Tata Sons Ltd. vs S. Bandyopadhyay Through New ...
2004 Latest Caselaw 286 Del

JUDGMENT

Madan B. Lokur, J.

1. The Petitioner is aggrieved by an Award dated 18th February 1998 passed by the learned Labour Court in ID No. 85/92. The sole question agitated by learned counsel for the Petitioner is with respect to the finding of the learned Labour Court that the Respondent, an employee of Tata Risk Management Services, working as a Deputy Manager (Engineering) on a salary of Rs. 2700 per month, dearness allowance of Rs. 1500 per month and a flat is a workman within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 (for short the Act).

2. The case law on the subject of how to determine whether an employee is a workman or not has been discussed by me in considerable detail in K.H. Pandhi vs. Presiding Officer, CW No. 1224 of 1978 decided on 5th February 2004. It is not necessary for me, therefore, to repeat the case law or the discussion therein.

3. Suffice it to say that the Constitution Bench of the Supreme Court in H.R. Adyanthaya vs. Sandoz (India) Ltd., held that for an employee to be covered by the definition of "workman", he must be employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work. If he falls within these categories, it has then to be seen whether he comes within any of the four excluded categories mentioned in Section 2(s) of the Act. The Constitution Bench noticed certain earlier decisions where the initial determination was whether an employee falls within any of the excluded categories. If he did not fall within any excluded category, then it was held that he was a workman within the meaning of Section 2(s) of the Act. The Constitution Bench found this approach to be incorrect.

4. So far as the present case is concerned, I find that the learned Labour Court has not followed the sequence laid down by the Supreme Court in Adyanthaya and that is why it has fallen into error.

5. A review of the case law undertaken in Pandhi clearly indicates that the mere designation of an employee is not of any consequence for the purposes of determining whether he is a workman or not. What is of importance is the nature of his duties, particularly his primary duties or his basic duties and the dominant purpose of his employment.

6. Learned counsel for the parties referred me to some judgments not discussed in Pandhi. These decisions confirm rather than detract from the conclusions already arrived at in Pandhi. However, for the sake of completeness, I propose to discuss these decisions referred to by learned counsel.

7. The question that arose in T.P. Srivastava vs. M/s National Tobacco Co. of India Ltd, was whether a Section Salesman was a workman or not. The Supreme Court discussed the nature of work of a Section Salesman and concluded that since his duties require an imaginative and creative mind, his duties could not be termed as either manual, skilled, unskilled or clerical in nature. Consequently, it was held that such an employee cannot be termed as a workman. This is what the Supreme Court said in paragraph 3 of the Report:

"It is seen from the facts found that the appellant was employed to do canvassing and promoting sales for the company. The duties involve the suggesting of ways and means to improve the sales, a study of the type or status of the public to whom the product has to reach and a study of the market condition. He was also required to suggest about the publicity in markets and melas, advertisements including the need for posters, holders and cinema slides. These duties do require the imaginative and creative mind which could not be termed as either manual, skilled, unskilled or clerical in nature. The supervising work of the other local salesmen was part of his work considered by the Tribunal as only incidental to his main work of canvassing and promotion in the area of his operation. Such a person cannot be termed as a workman is also the ratio of the decision of this Court in Burmah Shell Oil Storage and Distribution Company v. Burmah Shell Management and Staff, , D.S. Nagaraj v. Labour Officer, Karnal, (1972) 42 FJR 440 (Andh Pra), J.J. Dechane Distributor v. State of Kerala, (1974) 2 Lab LJ 9 : (1974 Lab IC 379) (Kerala)."

8. S.K. Verma vs. Mahesh Chandra was a case in which the question that arose was whether a "development officer" working with the Life Insurance Corporation was a workman. This decision was held to be per incuriam in Adyanthaya. Reference was also made by learned counsel to Ved Prakash Gupta vs. M/s Delton Cable India (P) Ltd. . This decision followed the ratio of S.K. Verma and even otherwise, the Supreme Court said in Adyanthaya, that the decision turned on its own facts. These decisions are, therefore, not at all helpful in deciding the controversy in the present case.

9. Tata Risk Management Services is said to be a division of Tata Sons Ltd. and performs consultancy service in the field of risk management. While the exact nature of duties of the Respondent employee is not specifically available on record, various documents filed before the learned Labour Court indicate the nature of work done by him and these documents show that his work required imagination and creativity, as one would expect of a consultant.

10. What does the employee say about the nature of work done by him? He says in paragraph 3 of his statement of claim that he was employed with the Petitioner since 15th January, 1985 as a highly skilled workman. He was doing work with his own hands and he had no power to appoint or charge sheet any worker. He had no power to grant leave and could not take independent decisions. He was working on instructions from the management. He repeats this in his affidavit by way of evidence and adds that he was performing duties like checking with his own hands machines, buildings, electrical installations and fire fighting equipments. In other words, his case was that he was a skilled manual worker.

11. On the other hand, the case of the Petitioner in the written statement was that the employee was holding a managerial post with all privileges and facilities according to his grade. It was denied that he is a highly skilled workman or that he is doing any work with his own hands. This is repeated in the affidavit by way of evidence. In addition, it is stated that the work of the employee involved development of business for marketing purposes, which included making financial commitments on behalf of Tata Risk Management Services and forwarding offers to various parties independently. It is further stated that as a person holding an executive and managerial position in a consultancy organization the employee had the final say in some matters. It is stated that the organization performs consultancy services in risk management and it is not a manufacturing division.

12. The cross-examination of the witnesses does not add to the above or bring out the exact nature of work done by the employee. However, detailed reference was made by learned counsel for the parties to various documents on record to show the kind of work done by the employee. The more important letters in this regard need to be mentioned.

13. A letter dated 15th December, 1987 sent by the employee to Fertilizer Corporation of India (Exhibit MW1/4 also Exhibit WW1/M6) is on the subject of forwarding an offer in regard to fire safety audit of Fertilizer Corporation of India and the view expressed by the employee in relation to a tender. This document reads as follows:-

"Please find herewith enclosed two copies of the Tender offering the aforesaid services to Fertilizer Corporation of India Ltd. Ramagundam Unit in regard to Fire Safety Audit. This document has been submitted in duplicate for your consideration.

In this connection, we would request you to note that we have assumed that you would need a period of six months to decide on the recommendations we make. Also, in our scope of work we shall be providing basic recommendations with regard to paras 3, 4, 5 and 6 and your Contractor/Suppliers shall be developing the detailed Engineering designs etc. Our services, however, to assist you in the matter and to evaluate these contractor's offers etc. shall be included within our scope of work. Having regard to this, we have taken item 8(c) of the Scope of Work as different and quoted for it in Annexure-V, separately."

14. Annexure V to the aforesaid document gives the schedule of fees for conducting safety audit, the charge being Rs. 2,25,000/- and if overseas associates are involved, then the charge would be Rs. 22,50,000/- (Exhibit WW1/M7).

15. In a letter dated 6th October, 1989 sent by the Petitioner to M/s Premier Cables Co. Ltd. (Exhibit MW1/5) the subject is "Risk and Insurance Management Consultancy." The letter contains the observations of the employee on a fire policy and a machinery insurance policy. The relevant portion of this letter is as follows:-

"As stated in our Action Plan earlier the wire drawing carried out in your factory with a solid, dry and powdered lubricant like calcium stearate and the water based coolant used for machining. The hazard therefore, is the same as wire drawing, categorized under item (ii) under the Engineering Workshops Tariff and carrying a rate of Rs. 1.30 per mille. Please therefore ask your insurer to charge this rate instead of Rs. 1.90 per mille and refund the Rs. 14,000/- or so collected excess.

Machinery insurance policy extends to cover damage to electrical machinery/equipment/installation by fire originating within the equipment/installation by short-circuiting, etc. which risk is specifically excluded under the fire policy, Thus machinery insurance policy is designed to cover wide range of damages such as burning out of coils in electrical machines like motors, fire occurring due to electrical faults in these equipment, seizure of piston, breakage of piston rod, seizure of bearings due to lack of lubrication and so on.

In order to determine whether a particular machinery/equipment should or should not be insured against breakdown risks the following aspects need to be considered:

a. For rotating machines damage due to break-down is generally reparable by replacement of parts and the machine is rarely treated as total loss. Therefore the likely costs of repairs (replacement of parts) is one of the criteria.

b. Possibility of breakdown based on your own experience of damage which to an extent depends on the maintenance of the machinery.

c. Amount recoverable under the insurance policy in the event of a total loss or constructive total loss of a particular machinery/equipment will be after taking into account certain exclusions, actual depreciation, the deductible excess and the salvage.

With total loss claims, there is often dissatisfaction that the claim recovered is much less than the actual loss suffered by the insured. For instance, say, a transformer is badly damaged due to fire resulting from an internal cause and is therefore declared to be constructive total loss. As explained settlement of the claim will be on the basis of its replacement cost as new, less depreciation for the number of years it has been in use as compared to its anticipated life. From this will be deducted the salvage value available and the deductible excess. Therefore, whilst a machine/equipment may have been insured for its full replacement value as new, the claim recoverable may fall for short of the replacement cost.

Finally, whilst possibility of breakdown may exist in almost all electrical equipment or rotating machinery, we would recommend you to consider generally machinery breakdown insurance cover in respect of such machinery equipment where the cost of repairs or replacement is likely to be substantial."

16. For the above opinion, a bill of Rs. 15,000/- (Exhibit MW 1/6 also Exhibit WW1/M4) towards professional fee was sent under the signatures of the employee.

17. Finally, there is a reference to a memo issued some time in 1987, which is Exhibit MW1/8 (also Exhibit WW1/M3). This memo is signed by a superior (Mr. Bilimoria) of the employee and the same is marked to the employee for further action, if necessary. The employee put a note thereon indicating that he has discussed the matter and no further action is needed. This memo relates to a settlement of claims of Simbhaoli Sugar Mills. It reads as follows:-

"In the 4th para of your letter you have explained the basis of claims settlement in case of fire damage to stocks in godown.

It is stated that the "basis of calculating the indemnity in case of raw materials shall be value declared on the policy and prevailing market rates on the date of loss, and for finished goods shall be cost of product only excluding profits". We would explain that claim for damage to raw materials will be settled on the basis of market value on the date of the loss subject to adequacy of the sum insured calculated on that basis. If the sum insured is less, the condition of average would apply.

As far as finished goods are concerned, claim could be made on the basis of insured's sale value of the product not of all discounts after deducting any unincurred cost. To quote an example, if say the finished goods are still in unpacked condition whereas the sale value agreed is for packed material all packing charges not yet incurred at the time of the loss should be deducted from the sale value for the purpose of the claim."

18. None of these documents have been controverter by the employee and these really form the basis for determining the nature of duties performed by him. Even a cursory reading of these documents suggests that the employee was highly educated (as per his visiting card, he is a chartered engineer) and was certainly not doing any manual work as claimed by him. Manual work (or inspection) may have been incidental to his primary duties as a consultant in risk management, but that will not make him a workman for the purposes of the Act. The nature of work clearly involved a considerable amount of mental inputs related to creativity and imagination. It can hardly be said that the employee was someone doing manual work.

19. The word "skilled" as in Section 2(s) of the Act has to be construed ejusdem generis, as held in Adyanthaya. So construed, it means skilled work, whether manual or non-manual, which is of a genre of the other types of work mentioned in the definition. The documentary evidence on record clearly shows that the work of the employee was that of a highly qualified and specialized consultant, in the field of risk management. By no stretch of imagination can he be called a skilled workman doing manual or non-manual work.

20. The learned Labour Court has referred to some communications to conclude that the employee was required to report to his superior Mr. Bilimoria. All that these communications show is that he was not doing much supervisory work. This does not lead the Respondent employee anywhere, because he may still be performing managerial or administrative functions. In any hierarchy an employee is always answerable to a superior and in this case the employee was answerable to Mr. Bilimoria. The fact that he was not doing supervisory work does not put him in the category of workman within the meaning of Section 2(s) of the Act; rather it takes him out of that definition.

21. I am aware that a writ court should not normally interfere with a finding of fact arrived at by the learned Labour Court. But, as discussed in Pandhi, the question whether an employee is a workman or not is a mixed question of law and fact. In the present case, the learned Labour Court having followed an approach not approved by the Supreme Court in Adyanthaya, a clear question of law does arise. A misunderstanding of the legal position caused the learned Labour Court to commit an error in concluding that the employee is a workman within the meaning of Section 2(s) of the Act. Under these circumstances, it has become necessary to interfere with the conclusion arrived at by the learned Labour Court, which is based on an incorrect appreciation of the law and facts.

22. Consequently, there is no option but to hold that the Respondent employee is not a workman. Accordingly, the impugned Award is set aside and the writ petition is allowed. No costs.