W.P.(C)/9843/2018 of NITYA NAND SINHA Vs M/S HL PROMOTERS PRIVATE LIMITED AND ANR

*IN THE HIGH COURT OF DELHI AT NEW DELHI

%Date of Decision: 04[th]December, 2019

+W.P.(C) 9843/2018

NITYA NAND SINHA

..... Petitioner

Through:Mr. Bankey Bihari, Mr. BirendraBikram, Advocates with petitioner inperson.

versus

M/S HL PROMOTERS PRIVATELIMITED AND ANR

..... Respondents

Through:Mr. Neeraj Malhotra, SeniorAdvocate with Mr. Saifur R. Faridiand Ms. Cassandra Zosangliani,Advocates for R1.Ms. Barnali Basak, Advocate forR2/GNCTD.

CORAM:HON'BLE MR. JUSTICE J.R. MIDHA

J U M N T

1.The petitioner has challenged the order dated 31[st]May, 2018 wherebythe learned Labour Court rejected the statement of claim of the petitioner.

2.The petitioner raised an industrial dispute against the respondents onthe averments that he was in the permanent and continuous employment ofthe respondent since 01[st]December, 2014; he was designated as GeneralManager but he never performed managerial, supervisory and administrativenature of duties during his tenure; the primary, basic and dominant nature of

duties of the workman were to generate regular reports; preparation ofsketches; preparing “Request for quotation” with drawings to call thecontractors to get quotations and then preparing comparative statement,analysis of rates; preparing “Note for record” for approval, preparing “Letterof Intent”; preparing contractor’s agreement technical portion of approvaland submitting the same to his superior, Mr. Sanjeev Suri, Regional Head ofEngineering; taking of measurements at site and other miscellaneous jobs;the workman was never authorized to take any independent decision andthere was no subordinate staff working under him; the workman during histenure of service performed his duties with utmost dedication, sincerity andhonesty; he had flawless record of service to his credit; no job descriptionwas issued to the workman and the duties performed by him were purelyclerical, technical, manual etc; initially, the workman was employed onprobation for period of six months which was to be confirmed oncompletion of the probation period; the petitioner is workman within thedefinition of Section 2(s) of the Industrial Disputes Act; his last drawnwages were Rs.4,00,000/- per month and the respondent has not paid theperformance incentive at the rate of 20.2% of the salary since the date ofjoining; the respondent instead of appreciating the petitioner startedharassing the petitioner and pressurized him to either submit resignation orface dire consequences which was not accepted by the petitioner who madea complaint dated 27[th]May, 2015 to the Director of the respondent; therespondent illegally terminated the petitioner’s services on 16[th]June, 2015on the ground that the performance in the probation period was not foundsatisfactory; the termination is illegal and violative of Section 25(h) of theIndustrial Disputes Act; the petitioner issued demand notice dated 23[rd]

October, 2015 to the respondent which was replied on 04[th]December, 2015;the petitioner is not gainfully employed since the date of his termination; andthe petitioner is entitled to reinstatement with continuity of service and backwages along with all consequential benefits.

3.Respondent No.1 filed the written statement in which preliminaryobjection was raised on the ground that the petitioner was working as aGeneral Manager at last drawn salary of Rs.4,00,000/- per month and wasnot workman within the meaning of Section 2(s) of the Industrial DisputesAct; the petitioner was entrusted with managerial, administrative andsupervisory work described in his job description; the petitioner wasresponsible to supervise, manage and ensure that all resources for the projectare available as per plan to meet deadlines; the petitioner was responsible tosupervise the works and ensure that the quality and safety standards aremaintained while achieving time and cost targets fixed on weekly andmonthly basis and also responsible for ensuring statutory compliances onsite; the petitioner was responsible to maintain excellent working relationswith the contractors by properly supervising various work contracts assignedto the contractors and to make sure that the work progresses as per thetimeline fixed and upto the standard and quality as prescribed.

4.The following issues were framed by the Labour Court on 14[th]October, 2016;-

“(i) Whether the claimant is workman as defined under Section2(s) of the Industrial Disputes Act, 1947 (as amended up todate)?2(s) of the Industrial Disputes Act, 1947 (as amended up todate)?

(ii) Whether the claimant/applicant was on probation on the allegeddate of alleged termination, if so, its effect? OPMdate of alleged termination, if so, its effect? OPM

(iii) Whether the services of the claimant were terminated by themanagement illegally and unjustifiably as claimed by theclaimant? OPWmanagement illegally and unjustifiably as claimed by theclaimant? OPW

(iv) Whether the claimant is entitled to the relief claimed in thestatement of claim? OPWstatement of claim? OPW

(v) Relief”

5.The Labour Court treated issue No.1 as preliminary issue anddecided the same against the petitioner holding that the petitioner was not aworkman within the definition of Section 2(s) of the Industrial Disputes Act.The findings of the Labour Court are reproduced hereunder:-

“In the light of aforesaid, the claimant by no stretch of imaginationfalls under the category of workman as defined under Section 2(s)of the Industrial Dispute Act, 1947. Mere statement that he neverperformed any managerial, supervisory and administrative natureof duties could not be epso facto be presumed. Thus the claimantwas performing the work of Supervisory or the AdministrativeCategory and as such he does not fall within the definition ofworkman, as provided U/s 2 (s) of I.D. Act. Resultantly, preliminaryissue is decided against the workman. Consequently, claim of theworkman is rejected. Award is passed accordingly. Requisite copiesof the award be sent to the competent authority for publication asper provisions of Industrial Dispute Act.”

Submissions of the petitioner

6.The petitioner was workman irrespective of designation and salaryas he was neither having any subordinate staff nor having any independentdecision making capacity; the hiring of five subordinate staff was kept onhold by the petitioner’s superior and the petitioner was forced to work for sixpeople at time; the petitioner never worked in any managerial,administrative and supervisory capacity; severe charges were made againstthe petitioner in Annexure to the termination letter; the termination was

stigmatic and not termination simplicitor, which resulted into the petitionerwithout job since over four years; the termination and its modus operandiadopted by respondent No.1 tantamount to victimization and unfair labourpractices as defined under Schedule V read with Section 2 (ra) of theIndustrial Disputes Act; Issue no.1 “Whether the claimant is workman asdefined under Section 2(s) of the Industrial Disputes Act, 1947” is mixedquestion of law and fact and ought to have been decided only after callingupon the parties to lead their respective evidences; learned Labour Courtpassed the impugned award merely on the basis of assumption and withoutgoing into the aspect of the nature of duties discharged by the petitioner; thesaid issue cannot be decided on the basis of the designation and salary; thedesignation of an employee is not of much importance and what is importantis the nature of duties performed by the employee; and rather all the issuesshould be decided together after scrutinizing the evidence led by the partiesto the dispute. All the issues framed by the Labour Court are mixedquestions of facts and law and could not have been summarily decidedwithout the evidence by respective parties. Reliance was placed on S.K.Maini v. M/s Carona Sahu Company Ltd., JT 1994 (3) S.C. 151, D.P.Maheshwari v. Delhi Administration, (1983) 4 SCC 293, Anand RegionalCo-op. Oil S. Union Ltd. v. Shailesh Kumar Harsha Bhai Shah, (2006) 6SCC 548, S.K. Verma v. Mahesh Chandra, (1983) 4 SCC 214, SharadKumar v. Govt. of NCT of Delhi, 2002 (3) SCALE 442, Workman ofDimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate, AIR1958 SC 353, The Management of Express Newspapers Pvt. Ltd. v. ThePresiding Officer, Labour Court, Madurai, AIR 1964 SC 806, ManojSinghania v. Union of India, 150 (2008) DLT 513, Kailash Chand v. DTC,

217 (2015) DLT 698 (DB) The Management of Brooke Bond v. Y.K.Gautam, AIR 1973 SC 2634, Rajesh Kohli v. High Court of J & K, (2010)12 SCC 783, Management Utkal Machinery Ltd. v. Workmen, Miss ShantiPatnaik, AIR 1966 SC 1051.

Submissions of respondent No.1

7.Vide Appointment Letter dated 2[nd]December, 2014, the Petitionerwas appointed as General Manager (Engineering) in Grade of theCompany at yearly package of Rs.48,00,006/-. The location of thePetitioner’s appointment was at Bahadurgarh Site Office, Haryana. In termsof Clause 5 of the Appointment Letter, the Petitioner was to be on probationfor period of six months from the date of joining, which could be extendedby the Company if the performance or conduct of the Petitioner was notfound satisfactory. Unless such confirmation was communicated, thePetitioner was deemed to continue with the appointment on the probationarybasis. The Petitioner accepted the terms of his appointment and accordingly,signed the same. In terms of Clause 7 of the Appointment Letter, theCompany was authorized to terminate the employment of the Petitionerwithout any notice or salary in lieu thereof, if the Petitioner was found to bein breach of any of the Company’s policy on discipline, computer andinternet usage or found guilty of dishonesty, disobedience, disorderlybehaviour, negligence, absence from duty without permission, sexualharassment, violation of Tata Code of Conduct, violation of the Safety andQuality policies of the Company or any other conduct considered by theManagement to be detrimental to the interests of the Company.8.The Petitioner was appointed as General Manager (Engineering) andwas performing managerial, administrative and supervisory work. The

Petitioner was responsible for supervision and management of the overallProject as per agreed design and cost parameters. He was also responsible tomanage and ensure that all resources for the project were available as perplan to meet deadlines. As part of his job, the Petitioner was responsible tosupervise the works and ensure that the quality and safety standards weremaintained while achieving time and cost targets fixed on weekly andmonthly basis and also responsible for ensuring statutory compliances on theProject Site. Another aspect of the role of the Petitioner was to maintainexcellent working relationships with the independent contractors bysupervising various work contracts assigned to them and to make sure thatthe work progresses as per the timeline fixed and prescribed qualitystandards.

9.The roles and responsibilities of the Petitioner were laid down in thejob description of Project Head, which is reproduced hereunder:

Strategic

Responsible for supervision and management of the overallproject within the stipulated time and cost parameters meetingacceptable standards of Quality and Safety.Responsible for supervision and management of the overallproject within the stipulated time and cost parameters meetingacceptable standards of Quality and Safety.

Provide inputs on Project feasibility and Project planningProvide inputs on Project feasibility and Project planning•Ensure adhering to Plans & Cost Estimates for all projectsEnsure adhering to Plans & Cost Estimates for all projectsOperational

Work execution at Site

Superviseandco-ordinatedailyexecutionbyvariouscontractorscontractors

Ensuringconstructionasperagreeddesignsandcostmanagement to ensure profitability.management to ensure profitability.

Overseeing the procurement and contractual requirements onan overall basisOverseeing the procurement and contractual requirements onan overall basis

Ensuring all statutory compliances are maintained up to date atsites and other parties like contractors have also requiredstatutory compliancesEnsuring all statutory compliances are maintained up to date atsites and other parties like contractors have also requiredstatutory compliances

Interpretation of drawings/ designsInterpretation of drawings/ designs

Assist deputy project manager in preparation of detailedactivity scheduleAssist deputy project manager in preparation of detailedactivity schedule•Determinerequirementsandorder/requisitionmaterial(cement and steel) at site(cement and steel) at site

Maintain and verify measurement sheets for various activitiesMaintain and verify measurement sheets for various activities

Ensure availability of materials, equipment etc that are to beprovided at site and coordinate to ensure the sameEnsure availability of materials, equipment etc that are to beprovided at site and coordinate to ensure the same

Supervise work at site to ensure that contractors are executingaspercontractandtorequiredqualityandcontractspecifications and work completion is on scheduleSupervise work at site to ensure that contractors are executingaspercontractandtorequiredqualityandcontractspecifications and work completion is on schedule

Provide technical guidance on site whenever & whereverrequired and resolving critical issues on siteProvide technical guidance on site whenever & whereverrequired and resolving critical issues on site

Monitor the costs at site actively and ensure they are withinbudget.Monitor the costs at site actively and ensure they are withinbudget.

Ensure that there is conducive and safe work environment atthe siteEnsure that there is conducive and safe work environment atthe site

Ensure proper storage, record keeping and inventory of allmaterials at siteEnsure proper storage, record keeping and inventory of allmaterials at site•Ensure adequate security is provided at site to minimizepilferage, etc.Ensure adequate security is provided at site to minimizepilferage, etc.

Ensure that reporting to regional and HO on the project istimely and participate in all project review meetingsEnsure that reporting to regional and HO on the project istimely and participate in all project review meetings

Ensure that Site accounts and petty cash are maintainedaccurately and as per the required guidelinesEnsure that Site accounts and petty cash are maintainedaccurately and as per the required guidelinesVendors & Contractors

Assist where required in the selection of local vendors andcontractors/sub contractorsAssist where required in the selection of local vendors andcontractors/sub contractors

Develop and maintain relationships with key vendors andcontractorsDevelop and maintain relationships with key vendors andcontractors

Escalate issues to the local representatives of the contractors asper the requirements.Escalate issues to the local representatives of the contractors asper the requirements.

Quality & Safety

Ensure that all Quality Assurance & Quality Control activitiesare being carried out effectively and in timely manner, so thatthe quality of material (cement, steel, etc) & equipment beingused at the site is of high quality and reliable.Ensure that all Quality Assurance & Quality Control activitiesare being carried out effectively and in timely manner, so thatthe quality of material (cement, steel, etc) & equipment beingused at the site is of high quality and reliable.

Ensure the preparation & implementation of safety plansEnsure the preparation & implementation of safety plans

Ensure that safety training is regularly conducted for all staffincluding contractor staffEnsure that safety training is regularly conducted for all staffincluding contractor staffDevelopmental

Keep abreast of developments in the areaKeep abreast of developments in the area

Participate in recruitment of appropriate talent in line withapprovals for work areaParticipate in recruitment of appropriate talent in line withapprovals for work area

Manage the team effectively by coaching, mentoring, provideperiodic feedback and exposure to enhance learningManage the team effectively by coaching, mentoring, provideperiodic feedback and exposure to enhance learning

10.The Petitioner’s work during his employment with Respondent No.1mainly involved managerial and supervisory work viz. review of preliminarywork done by other clerical staff, taking management decisions like hiringconsultants, floating tenders, liaising and supervising for seeking statutoryapprovals, instructing junior staff to carry out the work and asking them toreport to him etc. This is amply evident from perusal of the minutes ofweekly review meetings of Respondent No.1 as well as contemporaneousemails.

11.Whether particular employee is workman within the meaning ofSection 2 (s) of the Industrial Disputes Act, or person is employed insupervisory capacity, the test to determine this is to understand what was theprimary, basic or dominant nature of duties for which the person whosestatus is under enquiry was employed. Where an employee has multifariousduties and question is raised whether he is workman or not, the Court hasto find out what are the primary and basic duties of the person concernedand if he is incidentally asked to do some other work, which may notnecessarily be in tune with the basic duties, these additional duties cannotchange the character and status of the person concerned. In other words, thedominant purpose of employment must be taken into consideration and thegloss of some additional duties must be rejected while determining the status

and character of the person. Perusal of the job description of the ProjectHead, the designation the Petitioner was employed at, minutes of weeklyreview meetings and the emails exchanged between the Petitioner andRespondent No. 1 clearly show that the Petitioner was entrusted withmanagerial, supervisory, and administrative tasks and was performing themas part of his duties and role assigned.

12.Even assuming for the sake of arguments, that the Petitioner wasdoing some clerical work as alleged, in view of the legal position that theprimary nature of duties of an employee are to be seen while undertaking anexercise for the purposes of Section 2 (s) of the Industrial Disputes Act, thePetitioner cannot be classified as workman. The perusal of the recordclearly establishes that the dominant purpose of employment of thePetitioner with Respondent No. 1 was management and supervision of theProject. It is for these reasons, the Petitioner was drawing hefty annualsalary package of Rs.48,00,006/-. It is unprecedented that workman isemployed at such higher remuneration. The Company has also executed aletter of authority in favour of the Petitioner pertaining to the Project,whereby the Petitioner has been authorized to take various important actionson behalf of the Company, having binding effect on the Company.

13.ThePetitioner’sroleinRespondentNo.1companywasadministrative, managerial and supervisory. No organization confers suchwide powers on any of its employee unless such an employee is high-rankingofficial,whosedutiespre-dominantlyaresupervisoryandmanagerial. One of the factors in considering if an employee is supervisoror not is whether such an employee can bind the employer by taking somekind of decision on his behalf. Execution of the Letter of Authority dated

10[th]December 2014 conclusively proves that the Petitioner was authorizedto bind the Respondent No.1.

14.The Petitioner’s contention that the finding of the Ld. Labour Courtwas premature and the decision that the petitioner was not workman couldnot have been taken without leading evidence, is bad in law on multipleaccounts. Firstly, there is no bar under law to decide maintainability of aclaim as preliminary issue. The petitioner has relied on D.P. Maheswari v.Delhi Administration, (1983) 4 SCC 293 in which the Supreme Court heldthat the “Tribunals and Courts who are requested to decide preliminaryquestions must ask themselves whether such threshold part-adjudication isreally necessary and whether it will not lead to other woeful consequences,meaning thereby, tribunal or Court can decide the issue of maintainabilityat the threshold if it is absolutely necessary and if the outcome of thethreshold issue is likely to make rest of issues redundant.

15.The Petitioner’s performance during his probation period with theCompany was not befitting of any employee, let alone of an employee at thedesignation and role the Petitioner was entrusted in the Company. Since veryearly of his joining the Company, the Petitioner exhibited incompetency aswell as undisciplined behaviour. Non-performance of the assigned tasks bythe Petitioner, clubbed with deliberately not responding and coordinatingwith the colleagues resulted in great hardship to the day to day functioningof the Company as well as delay in the execution of the Project. The copy ofenquiry report on the Petitioner’s incompetency is Annexure to thetermination letter dated 16[th]June, 2015. Despite having been advised andrequested to ably perform his duties, the Petitioner did not mend his waysand continued to behave to work in manner which was against the interest

of the Company.The Petitioner filed complaint with the Chief EthicsOfficer of the Company, highlighting alleged violations by one Mr. SanjeevSuri of the Tata Code of Conduct on 27[th]May, 2015. An internal enquirythereafter was undertaken by the Company to look into the allegations madeand report was submitted on 4[th]June, 2015. The said enquiry concludedthat the issues raised by the Petitioner in his complaint to the Chief EthicsOfficer mainly arose out of personality or ego clashes between the Petitionerand his superiors in the Company and appeared to have been made out ofagitated behaviour and personal animosity against fellow employees. Theenquiry report concluded that the Petitioner failed to accept any directionsfrom his immediate superiors and deliberately took adverse views despitemanagement decisions, thereby derailing the progress of the Company andthe Project. The Petitioner failed to display the requisite professionalcompetency.16.Being General Manager and Project Head, the Petitioner was givenresponsibilities and roles to perform various tasks and was liable to ensurethat his team achieves the targets within the deadlines and to supervisevarious works being executed by the contractors. The petitioner, however,failed to perform the same with required dedication and was also unable towork harmoniously with his co-workers. Despite being given repeatedwarnings and opportunities, the petitioner exhibited erratic behaviour withhis co-workers, deflecting blames on others and behaved disrespectfullytowards his co-workers. Despite being afforded several opportunities andefforts of the Petitioner’s reporting officer, reviewer and the HR, thePetitioner failed to display any improvement in his competency, behaviourand disciplinary front. The Company, therefore, did not confirm the

Petitioner’s employment and he continued to be on probation period. Sincethe Petitioner failed to display any sign of improvement in his competencyor behaviour, the Company was constrained to terminate his employmentwith immediate effect vide letter dated 16[th]June, 2015. In terms of Clause 7(a) of the Appointment Letter, by which the Company was authorized toterminate Petitioner’s employment without any notice or salary in lieuthereof. The Company in good faith decided to terminate the petitioner’sservices by providing one month salary in lieu of one month notice period.Full and final settlement of petitioner’s dues was made by the Company indue course. The termination of Petitioner’s services by the Company waslawful, and under the terms and conditions of his appointment.

17.The services of probationer have been terminated during the periodof probation in terms of the contract of employment/letter of appointment. Itis settled legal position that such termination does not tantamount to‘retrenchment’ within the meaning of Section 2 (o)(o) of the IndustrialDisputes Act, 1947.

18.In Governing Council of Kidwai Memorial Institute of Oncology,Bangalore v. Dr. Pandurang Godwalkar, (1992) 4 SCC 719, the issuepertained to termination of an employee, appointed as Lecturer in SurgicalOncology in the Appellant Institute on probation for one year on conditionthat “failure to complete the period of probation to the satisfaction of thecompetent authority will render the [Respondent] liable to be dischargedfrom service.” The Respondent’s services were terminated before the expiryof the period of probation. Challenged by the Respondent, the order oftermination was quashed by the Karnataka High Court. Setting aside theorder of the Karnataka High Court, the Supreme Court held:

“7. When an appointment is made on probation, it presupposesthat the conduct, performance, ability and the capacity of theemployee concerned have to be watched and examined duringthe period of probation. He is to be confirmed after the expiryof probation only when his service during the probation isfound to be satisfactory and he is considered suitable for thepost against which he has been appointed.

If the decision is taken, to terminate the service of an employeeduring the period of probation, after taking into considerationthe over-all performance and some action or inaction on thepart of such employee then it cannot be said that it amounts tohis removal from service as punishment.8. Even if such employee while questioning the validity of anorder of termination simplicter brings on record that somepreliminary enquiry or examination of some allegations hasbeen made, that will not vitiate the order of termination.”

19.InM.Venugopalv.DivisionalManager,LifeInsurance

Corporation of India, Machilipatnam, AP, (1994) 2 SCC 323, the servicesof the Appellant (appointed as Development Officer with probation periodof 1 year) were terminated during the extended period of probation onaccount of failure to improve his performance. The order of termination wasquashed by the Single Judge of Andhra Pradesh High Court, which washowever subsequently set aside by the Division Bench. Upholding the orderof the Division Bench, the Supreme Court held that since the termination ofthe Appellant’s services was result of the contract between the Appellantand the Respondent, it would not qualify as retrenchment under Section 2(o)(o) of the Industrial Disputes Act and hence non-compliance of therequirement of Section 25-F shall not vitiate or nullify the order oftermination of the Appellant. The Supreme Court further held that “Evenunder general law, the service of probationer can be terminated aftermaking an overall assessment of his performance during the period of

probation and no notice is required to be given before termination of suchservice.

20.Similar view has been taken by the Supreme Court in Kalyani SharpIndia Ltd. v. Labour Court No.1, Gwalior, (2002) 9 SCC 655 wherein theservices were terminated during probation. It was held:

“It is clear that the respondent has been appointed as TraineeService Technician and for period he had to undergo the trainingto the satisfaction of the appellant and if his work was notsatisfactory during the period the facility could be withdrawn at anytime and he would be regularised only on completion of histraining. Thus, the respondent’s services were terminated before theexpiry of the probationary period. In such case, question of issueof notice before terminating the service as claimed by therespondent does not arise.”

21.In Kalyani Sharp (supra), the Supreme Court relied on Escorts Ltd. v.Presiding Officer, (1997) 11 SCC 521, wherein it was held that since thetermination was in accordance with the terms of the contract though beforethe expiry of period of probation, it fell within the ambit of Section 2 (o)(o)(bb) of the Industrial Disputes Act and did not constitute retrenchment.

22.In Mahinder Singh v. M/s Indian Airlines, 2016 SCC Online Del5008, the Division Bench of this Court, referring and relying on the settledlegal position, held that the termination of service of probationer in terms ofthe stipulation contained in the contract of employment does not amount to“retrenchment” within the meaning of Section 2 (o)(o) of the IndustrialDisputes Act.

23.Sameviewwastakenby DivisionBenchofthisCourt inManagement of Apparel Export Promotion Council v. Surya Prakash, 178(2011) DLT 624. The Division Bench held as under:

“9. The appointment letter clearly sets out the terms ofemployment which make it clear that his services could be putto an end at any time by giving twenty four hours notice duringthe period of probation and his services would be regularizedonly after satisfactory completion of the probation period.These terms were accepted by the workman and were neverchallenged before the Tribunal or writ court. In fact theRespondent-workman has not led any evidence in the Courtsbelow that the appointment letter was issued with malafideintent to terminate his services.

10. In our considered opinion, the termination of the servicesof the workman in accordance with the condition mentioned inthe employment contract clear fall within the domain ofexception to definition of retrenchment as provided inclause(bb) of Section 2(oo) of the Act as reproduced above.”

24.Clause 5 of the Petitioner’s Appointment Letter dated 1[st]December2014, categorically stipulated that the Petitioner was to be on probation for aperiod of six months from the date of his appointment, extendable further ifthe Petitioner’s conduct was not found satisfactory. The Petitioner was toremain on probation unless his appointment was confirmed in writing by theRespondent No.1.

25.Since the appointment of the Petitioner was not confirmed by way ofany written communication, he remained on probation in June 2015. Whenhis services were lawfully terminated on the grounds of incompetency andbehavioral issues. In view of the above said legal position, the services of thePetitioner were lawfully terminated by the Respondent No.1.

26.The petitioner has attempted to argue that his termination wasstigmatic, which is not correct. Reliance is placed on Chaitanya Prakash v.H. Omkarappa, (2010) 2 SCC 623, wherein one Omkarappa was appointed

as an Executive Director (Marketing) by the Appellant No.2 and was toremain on probation for one year from the date of his appointment. Givenhis misconduct and the deficiencies in his performance and failure toimprove despite multiple opportunities, his probation was not confirmed andemployment was ultimately terminated by the appropriate authority.Negating the claim that the termination as stigmatic, the Supreme Courtheld:

“18. It is no longer res integra that even if an order oftermination refers to unsatisfactory services of the personconcerned, the same cannot be said to be stigmatic.”

“The Board of Directors constituted of responsible personsand they while deciding the suitability of the respondent notonly considered the performance Assessment Report but alsoconsidered all other records, and thereafter they took aconsidered and conscious decision that the respondent was notsuitable for confirmation and terminate his service.

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24. The said decision of the Board of Directors appears to bein parity with the ratio of the aforesaid decisions of this Court(supra). The reasons mentioned in the letter dated 29.11.1999-terminating the services of the Respondent cannot be said tobe stigmatic.”

27.The issue whether the claim of the Petitioner is barred by Section 2(o)(o) (bb) of the Industrial Disputes Act or not, is pure question of lawand can be decided at any stage of the proceedings. That apart, RespondentNo.1 had taken the argument that Petitioner’s claim was not maintainable ashe was terminated during his probation and in fact one of the issues framedby the Ld. Labour Court was as to whether the Petitioner was on probationor not. Reliance is placed on Kalyani Sharp (supra) in which the SupremeCourt dealt with similar issue. It was the employee’s argument therein that

the contention that the termination of services of the employee were notaffected by Section 25-F of the Industrial Disputes Act, was not arguedbefore the Labour Court or the High Court and hence, could not be raised atbefore the Supreme Court for the first time. Rejecting the objections, it washeld:

“So far as the first contention is raised on behalf of theRespondent is concerned, we may state that the argumentemerges from the documents which the respondent has reliedbefore the Labour Court to show about his employment and thetermination of service. No fresh investigation of facts is required.It is simple case of application of law in the matter. Hence thepreliminary objection is rejected.

28.Even otherwise, the Petitioner did not qualify as workman underSection 2 (s) of the Industrial Disputes Act as he was employed by theRespondent No.1 as General Manager (Engineering) who was responsiblefor supervision and management of the overall Project. Borne out of therecord (the job description of the Petitioner in the Respondent No.1), thePetitioner was performing mainly managerial and supervisory functions.Record also shows that the Petitioner had junior staff working for him, wasauthorized to hire subordinates and assign work to them. All of this clearlyevidences that he was performing supervisory functions. Admittedly, thePetitioner was drawing hefty salary of INR approximately 4 lacs per month(INR 48,00,006/- per annum). It is unconceivable that workman would beemployed by any organization at such higher remuneration for clerical job.29.In terms of Section 2 (s) of the Industrial Disputes Act, person whois employed in any industry and performs any manual, unskilled, skilled,technical, operational, clerical or supervisory work qualifies as workman.

Any personwhohasbeenemployedmainly inamanagerialoradministrative capacity, however, is not workman. The Petitioner wasperforming managerial and supervisory role during his employment withRespondent No.1 and hence, did not qualify as workman.30.The test to determine whether an employee was workman orperforming managerial and supervisory duties is to understand what was theprimary, basic or dominant nature of duties for which the person whosestatus is under enquiry was employed.

31.The Petitioner was appointed as General Manager (Engineering)/ProjectHead and wasresponsiblefor the overall supervision andmanagement of the Project. He was responsible to manage and ensure thatall resources of the Project were available as per plan to meet the deadlines.His role and responsibilities were laid down in the job description of theProject Head. The Petitioner was aware of his responsibilities and himselfuploaded the Goal Sheet (describing his roles) on Respondent No.1’s webportal (ESS Portal).

32.The perusal of the weekly review meetings of the Respondent No. 1would specifically show that the Petitioner’s role as Project head involvedreviewing preliminary works done by clerical staff, taking managementdecisions like hiring consultants, floating tenders, liaising and supervisingfor statutory approvals, instructing junior staff to carry out work etc. It is dueto the above managerial position, the Petitioner was drawing hefty salaryof INR 48,00,006/- per annum. It is unconceivable that workman would beemployed by any organization at such higher remuneration.

33.It is settled law that where an employee has powers of assigningdistribution of work, there is supervision. The record shows that the

Petitioner was authorized to hire subordinates and assign work to themevidence that he was performing supervisory functions.

34.Another important evidence of Petitioner’s managerial role inRespondent No. 1 was his authorization to take decisions on behalf ofRespondent No. 1. This authorization was conferred upon the Petitioner byway of Letter of Authority issued by Respondent No.1 on 10[th]December2014, immediately after his appointment on 2[nd]December 2014.

35.In terms of this Letter of Authorization, the Petitioner was authorizedto engage, retain, hire and employ any person as may be required for thepurposes of the Project. The petitioner was also authorized to sign on variousdocuments on behalf of Respondent No.1 which would have binding effect.These facts when seen in light of the settled legal position that an employeequalifies as supervisor when he can bind the employer by taking some kindof decision on his behalf, it is conclusively established that the Petitionerwas performing managerial role. No organization confers such wide powerson any employee unless such employee is high-ranking official, withduties which are predominantly supervisory and managerial. This beliesPetitioner’s stand in the petition that he was never authorized to take anyindependent decision.

36.There is no bar under law to decide the maintainability of claim as apreliminaryissue.WhilerelyingonD.P.Maheswariv.DelhiAdministration, (1983) 4 SCC 293, the Petitioner conveniently ignored theobservation of the Hon’ble Supreme Court that- “Tribunals and Courts whoare requested to decide preliminary questions must ask themselves whethersuch threshold part-adjudication is really necessary and whether it will notlead to other woeful consequences”. Implicit in this observation of the

Supreme Court is the proposition that there is no bar on Courts to decide theissue of maintainability at the threshold if the outcome of the threshold issueis likely to make rest of the issues redundant.

37.The Petitioner, from the date of his appointment with RespondentNo.1 was to be on probation for period of six months. Given however hisfailure to display the requisite professional competency, including but notlimited to inability to work harmoniously with his co-workers, constantinsubordination, erratic behavior to name few; his employment could not beconfirmed by Respondent No.1. This was also in accordance with Clause 5of Petitioner’s Appointment Letter.

38.Despite being afforded multiple opportunities, the Petitioner failed todisplay any signs of improvement. Respondent No. 1 was, therefore,constrained to terminate Petitioner’s employment in accordance with Clause7 of the Appointment Letter. Full and final settlement of Petitioner’s dueswas also made immediately by Respondent No.1.

39.The termination of Petitioner’s services from Respondent No. 1occasioned solely due to the Petitioner’s failure to perform the assignedtasks with required dedication, clubbed with his subordination andundisciplined behavior. The result of an internal enquiry conducted by theRespondent No.1 as well as the contemporaneous emails evidence this.

40.The enquiry initiated on the Petitioner’s own complaint to the ChiefEthics Officer of Respondent No.1 also concluded that the issues raised bythe Petitioner mainly arose out of personality or ego clashes between thePetitioner and his superiors at Respondent No.1 and appeared to have beenmade out of agitated behavior and personal animosity against fellowemployees.

Discussions and Findings

41.The respondent appointed the petitioner as General Manager(Engineering) in Grade-D on 01[st]December, 2014 at an yearly package ofRs.48,00,006/- (Rs.4,00,000/- per month approx.). Immediately upon theappointment, respondent No.1 conferred letter of authority upon thepetitioner on 10[th]December, 2014 authorising him to engage, retain, hireand employ any person as may be required for the purposes of the Project.The petitioner was also authorized to sign on various documents on behalf ofthe respondent No.1 which would have binding effect. The minutes ofweekly revenue meetings show the petitioner’s role as Project headinvolved reviewing preliminary works done by clerical staff, takingmanagement decisions like hiring consultants, floating tenders, liasing andsupervising for statutory approvals, instructing junior staff to carry out worketc.

42.This Court is satisfied that the primary, basic and dominant nature ofduties of the petitioner was managerial and supervisory and the petitionerwas not ‘workman’ within the meaning of Section 2(s) of the IndustrialDisputes Act. There is sufficient material on record to decide this issue. Thepetitioner’s ground that no evidence is required to decide the same isrejected.

43.This Court also heard the parties on the respondents objection that thepetitioner was on extended probation and was not ‘workman’ within themeaning of Section 2(s) of the Industrial Disputes Act and his terminationdoes not amount to ‘retrenchment’ within the meaning of Section 2(oo)(bb)of the Industrial Disputes Act, which is pure question of law and no

evidence is necessary to decide the same.

44.Clause 5 of the appointment letter dated 2[nd]December, 2014 providesthat the petitioner shall be on probation for period of six months and theprobation would continue till his appointment was confirmed in writing. Thepetitioner has not been confirmed in writing and, therefore, the petitionershall be deemed to be on extended probation period. Clause 5 of theappointment letter is reproduced hereunder:

“5. Probation

You shall be on probation for period of six months. Thisprobationary period may be extended from time to time in case yourperformance is not upto mark per the performance managementsystem in the company and/or your conduct are not found satisfactoryto the Company. The confirmation of the services will not be deemedto have taken place unless and until, informed to you, in writing. Untilsuch confirmation letter is issued to you, you will be deemed tocontinue your appointment on probationary basis”

45.The law with respect to the termination of the service of probationeris well-settled that the probationer is not ‘workman’ within the meaning ofSection 2(s) of the Industrial Disputes Act and the service of probationercan be terminated during the period of probation and such termination doesnot amount to retrenchment within the meaning of Section 2 (oo) of theIndustrial Disputes Act.

46.Applying the aforesaid principles to the present case, the petitioner,being on extended probation, is held not ‘workman’ within the meaning ofSection 2(s) of the Industrial Disputes Act and his termination does notamount to ‘retrenchment’ within the meaning of Section 2(o)(o) of theIndustrial Disputes Act. Reference be made to the following judgments:

(i)In M. Venugopal v. Divisional Manager, (1994) 2 SCC 323,

the service of the workman was terminated during the extendedprobation period. The Supreme Court held that the termination beforethe expiry of the period of probation fell within the ambit of Section2(oo)(bb) of the Industrial Disputes Act and it did not constituteretrenchment.

(ii)In Escorts Limited v. Presiding Officer, (1997) 11 SCC 521,the workman was appointed on temporary basis for period of twomonths. The terms of appointment enabled the employer to terminatethe services at any stage without assigning any reason. The SupremeCourt held that the termination of service under the said term, eventhough effected before the expiry of the specified period, did notamount to retrenchment.

(iii)In Kalyani Sharp India Ltd. v. Labour Court No. 1 Gwalior,(2002) 9 SCC 655, the trainee was terminated during the period ofprobation. The Supreme Court held that there was no infirmity in thetermination of trainee on probation. The relevant portion of the saidjudgment is reproduced as under:

“6. The order of employment itself clearly sets out the termsthereafter which makes it clear that the facility of providingtraining to him could be put to an end to at any time withoutassigning any reason whatsoever and his services could beregularised only on satisfactory completion of his training.If these clauses are read together, it is clear he was underprobation during the relevant time and if his services arenot satisfactory, the same could be put an end to. It is clearthat the respondent had been appointed as TraineeService Technician and for period he had to undergo thetraining to the satisfaction of the appellant and if his workwas not satisfactory during that period the facility could bewithdrawn at any time and he would be regularised only on

completion of his training. Thus the respondent's serviceswere terminated before expiry of the probationary period.In such case, questionof issue of notice beforeterminating the service as claimed by the respondent doesnot arise. Escorts' case (supra) is identical with the presentcase. Following the said decision and for the reasons statedtherein these appeals are allowed. The order made by theHigh Court affirming the award made by the Labour Courtis set aside and the claim made by the respondent isdismissed.”

(iv)In Mahinder Singh v. Indian Airlines Ltd., 2016 SCC OnLineDel5008,theDivisionBenchofthisCourtfollowingM.Venugopal (supra), Escorts Limited (supra) and Kalyani Sharp IndiaLtd. (supra) held that the termination of service of probationer interms of the stipulation contained in the contract of employment doesnot amount to "retrenchment" within the meaning of Section 2(oo) ofthe Industrial Disputes Act since it is covered by clause (bb) ofSection 2(oo) of the Act and Section 25-F of the Act does not getattracted in such cases. Relevant portion of the said judgment isreproduced hereunder:

“14. In view of the aforesaid judgments of the Supreme Courtgoverning the field it can be safely culled out that termination ofservice of probationer in terms of the stipulation contained inthecontractofemploymentdoesnottantamountto“retrenchment” within the meaning of Section 2(oo) of the Actsince it is covered by clause (bb) of Section 2(oo) of the Act.

-Thus, Section 25F of the Act does not get attracted in suchcases.”

(Emphasis Supplied)

(v)In Mahinder Singh (supra), the Division Bench rejected theworkman’s contention that he would be treated as deemed confirmed

employee as his probation period had come to an end and the samewas not extended further. The Division Bench held that the workmanwas not confirmed employee. Relevant portion of the said judgmentis reproduced hereunder:

“15. The submission of learned counsel for the appellant that theprobationperiodoftheappellantcametoanendon31.5.1988/28.6.1988 as the same was not extended further is bereft ofany merit as there is nothing in the terms of the letter of appointmentfrom which it can be construed that after expiry of the period ofprobation, the appellant would be treated as ‘deemed confirmed’employee.

16. Substantially similar question arose in Head Master, LawrenceSchool Lovedale v. Jayanthi Raghu, AIR 2012 SC 1571 In that case,the first respondent i.e. Jayanthi Raghu was appointed on the post ofMistress with effect from 01.09.1993. It was stipulated in the letter ofappointment that she would be on probation for period of two yearswhich may be extended for another one year, if necessary. InNovember, 1995, while she was working as Mistress in theappellant's school, as alleged, she had received some amount fromone Nathan. meeting was convened on 09.09.1997 and in theproceedings, certain facts were recorded. The said allegations thoughtreated ‘stigmatic’ by Ld. Single Judge, yet the Division Bench on astudied scrutiny of the factual scenario, opined that the same do notcast any ‘stigma’. However, the Division Bench, concurred with theultimate conclusion of the Ld. Single Judge on the basis that by virtueof the language employed in Rule 4.9 of the Rules of LawrenceSchool, Lovedale (Nilgiris), she had earned the status of confirmedemployee having satisfactorily completed the period of probation and,therefore, her services could not have been dispensed with withoutholding an enquiry.

Rule 4.9 was to the following effect:

“4.9 All appointments to the staff shall ordinarily be made onprobation for period of one year which may at the discretionof the Headmaster or the Chairman in the case of members ofthe staff appointed by the Board be extended up to two years.The appointee, if confirmed, shall continue to hold office till

the age of 55 years, except as otherwise provided in theseRules. Every appointment shall be subject to the conditionsthat the appointee is certified as medically fit for service by aMedical Officer nominated by the Board or by the ResidentMedical Officer of the School.”

17. The fulcrum of the controversy was whether the appellant schoolwas justified under the Rules treating the respondent teacher as aprobationer and not treating her as deemed and confirmedemployee. The Supreme Court referred to the following earlierdecisions operating in the field:

“10. ……In Sukhbans Singh v. State of Punjab, AIR 1962 SC1711, the Constitution Bench has opined that probationercannot, after the expiry of the probationary period, automaticallyacquire the status of permanent member of the service, unless ofcourse, the rules under which he is appointed expressly providefor such result.

11. In G.S. Ramaswamy v. Inspector-General of Police,Mysore3, AIR 1966 SC 175 another Constitution Bench, whiledealing with the language employed under Rule 486 of theHyderabad District Police Manual, referred to the decision inSukhbans Singh (supra) and opined as follows:-

“It has been held in that case that probationer cannotafter the expiry of the probationary period automaticallyacquire the status of permanent member of service,unless of course the rules under which he is appointedexpressly provide for such result. Therefore even thougha probationer may have continued to act in the post towhich he is on probation for more than the initial period ofprobation, he cannot become permanent servant merelybecause of efflux of time, unless the Rules of service whichgovern him specifically lay down that the probationer will;be automatically confirmed after the initial period ofprobation is over. It is contended on behalf of thepetitioners before us that the part of r. 486 (which we havesetoutabove)expresslyprovidesforautomaticconfirmation after the period of probation is over. We areof opinion that there is no force in this contention. It is truethat the words used in the sentence set out above are not

that promoted officers will be enable or qualified forpromotion at the end of their probationary period whichare the words to be often found in the rules in such eases;even so, though this part of r. 486 says that “promotedofficers will be confirmed at the end of their probationaryperiod”, it is qualified by the words “if they have givensatisfaction”.Clearlythereforetheruledoesnotcontemplate automatic confirmation after the probationaryperiod of two years, for promoted officer can only beconfirmed under this rule if he has given satisfaction.”

12. In State of Uttar Pradesh v. Akbar Ali Khan, AIR 1966 SC1842, another Constitution Bench ruled that if the order ofappointment itself states that at the end of the period of probation,in the absence of any order to the contrary, the appointee willacquire substantive right to the post even without an order ofconfirmation. In all other cases, in the absence of such an order orin the absence of such service rule, an express order ofconfirmation is necessary to give him such right. Where after theperiod of probation, an appointee is allowed to continue in thepost without an order of confirmation, the only possible view totake is that by implication, the period of probation has beenextended, and it is not correct proposition to state that anappointee should be deemed to be confirmed from the mere factthat he is allowed to continue after the end of the period ofprobation.

13. In State of Punjab v. Dharam Singh, AIR 1968 SC 1210, theConstitution Bench, after scanning the anatomy of the Rules inquestion, AIR 1966 SC 1842 AIR 1968 SC 1210 addressed itself tothe precise effect of Rule 6 of the Punjab Educational Service(Provincialised Cadre) Class III Rules, 1961. The said Rulestipulated that the total period of probation - including extensions,if any, shall not exceed three years. This Court referred to theearlier view which had consistently stated that when firstappointment or promotion is made on probation for specificperiod and the employee is allowed to continue in the post afterthe expiry of the period without any specific order of confirmation,he should be deemed to continue in his post as probationer onlyin the absence of any indication to the contrary in the originalorder of appointment or promotion or the service rules. Underthesecircumstances,anexpressorderofconfirmationisimperative to give the employee substantive right to the post andfrom the mere fact that he is allowed to continue in the post afterthe expiry of the specified period of probation, it is difficult to holdthat he should be deemed to have been confirmed. When theservice rules fixed certain period of time beyond which theprobationary period cannot be extended and an employeeappointed or promoted to post on probation is allowed tocontinue in that post after completion of the maximum period ofprobation without an express order of confirmation, he cannot bedeemed to continue in that post as probationer by implication. Itis so as such an implication is specifically negatived by the servicerule forbidding extension of the probationary period beyond themaximum period fixed by it.”

18. Thereafter, it was held as under:

“The status of confirmation has to be earned and conferred. Hadthe rule making authority intended that there would be automaticconfirmation, Rule 4.9 would have been couched in differentlanguage. That being not so, the wider interpretation cannot beplaced on the Rule to infer that the probationer gets the status of adeemedconfirmedemployeeafterexpiryofthreeyearsofprobationary period as that would defeat the basic purpose and intentof the Rule which clearly postulates “if confirmed”. confirmation,as is demonstrable from the language employed in the Rule, does notoccur with efflux of time. As it is hedged by condition, an affirmativeor positive act is the requisite by the employer. In our consideredopinion, an order of confirmation is required to be passed. TheDivision Bench has clearly flawed by associating the words ‘ifconfirmed’ with the entitlement of the age of superannuation withoutappreciating that the use of the said words as fundamental qualifiernegatives deemed confirmation.”

19. In the instant case also, the appellant was not conferred with thestatus of confirmed employee. From Clause 4 of the letter ofappointment, it cannot be inferred that after expiry of period ofprobation for period of one year, the petitioner got the status of aconfirmed employee. Since, he was still on probation, and in terms ofClause 4 of the Appointment Letter, his services have been terminated

in view of his ‘unsatisfactory performance’ same does not tantamountto ‘retrenchment’ within the meaning of Section 2(oo) of the Act.”

(Emphasis Supplied)

(vi)In Kamal Kumar v. J.P.S. Malik, Presiding Officer, 1998 (45)DRJ, Management of M/s Otis Elevator Co. (India) Ltd. vs.Presiding Officer, Industrial Tribunal-III, 2003 LLR 701, R. KartikRamchandran v. Presiding Officer, Labour Court, 2006 LLR 223and Raj Kumar Rastogi v P.O. Labour Court-X, (2015) 221 DLT242, this Court held that trainee/ probationer was not workmanwithin the meaning of Section 2(s) of the Industrial Disputes Act.

Conclusion

47.The petitioner is not ‘workman’ as defined in Section 2(s) of theIndustrial Disputes Act.

48.The writ petition is dismissed and the rejection of his claim by theIndustrial Tribunal is upheld.

DECEMBER 04, 2019ak

J.R. MIDHA, J.