Holding

The respondent's case is covered by Section 18 of the Apprentice Act, 1961 and not by the Industrial Disputes Act, 1947; therefore the Labour Court and High Court erred in treating him as a workman.

Summary

The respondent, V. Lakshminarayanan, joined National Small Industries Corp. Ltd. as a casual labourer in 1987 and was later appointed as an apprentice trainee (shop assistant) on 26 April 1990 for a two‑year training period. He was removed from service on 1 May 1992. The Labour Court held he was a workman under the Industrial Disputes Act, 1947 and ordered reinstatement with back wages; the High Court upheld that view. On appeal, the Supreme Court examined whether the respondent should be treated as a "workman" under Section 2(s) of the Industrial Disputes Act or as an apprentice trainee governed by Section 18 of the Apprentice Act, 1961. The Court found that the appointment letter and subsequent correspondence clearly designated him as an apprentice trainee, and that Section 18 of the Apprentice Act expressly excludes apprentices from the ambit of labour laws. Consequently, the Court held that the Labour Court and High Court erred in applying the Industrial Disputes Act, and set aside their orders.

Issues considered

Whether the respondent was a "workman" within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 or an apprentice trainee within the meaning of Section 18 of the Apprentice Act, 1961.
Whether the termination of the respondent's apprenticeship violated Section 25F of the Industrial Disputes Act, 1947 and entitled him to reinstatement and back wages.
Whether the exception in clause (bb) of Section 2(oo) of the Industrial Disputes Act would preclude the application of Section 25F even if he were a workman.

Legislation cited

Industrial Disputes Act, 1947s. 128, s. 178, s. 25F, s. 2(oo), s. 2(s)

Subjects

apprenticeshipworkman definitionIndustrial Disputes ActApprentice Acttermination of servicereinstatementlabour lawSection 25FSection 18

Judgment

.....
NATIONAL SMALL "INDUSTRIES CORPN. LTD. A
v.
V. LAKSHMINARAYANAN

NOVEMBER I0, 2006

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

Apprentice Act, 1961-s.18-Respondent appointed as apprentice-
Required to undergo training period of two years-Removed from service-
Held: His case is covered by s.18 ofApprentice Act and not s.2(s) ofIndustrial C
Disputes Act, 1947-Lahour laws.

In 1987, respondent-workman joined as casual labourer in Marketing
Division of appellant on daily wages. Respondent was performing dispatch
work, remitting money by going to the regional office, cleaning articles and
delivering goods. While working with the appellant, he was called for direct D
interview for the post of Apprenticeship trainee (Shop Assistant) and was
selected as per Order dt. 26th April 1990. The training period was for two
years. On 1st May, 1992, he was removed from service. Respondent raised
industrial dispute. Labour Court held that the respondent had been performing
a full-time job and hence his dismissial from service was not justified and
ordered reinstatement with back wages. Appellant unsuccessfully filed writ E
petition before High Court.

In appeal to this Court, question for consideration is whether the
respondent was, a workman within the meaning of Section 2 (s) of the lndustiral
Disputes Act, 1947 or an apprentice trainee within the meaning of Section
18 of the Apprentice Act, 1961. F
Allowing the appeal, the court
HELD:l. The respondent's case was covered by the provisions of Section
18 of the Apprentice Act, 1961. Both the Labour Court as well as the High
Court erred in proceeding on the basis that the respondent was a workman to G
whom the provisions of the Industrial Disputes Act, 1947 would be applicable.
(830-D-E)
2. Under Section 2(s) of 1947 Act, 'workman' includes an apprentice
However, Section 18 of the 1961 Act defines that apprentices are trainees
~I H
822 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.
.....
A and not workers. Thus, on the one hand while an apprentice is also treated to
be a workman for the purpose of the 1947 Act, by virtue of Section 18 of the
1961 Act, it has been categorically provided that apprentices are not workers
and the provisions of any law with respect to labour shall not apply to or in
relation to such apprentice. [828-A, B, DJ ·
B 3.1. Leiter dated 29th April, 1992, written by the respondent to the
appellant-corporation indicate that he had been appointed as Sales Assistant
(Apprentice) for a period of two years with effect from 3rd May, 1990 and the
period was to expire on 2nd May, 1992. In this letter, the respondent requested
the appellant-corporation to consider his absorption on a permanent basis in
view of the fact that he had been working in the organization for six years. It
C is only on 5th February, 1993, that the respondent's lawyer wrote to the
appellant-corporation indicating that at the interview held on 13th April, 1990
for appointment to the post of Apprentice Trainee (Shop Assistant), it had been
agreed to absorb him in Group 'D' Category after completion of his
apprenticeship. From the aforesaid documents it would be evident that even if
D the respondent had been working on a daily-wages basis prior to his
appointment as Apprentice Traniee (Shop Assistant), at least from 3rd May,
1990 till 2nd May, 1992, he was working as an apprentice on a consolidated
salary. Other than the assertion made on behalf of the respondent that the
appellant had agreed to absorb the respondent in Group 'D' Category as Peon/
Shop Assistant afte completion of apprenticeship and the recommendation said
E to have been made by the General Manager indicating that the respondent
could be appointed and taken as a permanent worker, there is no other
material to support the case made out by the respondent. In the absence of
any such mMerial, it is difficult to understand the reasoning of the Labour
Courfthat the respondent was not an "apprentice trainee" but a "workman"
who was made to perfrom a full-time job under the guise of an Apprentice
F
Trainee. [829-B-H]
3.2. The High Court appears to have been impressed by the resoning of
the Labour Court with regard to the finding that although designated as an
apprentice, the respondent was not undergoing training, but was _an employee
G doing full time work in the establishment. Such a view, is not supported by
the materials on record and is completely contrary to the appointment letter
issued to the respondent on 26th April, 1990 and the respondent's own letter
dated 29th April, 1992, in admission of such fact. There is nothing on record
to indicate that the respondent's service had ever been regularized or that
he was brought on the rolls of the permanent establishment.
H (829-H; 830-A~B).
NATIONAL SMALL INDUSTRIES CORPN. LTD. v. V. LAKSHIMNARAYANAN [ALTAMAS KABIR, J.] 823

4. Even if it is accepted that the respondent was a workman within the A
meaning of the 1947 Act, on account of his contractual tenure, his case would
come within the exception of clause (bb) of Section 2(oo) thereof. In such a
case also, the provision of Section 25F of the said Act would have no applicatiom
[830-C-D)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4782 of2006.
B
From the Judgment and Order 28.3.2005 of the High Court of Judicature
at Madras in W.A. No. 539/2005. '

Shobha for the Appellant.

N.G.R. Prasad, S. Guru Kirshna Kumar and S.R. Setia for the Respondent. C
The Judgment of the Court was delivered by

ALT AMAS KABIR, J. Leave granted.

The short point for decision in these appeals is whether in view of, D
Section 18 of the Apprentices Act, 1961 (hereinafter called the "1961 Act")
the 1st Addi. Labour Court, Chennai, was justified in holding that the
respondent who had been appointed as an apprentice by the appellant herein
was a "workman" within the meaning of Section 2 (s) of the Industrial Disputes
Act, 1947 (hereinafter referred-fo as the ' 1947 Act'). The said question also
gives rise to the issue as to whether the Labour Court was right in holding · E
that the termination of the respondent's apprenticeship was in violation of
Section 25-f of the 1947 Act and consequently whether he was entitled to,
reinstatement with continuity in service and all back wages and other
concessions accruing to him.

A few facts are required to be set out to appreciate the award passed F
by the Labour Court.

The case made out by the respondent before the Labour Court under
Section 2 (a) of the 1947 Act was that he had joined the appellant herein as
a casual labourer on daily wages on 6th April, 1987. According to him he had G
continued to work in the Marketing Development Centre of the appellant at
Nungambakkam on daily wages at Rs. 15/- per day continuously till 2nd May,
1990. It was also his case that while working with the appellant he had been
calledfor a direct interview on 13th April, 1990 for the post of Apprenticeship ·
Trainee (Shop Assistant) and that he was selected as per the Order dated 26th
April, 1990. It was asserted by the respondent that during the l st year he was H
824 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.

A paid a salary of Rs.600/- per month and during the 2nd year he was paid
Rs.750/- per month as salary and after the training period was over, the
appellant herein had agreed to appoint him as· a Peon. It is his case that on
8th July, 1991, he was transferred to the Government Purchase Section of the
Regional Office where he was made to perform dispatch work. Suddenly, on
lst May, 1992, without any reason or inquiry, he was removed from service
B and that since he had served continuously f<;)r more than 240 days, his
removal from service should be treated as retrenchment since the appellant
herein had not followed the procedure indicated in Section 25-F of the 1947
Act.

C The further case of the respondent was that while juniors were allowed
to continue in service, he was not reinstated and his removal from service
without any reason violates the provisions of Section 25-F of 1947 Act.

The appellant herein had chosen to remain silent despite the several
letters written on behalf of the respondent and ultimately an application was
D filed before the Labour Officer on 30th March, 1993. However, since the
conciliation failed, the respondent was compelled to pray for reinstatement
with continuity of service and other concessions.

The case made out by the respondent was completely denied by the ·
appellant herein and it was stated in its counter that the respondent had
E applied to the appellant for appointment to the post of Staff Assistant
Apprentice Trainee and that in the interview dated 13th April, 1990 he was
selected and orders were passed in this regard on 26th April, 1990 wherein
it was specifically mentioned that the training period would be for two years
only. It was also mentioned that during the period of training in the lst year
F consolidated wages of Rs.600/- per month would be paid and during the 2nd
year a sum of Rs. 750/- per month would be paid. The respondent was directed
to report for training before 3rd May, 1990 and the training period consequently
came to an end on 2nd May, 1992. On 29th April, 1992, the respondent
requested the appellant to confirm him in service and by subsequent letters
dated 12th August, 1992 and 7th December, 1992, the respondent requested
G the appellant to make him permanent. Only thereafter notices were issued by
the respondent through his advocate indicating that he had been removed
from service without any reason or without holding any inquiry in violation
of Section 25F of the 194 7 Act. It was also contended on behalf of the
appellant that since the two years training period of the respondent as a
H trainee had come to an end, he was not entitled to any relief as prayed for.
NATIONAL SMALL INDUSTRIES CORPN. LTD. v. V. LAKSHIMNARAYANAN [AL TAMAS KABIR, J.J 82~

In order to decide the dispute the Labour Court framed the following issues:" A
"1. Whether it is correct to say that the petitioner was employed
only as a trainee in the respondent/Management, as contended
by the respondent?

2. Whether the removal of the petitioner from service is justifiable? B
3. If not, what is the relief for which the petitioner is entitled.?"

After examining the evidence which had been adduced on behalf of the
parties, the Labour Comt recorded that the.respondent herein had joim:d as
a casual labourer on 6th April, 1987 in the Marketing Development Centre
under the management of the appellant in the Eldorado Building at a daily C
wage of Rs.12/- which was subsequently enhanced to Rs.15/-. It was also
recorded that the respondent herein was performing dispatch work, remitting
money by going to the regional office, cleaning articles and delivering goods
sold to customers and in this background he was offered the post of Apprentice
Trainee (Shop Assistant) for which he was selected on 26th April, 1990 and
, was paid a sum of Rs.600/- per month during the 1st year of training, whidh D
amount was increased to Rs. 750/- per month during the 2nd year of training.
It was also recorded that although the respondent was appointed as Apprentice
Trainee (Shop Assistant), he continued to do the same work. lt was also
recorded that while perusing Ex. W-7, it was noticed that the appellant had
agreed to engage the respondent as a Peon in 'D' Category or as a shop E
assistant. It was also seen from letters exchanged between the parties that tile
respondent who had been serving as a casual labourer had been recommended
for appointment to a permanent post by the General Manager.

Basing its judgment on the aforesaid material, the Labour Court accepted
the case made out by the respondent and held that the case made out on F
behalf of the appellant that after the period of apprenticeship, the respondentis
connection with the appellant had ended, was not acceptable. The Labour
Court also came to the conclusion that even after joining as apprentice and
shop assistant on 3rd May, 1990, the respondent had served in the show
room and performed the same work which he had performed previously and G
had been performing a full-time job and hence his dismissal from service was
not at all justified. In view of its aforesaid findings, the Labour Court ordered
that the respondent be reinstated in service with continuity, together with
back wages and all other concessions accruing to him.

On 23rd June, 1997, the appellant challenged the award passed by the H
826 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Labour Court by way of a Writ Petition before the Madras High Court, being
No.9462/1997. On the said petition, the learned Single Judge stayed the award
and such stay was confirmed on 4th September, 1998 by the learned Single
Judge with a direction upon the appellant to deposit a sum of Rs.63,00Q/-
before the Labour Court within 12 weeks and further directed that the said
sum be invested in fixed deposit in a nationalized bank and the interest of the
B same be released to the respondent once in six months. There was a further
direction upon the appellant to pay ~s.750/- per month to the respondent and
to pay all the arrears within 12 weeks from the date of the order.

The said order of the learned Single Judge dated 4th September, 1998
C was challenged by the appellant in appeal being Writ Appeal No.1364/1998.
On 25th April, 2002, the Division Bench stayed the operation of th~ order of
the learned Single Judge dated 4th September, 1998 and moqifieq the interim
order in so far as it related to payment of wages under Section 178 of the
1947 Act. A direction was given that such payment was to be made under
Section 128 of the said Act from October, 1998 till the disposal of the Writ
D Appeal. The arrear of wages under Section 178 up to April 2002 was also
required to be paid on or before 15th May, 2002 and future monthly wages
on or before the I 0th of every succeeding month, failing which the stay would
stand automatically vacated. On 16th September, 2004, the Writ Appeal was
disposed of with the following directions:-

£ "The appellant (NSIC) shall pay to second respondent (Shri V. Lakshmi
Narayanan) directly by way of cheque a sum of Rs.15,000/- which
represents the interest on Rs.63,000/- from the date of the impugned
order till date, within a period of 4 weeks from today and in future,
the appellant shall pay to the second respondent interest @ 4% p.a.
F on Rs.63,000/- every quarter till the disposal of the Writ Petition
No.9462of1997."

The writ petition itself came up for hearing on 20th September, 2004
before the learned Single Judge who dismissed the same and confirmed the
award of the Labour Court dated 20th March, 1997. A restoration petition was
G also dismissed on 3rd January, 2005. The appellant thereupon filed another
Writ Appeal against the order of the learned Single Judge dismissing the writ
petition and the subsequent Qrder dismissing the restoration petition, bein~
Writ Appeal No.539/2005. On 28th March, 2005, the Division Bench dismissed
the Writ Appeal upon holding tqat although the r-espondent was designated
as an apprentice, in fact, he was not an apprentice but aq employee doing
H
NATIONAL SMALL INDUSTRIES CORPN. LTD. v. V. LAKSHIMNARAYANAN [AL TAMAS KABIR, J.J 827

full time work in the establishment. A
The present appeal is directed against the said judgment and order of
the Division Bench dated 28th March, 2005.

The other appeal is directed against the order of the learned Single
Judge of the Madras High Court dated 20th September, 2004 dismissing the B
appellant's Writ Application.

Since the same set of facts will be relevant for a decision in both the
appeals, they have been taken up together for disposal and are being disposed
of by this judgment.
c
The entire dispute centers round the question as to whether the
respondent was, in fact, a workman within the meaning of Section 2 (s) of the
1947 Act or an apprentice trainee within the meaning of Section 18 of the 196!1
Act.

Section 2 (s) of the 1947 Act defines "workman" in the following terms:- D
"2 (s). 'workman' means any person (including an apprentice) employed
in any industry to do any manual, unskilled, skilled, technical,
operational, clerical or supervisory work. for hire or reward, whether
the terms of employment be express or implied, and for the purposes
of any proceeding under this Act in relation to an industrial dispute, E
includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of, that dispute,
or whose dismissal, discharge or retrenchment has led to that dispute,
but does not include. any such person

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the F
Anny Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957);
or

(ii) who is employed in the police service or as an officer or other
employee of a prison ; or
G
(iii) who is employed mainly in a managerial or administrative
capacity; or

(iv) who, being employed in a supervisory capacity, draws wages
exceeding one thousand six hundred rup~~es per mensem or
exercises, either by the nature of the duties attached to the office H
828 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A or by reason of the powers vested in him, functions mainly of
a managerial nature."

From the above, it will be seen that a "workman" includes an
"apprentice". However, Section 18 of the 1961 Ac.t defines that apprentices
are trainees and not workers in the following terms:-
B
"18. Apprentices are trainees and not workers.
Save as otherwise provided in this Act,-

(a) every apprentice undergoing apprenticeship training in a designated
trade in an establishment shall be a trainee and not a worker; and
c
(b) the provisions of any law with respect to labour shall not apply
to or in relation to such apprentice."

From the above, it will be seen that on the one hand while an apprentice
is also treated to be a workman for the purposes of the 1947 Act, by virtue
of Section 18 of the 1961 Act, it has been categorically provided that apprentices
are not workers and the provisions of any law with respect to labour shall
not apply to or in relation to such apprentice.

We have been taken though the letter issued on behalf of the appellant
to the respondent on 26th April, 1990 with reference to the intervje"Y held on
E 13th April, 1990, for being engaged as Apprentice Trainee (Shop Assistant).
From the said order it is very clear that the respondent was appointed as an
apprentice and that the duration of his apprenticeship training would be two
years from the date on which he reported for such training. It was also
indicated that he would be paid a consolidated stipend of Rs.600/- per month
p during the first year and on satisfactory completion of the first year, he would
be paid at the rate of Rs. 750/- per month during the second year. It was further
stipulated that the respondent would be entitled to 15 days leave every year
during the period of apprentice training. Paragraph 5 of the aforesaid letter,
which seems to be in consonance with Section 22 of the 1961, Act states as
follows:-
G
"On completion of y9ur apprentice training satisfactorily, you will be
eligible to apply for consideration for recruitment to any post in Group
'D' Category (present Scale 196-290) subject to availability of vacancies
and recruitn:ient rules of the Corporation."

H
NATIONAL SMALL INDUSTRIES CORPN. LTD. "· V. LAKSHIMNARA YANAN [AL TAMAS KABIR. J.] 829

It also appears from the letter dated 3rd May, 1990, written by the A
. respondent to the Joint Manager (Marketing) of the appellant-corporation
that pursuant to the letter of 26th April, 1990, he reported for duty on 3rd
May, 1990 as Apprentice Trainee (Shop Assistant) in the Marketing
Development Centre.

We have also been shown a letter dated 29th April, 1992, written by the· B
respondent to the Regional General Man,..ger of the appellant-corporation ,
indicating that he had been appointed as Sales Assistant (Apprentice) for a
period of two years with effect from 3rd May, 1990 and the period was to
expire on 2nd May, 1992. In his said letter, the respondent requested the
authorities of the appellant-corporation to consider absorbing him on a , C
permanent basis in view of the fact that he had been working in the
organization for six years. It is only on 5th February, 1993, that the respondent's
lawyer wrote to the appellant-corporation indicating that at the interview held
on 13th April, 1990 for appointment to the post of Apprentice Trainee (Shop '
Assistant), it had been agreed to absorb him in a Group 'D' Category after
completion of his apprenticeship. It was also alleged that the termination of D
the respondent's service would amount to retrenchment.

From the aforesaid documents it would be evident that even if the
respondent had been working on a daily-wage basis prior to his appointment
as Apprentice Trainee (Shop Assistant), at least from 3rd May, 1990 till 2nd
May, 1992, he was working as an apprentice on a consolidated salary and the E
respondent himself was conscious of such fact since he had requested the
corporation and its authorities to absorb his services on a permanent basis
purportedly on the basis of a promise held out at the time when he was
interviewed for appointment to the post of Apprentice Trainee (Shop Assistant).
Other than the assertion made on behalf of the respondent that the appellant F
had agreed to absorb the respondent in Group 'D' Category as Peon/Shop
Assistant after completion of apprenticeship and the recommendation said to
have been made by the General Manager indicating that the respondent could
be appointed and taken as a permanent worker, there is no other material on
record to support the case made out by the respondent.
G
In the absence of any such material, it is difficult to understand the
reasoning of the Labour Court that the respondent was not an "apprentice
trainee" but a "workman" who was made to perform a full-time job under the
guise of an Apprentice Trainee. The High Court appears to have been impressed
by the reasoning of the Labour Court with regard to the finding that although
designated as an apprentice, the respondent was not undergoing training, but H
830 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A was an employee doing full time work in the establishment. Such a view, in
our judgment, is not supported by the materials on record and is completely
contrary to the appointment letter issued to the respondent on 26th April,
1990 and the respondent's own letter dated 29th April, 1992, in admission of
such fact. Had such a letter of appointment not been available, the Labour
Court and/or the High Court could justifiably have embarked on an exercise
B as to whether the respondent ·was in effect a "trainee" under the Apprentices
Act, 1961, or a "workman" within the meaning of Section 2 (s) of the 1947 Act.
There is nothing on record to indicate that the respondent's services had ever
been regularized or that he was brought on the rolls of the permanent
establishment.
c Even if it is accepted that the respondent was a workman within the
meaning of the 1947 Act, on account of his contractual tenure, his case would
come within the exception of clause (bb) of Section 2(oo) thereof. In such a
case also, the provisions of Section 25F of the said Act would have no
application to the respondent's case.
D
In the aforesaid circumstances, we are of the view that the respondent's
case was covered by the provisions of Section 18 of the I 961 Act and both
the Labour Court as well as the High Court erred in proceeding on the basis
that the respondent was a workman to whom the provisions of the I 947 Act
would be applicable.
E
The appeals are accordingly allowed and the judgment and orders under
appeal are set aside. This order will no.t affect the payments already made to
the respondent from time to time under the orders of the Courts.

Having regard to the facts involved there will, however, be no order as
F to costs.

D.G. Appeals allowed.