Workman classification for consultant duties supports exemption of retrenchment compensation under income tax law.

A consultant performing only technical and supervisory functions, such as inspection, advice, reporting and recommending remedial measures, was treated as a workman under section 2(s) of the Industrial Disputes Act, 1947. The role did not include authority to bind the employer, administrative control, disciplinary powers, or supervision over subordinates, so it was not managerial or administrative in substance. Applying a broad and pragmatic construction to the welfare definition of workman, the retrenchment compensation received by such an employee qualified for exemption under section 10(10B) of the Income-tax Act, 1961.

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Issues: Whether the assessee, engaged as a consultant, was a workman within the meaning of section 2(s) of the Industrial Disputes Act, 1947 so as to qualify for exemption of retrenchment compensation under section 10(10B) of the Income-tax Act, 1961.

Analysis: The definition of workman under section 2(s), as amended, covers persons doing skilled, manual, supervisory, technical or clerical work, but excludes persons employed mainly in a managerial or administrative capacity and those whose supervisory functions are mainly managerial. On the terms of the contract and the nature of duties, the assessee's role was limited to technical and supervisory tasks such as inspection, advice, reporting and suggesting remedial measures. He had no authority to bind the employer, no administrative control, no disciplinary powers, and no subordinate staff. The provision being part of a welfare legislation required a broad and pragmatic construction, keeping the labour force within its scope and excluding only the managerial force.

Conclusion: The assessee was a workman within section 2(s) of the Industrial Disputes Act, 1947, and the retrenchment compensation received by him was exempt from tax under section 10(10B) of the Income-tax Act, 1961.

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