Mumbai HC Awards ₹25 Lakh In Lieu Of Reinstatement And Back Wages To Accounts Manager Fired During Covid

The Respondent was appointed as Manager, Accounts and Finance in July 2019 and confirmed in February 2020.

The Petitioner terminated his employment on 3 May 2020, alleging misconduct.

The Respondent raised an industrial dispute; the Labour Court held the termination illegal and directed reinstatement with backwages.

The employer challenged the award, principally disputing whether the Respondent was a “workman” under Section 2(s) of the Industrial Disputes Act, 1947 (“ID Act”).

The High Court also considered the appropriate relief, having regard to the Respondent’s short service and age.

Section 2(s) of the ID Act includes persons employed to perform manual, skilled, technical, operational, clerical or supervisory work, but excludes persons employed mainly in managerial or administrative capacities and certain supervisory employees earning wages above the statutory threshold or performing mainly managerial functions.

Designation alone does not determine workman status; salary is relevant to the supervisory-employee exclusion only where employment in a supervisory capacity is established.

The Court further applied the principle that where evidence establishes routine work falling within the statutory definition, the employer must establish that an applicable exclusion applies.

No judicial precedents were cited.

The Respondent’s evidence described routine accounting and clerical tasks, performed under instructions from senior officers.

The employer did not establish that other employees reported to him, that he had authority over their service matters, or that he could independently make decisions binding the company; the evidence instead showed that the accounts employees reported to the Chief Finance Officer.

His managerial title and salary therefore did not establish that he fell within an exclusion in Section 2(s), and the Court upheld the finding that he was a workman.

On remedy, the Court noted that the employer did not contest the termination’s validity before it and that no inquiry had been held into the allegations.

However, considering the Respondent’s service of less than a year, age, limited remaining working years and the parties’ strained relationship, the Court found compensation preferable to reinstatement and backwages.

It modified the award by substituting lump-sum compensation of ₹25,00,000 for reinstatement and backwages, payable within two months; failing payment, the amount would carry interest at 8% per annum from expiry of that period.

No further service-related benefits were payable.

The petition was partly allowed, with no order as to costs.