--- title: "Karnataka High Court on inclusion of contract labour in computing the strength of workmen" date: 2026-07-27 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/contract-labour-workmen-strength-section-25k/ --- # Karnataka High Court on inclusion of contract labour in computing the strength of workmen Posted On - 27 July, 2026 • By - King Stubb & Kasiva In the case of *Workmen of Karnataka Malladi Biotics Ltd. v. Karnataka Malladi Biotics Ltd*, *(2026 SCC OnLine Kar 4017)* (*Karnataka High Court, 03rd June, 2026*), the Division Bench addressed whether contract labourers and security guards should be counted as “workmen” for the purposes of **Section 25K** of the Industrial Disputes Act, 1947. The ruling reversed earlier findings and held that the establishment employed over 100 workmen, thereby attracting Chapter V-B. ## Background of the Dispute The respondent-establishment **laid off and subsequently retrenched 84 workmen** in 2009. The affected workmen challenged the action, contending that the establishment’s total workforce crossed the 100-worker threshold prescribed under Chapter V-B (Sections 25M and 25N) of the Industrial Disputes Act, 1947. ## Findings of the Industrial Tribunal and Single Judge The Industrial Tribunal and the learned Single Judge dismissed the workmen’s claims. They held that the respondent employed only **92 “regular” workmen** and excluded certain categories from the computation under Section 25K. Specifically, the lower forums reasoned as follows: - **17 security guards** were excluded on the ground that they did not fall within the definition of “workmen” under Section 2(s). - **28 contract labourers** were similarly excluded from the computation under Section 25K. - With these exclusions, the total fell below the 100-worker threshold required for attracting Chapter V-B (Sections 25M and 25N). ## Division Bench Ruling on Workman Status The Division Bench reversed these findings. It held that **Section 2(s) does not condition workman status upon permanency of employment**. The Bench established the following key principles: - Any person engaged for hire or reward under the **supervision and control of the employer** qualifies as a workman. - This status applies regardless of whether the tenure is contractual or casual. - Security guards and contract labourers therefore ought to have been included in the computation under Section 25K. ## Adverse Inference for Withholding Evidence Additionally, the Bench invoked **Section 114, Illustration (g) of the Indian Evidence Act, 1872**. It drew an adverse inference against the management for wilfully withholding muster rolls and attendance registers despite a Tribunal direction. The Court held that the **withheld evidence would have been unfavourable to the management**, further supporting the conclusion that the workforce exceeded the statutory threshold. ## Outcome: Chapter V-B Held Applicable Consequently, the establishment was found to have employed **over 100 workmen**, attracting Chapter V-B of the Industrial Disputes Act, 1947. The lay-off and retrenchment of the 84 workmen were therefore subject to the prior-permission requirements under Sections 25M and 25N. *Last Updated on 27 July, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)