Supreme Court clarifies ‘Workman’ status under Industrial Disputes Act, 1947

A ‘workman’ as defined under Industrial Disputes Act (ID Act) excludes persons exercising managerial functions or operating in administrative capacity in the industry from its ambit. Naturally the interpretation of ‘managerial’ and ‘administrative’ capacity becomes an important determinant in identifying a person as a ‘workman’. The Supreme Court of India in ‘M/S Bharati Airtel Limited v. A. S. Raghavendra’ has clarified the criteria for distinguishing between workmen and non-workmen.

Facts of the case

In 2009, A.S. Raghavendra (Raghavendra) had been appointed as Regional Business Head (South) – Government Enterprise Services in the grade of Senior Manager (B2)-Sales of Bharati Airtel Limited (Bharati Airtel).

He was paid an aggregate annual benefit package of Rs. 2.2 million with additional perks for the position of Team Leader and Regional Business Head (South) – Government Enterprise Services, heading a team comprising four Accountant Managers (Sales).

In 2011, Raghavendra made an initial resignation request that was accepted by Bharati Airtel, and he was paid approximately 0.6 million by Bharati Airtel as full and final settlement of all his claims. After 19 months, Raghavendra filed a petition before the Deputy Labour Commissioner, alleging his resignation to be a ‘forceful resignation’. The proceedings before the Deputy Labour Commissioner, however, failed.

The matter was then referred to the Labour Court by the Government of Karnataka. The Labour Court ruled against Raghavendra, holding that he does not fall within the ambit of ‘workman’ as he had been performing ‘Managerial duties’.  Raghavendra made an appeal before the Karnataka High Court challenging the Labour Court’s ruling. The High Court Single bench ruled in his favor that he did not belong to ‘managerial’ category, hence is a ‘workman’ under ID Act, remanding the matter back to the Labour Court. Aggrieved by the Single Bench judgment, Bharati Airtel filed an appeal before the Division bench which was dismissed. Raghavendra then approached the Supreme Court challenging the High Court’s Division Bench ruling.

Supreme Court’s ruling

In its ruling, the Supreme Court considered the nature of duties undertaken by Raghavendra and the perks enjoyed by him such as special allowance, car hiring charges, petrol and maintenance, driver’s salary, professional body membership(s) and credit card reimbursement, etc. It was noted that Raghavendra was paid an aggregate amount of Rs. 2.2 million and that he headed a team of four Account Managers such that they were working under his ‘supervision’ and ‘control’.

The Supreme Court set aside the High Court’s decision, referring to earlier rulings that clarify a person does not lose managerial status simply because they lack the authority to (a) hire, (b) dismiss, or (c) oversee disciplinary actions for other employees. The main principle established is that an employee in a high-ranking role—despite not having these specific powers—should not be classified as a “workman” under the Industrial Disputes Act if their duties are primarily managerial and administrative.

Our Thoughts

The ID Act is social welfare legislation. It arms the otherwise vulnerable workmen with rights such as   collective bargaining power, safeguards against exploitation, compensation, etc., against the management of a company. In such a scenario, it is crucial to determine who falls within the category of “workman” to do purposive justice with the provisions of the ID Act. While the term “workman” is defined under the ID Act, Indian courts have often taken a broad and fact specific view while deciding if the employee would fall under the definition of workman under the framework of the ID Act.

The Supreme Court’s ruling settles the dust on the scope of “workmen” and clarifies that mere absence of powers to appoint, dismiss or hold disciplinary enquiry does not put the otherwise senior individual on the same position as that of a “workman”. The Supreme Court emphasized that an employee in a managerial role may not always have the authority to hire or fire other employees.

This ruling provides a new guidance on who qualifies as a “workman” and encourages employers to carefully evaluate roles to ensure compliance with the ID Act.

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