Managers are not workmen, says high court

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In a significant verdict that throws light on the issue of who can be considered a workman in the post-liberalization era, Bombay High Court has held in Standard Chartered Bank v Vandana Joshi that the work being rendered by Joshi in her employment as a personal financial consultant cannot be regarded as work of a clerical nature.

Standard Chartered appointed Joshi to its management group in May 2006, and dismissed her the following month for “deficiency in performance of duties”. Joshi challenged the dismissal before the Industrial Tribunal, which in 2009 directed the bank to reinstate her and pay her the salary she would have earned had she remained employed in the position in the interim period.

Asian_employeeThe tribunal found that in the terms of section 2(s) of the Industrial Disputes Act, 1947, Joshi should be considered a workman who performed work of a clerical nature, rather than an employee operating at a managerial level. The tribunal reached this finding on the basis that Joshi’s duties did not include supervisory functions (such as recommending leave or initiating disciplinary action in relation to subordinate employees), and because her work was subject to supervision and approval by senior managers.

Standard Chartered appealed against the tribunal order to the high court. In overruling the order of the tribunal, the court held that Joshi could not be treated as a workman within the meaning of section 2(s) of the Industrial Disputes Act, owing to the nature of the duties she performed in her position as a financial consultant.

In relation to what constitutes “work of a clerical nature”, the court held that the tribunal ought not to have relied on superficial indicators such as whether Joshi’s duties included supervisory responsibilities. The court noted that in modern corporations, not every managerial employee has the power to appoint, dismiss or otherwise supervise personnel. Further, the court held that the fact of an employee’s decisions being subject to verification or to a system of controls does not establish that the employee is a workman within the meaning of section 2(s) of the Industrial Disputes Act. In other words, managers do not become workmen merely because their decisions are structured by processes and approvals.

Instead, the court found that the substantive issue was the nature of Joshi’s duties and responsibilities in her appointed position. Joshi’s appointment was related to the “management of personal banking customers which formed a part and parcel of the business activity of the bank”. Joshi argued that this was a clerical task because she was answerable to, and was required to work under the instruction of, the branch manager. However, the high court overruled her contentions and held that they did not prove the clerical nature of her job.

The decision is significant because the court has held that the test that one must employ in such a case to determine whether an employee is a workman is what is the primary, basic or dominant nature of duties for which the person whose status is under enquiry was employed. A few extra duties would hardly be relevant to determine a person’s status. Nomenclature is immaterial and words like managerial or supervisory have to be understood in their proper context. Their mere use should not detract from the truth. The determinative factor is the main duties of the employee concerned and not the nomenclature or some works incidentally done.

The update of court judgments is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at [email protected] or [email protected] Readers should not act on the basis of this information without seeking professional legal advice.