Full Judgment Text
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CASE NO.:
Appeal (civil) 4782 of 2006
PETITIONER:
National Small Industries Corpn. Ltd.
RESPONDENT:
V. Lakshminarayanan
DATE OF JUDGMENT: 10/11/2006
BENCH:
Dr.AR. Lakshmanan & Altamas Kabir
JUDGMENT:
J U D G M E N T
(Arising out of SLP (C) No.14520/2005
WITH
CIVIL APPEAL NO. 4783/2006
(Arising out of SLP ) No................/06 CC 7812/06)
ALTAMAS KABIR, J.
Leave granted.
The short point for decision in these appeals is
whether in view of Section 18 of the Apprentices Act,
1961 (hereinafter called the "1961 Act") the 1st Addl.
Labour Court, Chennai, was justified in holding that the
respondent who had been appointed as an apprentice
by the appellant herein was a "workman" within the
meaning of Section 2 (s) of the Industrial Disputes Act,
1947 (hereinafter referred to as the ’1947 Act’). The said
question also gives rise to the issue as to whether the
Labour Court was right in holding that the termination of
the respondent’s apprenticeship was in violation of
Section 25-F of the 1947 Act and consequently whether
he was entitled to reinstatement with continuity in
service and all back wages and other concessions
accruing to him.
A few facts are required to be set out to appreciate
the award passed by the Labour Court.
The case made out by the respondent before the
Labour Court under Section 2 (a) of the 1947 Act was
that he had joined the appellant herein as a casual
labourer on daily wages on 6th April, 1987. According to
him he had continued to work in the Marketing
Development Centre of the appellant at Nungambakkam
on daily wages at Rs. 15/- per day continuously till 2nd
May, 1990. It was also his case that while working with
the appellant he had been called for a direct interview on
13th April, 1990 for the post of Apprenticeship Trainee
(Shop Assistant) and that he was selected as per the
Order dated 26th April, 1990. It was asserted by the
respondent that during the 1st year he was paid a salary
of Rs.600/- per month and during the 2nd year he was
paid Rs.750/- per month as salary and after the training
period was over, the appellant herein had agreed to
appoint him as a Peon. It is his case that on 8th July,
1991, he was transferred to the Government Purchase
Section of the Regional Office where he was made to
perform dispatch work. Suddenly, on 1st May, 1992,
without any reason or inquiry, he was removed from
service and that since he had served continuously for
more than 240 days, his removal from service should be
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treated as retrenchment since the appellant herein had
not followed the procedure indicated in Section 25-F of
the 1947 Act.
The further case of the respondent was that while
juniors were allowed to continue in service, he was not
reinstated and his removal from service without any
reason violates the provisions of Section 25-F of 1947
Act.
The appellant herein had chosen to remain silent
despite the several letters written on behalf of the
respondent and ultimately an application was filed
before the Labour Officer on 30th March, 1993. However,
since the conciliation failed, the respondent was
compelled to pray for reinstatement with continuity of
service and other concessions.
The case made out by the respondent was
completely denied by the appellant herein and it was
stated in its counter that the respondent had applied to
the appellant for appointment to the post of Staff
Assistant Apprentice Trainee and that in the interview
dated 13th April, 1990 he was selected and orders were
passid in this regard on 26th April, 1990 wherein it was
specifically mentioned that the training period would be
for two years only. It was also mentioned that during the
period of training in the 1st year consolidated wages of
Rs.600/- per month would be paid and during the 2nd
year a sum of Rs.750/- per month would be paid. The
respondent was directed to report for training before 3rd
May, 1990 and the training period consequently came to
an end on 2nd May, 1992. On 29th April, 1992, the
respondent requested the appellant to confirm him in
service and by subsequent letters dated 12th August,
1992 and 7th December, 1992, the respondent requested
the appellant to make him permanent. Only thereafter
notices were issued by the respondent through his
advocate indicating that he had been removed from
service without any reason or without holding any
inquiry in violation of Section 25F of the 1947 Act. It was
also contended on behalf of the appellant that since the
two years training period of the respondent as a trainee
had come to an end, he was not entitled to any relief as
prayed for. In order to decide the dispute the Labour
Court framed the following issues:-
"1. Whether it is correct to say that the
petitioner was employed only as a trainee
in the respondent/Management, as
contended by the respondent?
2. Whether the removal of the petitioner
from service is justifiable?
3. If not, what is the relief for which the
petitioner is entitled.?"
After examining the evidence which had been
adduced on behalf of the parties, the Labour Court
recorded that the respondent herein had joined as a
casual labourer on 6th April, 1987 in the Marketing
Development Centre under the management of the
appellant in the Eldorado Building at a daily wage of
Rs.12/- which was subsequently enhanced to Rs.15/-. It
was also recorded that the respondent herein was
performing dispatch work, remitting money by going to
the regional office, cleaning articles and delivering goods
sold to customers and in this background he was offered
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the post of Apprentice Trainee (Shop Assistant) for which
he was selected on 26th April, 1990 and was paid a sum
of Rs.600/- per month during the 1st year of training,
which amount was increased to Rs.750/- per month
during the 2nd year of training. It was also recorded that
although the respondent was appointed as Apprentice
Trainee (Shop Assistant), he continued to do the same
work. It was also recorded that while perusing Ex.W-7, it
was noticed that the appellant had agreed to engage the
respondent as a Peon in ’D’ Category or as a shop
assistant. It was also seen from letters exchanged
between the parties that the respondent who had been
serving as a casual labourer had been recommended for
appointment to a permanent post by the General
Manager.
Basing its judgment on the aforesaid material, the
Labour Court accepted the case made out by the
respondent and held that the case made out on behalf
of the appellant that after the period of apprenticeship,
the respondent’s connection with the appellant had
ended, was not acceptable. The Labour Court also came
to the conclusion that even after joining as
apprentice and shop assistant on 3rd May, 1990, the
respondent had served in the show room and performed
the same work which he had performed previously and
had been performing a full-time job and hence his
dismissal from service was not at all justified. In view of
its aforesaid findings, the Labour Court ordered that the
respondent be reinstated in service with continuity,
together with back wages and all other concessions
accruing to him.
On 23rd June, 1997, the appellant challenged the
award passed by the Labour Court by way of a Writ
Petition before the Madras High Court, being
No.9462/1997. On the said petition, the learned Single
Judge stayed the award and such stay was confirmed on
4th September, 1998 by the learned Single Judge with a
direction upon the appellant to deposit a sum of
Rs.63,000/- before the Labour Court within 12 weeks
and further directed that the said sum be invested in
fixed deposit in a nationalized bank and the interest of
the same be released to the respondent once in six
months. There was a further direction upon the
appellant to pay Rs.750/- per month to the respondent
and to pay all the arrears within 12 weeks from the date
of the order.
The said order of the learned Single Judge dated 4th
September, 1998 was challenged by the appellant in
appeal being Writ Appeal No.1364/1998. On 25th April,
2002, the Division Bench stayed the operation of the
order of the learned Single Judge dated 4th September,
1998 and modified the interim order in so far as it related
to payment of wages under Section 17B of the 1947 Act.
A direction was given that such payment was to be made
under Section 12B of the said Act from October, 1998 till
the disposal of the Writ Appeal. The arrear of wages
under Section 17B up to April 2002 was also required to
be paid on or before 15th May, 2002 and future monthly
wages on or before the 10th of every succeeding month,
failing which the stay would stand automatically
vacated. On 16th September, 2004, the Writ Appeal
was disposed of with the following directions:-
"The appellant (NSIC) shall pay to second
respondent (Shri V. Lakshmi Narayanan)
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directly by way of cheque a sum of
Rs.15,000/- which represents the interest
on Rs.63,000/- from the date of the
impugned order till date, within a period of
4 weeks from today and in future, the
appellant shall pay to the second
respondent interest @ 4% p.a. on
Rs.63,000/- every quarter till the disposal of
the Writ Petition No.9462 of 1997."
The writ petition itself came up for hearing on 20th
September, 2004 before the learned Single Judge who
dismissed the same and confirmed the award of the
Labour Court dated 20th March, 1997. A restoration
petition was also dismissed on 3rd January, 2005. The
appellant thereupon filed another Writ Appeal against the
order of the learned Single Judge dismissing the writ
petition and the subsequent order dismissing the
restoration petition, being Writ Appeal No.539/2005.
On 28th March, 2005, the Division Bench dismissed the
Writ Appeal upon holding that although the respondent
was designated as an apprentice, in fact, he was not an
apprentice but an employee doing full time work in the
establishment.
The present appeal is directed against the said
judgment and order of the Division Bench dated 28th
March, 2005.
The other appeal is directed against the order of the
learned Single Judge of the Madras High Court dated
20th September, 2004 dismissing the appellant’s Writ
Application.
Since the same set of facts will be relevant for a
decision in both the appeals, they have been taken up
together for disposal and are being disposed of by this
judgment.
The entire dispute centers round the question as to
whether the respondent was, in fact, a workman within
the meaning of Section 2 (s) of the 1947 Act or an
apprentice trainee within the meaning of Section 18 of
the 1961 Act.
Section 2 (s) of the 1947 Act defines "workman" in
the following terms:-
"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 \026
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
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(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."
From the above, it will be seen that a "workman"
includes an "apprentice". However, Section 18 of the
1961 Act defines that apprentices are trainees and not
workers in the following terms:-
"18. Apprentices are trainees and not
workers.\027Save as otherwise provided in this
Act,--
(a) every apprentice undergoing
apprenticeship training in a designated trade
in an establishment shall be a trainee and not
a worker; and
(b) the provisions of any law with respect to
labour shall not apply to or in relation to such
apprentice."
From the above, it will be seen that on the one hand
while an apprentice is also treated to be a workman for
the purposes of the 1947 Act, by virtue of Section 18 of
the 1961 Act, it has been categorically provided that
apprentices are not workers and the provisions of any
law with respect to labour shall not apply to or in
relation to such apprentice.
We have been taken though the letter issued on
behalf of the appellant to the respondent on 26th April,
1990 with reference to the interview held on 13th April,
1990, for being engaged as Apprentice Trainee (Shop
Assistant). From the said order it is very clear that the
respondent was appointed as an apprentice and that the
duration of his apprenticeship training would be two
years from the date on which he reported for such
training. It was also indicated that he would be paid a
consolidated stipend of Rs.600/- per month during the
first year and on satisfactory completion of the first
year, he would be paid at the rate of Rs.750/- per month
during the second year. It was further stipulated that
the respondent would be entitled to 15 days leave every
year during the period of apprentice training.
Paragraph 5 of the aforesaid letter, which seems to be
in consonance with Section 22 of the 1961, Act states as
follows:-
"On completion of your apprentice
training satisfactorily, you will be eligible
to apply for consideration for recruitment
to any post in Group ’D’ Category
(present Scale 196-290) subject to
availability of vacancies and recruitment
rules of the Corporation."
It also appears from the letter dated 3rd May, 1990,
written by the respondent to the Joint Manager
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(Marketing) of the appellant-corporation that pursuant
to the letter of 26th April, 1990, he reported for duty on
3rd May, 1990 as Apprentice Trainee (Shop Assistant) in
the Marketing Development Centre.
We have also been shown a letter dated 29th April,
1992, written by the respondent to the Regional General
Manager of the appellant-corporation indicating that he
had been appointed as Sales Assistant (Apprentice) for a
period of two years with effect from 3rd May, 1990 and
the period was to expire on 2nd May, 1992. In his said
letter, the respondent requested the authorities of the
appellant-corporation to consider absorbing him on a
permanent basis in view of the fact that he had been
working in the organization for six years. It is only on
5th February, 1993, that the respondent’s lawyer wrote to
the appellant-corporation indicating that at the interview
held on 13th April, 1990 for appointment to the post of
Apprentice Trainee (Shop Assistant), it had been agreed
to absorb him in a Group ’D’ Category after completion
of his apprenticeship. It was also alleged that the
termination of the respondent’s service would amount to
retrenchment.
From the aforesaid documents it would be evident
that even if the respondent had been working on a
daily-wage basis prior to his appointment as Apprentice
Trainee (Shop Assistant), at least from 3rd May, 1990 till
2nd May, 1992, he was working as an apprentice on a
consolidated salary and the respondent himself was
conscious of such fact since he had requested the
corporation and its authorities to absorb his services on
a permanent basis purportedly on the basis of a promise
held out at the time when he was interviewed for
appointment to the post of Apprentice Trainee (Shop
Assistant). Other than the assertion made on behalf of
the respondent that the appellant had agreed to absorb
the respondent in Group ’D’ Category as Peon/Shop
Assistant after completion of apprenticeship and the
recommendation said to have been made by the General
Manager indicating that the respondent could be
appointed and taken as a permanent worker, there is no
other material on record to support the case made out by
the respondent.
In the absence of any such material, it is difficult to
understand the reasoning of the Labour Court that the
respondent was not an "apprentice trainee" but a
"workman" who was made to perform a full-time job
under the guise of an Apprentice Trainee. The High
Court appears to have been impressed by the reasoning
of the Labour Court with regard to the finding that
although designated as an apprentice, the respondent
was not undergoing training, but was an employee doing
full time work in the establishment. Such a view, in our
judgment, is not supported by the materials on record
and is completely contrary to the appointment letter
issued to the respondent on 26th April, 1990 and the
respondent’s own letter dated 29th April, 1992, in
admission of such fact. Had such a letter of appointment
not been available, the Labour Court and/or the High
Court could justifiably have embarked on an exercise as
to whether the respondent was in effect a "trainee"
under the Apprentices Act, 1961, or a "workman"
within the meaning of Section 2 (s) of the 1947 Act.
There is nothing on record to indicate that the
respondent’s services had ever been regularized or that
he was brought on the rolls of the permanent
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establishment.
Even if it is accepted that the respondent was a
workman within the meaning of the 1947 Act, on account
of his contractual tenure, his case would come within the
exception of clause (bb) of Section 2(oo) thereof. In such
a case also, the provisions of Section 25F of the said Act
would have no application to the respondent’s case.
In the aforesaid circumstances, we are of the view
that the respondent’s case was covered by the provisions
of Section 18 of the 1961 Act and both the Labour Court
as well as the High Court erred in proceeding on the
basis that the respondent was a workman to whom the
provisions of the 1947 Act would be applicable.
The appeals are accordingly allowed and the
judgment and orders under appeal are set aside. This
order will not affect the payments already made to the
respondent from time to time under the orders of the
Courts.
Having regard to the facts involved there will,
however, be no order as to costs.