Management Of Godrej Consumer Products Ltd. vs State Of Assam And Ors

Sudhanshu Dhulia, CJ

Heard Mr. S. Dutta, learned senior counsel, assisted by Ms. S. Senapati, learned counsel for the appellant. Also heard Mr. T.C. Chutia, learned

Additional Senior Government Advocate for the respondents No.1 & 2 and Mr. K.M. Haloi, learned counsel for the respondent No.3.

The writ appellant before this Court has challenged the order of the learned Single Judge dated 29.03.2019 passed in WP(C) 1037/2017, whereby

the learned Single Judge had dismissed the writ petition of the present writ appellant, which in turn was filed as a challenge to the award of the Labour

Court dated 25.10.2016.

The brief facts of the case are that respondent No. 3 is a workman and was in employment of Godrej Consumer Products Limited. At the relevant

time, he was working as a “Senior Field Officerâ€. His services were terminated by order dated 1st of September, 2014. The dispute was

ultimately referred to the Labour Court under Section 10 of the Industrial Disputes Act, 1947.

The terms of reference made by the Government were as follows:-

“(i) Whether the management is justified to terminate Mr. Chanchal Mukhopadhyay from his service?

(ii) If not, then is he entitled to re-installation in the same post with back wages & back benefit?

The clear stand in the written statement taken by the workman was that he is a workman as defined under Section 2(s) of the Industrial Disputes

Act, 1947, as it stands amended in the State of Assam vide the Industrial Disputes (Assam Amendment) Act, 2007. Since this definition, is extremely

important for our adjudication, we may state that the workman has been defined under the Industrial Disputes Act, 1947 under Section 2(s) is as

follows:-

“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 express 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 [ten thousand 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.â€​

Since the subject matter1 which would be labour and industry, falls under the concurrent list, there have been State Amendments in the Act, from

time to time, by different States. In the State of Assam, an Amendment was brought in the year 2007, known as Industrial Disputes (Assam

Amendment) Act, 2007 which received the assent of the President on 30th October, 2007 under Clause (2) to Article 254 of the Constitution of

India2. The amendment widens the definition of workman so far as it is in applicable to the State of Assam.

By the said amendment, the following words i.e. “or any work for the promotion of sales†was inserted between words “or supervisory

work†and “for hire or rewardâ€. The effect of the amendment would be that a person who is employed in an establishment who is doing any

work for promotion of sales in Assam, is also a “workman.†Mr. Haloi, learned counsel for respondent No.3 (workman) would submit that by the

definition of “workmanâ€​, respondent No.3 is a workman.

Mr. Dutta would, however, submit that the definition of a “sales promotion employees†has to be seen also in terms of the Sales Promotion

Employees (conditions of Service) Act, 1976 (from hereinafter referred to as the Act 11 of 1976). In this Act, a “Sales Promotion Employee†has

been defined under Section 2(d) as under:-

“2(d) “sales promotion employees†means any person by whatever name called (including an apprentice) employed or engaged in

any establishment for hire or reward to do any work relating to promotion of sales or business, or both, but does not include any such

personâ€

(i) who, being employed or engaged in a supervisory capacity, draws wages exceeding sixteen hundred rupees per mensem; or

(ii) who is employed or engaged mainly in a managerial or administrative capacity.â€​

The argument of the learned senior counsel would be that the definition of “Sales Promotion Employee†has to be seen in context of Act 11 of

1976 where a sales promotion employee is not a “Sales Promotion Employee†if he is employed or engaged mainly “in a managerial or

administrative capacityâ€​ and is doing supervisory work or is drawing a high salary, which is not given to a workman.

The submissions are, however, not correct in view of the clarifications given in Section 2(a) and Section 6 of the Act 11 of 1976. Section 6 reads

as under:-

“6. Application of certain Acts to sales promotion employees.â€" (1) The provisions of the Workmen’s Compensation Act, 1923 (8 of

1923), as in force for the time being, shall apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen

within the meaning of that Act.

(2) The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, or in relation to, sales

promotion employees as they apply to, or in relation to, workmen within the meaning of that Act and for the purposes of any proceeding

under that Act in relation to an industrial dispute, a sales promotion employee shall be deemed to include a sales promotion employee who

has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or

retrenchment had led to that dispute.

(3) ………………………

(4) ………………………

(5) ………………………

(6) ………………………

(7) ………………………

(a) ………………………

(b) ………………………â€​

The above provision makes it very clear that when a sales promotion employee is dismissed, discharged, or retrenched, it has to be seen in relation

to a workman as given in the Industrial Disputes Act. In the Industrial Disputes Act, as we have seen the definition “workman†in Industrial

Disputes Act is very wide if, inter alia, includes a person who is employed to do any work of “promotion of salesâ€​.

The Labour Court came to the conclusion, and in our view it was the right finding that since respondent No.3 is a workman as the work assigned

to him is by and large a work which relates to “promotion of salesâ€, he has been illegally removed from service, without following the procedure.

It gave a categorical finding that there was no departmental enquiry made. There are no standing orders which were followed and action was taken

against the workman on a presumption that he is not a workman and therefore, not protected under the protected umbrella of Industrial Disputes Act.

The only reason given by the department before the Tribunal for terminating the service of the petitioner that his performance was extremely poor and

time and again he was given opportunity to improve his performance, but in vain. Looking at his conduct, the employer had no option but to terminate

the service of the respondent No.3.

Reliance has been made by Mr. S. Dutta, learned senior counsel for the appellant on a judgment of the Hon’ble Apex Court in State of

Uttarakhand and Others â€"Vs- Sureshwati reported in 2021 SCC Online SC 34. In the judgment cited by the learned senior counsel for the writ

appellant Mr. Dutta, the facts are entirely different. In that case, the workman was employed as an Assistant Teacher in a private school between

1993 to 1994 and thereafter, as a Clerk from 1994 to 1996. It was only in 2005 that the school started receiving grants-in-aid from the State and was

entirely funded by the State exchequer. Meanwhile, the workman had abandoned her service in the school, i.e. Haridwar, quite earlier as far back in

1997 and she got married to a person who was in another district, i.e. Dehradun, and she had even shifted to Dehradun. These are admitted facts.

After a period of nine years, i.e. when the school had come under grants-in-aid, the workman raised the complaint that she was continuing in the

school since 1993 and on 08.03.2006, her services were illegally retrenched without granting any hearing or compensation or notice! The other

interesting fact of the case was that in the school when she was employed between 1993 to 1997, her mother was a Chairman of the Management

Committee of the school and her father was a Member of the Management Committee.

Be that as it may, she made a complaint to the labour authorities and the matter was referred to the Labour Court. An ex-parte award was given

in favour of the workman, which was challenged in the High Court and the High Court allowed the writ petition and remanded the matter back to the

Labour Court to give a decision afresh. On remand, the matter was heard by the Labour Court and after hearing both the parties, the Labour Court

gave its award on 22.08.2016, wherein it was held that the claimant/workman was not entitled to get any relief as there was enough evidence given by

the Management to prove that she continued to remain absent from the school since 01.07.1997. She also failed to prove any evidence that her service

was terminated on 08.03.2006. It also was a finding that she had raised her grievance only after the school had come in grant-in-aid and the contention

of the claimant/workman that her appointment was illegally terminated was untenable.

This order of the Labour Court was challenged in the High Court and the learned Single Judge of the High Court allowed the writ petition on the

ground that the employer had admitted that there was no disciplinary enquiry done in the matter and, therefore, the award of the Labour Court was set

aside and direction was made for reinstatement.

It was this order which was under challenge. It was under these facts that the Hon’ble Apex Court (in State of Uttarakhand and Others -Vs-

Sureshwati), had said that the settled position is that even in a case where no disciplinary enquiry has been done, the Labour Court can re-appreciate

the evidence under powers vested to the Labour Court under Section 11A of the Act and see if there was enough evidence before the Labour Court

to have examined whether termination was justified or not. In Paragraph 22, it was stated as under:-

“22. This Court has in a catena of decisions held that where an employer has failed to make an enquiry before dismissal or discharge of

a workman, it is open for him to justify the action before the Labour Court by leading evidence before it. The entire matter would be open

before the tribunal, which would have the jurisdiction to satisfy itself on the evidence adduced by the parties whether the dismissal or

discharge was justified.â€​

Under these circumstances, the Hon’ble Apex Court was of the view that the High Court was not justified in setting aside the award of the

Labour Court as there was enough material to show that there was no illegality as alleged by the Government.

In our considered opinion, however, the aforesaid judgment would not help the writ appellant in this case for the simple reason that not only has the

writ appellant admitted that there was no disciplinary enquiry or disciplinary proceedings but they have also taken an extreme view that it was not

necessary for the reasons that the private respondent was not a workman. We have already seen that this is not the correct position of law as the

respondent No.3, i.e. Mr. Chanchal Mukhopadhyay, is a workman. Now even if we examine it from the view point for which we are being persuaded

to examine in this case by Mr. Dutta, learned senior counsel for the appellant, Mr. Dutta would argue that there was enough material before the

Labour Court to have justify the action of the writ appellant in terminating the services of the workman. We, however, think that it was not the case.

The stated case of the employer was that the respondent (who is a workman), was not performing well and inspite of opportunity given to him, his

performance was not improving. Therefore, his services were terminated.

Can bad performance be a ground for termination of services? Even if the conduct of the workman is termed as misconduct, the extreme

punishment of termination from service is extremely disproportionate. However, in case the services have to be terminated for any other reason, but

for disciplinary action, then retrenchment procedure has to be followed. “Retrenchment†has been defined under Section 2(oo) of the Act as

follows:-

“2(oo) ‘retrenchment’ means the termination by the employer of the service of a workman for any reason whatsoever, otherwise

than as a punishment inflicted by way of disciplinary action, but does not include-

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman

concerned contains a stipulation in that behalf; or

[(bb) termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the

workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]

(c) termination of the service of a workman on the ground of continued ill-health.â€​

Then again if a workman has to be retrenched from his service, it has to be done as provided under Section 25N3 of the Industrial Disputes Act,

1947 which means a retrenchment compensation three months prior notice and retrenchment compensation, amongst other procedural formalities,

given in sub-section (1) and (9) of Section 25N of the Act, which are all mandatory requirements in law. This admittedly has not been done.

The Labour Court has held the termination of the workman to be illegal and he has been directed to be reinstated in service with full back wages.

We agree with the findings as well as the relief given by the Labour Court in favour of the workman.

Accordingly, we are also in agreement with the findings given by the learned Single Judge, who has rightly upheld the award. Consequently, there

is nothing in this appeal which calls for an interference by this Court.

Writ Appeal stands dismissed. Interim order passed earlier stands vacated.

We make it clear that the appellant would be reinstated in service with full back wages.

While we were hearing the matter, we were told by the learned senior counsel for the writ appellant Mr. Dutta that the workman, during the

pendency of the proceeding, have already reached the age of his superannuation. These facts are not before us but in case this is so, the normal

procedure will follow and the workman will be deemed to have been reinstated in service and will be given full financial benefits in terms of back

wages and all other financial benefits he was entitled to till his date of superannuation. In case he has not reached the age of his superannuation as

yet, he shall continue on that post till his superannuation.