Holding

The respondent was not a workman under the U.P. Industrial Disputes Act, 1947, so the Labour Court award and High Court orders were set aside.

Summary

Muir Mills Unit of N.T.C. (U.P.) Ltd. appointed Swayam Prakash Srivastava as a Legal Assistant on a one‑year probation. After the probation period the mill terminated his services for unsatisfactory performance. Srivastava raised an industrial dispute; the Labour Court held he was a workman and ordered reinstatement with back wages. The High Court upheld that award. On appeal, the Supreme Court examined whether a legal assistant earning over Rs.500 per month and performing supervisory duties falls within the definition of "workman" under the U.P. Industrial Disputes Act, 1947, and whether the award directing reinstatement and back wages was perverse. The Court held that the employee was a professional falling under exception (iv) of section 2(z) and therefore not a workman; consequently the termination was not an illegal retrenchment and no back‑wages were payable. The appeal was allowed and the Labour Court award and High Court orders were set aside.

Issues considered

Whether a legal assistant employed on probation, drawing wages above Rs.500 and performing supervisory functions, qualifies as a "workman" under the U.P. Industrial Disputes Act, 1947.
Whether the Labour Court award directing reinstatement with back wages of a probationer whose services were terminated after the probation period is perverse.
Whether wages paid to the respondent for over fifteen years in the absence of gainful employment should be treated as compensation in lieu of reinstatement.

Legislation cited

Industrial Disputes Act, 1947s. 2(oo), s. 2(s)
Sick Industrial Companies (Special Provisions) Act, 1985
U.P. Industrial Disputes Act, 1947s. 2(z), s. 6-N

Subjects

workman definitionprobationary terminationindustrial disputeback wagesreinstatementU.P. Industrial Disputes Actprofessional employeeretrenchmentsick industrial company

Judgment

A MUIR MILLS UNIT OF N.T.C. (U.P) LTD.
v.
SWAYAM PRAKASH SRIVASTAVA AND ANR.

DECEMBER ! , 2006

B [DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.]

UP. Industrial Disputes Act, 1947

Section 2 (z)-'-Workman-legal Assistant in a textile mill's litigation
C department-Held-As his emoluments were over eight hundred rupees and
duties totally supervisory in nature, he was not a workman since he fell
under exception (iv) of section 2 (z) of the Act-It was more so as he was
a professional.

D Section 6 N-Retrenchment-Appointment on probationary basis period
whereof was one year from date ofjoining-Termination of services on expiry
of that period on ground of unsatisfactory performance-Requirement of
notice before termination-Held-No notice was required as appointment 1f'
letter specified date for termination of service.

E Industrial Disputes Act, 1947-Section 2 (S)-Workman-Held-
Distinction has to be drawn between occupation and profession-Former is
a principal activity earning regular wage or salary and latter is an occupation
requiring extensive training, study, mastery of specialized knowledge, and
usually has a professional association, ethical code and process ofcertification
or licensing-Professio.nal can never be termed as a workman under any
F law-Section 2 (z) UP. Industrial Disputes Act, 1947.

Labour law-Back wages-Award of-Held-without finding on gainful
employment of employee and discontinuance of his service being illegal or
in any manner stigmatic, award of backwages is perverse-it was more so
G as the employee had been receiving interim wages for over fifteen years
without having worked at all and without having established his
unemployment.

Labour law-Reinstatement of workman during probation period-
Award of-Labour Court granting reinstatement giving employer right to
H 1028
MUIR MILLS UNITOFN.T.C.(U.P)LTD.1•. SWAY AM PARAKASH SRIVASTAVA 1029.

take a decision on confirmation-High Court maintaining reinstatement A
after expi1y of probation period-Correctness of-High Court was wrong-
Reinstatement rejected more so as the Mill of employer had been shut down
and after lapse of over two decades, it was impracticable to reinstate the
workman.

Appellant, a textile mill, appointed respondent No. 1 as Legal Assistant B.
on a probationary basis, period whereof was one year from the date of joining.
On the expiry of probation period, he was informed that his performance was
found to be unsatisfactory and his services were terminated. Thereupon he
raised an industrial dispute which was referred for adjudication by State to
the Labour Court. The Labour Court held that he was a workman, his C
termination was illegal and he had to be reinstated with back wages. However,
it also observed that it did not have the power to examine the validity of the
termination of the services of a probationer before the completion of probation
period. Aggrieved by this, appellant preferred a writ petition before High
Court. By an interim order, the High Court stayed the operation of the award
of the Labour Court and directed the appellant to continue to pay his future D
salary till further order. The appellants complied with the order of the High
Court. The writ petition was dismissed by High Court holding that the order
of the Labour Court was neither perverse nor it suffered from any error of
law. Hence the present appeal.

On the contentions of the parties following issues arose for decision E
before the Court as to whether (i) legal assistant falls under the definition of
workman under the U.P. Industrial Disputes Act, 1947 (ii) award of Labour
Court was perverse as it directed the reinstatement with back wages of a
probationer whose services had been dis<:ontinued upon completion of the
probationary period on account of unsatisfactory work (iii) respondent No. 1 F
having worked as a probationer for just a year had enjoyed over 15 years of
wages without having worked for the same, even if the termination was illegal,
they be treated as compensation in lieu of reinstatement.

Allowing the appeal, the Court.
G
HELD: 1.1. The emoluments for the month of April, 1983 drawn by
.
.-
respondent No. 1 was Rs. 866.51 and the nature of duties of respondent No.
1 were totally supervisory capacity and he was designated as Legal Assistant
in the Mill's litigation department. So the respondent is not entitled to raise
an Industrial Dispute. 11040-FI
H
f .
.,.
1030 SUPREME COURT REPORTS [2006) SUPP. 9 S.C.R.

A 1.2. From the perusal of the job profile of respondent No. 1 and after
examining section 2 (z) of the U.P.I.D Act, 1947 it can be said that, respondent
No. 1 did not fall into the category of workman. He falls under exception (iv)
of section 2 (z) of the U.P.1.D Act, 1947. (1038-G-HJ

Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh, (2005J 3 SCC 232,
B relied on

A. Sundarambal v. Govt. of Goa, Daman and Diu, 11988) 4 SCC 42, and
HR Adyanthaya v. Sandoz (India) Ltd. AIR (1994) SC 2608, referred to.

. 1.3. Furthermore, a distinetion has to be drawn between occupation and
C profession. An occupation is a principal activity (job, work or calling, that
earns money (regular wage or salary) for a person and a profession is an
occupation that requires extensive training and the study and mastery of
specialized ~owledge, and usually has a professional association, ethical code
and process of certification or licensing. Classically, there were 01i1y three
D professions: ministry, medicine, and law. These three professions each hold
to a specific code of ethics, and members are almost universally required to
swear some form of oath to uphold those ethics, therefore "professing" to a
higher standard of accountability. Each of these professions also provides and
requires extensive training in the meaning, value, and importance of its
particular oath in the practice of that profession. A member of a profession
E is termed a professional. However, professional is also used for the acceptance
of payment for an activity. Also a profession can also refer to any activity from
which one earns one's living, so in.that sense sport is a profession. Th~refore,
it is clear that respondent No. 1 herein is a professional and never can a
professional be termed as a workman under any law. (1041-C-EJ

F 2.1. Perusal of termination order makes it clear that services of
respondent no. 1 were terminated after the completion of the probationary
period. (1043-F(

2.2. It is clear from the clause in the appointment letter and the
G termination letter that the Mill had reserved all rights to discharge from the
service of the Mill the respondent No. 1 without assigning any reasons and
without any notice. (1044-C(

Registrar, High Court of Gujarat & Anr. v. C.G. Sharma, (2005] 1 SCC
132; P.N. Verma v. Sanjay Gandhi PGJ ofMedical Studies, [2002) l SCC 520
H and State of Madhya Pradesh v. VK Chourasiya, (1999] SCC (L&S) 1155,
. ::.
' MUIR MILLS UNITOFN.T.C.(U.P) LTD. v. SWAYMIPARAKASH SRIVASTAVA[LAKSHMANAN.J.] } 031

relied on. A
2.3. Section 6-N, proviso states that' no such notice shall be nece~sary
if the retrenchment is under an agreement which specifies a date for the
termination of service." In the present case on the perusal of the appointment
letter it is clear that no such notice needs to be issued to respondent No. 1.
{1046-C-Dl B
3.1. The award of the labour Court is perverse as it had directed grant
of back wages without giving any finding on the gainful employment of
respondent No. 1 and held that the discontinuance of the services of a
probationer was illegal without giving any finding to the effect that the
disengagement of respondent No. 1 was in any manner stigmatic. (1044-F) C
MP State Electricity Boardv. Jarina Bee (Smt), (2003) 6 SCC 141, State
of Punjab v. Bhagwan Singh, (2002) 9 SCC 636, relied on.

3.2. Respondent No. 1 had been receiving interim wages for over 15
years without having worked at all and without having established his D
unemployment. The High Court failed to appreciate that the award itself had
only granted reinstatement to respondent No. 1 as a probationer giving the
petitioner the right to take a decision on confirmation. Further the Mill itself
has been shut down now and given the lapse of22 years, it was impracticable
to reinstate respondent No. 1 as probationer. (1045-E-F)
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1839of2005.

From the final Judgment and Order dated 1.11.2002 of the High Court
of Judicature at Allahabad in C.M.W.P. No. 22193/1987.

Sanjay Ghose and Anitha Shenoy, for the Appellant. F
Bharat Sangal, Samyadip Chatterji and V. Pattanaik, for the Respondents.

The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. The appellant in the present matter is Muir G
Mills a subsidiary of the National Textile Corporation Ltd. of State of Uttar
Pradesh. The respondent No. I was offered appointment as Legal Assistant
in the litigation section on a probation period of 1 year (in the pay scale of
Rs. 330-560) on 04.06.1982. The appointment letter stated that the said
appointment was on a probationary basis. The period of probation was set
at one year from the date of joining. On 12.06.1982, the respondent No. I H

•
I.
I

1032 SUPREME COURT REPORTS (2006] SUPP. 9 S.C.R. f .J
A joined his duties.
......
. On 23.11.1982, a letter was written by the Senior Legal Assistant to the
General Manager of the Mill stating that respondent No. I had completed 6
months of probation but was not able to understand fully the work of his post
and stated that "His work is not up to the mark; therefore he is of no use
B to us". However, it was decided to give the respondent No. I an opportunity
to improve his performance. It is the case of the appellants that the respondent
No.I was orally informed about the above decision of the appellants.

~
On the expiry of the probation period of the respondent No. I, a letter
dated 04.06.I983 was issued to the respondent No.I stating that, "Your
c performance has not been found satisfactory and as such, you have failed
to complete the probationary period successfully".

On 06.02.1985, respondent No. I raised an industrial dispute which was
referred for adjudication by respondent No.2 the State of Uttar Pradesh, to
the Labour Court in the following terms, "Is termination of the services of the
D
workman Swayam Prakash Srivastava (son of Hori Lal Srivastava), Legal
Assistant by the employers vide their order dated 04.06.1983 is right and/or
legal? If not, the concerned workman is entitled to which benefit/relief and
along with which other details."
•
E On 25.05.198/, the Labour Court delivered an award holding that, the
respondent No. I was a workman and the termination was illegal and that
respondent No. I has to be reinstated within a month of the order with
backwages. The Labour court also observed that the Industrial adjudicator
had no power to examine the validity of the termination of the services of a
probationer before the completion of probation period.
F
Aggrieved by this order of the Labour Court, the appellant preferred a
writ petition being WP No.22 I 93 before the High Court of Judicature, Allahabad ,.
challenging the award of the Labour Court dated 25.05. I 987. By an interim
order dated 02.12.1987, the High Court stayed the operation of the award of
the Labour Court subject to the deposit of one half of the decreed backwages.
G
The appellant was also directed to continue to make payment of the future
salary of respondent No. I till further orders. The respondent No. I was given
the liberty to withdraw the backwages upon furnishing security. The future
salary be withdrawn by respondent No.I without any security. The appellants
complied with the order of the High Court immediately.
H
..,,,

.}
MUIR MILLS UNIT OFNTC. (U.P) LTD. 1·. SWAY AJ\1 PARAKASH SRIVASTAVA [LAKSHMANAN, J.] J033

Muir Mills ceased to be operational in 1991. In the period I 992- I 993, the A
appellants referred to the Board of Industrial and Financial Reconstruction
('BIFR') under the Sick Industrial Companies (Special Provisions) Act ('SICA').
On 05.02.2002 the National Textile Corporation (UP) Ltd, of which the appellants
is a constituent entity was declared as a sick industrial company under the
SICA and 9 of the I I mills ·owned by the said company was directed to be B
closed.

On 0 I .11.2002, the High Court dismissed the writ petition No.22193 of
1987 holding that the High Court will not interfere with the order of the Labour
Court as the same has neither been shown to be perverse, nor suffering from
any error of law. C
By letter dated 9/11.03.2004, the Ministry of Labour, Government of
India approved the formal closure of Muir Mills.

However, on 20.04.2004, the appellant company received a show cause
notice from the Deputy Labour Commissioner asking the appellant to explain D
why a recovery certificate of over ten lakhs be not issued in favour of
respondent No. I.
)

An SLP was filed by the appellant on I6.07.2004 challenging the order
of the High Court dated Ol. I I .2002.
E
The issues that deserve to be settled by this court according to us are:

I. Whether 'legal assistant' falls under the definition of workman
under the Industrial Disputes Act?

2 Whether the High Court failed to appreciate that the award was
perverse inasmuch as it directed the reinstatement with backwages F
of a probationer whose services had been discontinued upon
completion of the probationary period on account of unsatisfactory
work?

3. Whether the High Court failed to appreciate that respondent
No.1 having worked as a probationer for just a year had enjoyed G
over 15 years of wages without having worked for the same and
that in the facts and circumstances even if the termination was
held to be illegal, these wages paid should have been held to be
treated as compensation in lieu of reinstatement?

H
(
~

1034 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A The appellant Mill was represented before us by learned counsel Mr.
Sanjay Ghose, assisted by Ms. Anitha Shenoy, advocate. Mr. Bharat Sangal,
learned counsel appeared for the respondents.

The appellants stated that respondent No. I was not a workman as
understood under the Industrial Disputes Act. The respondent No. I . was
B being paid a sum of Rs. 866.5 I as salary and his work was essentially of
supervisory nature. The nature of respondent No. I, Mr. Swayam Prakash
Srivastava's work was to supervise the court cases and conduct them in the ~
courts for the appellant Mill.

It was submitted on behalf of the appellants that the High Court failed
c to appreciate that the award of the Labour Court was perverse as it directed
the reinstatement with backwages of a probationer whose services had been
discontinued upon completion of the probationary period on account of
unsatisfactory work. In this regard the learned counsel referred to this Court's
decision in the case of Pavanendra. Narayan. Verma v. Sanjay Gandhi PG/
D of Medical Studies & Anr., [2002] I SCC 520, where it was held that the
services of a probationer can be terminated at any time before confirmation,
provided that such termination is not stigmatic.

Learned counsel submitted that the High Court failed to appreciate that
the award of the Labour Court was also perverse as it had directed grant of
E backwages without giving any finding on the gainful employment of
respondent No. I and held that the discontinuance of the services of a
probationer was illegal without giving any finding to the effect that the
disengagement of respondent No. I was in any manner stigmatic. The decision
in the case of MP State Electricity Board v. Jarina Bee (Smt), [2003] 6 SCC
14I was cited in this regard where it was held that payment of full back wages
F was not the natural consequence of setting aside an order of reinstatement. ;,.
In the instant case, though the termination was as far back as in I 983, the
Industrial Adjudicator has not given any finding on unemployment.

It was submitted that the respondent No. I had been receiving interim
G wages for over I 5 years without having worked at all and without having
established his unemployment. The High Court failed to appreciate that the
award itself had only granted reinstatement to respondent No. I as a probationer
giving the petitioner the right to take a decision on confirmation.

The High Court failed to appreciate that respondent No. I having worked
.,,.,
H
MUIRMILLSUNITOFN.T.C.(U.P)LTD. >: SWAYAMPARAKASHSRIVASTA\'A[LAKSHMANAN,J] I035

as a probationer for just a year had enjoyed over 15 years of wages without A
having worked for the same and that in the facts and circumstances even if
the termination was held to be illegal, these wages paid should have been
held to be treated as compensation in lieu of reinstatement.

The appellants further contended that, assuming but not conceding that
the tennination of the service of respondent No. I was illegal, given the fact B
that all that the Labour Court directed was that the respondent be reinstated
as a probationer and given the fact that the Mill itself had been closed down
and the appellant declared a Sick Industrial Company in respect of which a
' revival scheme was sanctioned, the decision of this court in Rolston John v.
Central Government Industrial Tribunal-cum-Labour Court & Ors., [19951 C
Suppl 4 SCC 549 would be applicable and the logical relief would be to be
compensated in lieu of reinstatement, which in the given' case could be
deemed to set off and satisfied by the payment received by respondent No. I
of wages pursuant to the interim order of the High Court dated 02. 12.1987.

It was further submitted that the huge financial liability of Rs.7 lakhs D
in wages to a probationer who had worked for only about a year was something
which the appellant, being a Sick Industrial Company, would find impossible
to bear and if this liability is saddled upon the appellant, it could prejudice
the sanctioned scheme for revival of two remaining mills. Almost 6898
employees have been retired under a voluntary retirement scheme.
E
That the High Court erred in dismissing the writ petition of the appellant
on the ground that the appellant had not complied with the interim order of
the High Court whereas the appellant mill has complied with order dated
2.12.1987 for payment of half of the decreed backwages as early as on
19.1.1988.
F
Concluding his arguments the learned counsel submitted that, the NTC
·i (UP) Ltd. was managing 11 nationalised textile mills in the State of Uttar
Pradesh. On account of huge losses, obsolete technology, excess labour/staff
force the company was referred to the Board for Industrial and Financial
Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) G
Act in the year 1992-1993. The IFCI has prepared a Revival Scheme on the
basis of which the BIFR has approved of a sanctioned scheme. Under the
Scheme, 9 of the 11 mills, including the Muir Mills where respondent No. I had
served as a probationer, have been closed down. About 6898 employees
have opted for VRS. The High Court failed to appreciate that the petitioner-
Company itself had been declared a Sick Industrial Company and the Muir H
;
1036 SUPREME CbURT REPORTS [2006] SUPP. 9 S.C.R.

A Mills wherein the respondent worked had been closed down and the
reinstatement in any event was an impossibility.

That the daim had been raised by the respondent,. a probationer who
had served for orily one year·and who has already received wages for over
15 years amounting to Rs.2.5 lakhs despite no entitlement to the same under
B law and without any proof ofunemployrnent during this period. If a recovery
certificate of over Rs. I 0 lakhs is allowed to be issued in favour of respondent
No. l then the appellant already staggering under a huge financial liability
which the appellant, being a Sick Industrial Company would fine:! impossible
to bear and if this liability is saddled upon the appellant, it could seriously
C prejudice the sanctioned scheme for revival of two remaining mills affecting
the future of about 3000 employees who have been labouring day and night
in· the remaining mills to make the Revival Scheme a success.

The respondents submitted that the respondent No. I was appointed as
Legal Assistant in the appellant's organization where he worked with full
D devotion, sincerity and to the full satisfaction of the employers but his
services were terminated on 04.06.1983 without any reason. It was submitted
that, respondent No.I was on leave on 04.06.1983 and 05.06.1983 (being a
Sunday) and on 06.06.1983 when he went for work he was given the termination
order. Respondent No.I was not issued a charge sheet or notice during the
period before the termination of his services.
E
It was contended that respondent No. I was appointed as legal assistant
but he was not doing any work of supervisory nature and that no body was
working under him. Further it was contended that respondent No. I used to
do parokari on behalf of the Mills and that this type of work cannot be called
F as work of supervisory nature and therefore respondent No. I will qualify to
be workman as defined under section 2(z) of the U.P. Industrial Disputes Act
(U.P.I.D Act), 1947.

It was stated that the termination order comes under the definition or
retrenchment and the employers have not followed the legal process. The
G workman has stated that the termination order comes under the definition of
retrenchment under section 2 of the U.P. Industrial Disputes Act. The definition
of retrenchment is very elaborate in this section and in this connection a
decision of this court was cited, Karnataka State Road Transport
Corporation, Bangalore v. Abdul Qadir which appears on page 89 F.L.R. -
1984-48, where it was observed that, "To protect the weak against the strong
H this policy of comprehensive definition has been effectuated. Termination

-
MUIRMILLSUNITOFN.T.C.(U.P)LTD. v. SWAYAM PARAKASHSRIVASTA\'A [LAKSHMANAN,J.] J037

embraces not merely the act of tennination by the employer but the fact of A
tennination howsoever produced. We are inclined to hold that the stage has
come when the view indicated in Money's case has been 'absorbed into the
consensus' and there is no scope for putting the clock back or for an
anticlockwise operation. Once the conclusion is reached that retrenchment as
defined in section 2(oo) of the Industrial Disputes Act covers every case of B
tennination of service except those which have been embodied in the definition,
discharge from employment or tennination of service of a probationer would
also amount to termination."

It was also contended that there was no evidence whatsoever to prove
that the workman (respondent No. I) was given any warning during the period C
of his service for his unsatisfactory work and therefore tenninating his services
without a reasonable notice is wrong under law.

The respondents further contended that in the present fact scenario
retrenchment is bad under law as conditions under section 6-N is not complied
with. Section 6-N of the U.P. Industrial Disputes Act, 1947, states that, D
"No workman employed in any industry who has been in continuous
)
service for not less than one year under an employer shall be
retrenched b~ that employer until-

(a) The workman has been given one month's notice in wntmg
E
indicating the reasons for retrenchment and the period of notice
has expired or the workman has been paid in lieu of such notice
wages for the period of notice:

Provided that... .. ,

(b) The workman has been paid, at the time of retrenchment, F
compensation which shall be equivalent to fifteen days' average
pay for every completed year of service or any part thereof in
excess of six months ..... "

Therefore, it was submitted that backwages have to be paid to the
retrenched workman. The learned counsel cited a string of cases in support G
of this contention made before us, Surendra Kumar Verma Etc. v. Central
Government Industrial Tribunal-cum- Labour Court, New Delhi & Anr.,
[19811lSCR789, Hindustan Tin Works Pvt. ltd. v. Employees of Hindustan
Tin Works Pvt. Ltd, [1979) I SCR 563, Mohan Lal v. Mgmt. of Mis. Bharat
Electronics Ltd, [ l 98 l] 3 SCC 225, Post Graduate Institute of Medical H
,.
~
1038 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A Education and Research, Chandigarh v. Vinod Krishan Sharma & Anr.,
[2001] 2 SCC 59, JN.Srivastava v. Union of India, [1998] 9 SCC 559 and
Jitendra Singh Rathor v. Shri Baidyanath Ayurved Bahwan Ltd & Anr.,
[1984] 3 SCR 223 where this court has consistently held that in case of illegal
termination of service of a workman, the workman is deemed to be continuing
in service and is entitled to reinstatement with full backwages.
B
We heard the parties in detail and have perused through all the written
records placed before us. We are of the opinion that the arguments of the
appellant merits favourable consideration for the reasons stated infra.

With regard to the question, whether respondent No.I is a 'workman'
c under the U.P.I.D Act, 1947, we are of the view that respondent No.1 is not
a workman under the Industrial Disputes Act. Section 2(z) of the U.P.I.D Act
that is similar to section 2 (s) of the Industrail Disputes Act, 1947 states that:

'"Workman' means any person (including an apprentice) employed in
any industry to do any skilled or unskilled manual, supervisory,
D
technical or clerical 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
E dismissal, discharge or retrenchment has led to that dispute, but does
not include any such person-

(i) xxx
(ii) xxx
F (iii) who is employed mainly in a managerial or administrative capacity;
or
\..
(iv) who, being employed in .a supervisory capacity, draws wages
exceeding five hundred rupees per mensem or exercises, either
by the nature of duties attached to the office or by reason of the
G powers vested in him, functions mainly of a managerial nature."

In the fact situation of this case, from the perusal of the job profile of
respondent No. I and after examining section 2 (z) of the U.P.l.D Act it can
be said that, respondent No. I did not fall into the category of workman as
contended by the respondents as respondent No. I falls under exception (iv)
H of section 2 (z) of the U.P.1.D Act, 1947.
-1
MWRMILLS UNITOFN.T.C. (U.P)LTD. i: SWAYAM PARAKASH SRIVASTAVA (LAKSHMANAN, J.) } QJ9

The case of Sonepat Cooperative Sugar Mills Ltd v. Ajit Singh, [2005] A
3 SCC 232, can be referred to in this context. Here the respondent was
appointed to the post of "Legal Assistant" the qualification for which was
degree in law with a practicing licence. The nature of his duties was to prepare
written statements and notices, recording enquiry proceedings, giving opinions
to the management, drafting, filing the pleadings and representing the appellant
in all types of cases. He was also conducting departmental enquiries against
B
workmen in the establishment. He was placed in probation and his post was
dispensed with, following which he was terminated. He raised an industrial
dispute.

The question before the Labour Court was "Whether the applicant was C
a workman"; Labour Court held he was a workman, which was up~eld by High
Court, Management preferred an appeal to this Court. Following the decisions
of this Court in A Sundarambal v. Govt. of Goa, Daman and Diu, [1988]
4 SCC 42, HR Adyanthaya v. Sandoz (India) Ltd., AIR (1994) SC 2608 and
rejecting SK Verma v. Mahesh Chandra (supra), this Court held:
D
"Thus, a person who performs one or the other jobs mentioned in the
aforementioned provisions only would come within the purview of the
definition of workman. The job of a clerk ordinarily implies stereotype
work without power of control or dignity or initiative or creativeness.
The question as to whether the employee has been performing a
clerical work or not is requirectto be determined upon arriving at a E
finding as regards the dominant nature thereof. With a view to give
effect to the expression to do 'any manual, unskilled, skilled, technical,
operational, clerical or supervisory work', the job of the employee
concerned must fall within one or the other category thereof. It would
not be correct to contend that merely because the employee had not F
been performing any managerial or supervisory duties, ipso facto he
would be a workman"

" ... The Respondent had not been performing any stereotype job. His
job involved creativity. He not only used to render legal opinion on
a subject but also used to draft pleadings on behalf of the appellant G
as also represent it before various courts/authorities. He would also
discharge quasi-judicial functions as an enquiry officer in departmental
enquiries against workmen. Such a job, in our considered opinion,
would not make him a workman."

In A Sundarambal v. Govt. of Goa, Daman and Diu (supra), question arose H
1040 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A as to whether a teacher employed in a school is a 'workman' under s.2(s), here
this Court was of the opinion that:

"The teachers employed by educational institutions, whether the said
institutions are imparting primary, secondary, graduate or postgraduate
education cannot be called as 'workmen' within the meaning ofs.2(s)
B of the Act. Imparting of education which is the main function of
teachers cannot be considered as skilled or unskilled manual work or
supervisory work or technical work or clerical work. Imparting of
education is in the nature of a mission or a noble vocation. The "
clerical work, if any they may do, is only incidental to their principal
work or teaching. It is not possible to accept the suggestion that
c having regard to the object of the Act, all employees in an industry
except those falling under the exceptions (i)-(iv) in s.2{s) of the Act
should be treated as workmen as it will render the words, "to do any ~
skilled or unskilled, manual, supervisory, technical or clerical work"
meaningless. Therefore, the appellant teacher of the school conducted
D by ... was not a workman, though the school was an industry, in view
of the definition of 'workmen' as it now stands."

It can be observed that even before the Labour Court as a preliminary
objection, it was contended by the appellant that, the respondent No. I was
not under the category of workman as defined in section 2 of the U.P.
E Industrial Disputes Act, 1947. Hence the reference order is not covered under
the U.P. Industrial Disputes Act, 1947; and the reference order is totally
vague, bad in law and is liable to be rejected. It was also stated before the
Labour Court that the total emoluments for the month of April, 1983 drawn
by Sri Srivastava were totally in his supervisory capacity and he was designated
as Legal Assistant in the Litigation Department of the Mill and therefore the
F
reference before the Labour Court is not maintainable.
~

Before the Labour Court the respondent was examined as W.W-1. In his
deposition in-chief, he stated on oath that, on 04.06.1982 he was appointed
as the legal assistant in the Mill. In the cross-examination he stated that he
G was appointed in the post of Legal Assistant in the Mill and a total of Rs
850/- per mensem was being paid as salary. One Mr. Naresh Pathak was
examined as E.W.-1, he deposed on oath that he was working as Senior Legal
Assistant since 1971 and that the respondent had worked in his· department
in the post of Legal Assistant in June 1982 in a supervisory capacity and the
work of the respondent No. I was to supervise the court cases and whenever
H ~
~
MUIRMJLLSUNITOFN.T.C. (U.P)LTD.1·. SWAYMIPARAKASHSRIVASTA\'A[LAKSHMANAN.I.) ) Q4 J

A
". necessary to prepare draft reply to matters that are pending in the court. He
also deposed that the work of the respondent was not satisfactory and in this
regard a note was issued to the General Manager. In cross-examination the
witness deposed that he has no document to prove that the nature of work
of the respondent was supervisory. However this was not given any kind of
serious consideration by the High Court while deciding on the claim made by
the respondents.
B

Furthermore if we draw a distinction between occupation and profession
we can see that an occupation is a principal activity Gob, work or calling) that
earns money (regular wage or salary) for a person and a profession is an
occupation that requires extensive training and the study and mastery of
specialized knowledge, and usually has a professional association, ethical
c
code and process of certification or licensing. Classically, there were only
three professions: ministry, medicine, and Jaw. These three professions each
.. hold to a specific code of ethics, and members are almost universally required
to swear some form of oath to uphold those ethics, therefore "professing" to
a higher standard of accountability. Each of these professions also provides D
and requires extensive training in the meaning, value, and importance of its
particular oath in the practice of that profession.
)
A member of a profession is termed a professional. However, professional
is also used for the acceptance of payment for an activity. Also a profession
can also refer to any activity from which one earns one's living, so in that E
sense sport is a profession.

Therefore, it is clear that respondent No. l herein is a professional and
never can a professional be termed as a workman under any law.

The perusal of the appointment order becomes useful here for addressing F
the issue whether the High Court failed to appreciate that the award of the
Labour Court was perverse as it directed the reinstatement with backwages
of a probationer whose services had been discontinued upon completion of
the probationary period on account of unsatisfactory work.
G
"MUIR MILLS

UNIT OF NATIONAL TEXTILE CORPORATION (U.P) Ltd.
SUBSIDIARY OF NATIONAL TEXTILE CORPN. Ltd. NEW DELHI

(A GOVERNMENT OF INDIA UNDERTAKING)
H
~

'
1042 SUPREME COURT REPORTS (2006) SUPP. 9 S.C.R.
,.
,,- .
A Post Box No.33,
Civil Lines,
Kanpur-208 001
Dated: 4th June, 1982
Ref No.
Sri. Swayam Prakash Srivastava,
B S/o Sri. Hori Lal Srivastava,
21/8, Safed Colony, Juhi
Kanpur
Dear Sir,

c With reference to your application dated 24.05.1982 and subsequent
interview you had with us on 27 .05.1982, we have pleasure in offering
you the post of Legal Assistant in the pay scale ofRs.330-10-380-EB-
12-500-EB- 15-560/- with a starting basic pay of Rs.330/- (Rupees
Three hundred Thirty only) per month with effect from the date of
your joining the Mills, on the following terms and conditions:-
D
I. ..... •
2 .....
(
3. You will be on probation for a period of one year from the date
E of your joining the Mills. The probation period of one year can be
extended or curtailed at the discretion of the appointing authority. In
the event of your failure to complete the said probationary period
satisfactorily, you may render yourself liable to be discharged from
the service of the Mill without assigning any reasons and without any
notice. During the period of probation, you can resign from the service
F of the Mill without giving any notice. Unless a letter is issued to you
to the effect that you have completed your probation satisfactorily,
the probation period shall be deemed to have been extended. No
~
increment shall be granted to you unless you have completed the said
probationary period satisfactorily and a letter to this effect has been
issued to you.
G
4. After you having completed the probation satisfactorily, your
services can be terminated by the appointing authority on giving you
one month's notice or pay in lieu thereof. If you wish to resign from
the service of the Mill, you will have to give one month's notice or
pay in lieu thereof to the Mill.
H
~
. .,.
MUIRMILLSUNlTOFN.T.C. (U.P)LID. v. SWAY AM PAR...KASH SRIVASTAVA [LAKSHMANAN, I.] 1043

5..... A
6. Your employment will be governed by all the rules and regulations,
tenns and conditions of service, administrative orders and/or standing
orders presently in force or as may be framed, amended, altered or
extended from time to time and as applicable to the employees of the
Mills. B
7.....
.·~
8.....

9.....
c
10.....

11. ....

12. On attaining the age of 58 years, you shall have no claim to be
continued in the service of the Mill thereafter and your services shall
come to an end automatically.
t>
) 13 .....

14.....
Yours faithfully
E
(for) Muir Mills
Unit of NTC (UP) Ltd.
(A.L. MA THUR)
General Manager"
Also if we peruse through the termination order it is clear that the
respondent No. I was appointed in the capacity of legal Assistant and his F
services were tenninated after the completion of the probationary period.

4th June, I 983
Shri Swayam Prakash Srivastava,
Legal Assistant, G
Muir Mills
Kanpur
Reference para 3 of appointment letter No. PA/16182 dated 4th June,
1982.

.. .... :A
1044 SUPREME COURT REPORTS (2006] SUPP. 9 S.C.R.

A Your performance has not been found satisfactory and as such, you
have failed to complete the probationary period successfully. Your
services are, therefore, being terminated with immediate effect.

Please contact Accounts Dept. on any working day and get your dues
cleared on production of a 'No Demand Certificate' from all the
B concerned.
For Muir Mills
Unit ofNTC (U.P) Ltd.
It is clear from the clause in the appointment letter and the termination
letter that, the Mill had reserved all rights to discharge from the service of
C the Mill the respondent No. I without assigning any reasons ahd without any
notice.

Also in the case of Registrar, High Court of Gujarat & Anr. v.
CG.Sharma, [2005] I SCC I32, it was observed that an employee who is on
D probation can be terminated from services due to unsatisfactory work.

This Court's decision in the case of P.N. Verma v. Sanjay Gandhi PG!
of Medical Studies (supra), can be referred to in this context, where it was
(
held by this court that, the services of a probationer can be terminated at any
time before confirmation, provided that such termination is not stigmatic. This
E Court in State of Madhya Pradesh V. VK Chourasiya, [1999] sec (L&S) I I55
also has held that in the event of a noll-stigmatic termination of the services
of a probationer, principles of audi alteram partem are not applicable.

We are also of the view that the award of the Labour Court is perverse
as it had directed grant of backwages without giving any finding on the
F gainful employment of respondent No.I and held that the discontinuance of
the services of a probationer was illegal without giving any finding to the
effect that the disengagement of respondent No. I was in any manner stigmatic.
The decision in the case of MP State Electricity Board v. Jarina Bee (Smt)
(supra), this court held that payment of full back wages was not the natural
consequence of setting aside an order of reinstatement. In the instant case,
G though the termination was as far back as in 1983, the Industrial Adjudicator
has not given any finding on unemployment. This Court in a recent case of
State of Punjab v. Bhagwan Singh [2002] 9 SCC 636 has held that even ifthe
termination order of the prnbationer refers to the performance being 'not
satisfactory', such an order cannot be said to be stigmatic and the termination
H would be valid.
MUIR MILLS UNITOFN.T.C.(U.P)LTD." SW AYAM PARAKASHSRIVASTAVA [LAKSHMANAN,J.] } 045

Further the Labour Court issued notices to both parties and after A
adducing evidence and hearing both the parties, it has recorded a finding that
the termination of services of the concerned workman, during his service, was
neither based on unsatisfactory work nor the same could have been proved
before the labour court and therefore, the labour court arrived at the conclusion
and recorded a finding that the services of the workman have been terminated
by way of victimization and unfair labour practice. Aggrieved by the aforesaid B
award, the employer-petitioner has come before this court by means of the
present writ petition. An application has been filed by the workman concerned
that the employer has not complied with the aforesaid interim order.

However, we are of the view that, the emoluments for the month of C
April, 1983 drawn by respondent No. I was Rs.866.51 and the nature of duties
of respondent No. l were totally supervisory capacity and he was designated
as Legal Assistant in the Mill's litigation department. So the respondent is
not entitled to raise an Industrial Dispute and also that his services are
governed by all the rules and regulations, terms and conditions of service,
administrative orders and/or standing orders presently in force or as may be D
framed, amended, altered or extended from time to time and as applicable to
the employees of the Mills as is clear from the appointment order of04.06.1982.
Also it is clear from the facts that the appellants have complied with the
interim order of the High Court.

We also observe that the respondent No.I had been receiving interim E
wages for over 15 years without having worked at all and without having
established his unemployment. The High Court failed to appreciate that the
award itself had only granted reinstatement to respondent No. I as a probationer
giving the petitioner the right to take a decision on confirmation. Further the
Mill itself has been shut down now and given the lapse of 22 years, it was F
impracticable to reinstate respondent No. I as a probationer.

It is also pertinent to mention Section 2(oo) of the Industrial Disputes
Act. Section 2 (oo) of the l.D.Act, 1947 states that,

"2. (oo) "retrenchment" means the termination by the employer of the G
service of a workman for any reason whatsoever, otherwise than as
a punishment inflicted by way of disciplinary action but does not
include-

(a) Voluntary retirement of the workman; or
H
1046 SUPREME COURT REPORTS [2006] SUPP. 9 S.C.R.

A (b) Retirement of the workman on reaching the age of superannuation
if the contract of employment between the employer and the workman
concerned contains a stipulation in that behalf; or

(bb) .... .

B (c) ...."

However, this provision is not applicable to the U.P. Industrial Disputes
Act, 1947.

With regard to the contention of the respondents that in the present
C fact sc{;nario retrenchment is bad under law as conditions under section 6-
N, which talks about a reasonable notice to be served on an employee before
his/her retrenchment, is not complied with; we are of the view that an even
under Section 6-N, proviso states that 'no such notice shall be necessary if
the retrenchment is under an agreement which specifies a date for the
termination of service." In the present case on the perusal of the appointment
D letter it is clear that no such notice needs to be issued to respondent No. l.

The respondents had referred to many cases with regard to backwages
to be paid to the retrenched workman. The learned counsel cited a string of
(
decisions of this court in support of this contention. We are however not
addressing this plea of the respondents, as we have already observed that
E respondent No. I is not a workman under the Industrial Disputes Act, 194 7
and the U.P.I.D Act, 1947 and also that the retrenchment was not illegal and
therefore the question of backwages do not arise.

In the result, we allow the appeal preferred by the appellants and set
aside the award of the Labour Court and the orders of the High Court. We
F also observe that no recovery certificate needs to be issued in favour of
respondent No. I, in lieu of the show cause notice issued by the Deputy ...
Labour Commissioner. However we state that the salary that has been already
paid to respondent No. I under the orders of the court will not be recovered
from the respondent. The High Court while passing the interim order dated
G 02.12.1997 in writ petition No. 193 of 1997 while granting stay of the award
of the Labour Court directed the Management to deposit half of the amount
decreed and also continue to deposit the amount of salary of respondent in
future until further orders and that the past award if deposited could be
withdrawn by the workman after furnishing security. However, no security
need be given to the withdrawal of the amount which is to be deposited as
H
• 11
MUIRMILLSUNITOFN.T.C. (U.P)LTD. v. SWAYAM PARAKASH SRIVASTAVA [LAKSHMANA>'\l,J.] { 047
future salary. A
In view of our finding that the respondent is not a workman, he will not
be entitled to payment of half of the decreed amount which was ordered to
be deposited. If the amount has not been withdrawn so far, the Management
is at liberty to withdraw the same from the court deposit. However we are not
~~~ B
v.s Appeal allowed.