Supreme Court Restores Labour Court Award, Holds "Dominant Nature" Test Determines Who Is a Workman

A Bench of Justices Prashant Kumar Mishra and N. V. Anjaria heard an appeal challenging whether the appellant qualified as a “workman” under Section 2(s) of the Industrial Disputes Act, 1947, and whether the High Court erred in setting aside a Labour Court award that had directed reinstatement with back wages.

The Court allowed the appeal, held that the employee fell within the statutory definition of “workman,” set aside the High Court order, and restored the Labour Court’s judgment and award directing reappointment and full back wages. The Court applied the “dominant nature” test to determine the character of employment and observed that nomenclature or designation could not determine statutory status. The Court, in its reasoning, observed: “Therefore, the acid test is, what may be called the dominant nature test to determine whether the employee is a ‘workman’ or not. It is the dominant nature of work or the main employment to which the employee is engaged, that would make or unmake the status as a ‘workman’ for such employee. This test is based on the realistic consideration of the principal nature of work performed by the employee. On the other hand, incidental trapping of supervisory work does not make an employee the supervisor. Even in manual duties, certain supervisory work would be in-built, but it cannot be a ground to exclude the employee from the definition of workman. What is to be applied is the acid test of dominant nature. Supervisor may have to perform clerical work attendant to his principal job.” The Court further noted that “the nomenclature or the designation given to the appellant was an eyewash,” and directed compliance with the Labour Court award within two weeks.

Background The dispute arose from the termination of an employee who had worked for some 12–13 years at M/s Sai International Hotels Private Limited, Rayagada. The appellant, appointed as a cashier/front office executive on 09.03.2005, alleged that he performed duties under managerial direction, received provident fund and insurance benefits, and that his salary was suddenly stopped. The employer issued a letter dated 09.11.2018 stating that his services were terminated with effect from 22.04.2018 and offered one month’s notice pay. The appellant filed a Reference under the Industrial Disputes Act in July 2019.

The Labour Court found that the establishment constituted an “industry,” that the dispute was an “industrial dispute,” and that the appellant was a “workman” under Section 2(s). It recorded that the appellant had rendered continuous service exceeding 240 days in a year, held the termination to be in breach of Section 25-F, and directed reinstatement with back wages. The management challenged that award in the Orissa High Court, which reversed the Labour Court on the ground that the employee performed supervisory or managerial duties and therefore fell outside the definition of “workman,” relying on precedents including Syed Yakoob and National Engineering Industries Ltd.

Before the Supreme Court, counsel for both parties argued the nature of duties and the significance of designation. The Court surveyed earlier authorities (including Lloyds Bank, Anand Bazar Patrika and related decisions) and reiterated that the predominant or substantial nature of duties — the “dominant nature test” — determines whether an employee was a workman. Applying that test to the record, the Court found that the appellant’s duties were principally clerical/manual (receptionist, cashier, handling hotel boys) and that there was no evidence of independent supervisory authority. The Court therefore held that the High Court erred, restored the Labour Court award and ordered compliance within two weeks. The appeal was allowed and interlocutory matters stood disposed of.

Case No.: 2025 INSC 1467 Case Title: Srinibas Goradia v. Arvind Kumar Sahu & Ors. Appearances: For the Petitioner(s): Mr. Rajdipa Behura, Advocate For the Respondent(s): Mr. Kedar Nath Tripathi, Advocate; Mr. Aditya Narayan Tripathi, Advocate