Standard Chartered Bank vs Vandana Joshi And Another
2009 Latest Caselaw 123 Bom

                                            1

              IN THE HIGH COURT OF JUDICATURE AT BOMBAY




                                                                                
                                      O. O. C. J.




                                                        
                         WRIT PETTION NO.975 OF 2009

    Standard Chartered Bank                                      ..Petitioner.




                                                       
         Vs.
    Vandana Joshi and another                                    ..Respondents.
                                    ......
    Mr. J.P. Cama, Senior Advocate with Mr. Ashok D. Shetty  and Ms Rita 




                                            
    K. Joshi for the Petitioner.
    Ms Vandana K. Joshi - Respondent No.1 present in person.
                              ig     ....

                              CORAM : DR. D.Y. CHANDRACHUD, J.

17th December, 2009.

ORAL JUDGMENT :

1. The challenge in these proceedings is to an award of the Central

Government Industrial Tribunal dated 22nd January, 2009. The

Petitioner has been directed to reinstate the First Respondent with full

backwages and continuity of service. The issue upon which the

outcome of these proceedings turns is whether the First Respondent

was a workman within the meaning of Section 2(s) of the Industrial

Disputes Act, 1947. The Tribunal held that the First Respondent was

a workman and that the termination of service was not lawful.

2. The First Respondent was appointed by the Petitioner as a

Personal Financial Consultant on 2nd May, 2006. The letter of

appointment stipulated that the First Respondent was being placed in

the management cadre of the Petitioner at Band 8-B. The addendum

to the letter of appointment contained a declaration that the First

Respondent had read and accepted the terms and conditions of

appointment. During the course of the evidence before the Industrial

Tribunal, the documents produced by the First Respondent were taken

on the record and marked as Exhibit 18. Among the documents was

the letter of appointment, the addendum and a document showing

the job description and key responsibilities. Under the head "Job

role" the duties expected of the First Respondent included "achieving

allocated business targets, ensuring high quality customer service,

ensuring external and internal compliance on all branch transactions,

handling difficult customer situations and contributing to the overall

achievement of business growth". The "Key responsibilities" were

the following :

● Achieve allocated business targets and actively cross - sell

Consumer Banking products and third party products ● Generate new business via sales promotions, out-

marketing calls and presentations and in -branch contacts

● Participate actively in branch sales planning to generate action plans for meeting targets ● Ensure high level of customer service in the Branch,

Manage difficult customer situations ● Ensure compliance with internal and external guidelines and ensure minimal comments in audits and other inspections

● Ensure transactions are processed with a high level of accuracy and commitment in order to satisfy customer

● needs

Ensure validity and completeness of transactions processed and ensure concessions relative to exchange

rate, fees. charges etc. are authorized / overridden by appropriate authorities ● Take responsibility for general reconciliation and control activities

● Find ways to improve operational efficiency and control costs to meet cost budgets

● Gather / prepare statistics for service quality and productivity indicators ● Active participation in branch sales planning to generate action plans for meeting targets

● Responsible for general reconciliation and control activities ● Be multi-skilled to handle all kinds of transactions and services in bank

● Manage attrition of the base.

3. The services of the First Respondent were terminated on 23rd

June, 2006. Prior to the order of termination certain emails were

addressed to the First Respondent pointing out deficiencies in her

performance of duties. The First Respondent by a letter dated 25th

June, 2006 admitted the receipt of the memos that were issued to her

and placed her version on the record. Be that as it may, on the

termination of the services of the First Respondent, a reference to

adjudication was sought to the Industrial Tribunal under Section 10 of

the Industrial Disputes Act, 1947.

4. In the statement of claim that was filed before the Industrial

Tribunal the First Respondent stated that the appointment related to

'management of personal banking customers which forms a part and

parcel of the business activity of the bank'. The First Respondent,

however, stated that she was answerable to the Branch Manager and

was required to work under the instruction and control of the Branch

Manager. The statement of claim, as it was originally filed, did not

contain an averment that the duties of the First Respondent were of a

clerical nature. However, in a rejoinder filed before the Tribunal the

First Respondent set up the case that the work which was being

rendered was "basically clerical in nature". The First Respondent

stated that being a Personal Financial Consultant she had no authority

or power to authorize or take any decision to complete a transaction.

The Personal Financial Consultant and the Regional Head were

separated in hierarchy by a Line Manager, Branch Manager and

Cluster Head. The First Respondent claimed that all Personal

Financial Consultants reported to the Line Manager and were not

involved in any of the decision making processes or in the discharge

of supervisory functions. The case of the First Respondent was that

she was doing work of a clerical nature and not work of a managerial

or supervisory nature. The management disputed this.

5. Evidence was adduced before the Tribunal on behalf of the

employer and by the First Respondent. The two witnesses who

deposed on behalf of the employer were (i) Ms Pooja Banerjee -

Manager Human Resources and (ii) Ms Tripti Srivastava - Director

Transaction Banking. The First Respondent stepped into the witness

box. The Industrial Tribunal came to the conclusion that the First

Respondent did not recommend leave; that she did not have the

power to initiate disciplinary proceedings or to issue decisions which

would bind the employer. The Tribunal held that her duties were to

attend to customers and to observe the fulfillment of KYC norms. The

First Respondent was held not to fall in the supervisory category. The

termination of the First Respondent was held to be unlawful and a

direction was issued to the Petitioner to reinstate the First Respondent

with full backwages and continuity of service.

6. Counsel appearing on behalf of the Petitioner submitted that the

letter of appointment and the addendum to it set out the conditions of

appointment and the nature of duties of the First Respondent. During

the course of her evidence the First Respondent accepted having

signed and accepted the document and that it reflected the nature of

her duties. According to the Petitioner the First Respondent had

admitted during the course of her evidence that her appointment

"was on the basis of sales and service" and that as a sales person, she

had to sell the products of the bank. Counsel submitted that the

nature of the duties that were performed by the First Respondent

would clearly belie the case that the work which was being rendered

was of a clerical nature. The burden of establishing that she was a

workman within the meaning of Section 2(s) of the Industrial

Disputes Act, 1947 lay upon the First Respondent in view of the

judgments of the Supreme Court. The First Respondent failed to

discharge that burden and the Tribunal had failed to apply its mind to

the evidence on the record which would establish that the work was

not of a clerical nature.

7. On the other hand, the First Respondent who has appeared in

person submitted that the nature of her duties was not related either

to marketing or to sales and that she was not doing any work of a

managerial nature. The First Respondent submitted that the work

which was being rendered by her related to customer service. The

work involved data entry which fell within the description of work of

a clerical nature within the meaning of Section 2(s). The First

Respondent placed extensive reliance on the notes of cross

examination of MW 1 and MW 2 who had deposed on behalf of the

bank and it was urged that the admissions during the course of the

cross examination would belie the contention of the management in

these proceedings.

8. The question as to whether the First Respondent was a

workman within the meaning of Section 2(s) of the Industrial

Disputes Act, 1947 must be decided with reference to the nature of

duties that were performed by the First Respondent. Nomenclatures

in this area of law, as in others, are not decisive. Therefore, the fact

that the letter of appointment dated 2nd May, 2006 refers to the

appointment being in the management cadre of the bank is not

decisive of whether the First Respondent was in fact doing duties

which predominantly were those of a workman under Section 2(s).

However, what is of significance is that the addendum to the letter of

appointment contains a declaration by the First Respondent of having

read and accepted all the terms and conditions of appointment.

During the course of her cross examination the First Respondent

admitted that at the time of joining service she was served with the

documents which she had produced at Exhibit 18. The First

Respondent admitted that page 8 of Exhibit 18 shows the nature of

her duties. Now as already noted earlier, the job role assigned to the

First Respondent involved achieving allocated business targets,

ensuring high quality customer service, ensuring external and internal

compliance on all branch transactions, handling difficult customer

situations and contributing to the overall achievement of business

growth. The key responsibilites assigned to the First Respondent

broadly included areas of generating new business, participation in

branch sales, planning to generate action plans for meeting targets

and ensuring high levels of customer service. Besides this, the First

Respondent was required to ensure compliance with internal and

external guidelines, ensure the processing of transactions with

accuracy and to ensure the validity of transactions. The

responsibilities included finding ways to improve operational

efficiency and controlling of costs, responsibility for general

reconciliation and control activities and to manage the attrition of the

customer base. The First Respondent was required to be multi skilled

to handle all kinds of transactions and services in the bank.

9. During the course of the submissions the First Respondent urged

that the responsibilities which were assigned to her and which were

accepted by her were not necessarily those which she had performed.

Such a case, however, has not been set up in the course of the

evidence. The Court must go by the nature of the duties and

responsibilities associated with the job particularly in the context of

the fact that the First Respondent has in her evidence accepted having

signed the appointment letter and the fact that the relevant page of

Exhibit 18 shows the nature of her duties. During the course of her

evidence the First Respondent stated that her appointment was on

the basis of sales and service. She deposed that she had to attend

walk in customers, get application forms from them and to attend to

work as stated in the examination in chief. In her examination in

chief the First Respondent admitted that the job objective / job

description included the duty to ensure that all accounts were sourced

in compliance with the bank's Anti Money Laundering (AML) policies

and the Know Your Customer (KYC) policies. The KYC norms, it may

be noted, are those spelt out by the Reserve Bank of India. The First

Respondent also stated that her duties included answering "non

routine queries". During the course of the submissions the First

Respondent has drawn the attention of the Court to the addendum to

the job description1. The job description inter alia states that the

jobholder must ensure that she / he is fully aware of all the policies

and procedures issued in relation to money laundering prevention.

The jobholder must ensure compliance with these policies and

procedures on ongoing basis and any suspicious transaction must be

reported to the supervising officer. The First Respondent had to

ensure that all accounts are sourced in compliance with AML / KYC

policies of the bank; ensure "full proof verification of identity of banks

customers" and to report any transaction where funds appear to

originate from suspected illegal sources.

1 pages 57 and 58 of the paper book.

10. These duties upon which there is absolutely no dispute or caveat

would belie the contention of the First Respondent that she was doing

work predominantly of a clerical nature. Section 2(s) of the Industrial

Disputes Act, 1947 defines the expression "workman" to mean any

person "employed in any industry to do any manual, unskilled,

skilled, technical, operational, clerical or supervisory work for hire or

reward". A Constitution Bench of the Supreme Court in H.R.

Adyanthaya v. Sandoz (India) Ltd.2 held that in order that a person

can be designated as a workman under Section 2(s) he/she must be

employed to do work which falls within one of the stipulated

categories viz. manual, unskilled, skilled, technical, operational,

clerical or supervisory. In other words, it is not enough that a person

is not covered by either of the four exceptions to the definition. It is

now also a well settled principle of law that the burden lies on the

person who asserts the status of a workman under Section 2(s) to

establish with reference to the dominant nature of his / her duties

that the work which is performed falls within one of the stipulated 2 1994 II CLR 552.

categories in Section 2(s). (Mukesh K. Tripathi v. Senior Divisional

Manager, LIC3 and Ganga Kisan Sahkari Chini Mills Ltd. v. Jaivir

Singh4).

11. The question as to what constitutes work of a clerical nature has

been dealt with in the judgment of the Supreme Court in the

Management of M/s. Sonepat Co-operative Sugar Mills Ltd. v. Ajit

Singh5. Mr. Justice S.B. Sinha speaking for a Bench of two Learned

Judges of the Supreme Court held thus :

"A person who performs one or the other jobs mentioned in the aforementioned provisions only would come within the purview

of definition of workman. The job of a clerk ordinarily implies stereotype work without power of control or dignity or

initiative or creativeness. The question as to whether the employee has been performing a clerical work or not is required to be determined upon arriving at a finding as regard the dominant nature thereof. With a view to give effect to the

expression to do "any manual, unskilled, skilled, technical, operational, clerical or supervisory work", the job of the concerned employee must fall within one or the other category thereof. It would, therefore, not be correct to contend that

merely because the employee had not been performing any managerial or supervisory duties, ipso facto he would be a workman."

3 2004 III CLR 534 at para 37..

4 2007 III CLR 840 at para 9.

5 2005 II CLR 66.

12. In the present case, the work that was being rendered by the

First Respondent and for which she was employed as a Personal

Financial Consultant cannot be regarded as work of a clerical nature.

The Court must have regard to the dominant nature of the work or

duties assigned. The dominant nature of work or duties for which the

First Respondent was engaged cannot be regarded as stereotypical,

without an element of initiative or creativeness, which is the test

which is elucidated in the judgment in Sonepat Co-operative Sugal

Mills Ltd. (supra). On the contrary the work which was assigned to

the First Respondent clearly shows that she was intrinsically

associated with the provision of a high level of customer service to the

customers of the bank. At one level the First Respondent constituted

a public interface for the bank with its customers while at another

level the First Respondent had to ensure that all the processes and

mechanisms of the bank were duly complied with in relation to

banking transactions. During her evidence the First Respondent in

fact admitted in terms that the job description included work that

would contribute to the business of the bank. The First Respondent

admitted that a term deposit database was provided to her and the

purpose of giving such a database was basically for generating and

securing new business opportunities. While doing such work the First

Respondent undoubtedly had to do incidental work including dealing

with net banking requests, requests for closure of accounts or change

of name and the management of the information system and data

entry. What the Court must have due regard to, however, is the

overall nature of the duties and responsibilities that are attached to

the job. The duties and responsibilities that were attached to the job

of the First Respondent were not of a clerical nature. As an employee

engaged in contributing to the business of the bank the First

Respondent was recruited to perform duties which cannot be

regarded of a clerical nature.

13. The judgment of the Supreme Court in Punjab Co-operative

Bank Ltd. v. R.S. Bhatia6 upon which reliance was placed by the

First Respondent is clearly distinguishable. That was a case where the 6 AIR 1975 SC 1898.

question as to whether the First Respondent was a workman was

concluded by the principles of res judicata since it had been decided in

an earlier proceeding between the same parties. Besides this, the

evidence on the record showed that the employee in his capacity as an

accountant used to sign the salary bills of the staff, including himself,

even while performing the duties of a clerk. The Supreme Court held

that this did not render the employee being one employed mainly in a

managerial or administrative capacity. The judgment is

distinguishable.

14. During the course of her submissions, the First Respondent

sought to place reliance on the cross examination of the two witnesses

who deposed on behalf of the bank. MW 1, during the course of her

cross examination admitted that the First Respondent did not sanction

leave and that she was not aware as to whether the First Respondent

could initiate proceedings against an employee of the bank. The

Tribunal has during the course of its award placed a great deal of

emphasis on the fact that the First Respondent could also not

recommend leave nor could she initiate disciplinary action against

other employees. The fact that an employee is not vested with the

power to sanction leave or to initiate disciplinary proceedings is not

conclusive of the question as to whether the work that is performed

by the employee falls within one of the categories stipulated in

Section 2(s). Whether leave can be sanctioned and whether

disciplinary proceedings can be initiated may in a given case be one of

the circumstances which may be considered in the balance. The

balance, however, has to be drawn on the basis of the overall nature

of the duties and responsibilities performed and the dominant nature

of the work that is performed by an employee. Virtual offices are now a

reality and paperless transactions are no longer a novelty. Managerial

organisation today is radically different from the pre-liberalization

era. Tests of control which were appropriate to a society thirty years

ago have become relics of an era which India has left behind in the

annals of history. The law has kept pace with the times by

recognizing that in order to determine whether a person is a workman

under Section 2(s), contemporary notions of business cannot be

stratified by notions of economic organisation developed for an era

which is no more.

15. In the judgment of this Court in Inthru Noronha v. Colgate

Palmolive (India) Ltd.7 the Court had occasion to take note of the

rapid evolution in business resultant upon the swift changes of

technology in modern times. The Court cautioned against placing the

discourse on Section 2(s) into a strait-jacket, in the following

observations :

"In deciding a case such as the present, the Court must be careful not to place its construction of legal categories into a

straitjacket. Business in recent years has been marked by rapid organisational changes. The swift evolution of technology has

led to a quantum change in the business environment. Modern managements have to alter the structure of organisation in order to meet the exigencies of the time. Every employee in the managerial cadre may not necessarily have the power to appoint

or dismiss personnel nor indeed would an employee engaged mainly in a managerial or administrative capacity always have the power to sanction leave applications. Similarly, the test of the existence of control over subordinates may be applicable in

certain factual situations, but not necessarily in every conceivable case. In others, control over subordinates may not necessarily be by all personnel in the managerial cadre. The number and strength of the subordinate staff depends upon the nature of the business that is being conducted. It would, for 7 2005 - III- LLJ 12.

instance, be wholly inappropriate to apply the same test which

would govern the organisation of a traditional form of manufacturing business to a business founded on software, bio- genetics or a business at the cutting edge of technology. The

interpretation of Section 2(s) must be such as would not lead to stultifying innovation, development and change in managerial practice. Business managers should have a high degree of

latitude to promote efficiency in a competitive business environment. Courts are ofcourse vigilant to deal with subterfuge. The important thing for the Court is to evaluate the position of an employee with reference to the nature of his

duties in the context of the business where those duties are performed."

16. In that case the Court held that the duties and functions showed

that the work was anything but clerical. Similarly, in Dhruba Kumar

Changkokoti v. Travel Corporation of India Ltd.8 a Learned Single

Judge of this Court observed that a person who was employed to

promote tourism of a travel company in Eastern Europe could not be

regarded as a workman within the meaning of Section 2(s). Though

such a person had no power to recruit or terminate employees or to

control employees of the organization, he was regarded as

discharging a part of the function on behalf of the employer viz.

looking after the business and promoting it in Eastern Europe. In

8 2000 II CLR 644.

Mukesh Tripathi's case (supra) the Supreme Court emphasized that a

person who had been recruited to develop the business of the

employer could not have done so without being a full fledged officer

of the Corporation and would not be a workman within the meaning

of Section 2(s). The First Respondent was appointed to contribute to

the development of the business of the Bank. Her duties were plainly

not clerical.

17. The second witness who deposed on behalf of the employer,

MW 2 deposed to the key responsibilities of the First Respondent.

During the course of the cross examination the witness stated that the

product team used to decide upon concessions relating to exchange

rate fees and that she was unable to recall as to whether the First

Respondent had no such right. The managerial staff of the bank was

to decide the manner in which control over costs was to be made and

the witness stated that there were no documents to show that the

First Respondent had participated in a meeting for controlling costs.

The witness also stated that the First Respondent was not the final

authority for opening bank accounts; that she had no power to

sanction leave or to take disciplinary action.

18. The fact that in an organizational structure the employee, in the

course of the decision making process, is subject to checks and

balances is not a matter which would establish that she / he is a

workman within the meaning of Section 2(s). Modern forms of

business in corporate organizations put into place a carefully crafted

process of checks and balances. Rarely, if ever, would an employee

have authoritarian control over business decisions. Employees are

made subject to checks and balances both at the lateral and vertical

level. Managerial decisions are subject to verification and approval.

The fact that decisions of an employee are subject to verification or

subject to a system of controls and balances does not establish that

the employee is a workman within the meaning of Section 2(s).

Managers do not become workmen because their decisions are

structured by processes and approvals. Absolute autonomy is not the

norm in managerial decision making. Nor does the law insist on

absolute discretion or absolute autonomy for a person to be a

manager. Basically the answer to the question must depend upon the

dominant nature of the duties and responsibilities.

19. The Industrial Tribunal has applied a superficial approach to the

entire problem in determining as to whether the First Respondent was

a workman within the meaning of Section 2(s). The Industrial

Tribunal ought to have travelled beyond a superficial analysis of

whether or not the First Respondent was entitled to recommend leave

or to initiate disciplinary action. That the Tribunal has failed to do so

has led to a manifest failure of justice. The Tribunal has failed to

consider material aspects of the evidence on the record and to apply

tests which are now settled in view of the judgments of the Supreme

Court and this Court to which a reference has been made in the

earlier part of this judgment. In the circumstances, the interference of

this Court in the exercise of its jurisdiction under Article 226 is

necessitated to correct a patent error on the part of the Tribunal in the

exercise of its jurisdiction.

20. Once this Court comes to the conclusion that the First

Respondent was not a workman within the meaning of Section 2(s),

the Tribunal had no jurisdiction to entertain the reference which

ought to have been rejected.

21. For these reasons, the Petition would have to be allowed and is

accordingly allowed. The award of the Industrial Tribunal dated 22nd

January, 2009 is set aside. The reference (Reference CGIT - 2/37/of

2007) shall accordingly stand dismissed. Rule is made absolute in the

aforesaid terms. There shall be no order as to costs.

***