Redefining ‘Workman’ under the Industrial Disputes Act, 1947: Analysing the Supreme Court’s ruling in the Bharti Airtel case

Background:

Section 2 (s) of the Industrial Disputes Act, 1947 (“ID Act“) defines workman as any person employed in an industry for manual, skilled, technical, clerical, or supervisory work, including those dismissed, discharged, or retrenched related to industrial disputes (“Workman“). The definition excludes individuals performing managerial or administrative roles in the industry. As a result, defining ‘managerial’ and ‘administrative’ roles is very crucial to determine if someone is a Workman.

This classification of roles carries significant legal value, particularly in determining the rights, protections, and entitlements available to a Workman. Recently the Supreme Court in the case of M/s Bharti Airtel Limited vs. A.S Raghavendra¹, decided the question in relation to classification between Workman and non-Workman.

Facts of the Case:

In 2009, A.S. Raghavendra (“Employee“) was appointed as Regional Business Head (South) – Government Enterprise Services at Bharti Airtel Limited (“Bharti Airtel“), in the grade of senior manager (B2)-Sales. He acted as a team leader, supervising 4 (four) account managers across 4 (four) states. On March 24, 2011, the Employee submitted his resignation, which was accepted on May 9, 2011, with a full and final settlement of INR 5,92,538.

19 (nineteen) months later, in December 2012, the Employee filed a petition before the Deputy Labour Commissioner, Bengaluru, alleging his resignation was forced. Further conciliation proceedings were initiated but failed to resolve the dispute. On June 27, 2013, the Government of Karnataka referred the matter to the Labour Court under Section 10(1)(c) of the ID Act. The Labour Court on September 5, 2017, ruled that the Employee did not qualify as a Workman under the ID Act as his role was managerial, involving supervision and control over subordinate employees. Dissatisfied with this decision, the Employee filed a writ petition before the Karnataka High Court.

The Single Judge Bench of the High Court ruled that since the Employee lacked powers to appoint, dismiss, or conduct disciplinary inquiries, he did not fall within the managerial category and was, therefore, a Workman under the ID Act. The court set aside the Labour Court’s decision and remanded the matter back to it for fresh adjudication within 3 (three) months. Bharti Airtel appealed this decision before the Division Bench of the Karnataka High Court, which dismissed the appeal. Subsequently, Bharti Airtel filed a civil appeal before the Supreme Court, challenging the Division Bench’s judgement.

Issues:

The key issue before the Supreme Court was whether the Employee qualified as a Workman under the ID Act, based on his job responsibilities, powers, and role within the company. The proceedings revolved around interpreting managerial versus non-managerial roles to determine eligibility under the ID Act.

Supreme Court’s ruling:

The Supreme Court ruled that the Employee did not qualify as a Workman under Section 2(s) of the ID Act, setting aside the Karnataka High Court’s Division Bench judgment. The Court emphasized that the Employee’s role as senior manager (B2) – Sales at Bharti Airtel involved managerial and supervisory responsibilities. He headed a team of 4 (four) account managers, exercised control and supervision over their work, and was responsible for ensuring discipline and efficiency within his department. His employment included perks like a special allowance, car hiring charges, driver’s salary, and professional memberships, reflecting his senior position.

The Court also considered his previous managerial roles and clarified that the absence of specific powers, such as appointing or dismissing employees, cannot alone determine managerial status. An individual with significant administrative responsibilities and authority, even without such powers, is not deemed a Workman. On the issue of alleged forced resignation, the Supreme Court rejected the Employee’s claims. It held that dissatisfaction with workplace conditions or unaddressed grievances does not constitute coercion. The resignation was deemed voluntary, as employees cannot dictate employment terms to their employer. The Court concluded that the Labour Court’s decision was legally sound, affirming that the Employee’s duties and position excluded him from being classified as a Workman under the ID Act.

Analysis:

This ruling provides insights into the criteria for identifying a Workman and urges employers to thoroughly assess job roles to align with the requirements of the ID Act. The Court relied on precedents like Ved Prakash Gupta vs. Delton Cable India (P.) Ltd.² and S.K. Maini vs. M/s Corona Sahu Company Limited ³, reiterating that managerial duties do not always include power of appointment and discharge, especially in large organizations where such authority may rest with higher management. Additionally, it clarified that an employee’s claim of resignation not being “of free will” does not automatically indicate coercion; grievances or dissatisfaction with employment terms do not suffice to establish forced resignation.

This judgment reinforces the importance of fact-specific analysis in identifying workmen under the ID Act while highlighting employers’ prerogative in managing employment terms. It offers guidance for businesses in ensuring compliance and strengthens the understanding of protections under the ID Act.

¹ (2024) 6 SCC 418.

² (1984) 2 SCC 569.

³ (1994) 3 SCC 510.