The Karnataka High Court released 84 laborers who were dismissed from service 17 years ago

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In a relief to 84 workers dismissed from service nearly 17 years ago, the Karnataka High Court has ordered a private pharmaceutical company to pay a lump sum of ₹3,000 to each of the dismissed workers for terminating them from service without seeking permission from the state government under the provisions of the Industrial Disputes (ID) Act, 1947.

A Division Bench comprising Justice DK Singh and Justice S Rachaiah passed the order while allowing the appeal filed by the dismissed workers of Karnataka Malladi Biotics Ltd., (also known as Embio Ltd.), Mandya.

The bench ruled that the company had illegally circumvented the mandatory provisions of the ID Act by not seeking prior government permission before laying off and laying off 84 employees in 2009, falsely claiming that it employed fewer than 100 persons and was therefore exempt from seeking such permission. Both the Industrial Tribunal and a single judge of the High Court upheld this reduction.

The main dispute centered on whether the pharmaceutical company’s workforce at its Mandya factory, which was later closed, had reached the statutory limit of 100 workers, a prerequisite for invoking the UK chapter of the ID Act, which requires prior government approval for layoffs and retrenchments.

The workers, represented by the Karnataka Malladi Biotics Employees Union, claimed that the management employs 92 permanent workers, 17 watchmen and 28 contract/casual workers, taking the total workforce well beyond the 100 mark. However, the company claimed to have only 92 regular employees. The Tribunal and the Single Judge held that security guards and contract workers could not be considered “workmen” under Section 2(s) of the ID Act.

Rejecting the company’s contention, the Bench said that “any person employed in an industry who performs manual, skilled, technical or operational work for hire or reward is a workman” and that the nature of the employment – whether temporary, casual or permanent – is irrelevant. The Bench also pointed out that the direct supervision and administrative control exercised by the management over security and contract workers brought them squarely within the statutory definition.

The court also drew an adverse inference against the company from willfully withholding key employment records, including muster sheets and attendance books of contract workers, despite a special tribunal order directing their production.

Published – 04 Jun 2026 23:03 IST