employee relationship:The petitioner argued that it was the respondent's duty to prove employment, which he failed to do. The Labour Court erroneously placed the burden on the petitioner to prove the respondent was a consultant. The petitioner cited Supreme Court judgments emphasizing that the onus to prove continuous employment for 240 days lies on the employee, which the respondent did not discharge.3. Evaluation of documentary evidence and its credibility:The respondent did not produce any documentary evidence like appointment letters or wage slips. The petitioner presented bills, TDS statements, and other documents to show the respondent was a consultant. The Labour Court found these documents complicated and inferred an employer-employee relationship based on TDS deductions, which the petitioner argued was a perverse finding. The petitioner highlighted that Form No. 16A and other documents indicated consultancy payments, not salary.4. Applicability of the B.I.R. Act and jurisdiction of the Labour Court:The petitioner claimed that the B.I.R. Act applied to them, and therefore, the Labour Court lacked jurisdiction. This argument was not adequately addressed by the Labour Court, which the petitioner argued was a significant oversight.5. Entitlement to reinstatement and back wages:The Labour Court granted reinstatement with 20% back wages, which the petitioner contested, arguing that the respondent, being a technical expert, would not remain idle and failed to prove continuous employment or wrongful termination. The petitioner cited cases where the Supreme Court held that the burden of proving 240 days of continuous service lies on the employee, and adverse inferences should not be drawn merely because the employer did not produce certain documents.Conclusion:The High Court found that the Labour Court's findings were perverse and against the evidence on record. The petitioner successfully demonstrated that the respondent was a consultant, not a workman. The Labour Court's judgment was quashed, and the petition was allowed, setting aside the order for reinstatement and back wages. The High Court emphasized the importance of proper burden of proof and the evaluation of documentary evidence in such disputes.