HEADLINE: Calculation of Workforce for Chapter V-B Application Includes Contractual and Casual Workers Under Section 2(s).

The Appellants (Workmen) challenged a common judgment of the learned Single Judge which upheld an Industrial Tribunal award rejecting their reference

The Management laid off and subsequently retrenched 84 workers in 2009, citing financial losses and raw material shortages

The Management claimed it employed only 92 regular workmen, making Chapter V-B of the Industrial Disputes (ID) Act (which requires prior government permission for establishments with 100+ workers) inapplicable

The Workmen contended that including 17 security guards and 28 contract/casual laborers—who worked under direct supervision—the total strength exceeded 100

Despite a Tribunal order dated 17.08.2012, the Management failed to produce muster rolls and wage registers for these additional categories

1. Whether the respondent-establishment employed not less than 100 workmen on average per day for the preceding 12 months, thereby making Chapter V-B of the ID Act applicable

2. Whether security guards and contract/casual laborers fall within the definition of "workman" under Section 2(s) for the purpose of computing the total count under Section 25K

3. Whether the lay-off and retrenchment were illegal for want of prior permission under Sections 25M and 25N of the ID Act

The court applied the definition of "workman" under Section 2(s) of the Industrial Disputes Act, 1947, which includes any person employed for hire or reward to do manual, unskilled, or technical work, regardless of whether the employment is temporary or regular

It relied on Section 25K, which triggers the stringent requirements of Chapter V-B for establishments with 100+ workmen

The court followed precedents like Sudarshan Rajpoot v. U.P. SRTC, holding that engaging workmen on a contractual basis for permanent nature work is prohibited

New India Assurance Co. Ltd. v. A. Sankaralingam, clarifying that part-time or non-regular workers under the employer's control are "workmen"

The court applied the principle of Adverse Inference under Section 114(g) of the Indian Evidence Act, 1872, where a party withholding best evidence in its possession is presumed to have evidence unfavorable to its case

The Court found that the definition of "workman" in Section 2(s) does not distinguish between regular, temporary, or casual status; the primary test is the existence of an employer-employee relationship characterized by supervision and control

Since the Management witness admitted to employing security staff and contract workers but failed to produce their specific employment records despite a court mandate, the Court held that the initial burden discharged by the workmen shifted the onus to the Management

Applying Section 114(g) of the Evidence Act, the Court drew an adverse inference against the Management for withholding muster rolls, concluding that the 17 security guards and 28 casual workers must be counted alongside the 92 regular workers

The total exceeded 100, making the establishment subject to Chapter V-B. As no prior government permission was sought for the lay-off or retrenchment, the Management's actions were held to be in mandatory violation of Sections 25M and 25N

It held that the respondent-establishment was governed by Chapter V-B of the ID Act and its failure to obtain prior permission rendered the retrenchment illegal

The Court declined reinstatement and instead directed the Management to pay a lump sum compensation of Rs. 3,00,000/- to each retrenched workman within eight weeks