SUPREME COURT OF INDIA
National Small Industries Corporation Limited
Vs
V. Lakshminarayanan
Appeal (Civil) 4782 of 2006
(Dr. Ar. Lakshmanan and Altamas Kabir, JJ)
10.11.2006
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 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 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)
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
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."
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. Save 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 (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 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.