The Jharkhand High Court on May 19, 2020 in the matter of Tata Refractories Ltd., Jamshedpur v. Presiding Officer, Labour Court, Jamshedpur and anr., reiterated the principles as to who can be held to be a workman within the meaning of the term 'workman' as defined in the Industrial Disputes Act, 1947 ("ID Act") along with the issues of whether (a) departmental enquiry is a must prior to terminating services of a workman on ground of loss of confidence; and (b) payment of back wages should be directed if termination was held to be illegal. 

Facts of the case: 

Shri M.A. Kumar ("Respondent no. 2") was in the employment of Tata Refractories Limited, Jamshedpur ("Petitioner") from the year September 16, 1981 till his termination on January 15, 1990. 

During his time in the employment of the Petitioner company, the Respondent no. 2 was provided with a loan by the Petitioner company for purchasing a car for his personal use sometime during 1988. However, in spite of there being a designated car agency by the name of M/s. Shri Ram Travels for providing local movement of the officers of the Petitioner company in Jamshedpur, Respondent no. 2 who was authorised to manage such car on hire and passing of bills for payment, used to engage his personal car for use by the officers and used to draw payments by way of hire charges for his car. 

Further, in violation of company rules, the Respondent no. 2 occupied a quarter of the Petitioner company for living purposes and by suppressing the fact that he owns a house at Jamshedpur, also applied for and received a house building loan for the purchase of a house in Kerala. In light of the aforementioned events, a purported enquiry was conducted by the Petitioner company and the services of Respondent no. 2 was terminated. 

Subsequently, after a gap of 2 (two) years from the date of termination, the Respondent no. 2 raised a dispute, and the matter was referred for adjudication before the jurisdictional Labour Court, who by an award dated November 13, 2000 inter alia directed the Petitioner company to reinstate the Respondent no. 2 with full back wages and continuity of service. 

Aggrieved by the award passed by the Labour Court, the Petitioner company preferred this writ petition. 

Arguments forwarded by the parties: 

It was inter alia argued by the Petitioner company that the Respondent no. 2 was not a 'workman' within the meaning of Section 2(s) of the ID Act, and that the Respondent no. 2 used to control and supervise the work of all office staff working under him and dealt in cash in connection with various matters including hiring of car and looking after the affairs of the guest house of the Petitioner company. 

It was argued by the Respondent no. 2 that the Labour Court rightly held the Respondent no. 2 to be a 'workman' under ID Act, as no documents were produced by the Petitioner company which would indicate that the Respondent no. 2 was engaged in a supervisory nature of job. Further, no charge-sheet was issued and no domestic enquiry was held by the Petitioner company which was in violation of the principles of natural justice and properly considered by the Labour Court. 

Issues before the court: 

The primary issue before the Jharkhand High Court was whether the Respondent no. 2 was excluded from being considered as a workman within the meaning of the term defined in the ID Act, in view of the supervisory nature of work performed by him. 

The additional issues adjudicated upon by the court was whether the termination of services of Respondent no. 2 was justified or not in absence of a disciplinary proceeding, and whether the Respondent no. 2 was entitled for any relief. 

Decision of the court: 

On the question of whether the Respondent no. 2 was a workman or not, the court, while relying on the decision of the Supreme Court in the matter of National Engineering Industries Limited v. Shri Kishan Bhageria and Others, 1988 Supp 1 SSC 82, held that the various works of the Respondent no. 2 were only performed on the orders of the Petitioner company, that it was not supervisory in nature, with no independent authority imposed upon the Respondent no. 2, and that the Respondent no. 2 could not take any decisions which would have bound the Petitioner company in any way. Therefore, the decision of the Labour Court was upheld by the court. 

On the question of whether the termination of services of Respondent no. 2 was justified or not, the court by relying on the decision of the Supreme Court in the matter of Chandu Lal v. The Management of M/s. Pan American World Airways Inc., (1985) 2 SCC 727, held that "loss of confidence of an employer over the employee attaches a stigma to the career of the employee and if such loss of confidence leads to termination of the services of an employee it should unerringly be preceded by a domestic enquiry in which the delinquent employee also participates". Therefore, the court held that the termination of services of Respondent no. 2 was not justified. 

On the question of whether the Respondent no. 2 was entitled to any relief, the court by relying on the guidelines laid down in Rajasthan State Road Transport corporation, Jaipur v. Phool Chand (Dead) Through LRs, 2018 AIR (SC) 4534, and Deepali Gundu Surwase v. Kranti Junior Adhyapak Mahavidyalaya, (2013) 10 SCC 324, held that the Respondent no. 2 was not entitled to any back wages and the same was set aside, since there was no pleading made by the Respondent no. 2 with regard to the same, 

Accordingly, the court disposed of the instant case, by affirming the order of reinstatement and continuity of service of the Respondent no. 2, but setting aside the entitlement of Respondent no. 2 to back wages. 

This update has been contributed by Arka Majumdar (Partner) and Avin Sarkar (Associate).