Supreme Court settles the status of part-time employees under Section 2(s) and 25F of the Industrial Disputes Act: Div. Manager, New India Assurance Co.Ltd. vs. A. Sankaralingam (2008)

Introduction

Date of the Judgment: October 03, 2008

Citation: Civil Appeal No. 4445 of 2006

Judges: Tarun Chatterjee, J., Harjit Singh Bedi, J.

Does a part-time employee qualify as a workman under the Industrial Disputes Act, entitling them to protection against unlawful retrenchment? The Supreme Court addressed this critical question in the case of Div. Manager, New India Assurance Co. Ltd. vs. A. Sankaralingam. The court clarified the scope of Sections 2(s) and 25F of the Industrial Disputes Act, 1947, specifically focusing on whether the protections afforded to workmen extend to those employed on a part-time basis. The judgment was delivered by a bench comprising Justice Tarun Chatterjee and Justice Harjit Singh Bedi.

Case Background

The case revolves around A. Sankaralingam (hereinafter referred to as ‘the workman’), who was appointed as a Sweeper-cum-Water Carrier at the Divisional Manager, New India Assurance Company Ltd., Tirunelveli (hereinafter referred to as ‘the employer’) on January 2, 1986. His initial monthly wage was Rs. 130. After working for several years, the workman requested regularization of his services. However, instead of regularization, he was orally informed on March 15, 1989, that his services were no longer required.

Following his termination, the workman sought intervention from the government, requesting reinstatement. When conciliation efforts failed, the matter was referred to the Industrial Tribunal for adjudication. The Tribunal, in its award dated September 10, 1998, ruled against the workman, stating that he did not qualify as a workman under Section 2(s) of the Industrial Disputes Act, 1947, because he was a part-time employee working on an ad-hoc basis. The Tribunal noted that the workman’s duty hours were limited to one or two hours per day, for which he was paid Rs. 150 per month, and that he was free to work elsewhere, which indicated his part-time status.

Aggrieved by the Tribunal’s decision, the workman challenged the award before the Madras High Court. The Single Judge overturned the Tribunal’s award, noting that the workman had worked from 1986 to 1989, and oral evidence suggested he worked in the office until 5 PM. The Single Judge found that the key issue was not the regularization of the workman’s services but whether his termination was illegal due to non-compliance with Section 25F of the Industrial Disputes Act, which outlines the procedure for retrenchment. The court held that Sections 2(s) and 25B of the Act apply to both full-time and part-time employees. Consequently, the Single Judge ordered the reinstatement of the workman with full back wages and directed the employer to consider his regularization in accordance with the law. This judgment was later upheld by the Division Bench of the High Court, leading the employer to appeal to the Supreme Court.

Timeline:

Legal Framework

The legal framework for this case primarily involves the interpretation and application of the Industrial Disputes Act, 1947, specifically focusing on the definitions of “workman” and “continuous service” as provided in Sections 2(s) and 25B, respectively. Additionally, Section 25F of the same Act, which deals with the conditions precedent to the retrenchment of workmen, is central to the dispute.

Section 2(s) of the Industrial Disputes Act, 1947 defines a “workman” as:

“Sec.2(s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person –
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.”

This section specifies who qualifies as a workman based on the nature of their employment, the type of work they perform, and their position within the organizational hierarchy. It explicitly includes those who have been dismissed, discharged, or retrenched due to an industrial dispute.

Section 25B of the Industrial Disputes Act, 1947 defines “continuous service” as:

“Sec.25-B. Definition of continuous service.- For the purposes of this Chapter,
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer –
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than –
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than –
(i) ninety-five days, in the case of a work man employed below ground in a mine ; and
(ii) one hundred and twenty days, in any other case.”

This section clarifies the conditions under which a workman is considered to have been in continuous service, which is crucial for determining eligibility for retrenchment benefits under Section 25F.

Section 25F of the Industrial Disputes Act, 1947 mandates the conditions precedent to retrenchment of workmen:

This section stipulates that a workman who has been in continuous service for not less than one year cannot be retrenched unless they are given one month’s notice or pay in lieu of notice, and retrenchment compensation is paid as per the provisions of the Act.

The interplay of these sections determines whether a part-time employee like A. Sankaralingam can claim the rights and protections afforded to a “workman” under the Industrial Disputes Act, particularly concerning retrenchment benefits.

Arguments

The arguments presented by both the appellant (employer) and the respondent (workman) centered on the interpretation of key provisions of the Industrial Disputes Act, 1947, and the factual circumstances of the employment.

Arguments by the Appellant (Employer):

• Incorrect Finding of Fact: The appellant argued that the High Court’s finding that the workman was employed on a full-time basis was incorrect. They pointed out that in his application dated May 30, 1989, the workman had identified himself as a part-time Sweeper-cum-Water Carrier. Additionally, they referred to an application dated September 23, 1991, from the President of the District Committee for legal aid, which also stated that the workman was employed as a part-time sweeper.
  
• Ineligibility for Section 25F Benefit: The appellant contended that the respondent was not entitled to the benefit of Section 25F of the Industrial Disputes Act because he was not a workman within the meaning of Section 2(s). They argued that the common understanding of a ‘day’ implies a full day’s work, not part-time employment.
  
• Reliance on Precedents: The appellant cited Shankar Balaji Waje vs. State of Maharashtra 1962 (Suppl.) (1) SCR 249, arguing that Section 79 of the Factories Act is analogous to Section 25B of the Industrial Disputes Act regarding the requirement of 240 days of employment. They also referred to Uttaranchal Forest Hospital Trust vs. Dinesh Kumar (2007) 13 SCALE 499 and Ram Lakhan Singh vs. Presiding Officer, Labour Court, Chandigarh 1989 Labour Industrial Cases 1650, where the status of a part-time sweeper was considered, and it was held that such an employee could not claim the benefit of Section 25F of the Act.
  

Arguments by the Respondent (Workman):

• Scope of Reference to the Tribunal: The respondent argued that the reference made to the Industrial Tribunal did not raise the question of whether the employment was part-time or full-time. Both the Single Judge and the Division Bench of the High Court had ruled in his favor on the facts, and therefore, no interference was warranted.
  
• No Distinction Between Part-Time and Full-Time Employees: The respondent contended that Section 2(s), which defines a “workman,” and Section 25B, which discusses “continuous service,” do not distinguish between part-time and full-time employees. If the legislature intended to differentiate between the two categories, the definitions would have been framed differently.
  
• Reliance on Precedents: The respondent cited Shri Birdichand Sharma vs. First Civil Judge, Nagpur & Ors. 1961 (3) SCR 161 and Silver Jubilee Tailoring House & Ors. vs. Chief Inspector of Shops & Establishments & Anr. (1974) 3 SCC 498, arguing that these cases conclusively held that there is no distinction between a full-time and part-time employee. A workman working part-time would not lose their status as a workman if employed with more than one employer.
  
• Judicial Opinion of High Courts: The respondent submitted that the preponderance of judicial opinion in various High Courts supports the proposition that part-time employees are covered under the definition of “workman.” They cited several cases, including:
  
  • Govind Bhai vs N.K. Desai (Gujarat High Court) 1988 Lab I.C. 505
  • Yashwant Sinha Yadav vs. State of Rajasthan (Rajasthan High Court) 1990 Lab I.C. 1451
  • Rajaram Rokde & Bros. vs. Shriram (Bombay High Court) 1977 Lab I.C. 1594
  • Dr. P.N. Gulati vs. Labour Court, Gorakhpur (Allahabad High Court) 1977 Lab I.C. 1088
  • Simla Devi vs Presiding Officer 1997 (1) LLJ 788
  • G.M. Telecom, Nagpur vs. Naresh Brijlal Charote & anr. 2001 LAB I.C. 2127 Bombay High Court
  • Coal India vs. P.O. Labour Court 2001-II-LLJ 45 Delhi High Court
  • Kailash Chand Saigal vs. Om Prakash & Ors.132 (2006) DLT 192 Delhi High Court

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether a part-time employee falls within the definition of “workman” under Section 2(s) of the Industrial Disputes Act, 1947, and is entitled to the benefit of Section 25F of the Act.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issue:

Authorities

The Supreme Court considered various judgments and legal provisions to address the issue of whether a part-time employee falls within the definition of “workman” and is entitled to the benefits of Section 25F of the Industrial Disputes Act, 1947.

Cases Relied Upon by the Court:

• Shri Birdichand Sharma vs. First Civil Judge, Nagpur & Ors. 1961 (3) SCR 161 [Supreme Court of India]
  

  Ratio: This case was cited to support the argument that there is no distinction between full-time and part-time employees under the Industrial Disputes Act.

• Silver Jubilee Tailoring House & Ors. vs. Chief Inspector of Shops & Establishments & Anr. (1974) 3 SCC 498 [Supreme Court of India]
  

  Ratio: The Court relied on this case to emphasize that workers paid on a piece-rate basis, while working in a shop, are workmen under Section 2(s) of the Act. It also highlighted the importance of the employer’s right to supervise and control the work.

• Govind Bhai vs N.K. Desai 1988 Lab I.C. 505 [Gujarat High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

• Yashwant Sinha Yadav vs. State of Rajasthan 1990 Lab I.C. 1451 [Rajasthan High Court]
  

  Ratio: Similar to the Govind Bhai case, this was used to reinforce the position that part-time employees are included within the definition of “workman.”

• Rajaram Rokde & Bros. vs. Shriram 1977 Lab I.C. 1594 [Bombay High Court]
  

  Ratio: This case followed the decision in the Silver Jubilee case, further solidifying the stance that part-time employees are covered under the Act.

• Dr. P.N. Gulati vs. Labour Court, Gorakhpur 1977 Lab I.C. 1088 [Allahabad High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

• Simla Devi vs Presiding Officer 1997 (1) LLJ 788 [Punjab and Haryana High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

• G.M. Telecom, Nagpur vs. Naresh Brijlal Charote & anr. 2001 LAB I.C. 2127 [Bombay High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

• Coal India vs. P.O. Labour Court 2001-II-LLJ 45 [Delhi High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

• Kailash Chand Saigal vs. Om Prakash & Ors.132 (2006) DLT 192 [Delhi High Court]
  

  Ratio: This case was cited to support the view that a part-time employee can be considered a workman under the Industrial Disputes Act.

Legal Provisions Considered:

• Section 2(s) of the Industrial Disputes Act, 1947
  

  Brief: Definition of “workman.” The court examined whether the definition includes part-time employees.

• Section 25B of the Industrial Disputes Act, 1947
  

  Brief: Definition of “continuous service.” The court considered whether part-time employment could constitute continuous service under this section.

• Section 25F of the Industrial Disputes Act, 1947
  

  Brief: Conditions precedent to retrenchment of workmen. The court assessed whether part-time workmen are entitled to the protection against retrenchment provided by this section.

Authority Table

Judgment

Treatment of Submissions

The Supreme Court dismissed the appeal, affirming the High Court’s decision. The Court held that a workman employed on a part-time basis, but under the control and supervision of an employer, is a workman in terms of Section 2(s) of the Act and is entitled to claim the protection of Section 25F thereof. The Court emphasized that the definition of “workman” under Section 2(s) does not differentiate between full-time and part-time employees.

Conclusion

The Supreme Court’s judgment in Div. Manager, New India Assurance Co. Ltd. vs. A. Sankaralingam clarifies that part-time employees, who are under the control and supervision of an employer, are considered workmen under Section 2(s) of the Industrial Disputes Act, 1947. Consequently, they are entitled to the protection of Section 25F of the Act, which outlines the conditions precedent to retrenchment. This decision reinforces the inclusive nature of labor laws, ensuring that vulnerable sections of the workforce are not deprived of their rights simply because of their employment status. The judgment aligns with the broader objective of the Industrial Disputes Act, which aims to protect the interests of workmen and promote industrial peace.