History- WEEK-1

History of Labour Legislation in India – with emphasis on the consolidation of existing

labour legislation under the new labour codes | Pre- WWII history of labour legislation in
India, A Critical Review of the Institutional Incentives Underlying Labour Regulation | New
Labour Codes – A Brief Overview | A Description (Structure, Functions, and Context for
Creation) of: a) Works Committee, Grievance Redressal Committee, Conciliation, Industrial
Tribunal and Labour Court

1) Powers and Duties of the Industrial Relations Code – contrasted against the Industrial
Disputes Act 1947
2) Review of the two cases: Kemp and Co. Ltd vs Their Workmen (1955) & M/s North
Brook Jute Co. Ltd V Their Workmen,
3) Broad Review of Chapter II and VII of the Industrial Relations Code

(Brief Notes) – primarily taken from: The Evolution of Labour Law in India: An Overview
and Commentary on Regulatory Objectives and Development – Richard Mitchell et al | Much
of these are covered in the Brennan Paper on Industrial Labour in Post-Colonial India:
Industrializing the Economy and Formalizing Labour [These Cover most of the answers to
Q1]

1. Ornati’s classification of the three distinct periods in the evolution of labour law:
a) Directed predominantly towards labour supply and control (Indian version of the
Masters and Servants provisions of English law) | interest convergence between
protectionists in Britain and social reformers in India | between 1880s and 1930s |
did little to seriously modify the working conditions of labour and the relationship
between the employer and the worker
b) The second period emerged with provincial autonomy in the second half of the
1930s (INC’s focus on worker’s rights: std of living, right to strike, trade unions
etc.)
c) Post-Independence legislation in the late 1940s and early 1950s
2. (Were a and b irrelevant as Ornati suggested?)  the authors seem to think that the
influence of the ILO, and the Royal Commission on Labour were major advances that
pushed the jurisprudential needle so to speak | they classify labour-law-development
into six periods
a) Pre 1920s: Industrialization (shift from rural  urban) | forced labourers for
public works | little attention to the organization of work by colonial authorities
beyond penal provisions that were aimed at securing labour supply and discipline
for emerging industries (refer to labour crimping) | quite counterintuitive
normative frameworks compared to the modern era: Workmen’s Breach of
Contract Act provided for the punishment of breaches of contract by workmen and
labourers in certain cases – enforced through fines and specific performance |
While these legislations made very little inroads into the working practices of
industries, they began exploring matters relating to the employment of women and
children, and concerning hours of work, in factories and mines | Regulation in the
planation sector was focused principally on matters relating to labour supply and
problems of the indentured labour system.

b) Post-WW I and the 1920s: Emergence of Trade Unions, and the AITUC in 1920 |
the influence of the Bolshevik revolution in Russia | the ILO’s influence on labour
policy | Continuation of the factory style of regulation (so it still typically
concerned hours of work, rest periods, female and child protections, health and
safety, etc.) | E.g.: Mines Act, 1922, the Workmen’s Compensation Act 1923,
Factories Act 1922 – ratification of relevant ILO conventions by the colonial
Indian government | While some scholars refute the importance of this period, the
Trade Union Act 1926, and the Trade Disputes Act, 1929 laid out a regulatory
framework that still formally underpins the collective labour law system of
present-day India | The Trade Union Act `926 provided for registration of trade
unions. However, there was no support for collective bargaining, and no
obligation to bargain in good faith | Trade Disputes Act 1929 placed severe
limitations on the right to strike, and compulsory reference of industrial disputes
to a conciliation board or a court of enquiry | strongly criticized by the AITUC
c) 1930s: Some of the factors that undergirded this phase were: economic
depression, increase in unemployment, agitation for Indian independence | The
Royal Commission Reports which were boycotted by the AITUC, as the British
Empire produced repressive legislations | 2 core factors shaped labour law: Firstly,
of the 24 pieces of labour legislations between 1933 and 1939, 19 arose from the
RC’s recommendations: all of which concerned protective factory and mines
regulation relating to hours of work, compensation etc. | Exceptions to this were
Payment of Wages Act, 1936 which empowered the employer to deduct wages of
employees absent from work in concert and without reasonable cause, another
exception was the Trade Disputes (Amendment Act), which authorized provincial
governments to appoint conciliation officers to assist in dispute settlement |
Provincial autonomy was really materialized with the passage of the Government
of India Act 1935 and produced expectations that more labour and union friendly
policies would emerge | Several provincial governments were already tinkering
with this idea – Bombay introduced the Trade Disputes (Conciliation) Act 1934
 effected changes to collective labour relations (by providing for the
appointment of a Labour Officer to represent the interests and grievances of
workers in the cotton mills)  but this was aimed predominantly at heading off
communist influence that may have emanated from labour movements following
years of declining sales in Bombay-based textile industries | The Industrial
Disputes Act 1938 by the Bombay provincial government imposed legal
obligations on employers to recognize trade unions | these measures were
ultimately limited in nature, and were not greeted with open arms by the Indian
trade union movement | The AITUC described the 1938 Bombay Bill as uncalled
for, reactionary, prejudicial, and harmful to the interests of workers and calculated
to create slave unions

d) WWII, and the Pre-Independence Period: Context was industrial unrest and strike
action against the conditions of war | The legislations were designed to secure
labour co-operation in support of the war effort: S. 49A of the Bombay Industrial
Disputes Act, granting power to the Bombay govt to refer industrial disputes to
compulsory arbitration by an Industrial Court, and banning all strikes and lockouts
prior to arbitration | Strikes were severely disapproved, e.g.: Bombay Industrial
 Relations Act 1946 (A continuation of the Bombay Industrial Disputes Act),
Central Government’s Essential Services Act 1941, Defence of India Rules Rule
81-A, and rule 56-A | Provisions of Rule 81-A still remain in the Industrial
Disputes Act, 1947 – and remained a core aspect of the legislation governing
industrial disputes and bargaining since that time | The successor to the Trade
Disputes Act, was designed to enable government agencies to investigate
industrial disputes over relevant terms and conditions of employment and to settle
them in appropriate cases | all of these were directed towards the control of labour
than towards settlement of issues – with little like the collective bargaining
procedures that subsisted in Britain and America | While strikes and lockouts were
strictly controlled, the state, at both the Central and State levels exercised strong
controls over the circumstances in which the industries to which the legislation
applied, and which unions may be permitted to notify such disputes | the ID Act
1947 for instance, only applied to workmen in industries, and excluded various
categories of workers, for instance, those in managerial and administrative
capabilities (the term industry however has been interpreted quite broadly – but
workers in govt services, and agricultural workers and the like are still excluded) |
Most scholars have noted that the evolution of labour law in the post WWII period
followed the pattern of restrictive policies of the colonial government and in
particular, the legislation of the war years (why?) | freedom of industrial action on
the part of the workers was more illusory than real, and what collective bargaining
there was, developed without state support, and evolved unsurprisingly in the
formal sectors of the economy | only a few states recognized the obligation of
employers to recognize trade unions |

e) Post-Independence, 1948 onwards: The context that underlay this period, was the
emergence of constitutional values (such as commitment to economic, political,
and social development, enshrined in the Preamble), and an egalitarian conception
of national development (reflected in the five-year plans). Consequently, a raft of
protective legislations was instituted: e.g., Factories Act 1948, Minimum Wages
Act 1948, and the decasualization of dock workers through the Dock Workers
(Regulation of Employment) 1948 – which meant the conversion of
casual/temporary employees to permanent employees, and the Plantations Labour
Act, 1951 which sought to regulate conditions of work, and provide welfare to the
plantation sector | However, the development that occurred in this period was
directly a product of the restrictive policies of government control that
characterized the colonial and immediate post-war (provincial Indian government)
period. Therefore, the newly independent Indian state pursuing the creation and
promotion of a state planned and organized economy, continued to play a strong
interventionist role in industrial relations. Despite the legal/formal recognition of
trade unions and collective bargaining, and the legalization of strikes and
lockouts, the strong level of state interventionism in the domain of industrial
relations, and the assumption that it was critical to the maintenance of industrial
peace was institutionalized. As such, any real possibility of collective bargaining
was seriously circumscribed, and was in fact considered to be incompatible with
economic planning.
The law has enabled the creation of obstacles that have made it more onerous to
secure, for instance, the registration of trade unions, post the amendment to the
Trade Union Act, in 2001 – it provided that trade unions were required to have at
least 100 members or to represent at least 10 per cent of the workforce in order to
secure registration under the Act. While certain regressive steps such as this were
instituted, some states (Maharashtra Recognition of Unions and Prevention of
Unfair Labour Practices Act, 1971) did move to provide unions with a right to
recognition, and passed laws that made the refusal to bargain on the part of the
employer, an unfair labour practice. Contrary to the general expectation that such
a legal measure would greatly assist the formation of trade unions, it failed in
practice to normalize collective bargaining. The Maharashtrian legislation was
limited in its application to only 9 industries. In 1982, the Indian Central
Government introduced the concept of unfair labour practice into national labour
law, and though this outlawed various labour practices (such as the refusal to
bargain collectively in good faith). While this seems like a major breakthrough in
principle, it has had little impact in practice. Collective bargaining doesn’t exist
across all levels in many industries, and has evolved in a de facto sense. In the
mid-1990s, the proportion of Indian workers covered by collective bargaining
agreements was estimated to be lower than 5 per cent.

The second broad dimension in which labour law developed, was in respect of the
relations between the employer and the worker. There are two main categories of
intervention: 1) Regulation for protective labour standards, e.g.: regulation for
minimum wages, equal pay, social security, insurance, maternity benefits,
housing, leave, health and safety, etc. 2) Employment security: Originally under
the ID Act 1947. The termination of, or dismissal from employment did not
constitute an individual industrial dispute, and naturally, there was little limitation
on the employer’s right to fire an employee, as it saw fit – other than the
requirement of notice. The Central Government gradually began to introduce
important regulations pertaining to retrenchments, lay-offs, and plant and industry
closures. These regulations: 1) Contained in Chapters VA and VB of the ID Act),
required for instance, permission by the appropriate authorities for mass
redundancies and firm closures, minimum notice periods and further relief in the
form of compensation. 2) 1964 amendment to the ID Act created a right in an
individual employee to notify an industrial dispute over his or her discharge,
dismissal, or retrenchment, or other form of termination, whether or not that
person was represented by a trade union. 3) 1971 amendment empowered the
Industrial Tribunals and Labour Courts to investigate the dismissal of employees,
and make appropriate orders, including reinstatement and compensation, where
the dismissal was found to be unfair. The Labour Courts and Tribunals in turn,
have developed a general broad discretion to review the dismissal of workers and
have awarded relief according to notions of procedural and substantive justice.
1976 amendments to the Act, increased the amount of notice required to be given
to certain categories of employees who had been in continuous service for at least
one year, and prohibited the dismissal of workers by way of retrenchment, lay-off,
or industry closure in factories, mines, and plantations employing 300 or more
persons (later reduced to 100 or more in 1982) without permission of the
appropriate government.
In addition to strengthening the law of dismissal of workers, major legislation was
introduced by the Central Government in 1970 which strictly limited and
regulated the use of contract and agency labour. And importantly, the ID
Amendment Act of 1982, declared certain collective behaviors (on the part of both
employers and unions) to be unfair labour practices, and also declared certain
hiring practices such as the continuing employment of workers on
casual/temporary contracts with the object of depriving them of the status and
privileges of permanent workmen, to be unfair. Overall, the long sweep of post-
 war evolution in Indian labour law, confirms the government’s interests
principally, in constructing and maintaining a floor of rights for certain classes of
labour, and restricting the industrial and political development of a collective
labour influence. Refer to the final paragraph of this section in the paper, for a
good review of what to necessarily make of this stage – in terms of evaluating
the impact of these developments on labour law.

f) The Struggle for Liberalization: Post 1990s: It’s difficult to evaluate the impact of
the major reform proposals, on labour law-development, given the widespread
perception that both the extent and content of regulation in the Indian labour
market has placed severe restrictions on the capacity of the Indian economy to
develop, particularly in the context of economic globalization. So, investors,
(typically, foreign investors) have referred to the volume and severity of the
regulatory framework and arcane nature of the rules and institutions constituting
Indian labour law. India prior to the harmonization project, and the passage of the
newly drafted Indian labour codes, the country had in excess of 150 separate laws,
governing the labour market and the workforce, most of which overlap, deviate
from Central principles or are perceived to be out of date. Therefore, there are
pressures from sources to rollback some of the regulations, and simultaneously,
the pressure to reform has been resisted by the labour movement. These
disagreements are in part over evidence, in part over ideology. There are certainly
legitimate doubts raised in the literature on the accuracy of the supposed
connection between Indian labour law, and the perceived inflexibility of the
Indian labour market (the evidence is considered slight, ambiguous, or both, refer
to footnote 97 of this paper). The underlying catalyst for labour market reform in
India, was the economic crisis which confronted the country in the late 1990s.
India was obliged to accept a readjustment package proposed by the World Bank
and the International Monetary Fund (SAPs). Resultantly, the Indian Government
in furtherance of the New Industrial Policy, was committed to reducing the
number of industry sectors under the monopoly or control of the state, abolishing
the need for government approval for new investment in specific sectors of the
economy, and generally winding back the public sector. There was certainly a
shift, to a less regulated labour market, in relation to the tight controls exercised
(at least in the organized sector), over dismissals and redundancies in the use of
contract labour. Workers were to be disciplined by the market rather than by state
control.

Successive governments, through various policy pronouncements have continued

to support such neoliberal reform measures, designed to effect adjustments to the
labour market, and to employment relations. These measures have included
policies to weaken union power, dilute labour laws, outlaw strikes, individualize
labour relations, privatize public enterprises, recognize the freedom to hire and
fire and close undertakings, remove the prohibition of contract labour, freedom to
introduce technical changes, etc. The legal and political strategies however, that
have been adopted have resulted in a slow liberalization process. By and large,
these reform measures have been pursued not through legislative change, but
rather through less direct and more piecemeal oriented approaches. This is
because, the various political and labour alliances across different political parties
are usually sufficient to block major labour law reform (due to the power and
numbers of unions, which, while it has been declining, nevertheless, remains
politically influential).

Part of the reason why there has been such a gradual approach to liberalization is
the federal political structure of India: Competition between the various states for
investment has led to legal change on a state-by-state basis, hence avoiding the
need for an all-embracing national reform of labour law. In order to attract
investment, often state governments provide assurances to investors that
inconvenient labour standards will not be enforced. Additionally, state reforms
may act as models for changes in other states, or even to provide some leadership
for reform at the Central Government level. Refer to this section of the paper and
study the Maharashtra and Andhra Pradesh contexts, respectively for examples
of successful and unsuccessful legislative modifications. More generally, the
liberalization process has entailed a relaxation of laws against the employment of
women at night, greater ease in shifts, and greater freedom for the use of contract
labour. Sources reveal that the use of contract labour, and the sub-contracting of
non-core activities to other firms, increased substantially during the 1990s, though
this increase was more pronounced in some states than others. On the other hand,
 despite the general laxity of enforcement in labour law, the laws on retrenchment
continue to be comparatively strictly implemented.

Other minor changes include matters such as the minimization of workplace

inspections and technical changes to the administration of workplaces, and
keeping of records required under various pieces of factory legislation and so on.
Much of this has been through administrative procedure, rather than formal legal
repeal and enactment. Refer to last two paragraphs of this section, to get a sense
of what the process of liberalization has accomplished at the state level and the
central level.

With regards, specifically, to the Brennan Paper: Recall some of the critical perspectives
discussed regarding the role of caste, gender, and the multivariate reasons for low
productivity.

Week 2 & 3 Notes – Part I

1
Description of the industrial adjudication authorities (powers and duties) under the
Industrial Relations Code and the Industrial Disputes Act

Industrial Disputes Act, 1947

Important definitions to be aware of while analyzing the cases we’ll address in the course of
this semester.

Award: Is an interim, or final determination of any industrial dispute, or of any question

addressed by the Labour Court, Industrial Tribunal, or National Industrial Tribunal and
includes an arbitration award made under Section 10-A

Industrial Dispute: any dispute or difference between employers and employers, or employers
and workmen, or between workmen and workmen, which is connected with the employment
or non-employment or the terms of employment or with the conditions of labour, or any
person.

1
Please refer to the ID Act, and the IR Code, and use this document only as a point of reference for your study
Review other important definitions in the Statute as well, e.g., arbitrator, wages, industry,
workmen, settlement, appropriate government, etc.

CASES:

1. Kemp and Co Ltd. vs Commissioner for Workmen’s Compensation and Ors

(Jurisdiction of the Commissioner—when person employed is concerned)

Brief Summary:

The second Respondent was terminated from service by the petitioner-firm (with a branch in
Madras and a head office at Bombay), and given a month’s salary in lieu of notice, and an
additional payment ex grata. The designation of the 2nd Respondent was: Branch Manager.

The 2nd Respondent preferred an appeal to the Commissioner for Workmen’s Compensation
under S. 41(2) of the Madras Shops and Establishments Act XXXVI of 1947. At this stage of
the process, the petitioner raised a preliminary objection that the Commissioner had no
jurisdiction, and that the appeal was therefore not competent. This was overruled.

The petitioner challenged the order of the Commissioner (dated 5 th May, 1954) under Article
226 of the Constitution, for the issue of a writ of certiorari.

Re: S. 41(2) to see who is possessed of a right to appeal. The Commissioner’s reasoning for
why the second respondent could be a person employed (re: S. 2(12) of the Act, specifically,
subsection (3)), and not a part of the firm’s management, was that the employee had no
authority to appoint/dismiss other employees, and had to take permission from the head
office, even in small administrative details – and as such, did not have the power of
management.

Understanding 41(2) requires contemplating the meaning of 2(12) of the Act  and this was
not the specific issue raised before the Commissioner. It was in fact, only during arguments
before the High Court, that this further question arose. In deciding whether a person is a
person employed within the meaning of 2(12), the requirements of the statutory def, and
common law concepts (of employer and employee) have to be examined.

Refer contention of Mr. Thyagarajan: 2nd respondent, though was in the position of a paid
employee, was an “employer” within the meaning of 2(5) of the Act, and was therefore, not a
“person employed” under 2(12)(3) of the Act. His argument was that the expressions,
“employer”, “person employed”, “and a person employed in a position of management” must
be construed in ref to the establishment/commercial establishment, which in this case, is the
office at Madras. Another contention was that since the 2 nd respondent was a manager acting
in general management or control of the establishment at Madras, he was an employer in
relation to that establishment at Madras, and since he is a statutory employer, can’t be a
“person employed” within the meaning of S. 2(12).

Petitioner’s argument: The scheme underlying the Act marked out with reference to a given
establishment. i.e., the branch of the petitioner at Madras, the employer, the persons
employed, persons employed in positions of management. A statutory employer therefore,
despite being an employee in other respects, cannot avail themselves of the right of appeal
under 41(2) of the Act.

The Court’s holding: The question of whether the 2 nd respondent was a person employed
within the meaning of 2(12) of the Act wasn’t decided by the Commissioner, and he had no
occasion to decide it. The proceedings before the Commissioner are still at the preliminary
stage, and the above contentions of the petitioner will have to be decided. The Court held that
it is not for itself to decide what is really a jurisdictional issue, and that questions about
whether the petitioner was a person employed, ought to be for the Commissioner (the
tribunal) to decide (Re.#8). Since the Commissioner’s jurisdiction only arises if the 2 nd
respondent is a person employed within the meaning of S. 2(12) of the Act, and the question
hasn’t been decided by the Commissioner yet (and has been assumed to be the case by
parties, which is why only the question as to whether S. 4(1)(a) applied, was considered). The
order was set aside, and the whole question will have to be gone into afresh by the
Commissioner. The Court only set out the contentions for and against the plea, and refrained
from deciding the question, because the primary duty of deciding that question is that of the
Commissioner’s, and so the writ was made absolute, with no order as to costs.

2. North Brook Jute Co. Ltd vs Their Workmen

(When there are alterations in the work load made by the employer to the
detriment of the workmen and the workmen refuse to do the extra work only, it
is not strike and hence not illegal or unjustified. However, if the employers in
retaliation go for a lockout, such lockout would then be illegal and the employees
shall be entitled to wages.)
On December 13, 1957, the Govt of WB referred under S. 10 of the ID Act, the following
dispute between Northbrook Jute Co., and Dalhousie Jute Bills who are appellants, and their
workmen: -

“Do the proposals of rationalization in the above two mills involve any increase in workload?
If so, what relief are the workmen entitled to?”

A month prior to this, a proposal was raised at an extraordinary meeting of the Works
Committee and they agreed to the proposal to implement the scheme of rationalization. A
notice under S. 9A of the ID Act was then given by the companies to the Unions of their
workmen, and the workmen objected to the introduction of this scheme (as it was going to
entail considerable job losses, and greater work for the employees). On December 16, the
above reference was pending before the Tribunal – and the management implemented the
scheme. The workmen refused to do the additional work placed on them by the scheme. Later
the same day, the mills declared a lockout. Work was however resumed in all departments by
Dec 20, except the weaving and finishing depts on Dec. 21, as a result of a settlement arrived
at between the workmen (rep by the Unions) and the Mills. But a dispute arose as regards the
payment of wages between 16th and 20th, with the Mills alleging that the workers engaged in
an illegal strike, and the workers alleging that there was a lock-out. Given the developments
in the case, the earlier issue was amended to read: "Has the rationalization effected in the
above two mills since 16th December, 1957, involved any increase in the workload? To what
relief the workers are entitled to?" – The Court held that they are no longer concerned with
this issue, as the decision of the Tribunal thereon which is against the workmen is no longer
disputed. With regards to the other two disputes, the Tribunal has made an award in favour of
the workmen that they are entitled to the wages for the period of absence above-mentioned
(between 16th – 20th/21st)

Workmen’s contentions: Illegal lockout by the employers | The operationalization of the

scheme of rationalization is in contravention of S. 33 of the ID Act. Therefore, the
workmen’s refusal to work was not an illegal strike, and the employer’s closure of the mills
was illegal.

Employers/Mills’ contentions: The Works Committee’s agreement with the scheme (which
included the indeterminate phraseology: “whenever they desired” – is proof that they acted in
accordance with the law. (The Court clarified that the Works Committee does not
represent the workmen for all purposes, and only for the purposes set out in S. 3(2) of
the Act) – and their agreement is not binding on the workmen or their Union | The
works committee is not intended to supplant or supersede the unions for the purpose of
collective bargaining.

Important precedent in Kemp and Co:

"the Works Committees are normally concerned with problems arising in the day to day
working of the concern and the functions of the Works Committee are to ascertain the
grievances of the employees and when occasion arises to arrive at some agreement also. But
the function and the responsibility of the works committee as their very nomenclature
indicates cannot go beyond recommendation and as such they are more or less bodies who in
the first instance endeavour to compose the differences and the final decision rests with the
union as a whole."

Another contention: Whatever alteration was effected in the conditions of service, was made
when notice under S. 9A was given, and since that was before the 13 th of December (when
the dispute was pending) – there can be no contravention of S. 33.

On this, look to para 8 to see the three different stages that the Court cleaves out, for
what the Legislature was contemplating.

In deciding for the purpose of S. 33 of the Act, at what point of time, the employer ‘alters’
any condition of service, we have to ascertain the time when the change of which notice
under S. 9A is given, is actually effected. If at that time, a proceeding is pending before a
Tribunal, S. 33 is attracted, but not otherwise. (The other time-stages are irrelevant)

The Court also held that the alteration was quite intuitively prejudicial to the interests of
workmen – classic move aimed at reducing the cost of production, and the method adopted
for attaining the object, was to obtain more work from the workmen for approximately the
same wages.

Company witness (Mr. Fraser) in his evidence:

"we had surplus labour in both the mills. The company was losing heavily. Till then we
depended on natural wastage and did not think of rationalisation; in November last year, the
decision was taken to take action on rationalisation."

On the final contention of the Mills that even if the scheme’s operation was in contravention
of S. 33, the appropriate remedy lay in S. 33A, and not in striking. The Court however
clarified that the existence of the remedy under S. 33A does not mean that the workmen were
bound to work under the altered conditions of service, especially given that these altered
conditions were in clear contravention of the law. Therefore, even if it were a strike, it was
certainly not illegal or unjustified.

Court’s Final Holding:

Our conclusion therefore is that the Tribunal was right in its opinion that the closure of
the mills by the employer amounted to an illegal lock-out, and the workmen, unable to
work in consequence of the lockout, are entitled to wages for the period of absence, caused
by such lock-out. The appeal is therefore dismissed with costs.

Chapter II

Chapter II describes the authorities under the Act

Section 3: Works Committee: Composition/Formation: Where a hundred or more workmen

are employed or have been employed in an industrial establishment on any day in the
preceding twelve months, the appropriate government may by general or special order,
require the employer to constitute a works committee consisting of representatives of both
employers and workmen such that the committee ought not to be comprised of a greater
number of representatives of employers than workmen | Workmen’s representatives shall be
chosen in the prescribed manner, in consultation with their trade union (if any are registered
under the Indian Trade Unions Act, 1926) Duties: It is their duty to promote measures for
securing and preserving the amity and good relations between the employer and workmen,
and more specifically, to articulate views on matters of common interest/concern, and to
compose a difference of opinion in furtherance of such an end.

Section 4: Conciliation Officers: Composition/Formation: The appropriate Government by

notification in the Official Gazette, may appoint such number of persons that it thinks fit to
be conciliation officers. Duties: They’re required to mediate in, and promote the settlement
of industrial disputes.

Section 5: Board of Conciliation: Composition/Formation: The Appropriate Government

may by notification in the Official Gazette, constitute a Board of Conciliation for the Duty:
of promoting the settlement of an industrial dispute. Composition: The Board shall consist of
a Chairman, and two or four other members, as the appropriate Government thinks fit. The
Chairman is required to be an independent person and the other members shall be persons
appointed in equal numbers to represent the parties to the dispute, and any person appointed
to represent the interests of a party, shall be appointed on the recommendation of that party. If
the party fails to make a recommendation, then the appropriate government shall appoint such
persons as it thinks fit. The Conciliation Board can also act despite the absence of either the
Chairman or the members, insofar as it possesses the prescribed quorum. However, if the
appropriate Government notifies the Board that the Chairman, or another member’s services
have ceased to be available, the Board shall not act until a replacement has been appointed.

Section 6: Courts of Enquiry: Composition/Formation: The appropriate Government may,

by notification in the Official Gazette, constitute a Court of Enquiry, for the Duty of:
Enquiring into any matter appearing to be connected with or relevant to an industrial dispute.
Composition: The Court may consist of one or more independent persons (based on what the
appropriate Government thinks fit), and where a Court consists of two or more members, one
of them shall be appointed as the Chairman of that Court of Enquiry. Similar to the Board of
Conciliation, the Court can function despite the absence of a member/chairman (insofar as it
possesses the prescribed quorum). And like the Board of Conciliation, if the appropriate
Government notifies the Court that the Chairman, or another member’s services have ceased
to be available, the Court shall not act until a replacement has been appointed.

Section 7: Labour Courts: Composition/Formation of the system of Labour Courts: The

appropriate Government may, by notification in the Official Gazette, constitute one or more
Labour Courts for the Duty: of adjudicating the industrial disputes relating to any matter
specified in the Second Schedule (which specifies the matters within the jurisdiction of
Labour Courts, e.g., Item 3: discharge or dismissal of workmen including re-instatement of,
or a grant of relief to, workmen wrongfully dismissed, Item 2: the application and
interpretation of standing orders) and for performing such other functions as may be assigned
to them under this Act. Composition of a particular Labour Court: A Labour Court shall
consist of one person only to be appointed by the appropriate Government, and the details of
their qualifications are set out in S. 7(3).

Section 7A: Tribunals: Composition/Formation of the system of Tribunals: The

Appropriate Government may by notification in the Official Gazette, constitute one or more
industrial tribunals for the Duty: of adjudicating industrial disputes relating to any matter,
whether specified in the Second Schedule (i.e. similar jurisdiction to Labour Courts outlined
in Section 7), or matters specified in the Third Schedule (which specifies the matters within
the jurisdiction of Industrial Tribunals, e.g., Item 1: Wages, including the period and mode of
payment, Item 9:Rationalisation), or to perform such other functions as may be assigned to
them under the Act. Composition of a particular Tribunal: A Tribunal shall consist of one
person only to be appointed by the Appropriate Government. The Appropriate Government
may, also appoint two persons as assessors to advise the Tribunal in the proceeding before it.
Qualifications for the appointment of the presiding officer are listed in 7A(3).

Section 7B: National Tribunals: Composition/Formation of the system of National

Industrial Tribunals (NT): The Central Government may, by notification in the Official
Gazette, constitute one or more NITs for the Duty: of adjudicating industrial disputes, which
in the opinion of the Central Government, involve questions of national importance or are of
such a nature that industrial establishments situated in more than one state are likely to be
interested in, or affected by, such disputes. Composition of a particular NT: A NT shall
consist of one person only to be appointed by the CG. Like S.7A, the CG can appoint two
persons as assessors to advise the NT in the proceeding before it, and the qualifications for
appointment are provided for in 7B (3).

Section 7C: Disqualifications for the presiding officers of Labour Courts, Tribunals and NTs:
If they’re not independent persons, or if they’ve attained the age of 65.

Refer S. 8 for the provision that instructs the Central Government to appoint persons to the
position of presiding officer/Chairman/member of the Court of Enquiry/Labour
Court/Tribunal/NT respectively, in the case where vacancies are required to be filled (other
than temporary absences)

S. 9 provides for finality of the orders constituting Boards and such: It expressly provides that
no order appointing any person as the Chairman/member/presiding officer of Board/Court of
enquiry/Labour Court/Tribunal/NT, shall be called into question in any manner, and
moreover stipulates that no act or proceeding before any Board or Court shall be called into
question merely on the grounds that there was a vacancy/defect in the constitution of such
Boards or Courts.  with a view to minimizing the range of industrial disputes that can
arise. S. 9 also stipulates that settlements arrived at in the course of a conciliation
proceedings shall not be deemed invalid purely on the grounds that such settlement was
arrived at after the expiry of the period referred to in S. 12(6), or S. 13(5).
 Under S. 12, there are two types of reports that Conciliation Officers are obligated to
produce Their Duties Described under S. 12: These are either reports of the
successful settlement (12(3))of the dispute or any of the matters in dispute, that has
been arrived at through conciliation proceedings, or alternatively, reports that detail
the steps taken forth by the Conciliation Officer for ascertaining the facts and
circumstances relating to the dispute, and for bringing about its settlement, alongside
a full statement of the facts and circumstances and the reasons (in their opinion) for
why the dispute could not be settled(12(4)). These reports are to be sent to the
appropriate Government. Similarly, S. 13 outlines the Duties of the Board: and this
section also prescribes the responsibility (among others) to produce two types of
reports. The first occurs when there is a successful settlement of the dispute, or of any
of the matters in dispute – which has been achieved via conciliation proceedings
before the Board of Conciliation, and like S. 12 (as it pertains to Conciliation
Officers), the second type of report the Board is obligated to produce, is when there
hasn’t been a successful settlement of disputes  Similar report to that provided for
in S. 12(4) described immediately above.

12(6) obligates the Conciliation Officer to submit the report described above, within a period
of 14 days of the commencement of the conciliation proceedings, or within a shorter period
as may be fixed by the appropriate government.

13(5) obligates the Board of Conciliation to submit its report under this section, within 2
months of the date, on which the dispute was referred to it, or within a shorter period as may
be fixed by the appropriate Government.

Chapter IIA prescribes an obligation on employers to provide notices to workmen, prior to

effecting any change in their conditions of service, in respect of any matter specified in the
Fourth Schedule (which outlines the conditions of service for change of which Notice is to be
given). This section also clarifies relevant requirements of such notices: such changes shall
not be effected within 21 days of providing such notices, and the notice also has to detail the
nature of the change proposed to be effected. It also outlines contexts where notices are not
required: when the change is in furtherance of settlements or awards, or for a specific class of
workmen (defined in 9A(b) proviso (b))

Power of Government to exempt: If the appropriate Government is of the opinion that the
application of the provisions of S. 9A to any class of industrial establishments/class of
workmen will affect the employers in such a manner that it causes serious repercussions to
the industry, then in the furtherance of public interest, the appropriate Government may by
notification in the Official Gazette exempt such section of industrial establishments/class of
workmen, from the application of the provisions of 9A.

Chapter IIB: Reference of Certain Individual Disputes to Grievance Settlement

Authorities:

S. 9(C)- Composition/Formation: Setting up of Grievance Settlement Authorities and

reference of certain individual disputes to such authorities: Quite similar (Especially 9C(1))to
the establishment of a Works Committee under S. 3. However, there is no requirement for
equal representation within the composition of the authority between the workmen and
employers, and the obligation to establish a GS Authority originates when the industrial
establishment employs 50 or more workers, as opposed to the works committee which
requires 100 or more people to be employed. Duties: Moreover, 9C (2) authorizes either an
individual workman, or any trade union of workmen (of which the workman affected in the
dispute is a member) to prescribe such dispute to the Grievance Settlement Authority. 9C (3)
obligates the GS Authority to follow the procedure/complete proceedings within such period
as may be prescribed. Importantly.9C (4) stipulates that the dispute settlement processes
outlined in Chapter III, cannot be activated unless such dispute has been referred to the
GS Authority concerned, and the decision reached by the Authority is not amenable to
any of the parties to the dispute.

Chapter III: Reference of Disputes to Boards, Courts, or Tribunals

Overview of S. 10: Reference of disputes to Boards, Courts, or Tribunals

10(1) effectively details the role the government plays in the creation of The appropriate
Government has the discretionary right to refer any industrial dispute that either exists, or is
apprehended, by order in writing, to a Board ( for the purpose of conciliation), Court for
Enquiry (for ascertaining the complete information, that is required in the furtherance
of promoting a settlement) Labour Court if it relates to matters in the Second Schedule,
which provides a list of items that fall within the jurisdiction of the Labour Court ( for the
purpose of adjudication), or to a Tribunal for matters either in the Second Schedule or Third
Schedule, i.e., matters within the jurisdiction of the 3 rd Schedule (for the purpose of
adjudication). Additionally, if the dispute is not likely to affect more than one hundred
workmen, but relates to a matter specified in the 3 rd Schedule, it may make the reference to a
Labour Court.

Some important aspects of the dispute reference process that are reflective of the
Appropriate Government’s power generally, and the CG’s power in particular, over the
institutional process:

 If the dispute concerns national importance, then the Central Government reserves the
right to refer (by order in writing) it to the NT, regardless of whether the state
Government was in fact, the appropriate Government.
 When the appropriate Government is the CG, the CG can refer the dispute to either
Labour Courts, or Industrial Tribunals, that have been constituted by the SG.
 The appropriate Government while referring an industrial dispute to one of these
bodies (C of E, LC, Tribunal, or NT), can specify the points of dispute for
adjudication, and these bodies are obligated to confine their adjudication to those
points and matters specified.
 Where a reference has been made to a NT, then notwithstanding anything contained in
the ID Act, no LC, or Tribunal shall have jurisdiction over the matter under
adjudication before the NT. If proceedings are simultaneously underway before the
LC, or Tribunal, then they are deemed to have been quashed on such reference to the
NT. It is also not lawful for the appropriate Government to refer the matter under
adjudication before the NT, to any LC, or Tribunal during the pendency of the
proceeding. – Procedural clarification: In 10(6) which details this provision, the
term ‘LC’ or ‘Tribunal’ includes any Court or Tribunal or other authority
under any law relating to investigation and settlement of industrial disputes in
force in any state – (e.g., C of E)
 In ID’s where the Central Government is not the appropriate Government, but the
dispute is referred to NT, then any reference in (some incredibly salient provisions) S.
15, S. 17, S. 19, S. 33-A, S. 33-A, S. 33B, and S. 36A, to the appropriate Government,
shall be constructed as a reference to the CG, and references in other provisions of the
Act, shall mean a reference to the SG.

Some other salient aspects of the dispute reference process

  Where the parties to the ID apply either jointly or separately, to refer the dispute to a
Board, C of E, LC, Tribunal, or NT, the appropriate Government if satisfied that the
persons applying represent the majority of each party, shall make the reference.
 C of E, LC, Tribunal, or NT, may appoint one or more assessors possessing
specialized knowledge in a dispute, if required for advice in the proceeding.
 The Officers and members of these bodies constituted under the ID Act, shall be
deemed to be public servants
 The orders that refer disputes to these various bodies (under 10(1)), shall specify the
period within which the body the dispute is referred to, is required to submit its award
to the appropriate Government. And when the dispute pertains to an individual
workman, the period shall not exceed three months.
 Where the parties to an industrial dispute apply either jointly or separately, to the LC,
Tribunal or NT for an extension of the period within which the award ought to be
submitted to the appropriate Government, the presiding officer of that body, may
(with reasons recorded in writing) extend such period by a duration of time that they
think fit. And for the purposes of constructing the period of time for extension, the
time during which the proceedings before these bodies, was stayed by an injunction or
order of a Civil Court shall be excluded.
 A caveat however, is that no proceedings before such bodies shall lapse solely on the
grounds that any period specified in S. 10 has expired prior to the completion of such
proceedings.
 If the appropriate Government is of the opinion at any time before the submission of
the award, enlarge the reference of the order’s application (i.e., the order to the
various bodies under the ID Act) to another establishment/group or class of
establishments, whether or not at the time of such inclusion, any dispute exists or is
apprehended in that establishment/group or class of establishments.
 The death of any of the parties to the dispute being a workman shall not constitute the
sole reason for the lapsing of proceedings before a LC, Tribunal, or NT in relation to
the ID in question. The body in question shall complete such proceedings and submit
its award to the AG.

10A: Voluntary Reference of Disputes to Arbitration – Brief Overview

Prior to referring a dispute to a LC, Tribunal, or NT, under S. 10, the employer and workmen
can agree to refer the dispute to arbitration, by way of a written agreement, and the reference
shall be to such person or persons (officer of LC, or Tribunal, or NT) as an arbitrator or
arbitrators as may be specified in the arbitration agreement. Additionally, where there are an
even number of arbitrators, the agreement shall have to provide for the appointment of an
umpire, who shall in the event of a deadlock, submit an award that shall be deemed to be the
arbitration award for the purposes of the ID Act. The form, and manner of the agreement
shall be prescribed. Copies of the arbitration agreement are required to be forwarded to the
appropriate Government, Conciliation Officer, and the AG shall publish within one month
from the date of the receipt of such copy, publish the same in the Official Gazette. Within this
one month time period however, the appropriate Government possesses the right to issue a
notification by which employers and workmen who are not parties to the case (but are
nevertheless concerned in the ID), are given an opportunity of presenting their case before the
arbitrator or arbitrators.

Chapter IV- Procedure, Powers, and Duties of Authorities - Overview

The authorities described in this Chapter, share several functions, and these are their
salient adjudicatory powers:

Subject to rules made in regards to this provision, an arbitrator, Board, Court, LC, Tribunal,
or NT shall follow the procedure that they think fit.

For the purpose of conducting an inquiry into an existing/apprehended dispute, the Court,
presiding officer of a LC, Tribunal or IT may after giving reasonable notice  enter the
premises of the establishment to which the dispute relates.

Every Board, Court, LC, Tribunal, and NT shall have the powers as vested in a Civil Court
under the Civil Procedure, when trying a suit in respect of: [Refer S. 11[3] for the typical
list of matters falling within the powers of a Civil Court].

On the other hand, Conciliation Officers can enforce the attendance of any person for
examination, and for compelling the production of documents, and in this regard alone,
possesses the powers as vested in a Civil Court  a distinction from the abovementioned
bodies.

All members of these bodies including Conciliation Officers can appoint one or more
assessors having specialized knowledge of the matter under consideration, as assessor or
assessors to advise it in the proceeding before it. All the members/officers/presiding officers
of these bodies shall also be deemed to be public servants as defined in S. 21 of the IPC.
The LC, Tribunal, NT have the discretionary authority to determine by and whom, and to
what extent and subject to what conditions costs have to be paid and can give necessary
directions for such purposes of ordering costs to be recovered (by the Government in the
same manner as an arrear of land revenue).

11A: This section explicates the power of LC’s, Tribunals, and NTs to provide relief in cases
of discharge or dismissal of workmen, and can provide an award to set aside/direct
reinstatement on specified terms and conditions/or give other relief deemed appropriate,
including a lesser punishment in lieu of the discharge or dismissal.

Duties of Conciliation Officers: They shall investigate the dispute, and all matters affecting
the merits and the right settlement thereof, and may do all such things that are deemed fit for
the purpose of inducing the parties towards a fair and amicable settlement off the dispute. If
such a settlement can be arrived at, the CO is required to send a report to the AG, alongside a
memorandum of the settlement signed by the parties to the dispute. Look above, for a
discussion of 12(4)(5)(6) on the duties of Conciliation officers. The reports they produce
under this section, shall be submitted within 14 days of the commencement of the
conciliation proceedings or within such shorter period as may be fixed by the
Appropriate Government. (if the parties to the dispute agree for an extension of the time
period, then subject to the CO’s approval, the period for submission of the report can be
extended)

Duties of the Board of Conciliation: Similarly, refer above to the duties of the Board. There
are several similarities between the Duties of a CO, and the Board. However, a key difference
is in the fact that the Board is required to submit its report under this section within two
months of the date, or within such shorter period as may be fixed by the AG, and further, the
AG may from time to time, extend the time for the submission of the report by such further
periods not exceeding two months in the aggregate, and if the parties to the dispute agree in
writing that the period ought to be extended.

Duties of Courts: A Court shall inquire into the matters (C of E) referred to it, and report to
the AG ordinarily within a period of six months from the commencement of the inquiry.

Duties of LC, Tribunals, and NTs: These bodies are required to hold proceedings
expeditiously and within the period specified in the order referring such IDs (factoring into
account, sanctioned periods of extension), submit an award to the AG.
Other Important Aspects of the Dispute Settlement Mechanism under the ID Act –
pertaining to reports/awards/payment of wages/procedural details of the proceedings

1. The Report of the Board/Court shall be in writing and signed by all its members. The
section doesn’t prevent any member of the Board/Court from recording any minute of
dissent from a report/recommendation. S. 16
2. The award of a Labour Court or Tribunal, or NT shall be in writing and shall be
signed by its presiding officer. S.16
3. Every report shall be accompanied by any minute of dissent recorded, and every
arbitration award (10A), and award of the LC, Tribunal, and NT shall within a period
of 30 days from the date of its receipt by the AG, be published in such a manner as the
AG thinks fit. Subject to the provisions of S. 17A, the awards published shall be final
and not called in question by any Court in any manner. S.17
4. S. 17A referred above, explicates details pertaining to the award’s commencement:
An award (including arbitration awards is enforceable on the expiry of thirty days
from the date of its publication. However, if the AG is of the opinion that any ward
given by a LC, or Tribunal, or NT is inexpedient on public grounds affecting the
national economy or social justice, can make the award unenforceable on the expiry
of thirty days, by notification in the Official Gazette. When any such declaration has
been made, the AG or the CG may, within ninety days from the date of publication of
the award under Section 17, make an order rejecting or modifying the award, and
shall on the first available opportunity, lay the award with a copy of the order before
the State Leg, or Parliament, if the order has been made by the SG, CG respectively.
5. The award that was rejected or modified by an order in a manner described
immediately above, shall become enforceable on the expiry of fifteen days from the
date on which it is so laid, and where no such order has been rendered, the award shall
become enforceable on the expiry of the period of ninety days. The award therefore,
shall come into operation either from the date specified in therein, or when no date is
specified, shall become enforceable on the basis of the process described here (i.e.,
after modification/rejection, it shall have to be declared and presented before the
Legislature (CG/SG respectively) within 90 days, and fifteen days from when it’s laid
– shall become enforceable).
6. S. 17B Where a LC, Tribunal, or NT by its award directs reinstatement of any
workmen, and the employers prefers instituting proceedings against such an award
 before the High Court/S.C, the employer shall be liable to pay such workman during
the period of pendency, full wages last drawn by him. Provided that if the HC/SC is
satisfied that such workman has been employed, and has been receiving adequate
remuneration during any such period or part, can order that no wages shall be payable,
or a part shall be payable as the case may be.
7. S. 18 A settlement arrived at by agreement between the employer and the workman
otherwise than in the course of conciliation shall be binding on the parties to the
agreement.
8. An arbitration award (under 10A) shall be binding on the parties to the agreement
who referred the dispute to arbitration.
9. A settlement arrived at in the course of conciliation proceedings, or an award of a LC,
Tribunal, or NT, which has become enforceable shall be binding on all the parties to
industrial dispute (including all parties summoned to appear in the proceedings as
parties to the dispute), insofar as the opinion records the opinion that they were
summoned with a proper cause. This will of course, include heirs/successors/assigns
in respect of the parties to which the dispute relates, and includes all the persons who
subsequently became employed in that establishment or part thereof, after the date of
the dispute.
10. S. 19: If the settlement agreement mentions a date upon which the settlement shall
come into operation, then it shall come into operation on that date. If no date is agreed
upon, it shall come into operation on the date on which the memorandum of
settlement is signed by the parties to the ID. This settlement is binding for such period
that the parties agree upon. If they don’t agree on a period, then for a period of six
months from the date on which the memorandum of settlement is signed by the parties
to the dispute, and shall continue to be binding on the parties after the expiry of the
period as well, until the expiry of two months from the date on which a notice in
writing of an intention to terminate the settlement is given by one of the parties to the
other party(s) in the agreement. [This pertains to settlements]
11. An award shall remain in operation for a period of one year, from the date on which
the award becomes enforceable under S. 17A. The AG may however, reduce the said
period and fix such period as it thinks fit. The AG can also extend the period of
operation by any period not exceeding one year, before the expiry of the traditional
period of operation of the award (one year/by what the AG modifies it to). The total
 period of operation of any award however, cannot remain operational upon the expiry
of three years from the date on which it came into force.
12. Where the AG, by its own motion, or on the application of a party bound by the
award, considers that there has been a material change in circumstances on which the
award was based, can refer the award/part of it, to a LC, Tribunal (if the award was
that of a tribunal), or an NT (if it was of a NT) to decide whether the period of
operation should/should not by reason of such material change, be shortened, and in
this regard, the decision of the LC, Tribunal, or the NT shall be final.
13. There is a two month notice period that can be given by either party bound by the
award announcing its intention to terminate the award, post which the award shall
cease to be in operation (and this is notwithstanding the one-year period specified in
19(3), from the date on which the award becomes enforceable under S. 17A
14. S. 20: Commencement and conclusion of proceedings: A Conciliation proceeding
shall be deemed to have commenced from the date on which a notice of strike or
lockout under S. 22 is received by the CO, or on the date of the order referring the
dispute to a Board, as the case may be. A Conciliation proceeding shall be deemed to
have concluded – where a settlement is arrived at  when the memorandum of the
settlement is signed by parties to the ID, or where no settlement is arrived at, when the
report of the conciliation officer is received by the AG or when the report of the
Board is published under S. 17, or when a reference is made to a Court, LC, Tribunal,
or NT, under S. 10 during the pendency of conciliation proceedings.
15. The proceedings before a LC, Tribunal, NT, or arbitrator under 10A, shall be deemed
to have commenced from the date of reference of the dispute for
arbitration/adjudication, and such proceedings shall be deemed to have been
concluded on the date on which the award becomes enforceable under 17A.
16. S. 21: No information obtained by a CO, Board, Court, LC, Tribunal, NT, or an
arbitrator in the course of any investigation or inquiry as to as trade union, or as to any
individual business which is not available otherwise than through evidence that was
given before such bodies - if the trade union/person/firm/company in question has
made a request in writing that such information be treated as confidential. And nor
shall such CO or individual member or presiding officer of these bodies or any person
present or concerned in the proceedings disclose such information without the consent
in writing of the secretary of the trade union/person/firm/or company in question as
 the case may be. Caveat: This shall not apply to a disclosure of such information for
the purposes of a prosecution under S. 193 of the IPC.

Authorities under the Industrial Relations Code (A comparative analysis of the

changes)

The IR Code is one of four newly enacted Labour Codes that subsumes 3 major Central laws
that relate to industrial dispute settlement and collective bargaining. They are: 1) The ID Act,
1947, The Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946.
The objects of these Acts have been retained for the most part with the IR Code merely
consolidating the laws for ease of compliance, but there are certain key aspects that ought to
be understood. Briefly, they are:

A) The definition of worker has been expanded to include Working Journalists, and sales
promotion employees (as defined in the respective acts that govern these
designations).
B) Fixed term employment has been given a statutory basis. (they’re entitled to receive
gratuity on a pro-rata basis if they render service for a period of 1 year under the
contract of employment).
C) There are provisions to establish a negotiation council where there is no single union
that meets the 51% threshold as mentioned above. The Council is constituted of
representatives from the various unions provided they have at least 20 per cent of the
employees as its members.
D) There are several other changes, and features that are relevant for our course of study
that will be examined in the following section which details the dispute resolution
process of industrial disputes under the IR Code.

Chapter 7 – Mechanism for the Resolution of Industrial Disputes

The different bodies that constitute the industrial dispute resolution process are: Conciliation
Officers, Industrial Tribunal, National Industrial Tribunal. However, in addition to these
processes, Chapter II of the Industrial Relations Code, establishes two bi-partite forums that
help secure good relations between workers and employers.

Given the altered dispute resolution architecture in the newly enacted Code, S. 51 details the
procedure to be followed in the transfer of pending cases. It specifies that on and from the
date of commencement of this Code, the cases that are pending in Labour Courts and
Tribunals constituted under the Industrial Disputes Act, 1947, shall be transferred to the
Tribunal having the corresponding jurisdiction under this Code. Likewise, the cases that were
pending before the National Tribunal, shall be transferred to the National Industrial Tribunal
having corresponding jurisdiction under this Code. 51(2) also clarifies that the cases
transferred to the Tribunal/National Industrial Tribunal, shall be dealt with either de novo, or
from the stage at which they were pending prior to such transfer.

Salient Features of the Dispute Resolution Process and Authorities under the IR Code
(and the ways in which its distinct from the process and structure provided for in the ID
Act)

S. 43 describes the right of the AG to appoint such number of persons, as it thinks fit, as
conciliation officers, either for a specified area, or for one or more specified industries, and
either permanently, or for a limited duration of time. Duty: They’re charged with the duty of
mediating in, and promoting the settlement of industrial disputes.

S. 44 provides that the Appropriate Government may, by notification, constitute one or more
Industrial Tribunals for the Duty of adjudicating industrial disputes, and for performing such
other functions as may be assigned to them under the Code. While the equivalent authorities
under the ID Act, 1947, i.e., Labour Courts and Tribunals, are comprised of only one person
to be appointed by the AG (S.7(2), 7A(2), and 7B(2) – For NT’s), the compositional structure
of Industrial Tribunals and National Industrial Tribunals (IT’s and NITs) as defined under S.
44, and S. 46, is different.

The Institutional Design of IT’s

Every IT shall consist of two members (not one) to be appointed by the AG, of whom, one
shall be a Judicial Member, and the other, and Administrative Member. A bench of the
Tribunal shall consist of either a Judicial and Administrative Member, or a single Judicial
Member, or single Administrative Member. The qualifications, terms of office, and
salaries/allowances and terms of service, are provided for, in subsections 4,5, and 6 of S. 44.
The procedure of the Tribunal shall be such as may be prescribed (including determinations
of the distribution of cases in the benches of the Tribunal).

The jurisdictional hierarchy is as follows:

1. A bench consisting of a Judicial and Administrative Member shall entertain and

decide cases only relating to:
 a) The application and interpretation of standing orders (covered under Chapter IV)
b) Illegality or otherwise of a strike or lockout (Chapter VIII)
c) Retrenchment of workmen and closure of establishment;
d) And Trade Union disputes
2. The remaining cases, shall be entertained and decided by the bench of the Tribunal
consisting of either a Judicial Member, or an Administrative Member.
3. In Tribunal benches with both a Judicial and Administrative Member, the former shall
preside over the Tribunal.
4. Similar to S. 8 of the ID Act, 1947 (which describes the procedure for the filling of
vacancies in the office of the presiding officer of a LC, Tribunal or NT, or in the
office of the Chairman, or any other member of a Board or Court), sub-section 9 of S.
44 stipulates that if for any reason, (other than a temporary absence) a vacancy occurs
in a NIT, or Tribunal, then such vacancy shall be filled up in the manner prescribed,
[w/o prejudice to subsections 4 and 5 of S. 44, which detail qualifications for
appointment, term of office, salaries, allowances, and other terms of service], and the
proceeding shall be continued before such NIT, or Tribunal from the stage at which
the vacancy is filled.
5. Slightly different to the right of the AG to appoint two assessors if it so thinks fit
under S. 7A, and 7B of the ID Act, the AG can under subsection 10 of S. 44, appoint
any such number of officers and staff that it thinks fit, in consultation with the
Judicial Member of the Tribunal.

S. 45 of the IR Code confers finality to the notifications that constitute the appointment of
Judicial and/or Administrative Members, and holds that no act or proceeding before the
Tribunal shall be called into question, mainly on the existence of any vacancy in, or defect in
the constitution of such Tribunal. While this is similar to S. 9 of the ID Act, some of they key
differences are as follows: a) The purview of S. 45 doesn’t extend to bodies such as the
Labour Court, Board of Conciliation, or other Courts, as these authorities do not subsist under
the IR Code. Additionally, there are slight differences in the statutory language b/w merely in
S. 9 of the ID Act, and mainly in S. 45 of the IR Code.

The Institutional Design of NITs

S. 46 establishes that the CG may by notification, constitute one of more NIT’s for the Duty
of: adjudication of industrial disputes, which in the CG’s opinion, involve questions of
national importance, or are of such a nature that industrial establishments situated in more
than one State are likely to be interested in or affected by such disputes. S. 46(1) mirrors S.
7B (1).

However, there are several differences between NTs under the ID Act, and NITs under the IR
Code. Unlike the NT, a NIT shall consist of two members to be appointed by the CG, one of
whom shall be a Judicial Member, and the other shall be an Administrative Member. The
qualifications for appointment, and disqualifying factors for appointment, are provided for in
subsections (3) and (4) of S. 46. Similar to IT’s defined under S. 44, the judicial member
shall preside over the NIT. The CG can also in consultation, with the Judicial Member of the
NIT, provide for the appointment of such number of officers and other staff, that are required
for the functioning of the NIT.

S. 47 describes the mechanism by which decisions of the Tribunal/NIT are arrived at: Firstly,
the decisions of the Tribunal/NIT shall be by consensus of the members. Given that there’s an
even number of members (1 JM, and 1 AM), the members of the Tribunal/NIT shall make a
reference to the AG, indicating the point(s) on which they differ, in the event of a
deadlock/difference in opinion on any point. The A.G on receipt of such a reference, shall
appoint a JM of another Tribunal/NIT respectively, who shall hear the point(s) themselves,
and the dispute shall be decided on the basis of the majority (including the original
Tribunal/NIT composition, and the JM of the other Tribunal/NIT who heard the case
thereafter).

S. 48 details the conditions of disqualification for members of Tribunal and NITs: I) If

they’re not independent persons, 2) have attained the age of 65.

S. 49 importantly, lays out the procedure and powers of arbitrators, CO’s, Tribunal and
NITs.

Refer specifically to the ways in which the Conciliation officer’s powers are specified under
sub-section 4, as distinct from the broad purview of powers provided under sub-section 3 to
CO, Tribunals, and NITs. Sub-section 5 recognizes the right of the AG to appoint assessors.
In the other ways in which their status has been specified (i.e., their designation as public
servants within the meaning of S. 21 of the IPC, - it’s similar to the ID Act)
Sub-section 7 is particularly important, as it specifies that determining by and to whom, and
to what extent and subject to what conditions, if any, the costs to be paid, shall be in the
discretion of the Tribunal, NIT as the case may be.

Sub-section 8: designates Tribunal/NIT to be a civil court for the purposes of S. 345, 346,
348 of the CrPC.

S. 50: Details the powers of Tribunal/NIT to provide appropriate relief in cases of discharge
or dismissal of workers. 53(6) prescribes the right of a concerned party to make an
application in the prescribed form to the Tribunal in the matters not settled by the CO, within
90 days from the date on which the report specifying the failure to arrive at a settlement has
been received by the concerned party. In cases where this has occurred, and an industrial
dispute now stands referred before such Tribunal/NIT, and they’re satisfied that the order of
discharge or dismissal or termination was not justified, they may set aside the order, direct
reinstatement on such terms and conditions as they think fit, and give other relief to the
worker including the award of lesser punishment in lieu of discharge or dismissal, as the
circumstances may require. They’re empowered to provide interim relief during the pendency
of the ID as well.

S. 51 describes the process by which all pending cases before Labour Courts and Tribunals
constituted under the ID Act – shall be transferred to the Tribunal/NIT with corresponding
jurisdiction (and shall be dealt with de novo (as if it were new), or from the stage at which
they were pending before such transfer.

Read S. 53 of the IR Code, alongside S. 12 of the ID Act to compare the course of action
for when conciliation proceedings fail/succeed.

The CG under S. 54 may refer an industrial dispute to a NIT, which in the opinion of the CG,
constitutes a question of national importance, or is of such a nature that it concerns industrial
establishments situated in more than one state.

S. 55 is exceedingly important: as it specifies the form of the award, and relevant details
regarding when it ought to be communicated, and when it comes into operation.

Subsections 1, and 2 specify general information regarding – the form of the award, and that
it ought to be communicated to the parties and the AG. It shall become enforceable on the
expiry of 30 days from the date of such communication. This is subjected to the condition
that if the AG believes the award has been given by a Tribunal in relation to an industrial
dispute to which it’s a party, or if the CG is of the opinion in any case where the award has
been given by the NIT, that it’s inexpedient on public grounds affecting national
economy/social justice – the AG, or CG can (either for the whole award/part thereof) declare
that it shall not become enforceable on the expiry of 30 days. Where such a declaration has
been made, the AG/CG may within 90 days from the date of the communication of such
award, make an order rejecting or modifying such award, and shall at the first available
opportunity lay the award together with a copy of the order before the State Leg/Parliament
respectively.

If an award has been rejected/modified by such an order, and is laid before the State
Leg/Parliament, such award shall become enforceable on the expiry of 15 days from the date
on which it is so laid,, and where no order under subsection 4 is made in pursuance of a
declaration- the award shall become enforceable on the expiry of the period of ninety days.

S. 56 – Read alongside S. 17 B of the ID Act.

Refer S. 57 for persons on whom settlements and awards are binding (non-conciliation
proceedings- on parties to the agreement/arbitration award- parties to the agreement/CO-
parties and other parties summoned to appear in proceedings insofar as they were summoned
with proper cause (as recorded in the opinion), heirs assignees, successors.

S. 58 1): Settlement shall come into operation on such date as is agreed upon by the parties to
the dispute, but if no date is agreed upon, it will the date on which the memorandum of
settlement is signed by the parties to the dispute. (2): It shall be binding for such a period as is
agreed upon by the parties, and if no such period is agreed upon – 6 months from the date on
which the memo of settlement is signed, and will continue to remain binding after the expiry
of the period until the expiry of sixty days from the date on which a notice in writing of an
intention to terminate the settlement is given by one of the parties to the other party or parties
to the settlement. (3): An award shall subject to the provisions of this section, remain in
operation for a period of 1 year from the date on which the award becomes enforceable under
S. 55 (provided that the AG can reduce or extend [not exceeding one year at a time, ensuring
that the total period of operation of any award does not exceed 3 years from the date on
which it came into operation) 4): If there has been a material change in circumstances in the
opinion of the AG (issue raised either via application, or of the AG’s own motion) then the
AG may refer the award or part of it to the Tribunal if the award is made by the Tribunal, to
decide whether the period of operation should by reason of such material change, be
shortened – and the decision of such Tribunal shall be final.

Also refer subsections 5,6, and 7 to this section,

S. 59: describes the process by which workers may be entitled to money either under
settlements/awards.

S. 60 is important – as it identifies when proceedings are said to have commenced, and when
they are said to be concluded, for both conciliation proceedings (starts on the date of the first
meeting held by the CO in an industrial dispute after the receipt of the notice of the strike or
lockout by the CO). Said to have concluded: 1) if a settlement is arrived at, when a
memorandum of the settlement is signed by the parties to the dispute, and 2) where no
settlement is arrived at, and failure of conciliation is recorded by the CO, or 3) when a
reference is made to a NIT, under this Code, during the pendency of conciliation proceedings.
And for arbitrators/Tribunal/NIT: It starts on the date of filing application, or appeal or on the
date of reference of the dispute for arbitration/adjudication, as the case may be, and such
proceedings shall be deemed to have concluded on the date on which the award becomes
enforceable.

S. 61 (which specifies confidentiality requirements for certain matters not available otherwise
than through the evidence given before such CO, Arbitrator, Tribunal, NIT – insofar as the
Trade Union/person/firm/company in question has made a request in writing to the authority
(CO, Arbitrator, Tribunal, NIT) that such information be treated as confidential. – Similar to
ID Act.

What is subsistence allowance?

S. 10 A of the Industrial Employment (Standing Orders) Act. 1946 provides that:

1. Where a workman is suspended from employment pending investigation/inquiry into

complaints or a charge of misconduct against them, the employer shall pay to such
workman subsistence allowance –
i) At the rate of 50 per cent of the wages which the workman was entitled to
immediately preceding the date of such suspension, for the first ninety days of the
suspension, and
 ii) At the rate of 75 per cent of such wages for the remaining period of suspension if
the delay in the completion of disciplinary proceedings against such workmen is
not directly attributable to the conduct of such workman.
2. If any dispute arises regarding the S.A payable to a workman under the first sub-
section, the workman or the employer concerned may refer the dispute to the LC
under the ID Act, within the local limits of whose jurisdiction, the industrial
establishment where the workman is employed, is situated, and the LC to which the
dispute is so referred shall after giving parties the opportunity of being heard, decide
the dispute, and such decision shall be final and binding on such parties.
3. If there are other provisions in this section, or under any other law for the time being
in force in any state that are more beneficial than the provisions provided above, then
the more beneficial law shall be applicable to the payment of S.A in the state.

CASES:

1. SIRSILK LTD. V. GOVT. OF A.P., AIR 1964 SC 160

(IT IS NOT MANDATORY TO PUBLISH THE AWARD UNDER 17 BY THE AG IF AT ALL THERE
IS A SETTLEMENT THAT THE DISPUTING PARTIES HAVE REACHED BEFORE THE

PUBLICATION, HOWEVER, THE COURT WILL EXAMINE POSSIBILITIES OF UNDUE

INFLUENCE, COERCION, ETC. IN CAS THERE IS A DISPUTE OR AN ISSUE ARISING AT A

LATER STAGE WRT THE SETTLEMENT THEN THE AG CAN ALWAYS PUBLISH THE

WITHHELD AWARD)

There were three appeals on certificates that raised the same question, and they were dealt
with together by the Supreme Court. The facts of appeal No. 220 are briefly as follows:
An order referring certain disputes between the appellant (management) and its workmen,
was made to the Industrial Tribunal, who upon presiding over the dispute, transmitted its
award to the Government in September, 1957. Pursuant to S. 17 of the Industrial
Disputes Act, the award has to be published by the AG within 30 days. However, prior to
the Government’s publication of the award, the parties settled their dispute, and sent a
letter to the Government on October 1, 1957 intimating the AG of the dispute’s
settlement, and also requested them to not publish the award. The Government expressed
its inability to withhold the award’s publication, given the binding language (shall) used
in S. 17 that enshrined obligations on the AG to publish the award. The dispute’s
trajectory was as follows: The appellants filed writ petitions before the High Court under
Art. 226 of the Constitution, but the H.C. that S. 17 was mandatory, and that it was not
open to the Government to withhold the publication of an award sent to it properly by an
Industrial Tribunal. The matter then reached the S.C. The Rationale of the S.C  By
virtue of S. 18(1), settlements arrived at otherwise than in the course of conciliation
proceedings and includes a written agreement between the workmen and the employer
(duly signed), shall be binding on all the parties to the dispute. And additionally, 19(1)
stipulates that settlements come into operation on such date as is agreed upon by the
parties to the dispute. Comparatively. S. 17A states that awards (including arbitration
awards) shall become enforceable on the expiry of thirty days from the date of its
publication under S. 17, which as stated earlier makes it mandatory for the AG to publish
awards (by Labour Courts, Tribunals, NT) within 30 days on receiving it. The Courts did
not entertain the argument that S. 17 when appropriately interpreted is directory. It is
clear from the language of both 17(1) and contextually relevant provisions such as 17(2)
which provides that published awards shall be final and not called in question by any
court. Moreover, the Government’s power is constrained by the formulation of S. 17A
which allows the Government in certain circumstances to declare that the award shall not
become enforceable on the expiry of thirty days from the date of its publication. The
appellants did raise an alternative submission that the objective of the ID Act is to
maintain peace between parties. Where they’ve already been able to accomplish such an
end by settling the dispute, their settlement ought to be preferred and such industrial
peace should not be disturbed by the publication off the award. The Courts discussed the
State of Bihar vs D.N. Ganguly, which stated that the only remedy would be to give effect
to such settlement by cancelling the reference, and passing an award on the terms of a
recorded compromise. However, the court noted that the case differed as the dispute was
still pending in D.N. Ganguly, whereas it had culminated in the instant case, and the
award was to be passed by the AG. The Courts noted that this was an exceptional
circumstance, and recognized that since the settlement is binding on the date prescribed in
the settlement agreement, there was no pending industrial dispute, and as such, the award
(to be published in the gazette) would be infructuous. Insofar as there are legitimate
concerns of undue influence/coercion/misrepresentation that may have produced such a
settlement, the Court noted that those concerns are true in all settlements, and moreover
held that the rules under the Statute, and the provisions of the statute are intended to
guard against such risks. The Court finally noted that in any eventuality, if discontent
were to arise with the settlement agreement, it will always be open to the Government to
publish the withheld award. The Court allowed the appeal, and directed the Govt not to
publish the award.

2. SCOOTERS INDIA LIMITED V. LABOUR COURT, AIR 1989 SC 149

(POWER OF THE LC- It also held that the mere establishment of a lawful and fair
enquiry cannot vitiate the right of the Labour Court to interfere by exercising its
powers under 6(2A)/11A.)
Brief Facts & Trajectory of the Dispute  The case Scooters India Ltd v. Labour
Court arose via an SLP, which was directed against a writ petition filed by the
petitioner in the High Court, itself, against the award of a Labour Court. The L.C.
substituted the order of termination of service (of the respondent) and ordered
reinstatement and the payment of 75 % back wages. In addition to the appellant’s writ
petition, the respondent also filed a writ petition praying for full back wages instead
of 75%. The High Court dismissed both writ petitions by a common order. The SLP is
directed against this order. The respondent was issued charge memos on 3 different
occasions, and separate inquiries were held in respect of each of the charges, and all
the charges (which pertained to acts of major misconduct) were proved. Moreover, the
enquiries conformed to statutory requirements and the principles of natural justice.
The findings recorded by the disciplinary authority were not open to challenge. The
Labour Court nevertheless set aside the order of termination, and held that it was in
the interests of justice to direct reinstatement with 75 % back wages. Rationale of the
Case  The High Court sustained the award on the basis of S. 6(2A) of the UP-ID
Act, 1947 [now 11A of the ID Act], and pointed out that the section conferred wide
powers on the Labour Court to interfere with an order of discharge or dismissal of a
workman and order reinstatement, including the substitution of any lesser punishment
as well. The petitioners submitted three contentions: First, that the High Court
proceeded on the basis that there was one order of termination of service, when there
were three separate enquiries and an order of termination had been passed in respect
of each of them. Second, that since the distribution of offensive pamphlets had taken
place outside the factory premises, para 14.2(13) of the Certified Standing Orders
would not be attracted because it refers to the distribution of offensive material inside
factory premises. The petitioners maintained that the act in question would fall under
 S. 14.2(20) of the Certified Standing Orders. And third, that the Labour Court should
not have interfered and their interference cannot be justified by S. 6(2A)/11(A), as the
internal enquiry was conducted fairly. The Court held that on the first ground, the HC
had in fact referred to all three chargesheets and the H.C can’t be considered to have
made a serious error by virtue of mistakenly stating that it had not to the effect, in the
judgment. The Court did not find any merit in the second ground, as the order of
termination of service referred only to 14.2(13) of the Standing Orders, and not
14.2(20). The H.C also extensively considered the nature of the powers conferred on
the Labour Court by S. 6(2A)/11A, and the facts of the case before coming to its
decision. Therefore, the S.C held that the Labour Court had not exercised its powers
under 6(2A)/11A in an arbitrary manner. It noted that the L.C had taken the view that
justice should be tempered with mercy, and that the erring workman should be given
an opportunity to reform himself and be a loyal and disciplined employee of the
petitioner Company. It also held that the mere establishment of a lawful and fair
enquiry cannot vitiate the right of the Labour Court to interfere by exercising its
powers under 6(2A)/11A. The SLP was dismissed. The S.C also expressed its hope as
a parting point that the respondent should conduct himself as a dedicated and worthy
employee of a public sector concern, and that doing so will be in the interests of all
workers as well as the petitioner company.

3. GUJARAT STEEL TUBES LTD. V. GUJARAT STEEL TUBES MAZDOOR SABHA, AIR
1980 SC 1896

[Interestingly by increasing the jurisdictional scope of arbitrators, the institution of

arbitration (in a long-term view) is weakened, as it can attract unwarranted interference
into the award of the arbitrator by the H.C. Hence, the Court held that the power of the
Court should only be used sparingly in cases (listed herein, e.g., gross miscarriage of
justice, etc.) Basically- 11A is applicable to arbitrators]

Facts of the Case  The appellant is a steel manufacturer in the outskirts of

Ahmedabad, and while its profits grew, there was protracted conflict between workers
and the management, in regards to the disproportionately low wages they received
(vis-à-vis the profits generated by the company). Consequent to prolonged attempts at
negotiation, and the occasion of multiple strikes, they did reach a temporary
agreement where the management agreed to implement the recommendations of the
Central Wage Board for Engineering Industries, and all the increments to be granted
to workmen (insofar as they don’t adversely affect the wages of workmen). Pursuant
to this, agreed upon mini-increases in wages were underway during the years of
1970,71, and 72, and the payment of bonus also the subject of bargain and agreement.
However, in September 1971, a violent conflict broke out which led to criminal cases
being filed against workers, and charges of go-slow tactics and lock-outs were
levelled against either party, and this ultimately led to cases of discharge, and
dismissal of workmen. While conciliations were helped, and two settlements were
arrived at, the fate of 32 workers (of the 64 that had been discharged) were left to be
decided as their dispute was subject to arbitration by an Industrial Tribunal.
Ultimately, after prolonged strikes, the Management transmitted a notice to the
workmen that they would be terminated, if they did not discontinue from engaging in
strikes, and resume work. Upon continuing strikes, an entire work force of 853
employees was terminated from service by way of discharge simpliciter (and under
the relevant Model Standing Orders that authorize discharge simpliciter). They also
clarified in the notice that they would be willing to re-employ the discharged
workmen. With the passage of time, and the increasing socio-economic pressures
plaguing the lives of workmen lacking the leverage to hold-out and fight for their
rights, the re-employment of discharged workmen slowly snowballed, leading to a
total of 419 workmen returning to the factory. The fate of the remaining employees
hanged in the balance, and the Sabha to its credit did attempt to (in a conciliatory
spirit) rejoin the rest of the employees and accept the offer, and the strike was by all
counts, liable to end. However, the Management was petulantly insistent that the
Sabha in its reply ought to publicly call off the strike, and advise workers to resume
work. Moreover, they clarified that they may only need about 250 more workers,
effectively pushing the remaining workers to unemployment and poverty. The dispute
was referred to an arbitrator who sided with the management, and upon appeal to the
High Court via a writ petition, the Court all but vindicated the position of the workers,
ordering reinstatement with either full or partial back pay, and save the consideration
of the quantum of back wages payable to workmen, which was contested on appeal to
the Supreme Court in the appeal as it stands before the Court. The management
naturally appealed against the decision of the H.C, to the S.C
Court’s Rationale  This case is particularly important for numerous reasons. The S.C
clarifies several points of law, most saliently, the appropriate constitutional lens through
which industrial jurisprudence should be interpreted. It performs a critical balancing act
between the interests of industry, and the rights and living conditions of workmen, often
unable to adequately combat the weaponized sphere of influence wielded by capital-
owners. The Court drew important distinctions between the American model of Laissez-
Faire neoliberal hegemonic discourses that actively deprioritize worker-concerns, and
roots its judgment in the ideological and political realities of the Indian economy. It
recognizes both the very real exigencies motivating interpretations that aid workers rights,
and the socialist subtext from which the Indian constitutional vision emerges. To that
effect, the Court expressly draws attention to Arts. 41,42, 39, 43, and 43 A which speak
of important policy directives such as the establishment of the right to an adequate means
of livelihood, the right to work, humane conditions of work, living wage ensuring a
decent standard of life and enjoyment of leisure and participation of workers in
management of industries. They set out that such is the value of the vision of Indian
Industrial Jurisprudence. They even state (after readings of both Gandhi, and the Old
Testament) that capital in Indian society, shall be the brother and keeper of labour, and
cannot disown its obligation. With this vision in mind, the Court clarified in this case,
after relying on (Hindustan Tin Works v. Its Employees) that the rule simply is that the
direction to deny reinstatement or pare down the quantum of back wages is absent save
for exceptional circumstances. The Court also importantly explored whether the discharge
was rightly executed by mode of discharge simpliciter, or whether it was a form of
punishment intended against the ‘wrongful’ conduct of the workmen to engage in the
strikes. It is to be noted that the Sabha did not challenge the claim that it was illegal (in
the sense of its violation of the settlement agreement to not engage in strikes or lock-outs
for a period of 5 years). But a deeper look at the facts of the case reveals several
irregularities with the mode of dismissal that the High Court has explored in its decision.

First that there is a clear distinction between discharge intended as punishment and
discharge simpliciter. While the management was attempting to validate the order of
discharge as discharge simpliciter properly passed under Model Standing Order 23, the
Bench held that the substance of the action (and not the form) was important in
determining what the dismissal order amounted to. The fact that the management sought
to disguise the true nature of the dismissal order (i.e., that it was punishment for engaging
in an illegal strike) was noticed by the Bench. In many situations, the language of the
termination order is equivocal, and misleading and dressed up as simple termination, and
as such, judges should examine the relationality between motive, and the foundation of
the order (and other facts and circumstances available) to identify the true effect of an
order of termination. If the two factors (motive, and the constitution of the order)
converge, then an inference of punishment is reasonable  that is, if the severance of
service is effected, the first condition is fulfilled, and if the foundation of such severance
is the workmen’s misconduct and/or is visited with evil pecuniary effects, such as
pecuniary cutbacks on their terminal benefits, then the second condition is satisfied. The
decisive factor then, is the plain reason for the discharge, and not the strategy of a non-
enquiry, or clever avoidance of stigmatizing epithets and making the termination seem
like a discharge simpliciter. The requirement then to conduct an enquiry is all the more
relevant, and using fine-tuned legalese to come to an end regulated by the statute is a
colorable action on the part of the management.

Second, that the order of termination of service properly interpreted as a form of

punishment for engaging in an ‘illegal’ strike, is itself invalid given the lack of an
individualized enquiry proceedings in the establishment of the guilt of each workman.
The Courts recognized that the theory of community guilt is not accepted in Indian legal
discourses. The order of termination in question, insofar as it can be properly conceived
of as punishment for the actions of the workmen (to engage in a strike) clubs all
participants into the category of those engaging in misconduct, purely by virtue of their
involvement in a strike. The management does not provide an individualized enquiry for
each of the workers involved, which industrial jurisprudence requires (both in case-law,
and under the ID Act, and also by virtue of Art. 311 of the Indian Constitution). The
Court noted that the lack of relevant distinctions between passive and active participants
(who started the strike), and between violent and non-violent strikers. Therefore, the
award suffers from the flaw that it equates mere participation in an illegal and unjustified
strike, with brazen misconduct by every workman without so much as even identifying
the charges against each of them.

Additionally, the Court clarified the powers of the arbitrator (in response to the contention
that the arbitrator could not exercise the power conferred on a Tribunal under S. 11A of
the 1947 Act, and could therefore not interfere with the punishment awarded by the
management to the workmen). While S. 11A does not expressly include arbitrators into
its ambit, the Court recognized that an arbitrator under S. 10A will have to decide cases
keeping in view, the spirit of the legislation (the ID Act). As such, the Court held that the
arbitrator could determine questions of guilt and punishment, and recognized the
similarity of the functions performed by both Tribunals and Arbitrators. “Tribunal”
simpliciter has a sweeping ambit, and as it literally means a seat of justice, it can include
a commission/court/or other adjudicatory organ created by the State. Section 2(r) of the
ID Act, embraces an arbitration tribunal. They examined the Object and Purpose of the
Section, and looked into its interpretative history to identify a way to resolve the
ostensible absence of arbitrator in 11A, and what implications this ought to have for the
powers and functions of arbitrators duly constituted under 10A. The Court recognized
that while it cannot assume legislative functions in the case of a casus omissus, they do
have a responsibility to rectify defects. Moreover, they took into account that prior to the
introduction of 11A, the Labour Court had the power to delve into the quantum of
punishment granted by the management, (and consider issues such as the obligation to
conduct an enquiry prior to dismissing workers).

The Court also clarified that the golden rule for the judicial resolution of industrial
disputes is first to persuade fighting parties, by judicious suggestions into the peace-
making zone, disentangle the differences, and narrow the mistrust between them, and
through consensual steps, convert them into negotiated justice. The prioritization of
negotiation over adjudication  is necessary as it helps vulnerable demographics, i.e.,
workers who benefit from the quick resolution of disputes (as opposed to costly enduring
adjudicatory processes that hinder their income)

Lastly, the Court discussed the powers of the High Court and its jurisdictional limits in its
interference of the punishment. By recognizing that arbitrators can be conceived of as
Tribunals in many respects (functions, and powers), the Court increased the jurisdictional
ambit of the arbitration process. The arbitrator has the power to bind not only the parties
to the reference, but also third parties as well. Given that they are then statutory tribunals,
their awards would come under the jurisdictional purview of the High Court. It held that
Art. 226 of the Constitution, is possessed of a power wide enough, to be a friend in need
when the summons comes in a crisis from a victim of injustice. To that effect, the Court
stated that what the Tribunal may in its discretion do, the High Court too under Article
226 can, if the facts compel so. However, the S.C. was mindful that every wrong order
cannot be righted merely on the count that its wrong, and emphasized that it can only be
quashed if it is vitiated by a fundamental flaw in the way of a gross miscarriage of justice,
absence of legal evidence, a serious error of law, or a perverse misreading of the facts.
Interestingly, the Court constructed a decolonial reading of Art. 226, noting its native hue,
and held that w.r.t Art. 226, the Court should be cautious both in not over stepping as if
Art. 226 were a matter of ordinarily appeal, and in not failing to intervene when a grave
error has crept in. Interestingly by increasing the jurisdictional scope of arbitrators, the
institution of arbitration (in a long-term view) is weakened, as it can attract unwarranted
interference into the award of the arbitrator by the H.C. Hence, the Court held that the
power of the Court should only be used sparingly in cases (listed herein, e.g., gross
miscarriage of justice, etc.)

4. REMINGTON RAND OF INDIA VS THEIR WORKME

(Salient Holding  S. 17(1) is directory in nature. )

Facts of the Case:
The Case arose via an appeal by Remington Rand of India Ltd against their workmen,
out of an award that was dated 5th October, 1965, made by the Industrial Tribunal –
This award was published in the Kerala Gazette on 15th November, 1966.

Central Issue of the Case:

Is an award published after the expiry of the period specified in S. 17 enforceable?
And connectedly, is S. 17 intended to be mandatory or directory?
Relevant Statutory Provisions:
The statute utilizes mandatory language “shall within a period of thirty days from the
date of its receipt by the appropriate Government, be published in such manner as the
appropriate Government thinks fit” in S. 17(1), and in S. 17(2) specifies that awards
published under S.17(1) shall be final and not called into question by any Court.
Other sections support this mandatory construction: S. 17(A)  An award becomes
enforceable on the expiry of thirty days from the date of publication under S. 17(1).
Also refer, S. 19
Court’s Reasoning:
Placing reliance on Sirsilk Ltd. v Govt of AP (which also discussed the mandatory
nature of S. 17, holding that it was instead directory) and Erumeli Estate v Industrial
 Tribunal, which held under similar fact-situations, that delays in publication of
awards don’t render them non-enforceable, and that S. 17 ought to be interpreted as
directory in nature  The Court held that S. 17 was directory in nature, and held the
award to be enforceable.
It also placed reliance on the reasoning in the State of Uttar Pradesh & Ors v Babu
Ram Upadhya, which discussed that in considering the legislature’s intentions, key
considerations to examine are whether there is any real consequence of non-
compliance (e.g., penalty, contingency for non-compliance). There are no such
consequences in the case of S. 17
Holding the award to be non-enforceable would entail needless harassment to the
parties, given the long-period of time taken for the reference to be concluded and for
the award to be published.
There should be no disparity in wages between different branches of a Company,
when the workers are engaging in similar work, and the Company is making profits.
They referred the matter to the Tribunal for fixing the wages, and adjusting the
workers in the revised scale.
On the question of Dearness Allowance, the Tribunal held that workmen of one of the
branches (Ernakulam) where the cost of living is higher, should get D.A at the rate
and manner in which the D.A was being paid to employees of the Madras Office. –
The Court held that it ought to be on the basis of the Bangalore branch.
On the question of the scheme for gratuity, the Court held that the scheme for gratuity
should be the same as that in the Ernakulam Branch, and in the Bangalore Branch
(with the difference being that the maximum fixed was 20 months wages, after 20
years of service  on matters of termination service relating to misconduct, and held
the qualifying period to be 15 years service.
They held the same principle of treating branches equally on the matter of leave as
well
On matters relating to working hours, work-load, and moving staff allowance, the
Court affirmed the position of the Tribunal in its award.
Holding:
Salient Holding  S. 17(1) is directory in nature.
The matter will go back to the Tribunal for disposal of the issue as to the revision of
wage scales and adjustment of workers in the revised scales. The scheme for gratuity
will stand modified as indicated in the judgment. The rest of the award will stand.

5. J.K. SYNTHETICS LTD. V. K.P. AGRAWAL (2007) 2 SCC 433

()
Facts of the Case & Trajectory of the Dispute  This case arose via a Special Leave
Petition, against the judgment of the Allahabad High Court, which rejected a writ petition
filed by the appellant, challenging an award (and a subsequent modification to the award)
of the Labour Court. The first respondent was working as an Assistant in the appellant
company, and was issued three charge sheets. He filed his objections/explanation in
respect of each charge sheet, following which an enquiry was conducted. Accepting the
report of the Inquiry Officer (which held that the charges were proved), the employer
imposed the punishment of dismissal. Conciliation proceedings were initiated, and
subsequent to its failure, the S.G referred the dispute to the Labour Court for adjudication.
The dispute revolved around the following question(s): Whether the termination of the
services of its workman Shri Kashi Prasad, is proper, and/or legal? If not, what
benefits/compensation is the workmen entitled to? The Labour Court held that the 1 st
charge sheet (insubordination and disorderly behaviour) was not proved, the 2 nd (made
false and indecent allegations against his superior officer, and thereby violated office
discipline) was proven, and on the 3 rd charge sheet (preparing the annual accounts
incorrectly) he was given the benefit of doubt. The punishment was deemed too harsh,
and so the Labour Court reduced the punishment of dismissal to the withholding of two
annual increments. The Labour however, omitted to answer the second question, i.e., if
so, what benefits/compensation is the workmen entitled to? The workman under S. 6(6) of
the UP ID Act, filed for correction of the award for reinstatement + back pay, and the
Court modified the award as they believed this to be a minor omission, and added
reinstatement and back pay. The management appealed to the HC, which affirmed the
corrected order.

Court’s Rationale: The Court in this case considered four issues, and they are as
follows:

Whether a provision enabling a court to correct any clerical or arithmetical mistake, or

error in the order arising from any accidental slip or omission, empowers the Labour
Court to grant a relief of back- wages, which was not granted in the original award?

On this question, the Court held that a perusal of the Labour Court’s decision in
the dispute makes it clear that it had accidentally omitted to answer the second
part of the reference, and was able to rectify said omission by adding a paragraph.
The Courts also placed reliance on Tulsipur Sugar Company v State of UP which
 addressed similar discussions regarding two issues that were interconnected, and
the Court addressed one but not the other. In that case, the questions concerned the
fitment of certain workmen in a new grade, and the date from which such fitment
should have effect. The Court in Tulsipur Sugar, recognized the Labour Court’s
power to rectify this accidental omission, and even clarified that S. 6(6) does not
lay down any time-limit within which correctional jurisdiction could be exercised,
and was therefore not barred by limitation.

When the punishment of dismissal is substituted by a lesser punishment (stoppage of

increments for two years), and consequently, the employee is directed to be reinstated,
whether the employee is entitled to back-wages from the date of termination to date of
reinstatement? (This is very relevant in the present case scenario only, because here the
court said the back wages are not given automatically nor are consequential- even
through the rectification because in the present case there is clear proof misconduct and
the same shouldn’t be rewarded. )

On this question, relevant excerpts of the Court’s ruling are:

“In cases where the misconduct is held to be proved, and reinstatement is itself a
consequential benefit arising from imposition of a lesser punishment, award of back
wages for the period when the employee has not worked, may amount to rewarding the
delinquent employee and punishing the employer for taking action for the misconduct
committed by the employee.”

“The decisions relating to back wages payable on illegal retrenchment or termination may
have no application to the case like the present one, where the termination (dismissal or
removal or compulsory retirement) is by way of punishment for misconduct in a
departmental inquiry, and the court confirms the finding regarding misconduct, but only
interferes with the punishment being of the view that it is excessive, and awards a lesser
punishment, resulting in the reinstatement of employee.”

“In this case, the Labour Court found that a charge against the employee in respect of a
serious misconduct was proved. It, however, felt that the punishment of dismissal was not
warranted and therefore, imposed a lesser punishment of withholding the two annual
increments. In such circumstances, award of back wages was neither automatic nor
consequential. In fact, back wages was not warranted at all.”
Whether on the facts and circumstances, the Labour Court was justified in interfering
with the punishment of dismissal? (The LC can only interfere when the gravity of the
punishment is disproportionate to the charges established- i.e. to say that when the
punishment is too harsh for the charges)

The Court clarified that the charge was already established against the employee
and was serious in nature. The Labour Court did not record a finding that the
punishment was harsh or disproportionately excessive. Purely on the ground that
the employee had worked for four years without giving room for much complaint,
the Labour Court ignored the seriousness of the misconduct. The Court stated that
its view, consistently has been that “in the absence of a finding that the
punishment was shockingly disproportionate to the gravity of the charge
established, the Labour Court should not interfere with the punishment”

If the employer was otherwise entitled to relief, whether it could be denied on the
ground that it had failed to reinstate the employee, in spite of the non-stay of the
direction for reinstatement? (you cannot straight deny the relief sought by the
employer- “the mere fact that the first respondent was not reinstated in pursuance of
the award of the L.C. cannot result in a dismissal of the writ petition challenging the
award.)

When the employer challenged the award of the LC and sought a stay of the
award, the High Court only stayed the award in relation to the back-wages, and
did not stay the award directing reinstatement. The employee’s counsel submitted
that despite the non-stay on the direction of reinstatement, he was not reinstated.
On this, the H.C. held that the employer had willfully violated the lawful order,
and was not entitled therefore, to the exercise of equitable discretion under Art.
226/227. The S.C. however, clarified that the assumption that there was a lawful
order, and that it was willfully violated, is itself not sound. Second, it found that
the employer was not given an opportunity to explain why the employee was not
reinstated. In fact, the contention of the employer is that the 1 st respondent did not
report back to service even though the employer was ready to reinstate him
subject to the final decision. It held that “the mere fact that the first respondent
was not reinstated in pursuance of the award of the L.C. cannot result in a
dismissal of the writ petition challenging the award.
6. INDIAN RAILWAY CONSTRUCTION COMPANY LIMITED V. AJAY KUMAR (2003) 4
SCC 579

(COURT MUST LOOK AT THE PROCESS THROUGH WHICH THE

IMPUGNED DECIDION WAS MADE AND NOT QUESTION THE DECISION
AS A WHOLE--ENQUIRY IS IMPORTANT- PNJ AUDI ALTERAM PARTEM- which
held that the exercise of power (whether legislative or administrative) will be set aside if
there is manifest error in the exercise of such power or the exercise of the power is
manifestly arbitrary. -- The Court held that to characterize a decision of the administrator
as ‘irrational’, the Court has to hold, on material that it is a decision “so outrageous” as to
be in total defiance of logic, or moral standards. These principles have been directly noted
in several Indian cases, (Union of India and Anr. V S Ganayutham). The test is to
basically see whether there is any infirmity in the decision-making process and not in the
decision itself.—the court here upheld the dismissal but also ordered back wages)

Facts of the Case & Trajectory of the Dispute  A bitter relationship subsisted
between the employer and employee, and the Respondent (employee) while on probation
allegedly assaulted a senior officer, and along with others ransacked the office creating
chaos. Subsequently, an order of dismissal was passed on 7.12.1983. The order of
dismissal pointed out that it would not be practicable to hold an enquiry before directing
dismissal (given the grave nature of the wrongs allegedly committed by the workman).
The respondent employee, alleged that the order of dismissal was a result of victimization
(due to his union activities). He stated this on record before the Delhi High Court (in the
writ petition), and claimed that the order of dismissal without holding an enquiry was
violative of the law, and was at variance with the requirements of Article 311(2) of the
Constitution of India. The Learned Single Judge was of the opinion that while enquiries
can be dispensed with, they should not have been in the instant case. It also held that
protections under Article 311(2) was available, and non-compliance with the procedure
vitiated the order of dismissal. The matter was challenged in LPA before the Division
Bench of the Delhi High Court by the employer. The Court held that there was scope for
judicial review of the order dispensing with enquiry. The order of dismissal was quashed
on the ground that it was activated with mala fides. It clarified that while the decision to
conduct or dispense an enquiry was that of the concerned authority, it could nevertheless
be judicially reviewed. It also held that 311(2) had no application. The Division Bench
upheld the Single Judge Bench judgment holding that on limited judicial review, the order
dispensing with enquiry was not sustainable.

The Court’s Rationale  The S.C highlighted the failure of the Courts (Single Judge
and Division Bench) to properly examine all the relevant case law, and consider the
question of practicability of holding an enquiry. They also held that the High Court’s
assumption that the order of dismissal (without enquiry) was mala fide prima facie, even
in the absence of specific allegations of mala fide conduct – was improper. The Courts
simply made bald statements regarding the alleged victimization of the worker, and of the
existence of mala fides. On the latter, the S.C. clarified the (heavy) burden of proof as
falling on the person alleging mala fide, and that while it may be difficult to establish a
state of mind, the sense of an improper motive must be shown from the established
surrounding factors which preceded the order. On the contention of the employer that
dispensing with the enquiry is required owing to: 1) the difficulties entailed in getting
witnesses to give free and frank evidence in light of the violent actions of the employee,
2) the time taken to conduct the enquiry, and the violent activities of the employees may
cause disruption to the company’s functioning, and pose safety risks for employees.
However, on the basis of such a presumptuous conclusion (that the employee is liable to
engage in intimidating and violent acts) the concerned authority should not have
dispensed with enquiry. Instead, the authority should have examined whether there was
something material, that had to be specifically dealt with, and if such a material concern
existed – it would be a valid ground for dispensing with enquiry. This relates to
impracticability. The Court upon reviewing the relevant rules applicable to the Indian
Railway Construction Company, that the disciplinary authority could dispense with an
enquiry, if the authority is satisfied that it is not reasonably practicable to hold an enquiry
in the manner prescribed in the rules (Rule 30).

It is well settled that the power to dismiss an employee dispensing with an enquiry, is not
to be exercised so as to circumvent prescribed rules. Additionally, the S.C. clarified that
the responsibility to determine whether the facts justify the dispensation of the enquiry, is
that of the disciplinary authority. Where two views are possible (as to the ‘propriety’ of
conducting an enquiry), the S.C. recognized that it is not its function to substitute its view
for that of the disciplinary authority. An incredibly important contribution
(precedentially) of this case, is its clarification of the scope of judicial review by the
Courts, and more specifically, the scope for judicial interference in administrative
decisions. Administrative action is the broad area of Governmental activities in which the
repositories of power may exercise every class of statutory function of executive, quasi-
legislative and quasi-judicial nature. The Court in clarifying its power relied on the State
of UP v Renusagar, which held that the exercise of power (whether legislative or
administrative) will be set aside if there is manifest error in the exercise of such power or
the exercise of the power is manifestly arbitrary.

In this regard, The Wednesbury case is a landmark case insofar as it laid down various
basic principles relating to judicial review of administrative directions. “To arrive at a
decision on reasonableness, the Court has to find out if the administrator has left out
relevant factors or taken into account irrelevant factors. The decision of the administrator
must have been within the four corners of the law, and not one which no sensible person
could have reasonably arrived at, having regard to the above principles, and must have
been a bona fide one.” While the decision could have been one of many choices that the
authority can decide, and not for the Court. Moreover, the Court placed a reliance on the
principles set out by Lord Diplock in CCSU case: illegality, irrationality, and procedural
impropriety. The Court did recognize that in the future, more grounds could become
available, including the doctrine of proportionality, which is a principle followed by
certain members of the European Economic Community. The Court held that to
characterize a decision of the administrator as ‘irrational’, the Court has to hold, on
material that it is a decision “so outrageous” as to be in total defiance of logic, or moral
standards. These principles have been directly noted in several Indian cases, (Union of
India and Anr. V S Ganayutham). The test is to basically see whether there is any
infirmity in the decision-making process and not in the decision itself. The Court
therefore performed a balancing act, and decided to in their consideration, offer up a
further payment of Rupees 12 lacs towards back wages, and also gave affect to the order
of dismissal.

7. KARNAL LEATHER KARAMCHARI SANGHATAN (REGD.) V. LIBERTY FOOTWEAR

COMPANY (REGD.) AIR 1990 SC 247
(PUBLICATION OF AGREEMENT REACHED AFTER ARBITRATION UNDER 10A (3) IS

MANDATORY BEFORE THE ARBITRATOR CONSIDERS THE MERITS OF THE DISPUTE-

 NON-COMPLIANCE OF THIS REQUIREMENT OF PUBLICATION, RENDERS THE AWARD

INVALID AND UNENFOREABLE)

Brief Facts  The company is a footwear brand, and was embroiled in a dispute with its
workers. They alleged that more than 200 workers had been laid off. The company
responded to the claim by stipulating that they weren’t employees at the ‘material time’.
This dispute led to a strike, and more employees were in turn laid off. Resulting in a law
and order problem, the Government stepped in, and formed a committee of 5 (2+2+
Deputy Commissioner)  with parity of representation. The Committee passed an award
against the company, and asked them to re-appoint 159 workers. The company naturally,
filed a writ petition before the High Court, and the H.C. ruled that the non-publication of
the agreement in the Gazette renders it void and directs publication followed by fresh
award. The case went to the S.C by way of appeal.

Issue  The principal question under consideration in the instant dispute, is whether non-
publication of the arbitration agreement as required under S. 10A(3) renders the arbitral
award invalid and unenforceable.

Holding 

The State Government shall publish condition No. 3 in the arbitration agreement in the
Government Gazette within four weeks from today.

The agreement containing condition No. 3 stands referred to the Industrial Tribunal,
Haryana at Ambala for passing an arbitration award in accordance with the law.

The reference made under Section 10(1) of the Act to the IT is quashed, and

The management shall withdraw the aforesaid LPA and the Writ Petition pending in the
High Court within three weeks from today, failing which the High Court shall dispose
them of as having become infructuous.

Important Excerpts of the Court’s Reasoning From the Judgment

“It is with respect to the time for publication of the agreement. But publication appears to
be not necessary for validity of the agreement. The agreement becomes binding and
enforceable as soon as it is entered into by the parties. Publication is also not an
indispensable foundation of jurisdiction of the arbitrator.” … However, “Sub-section (3)
also requires that a copy of the agreement shall be forwarded to the appropriate
government and the appropriate government shall, within one month from the date of
receipt of such copy publish it in the Official Gazette. At both the places it may be noted
that the legislature has used the word "shall". In the context in which this word has been
used, there is, in our opinion, little doubt about the obligation to publish the agreement in
the Official Gazette.”

Why is publication necessary?  Given that the stated objective of the Act is the
achieving of social justice, publication is essential insofar as it helps workers stay
informed, and reduces information asymmetries. Though unions exist, they facilitate the
resolution of disputes. They don’t decide. Therefore, despite the Unions playing a role in
facilitating the process of dispute resolution (whether it be through the constitution of
members of the committee, or in other ways), publication is still essential to ensure that
workers are adequately informed of the happenings that stand to afflict their lives.

8. General Manager, Security Paper Mill V. R.S. Sharma, (1986) Lab IC 667 SC
(the employees who are not a part of the union who entered in the agreement,
this agreement is non-binding on such non-members of the union--)

Brief Facts  There was a 1973 Agreement between the employer and workmen as part
of a conciliation proceeding, with respect to the granting of certain incentive benefits for
non-operative officers/staff. While this was in force, in Government of India passed a
letter reducing these benefits for non-operative staff – that order was challenged and
invalidated by Industrial Tribunal (constituted by the CG). In 1979, the management
entered into an agreement with SPM Union (one of three unions implicated in the present
dispute) to structure benefits along the lines of the 1975 GOI letter. The Respondents
(who were not part of the Union) challenged the agreement before the Authority under the
Payment of Wages Act, and the Authority ruled in their favour for deducted wages and
ordered costs at Rs. 10 per worker, but denied any compensation. The Management
appealed, but the Court affirmed the order (while setting aside the aspect of the order
providing for costs). This matter was then raised before the S.C by way of special leave
(preferred by the management).

The Core Issue  Does the agreement with the S.P.M Employees Union comply with
the provisions of the ID Act, 1947, and apply uniformly to all the workers in the plant?
Holding  The Court held that upon examining the material on record placed before
them, there were three Unions and no evidence to demonstrate that the respondents were
indeed members of the S.P.M Employees Union, which had entered into the agreement
dated April 11. 1979. Since it is not shown that S.P.M Employees Union (which was
party to the agreement) could represent the respondents herein, and that they were in fact
parties to it, the agreement was held to be non-binding on them. Moreover, the Court
clarified that the 1979 agreement between the management and S.P.M Employees Union
which itself is not binding on the respondents, cannot have the effect of depriving them of
their right under the settlement dated June 29, 1973, as long as it is in operation.

Important Excerpts of the Reasoning  “Law thus attaches importance and sanctity to
a settlement arrived at in the course of a conciliation proceeding since it carries a
presumption that it is just and fair and makes it binding on all the parties as well as the
other workmen in the establishment or the part of it to which it relates as stated above.” –
Contrarily, there was no evidence to substantiate the claim that the 1979 agreement was
fair or just.

“But in the case of a settlement not arrived at in the course of the conciliation proceeding
it has to be in writing and signed by the parties in the prescribed manner and a copy
thereof should be sent to the officer authorised by the appropriate Government in this
behalf and to the conciliation Officer. Such a settlement arrived at by agreement between
the employer and workmen otherwise than in the course of conciliation proceedings in
binding only on the parties to the agreement as provided in section 18(1) of the Industrial
Disputes Act, 1947.”

“Such a settlement is not binding on the other workmen who are not parties to the
settlement.”

9. MANAGEMENT OF THE NEEDLE INDUSTRIES V. THE LABOUR COURT, (1986) I

LLJ 405 MAD
(EXPRESS DEMANDS ARE NOT REQUIRED FOR INDUSTRIAL DISPUTES TO BE

ESTABLISHED, THEY COME INTO PLAY AUTOMATICALLY BY VIRTUE OF THE

DEFINITION OF ID UNDER SECTION 2K)

Brief Facts of the Case  In 1973, certain disciplinary proceedings were initiated
against the workman – He was exonerated, but in the intervening 199 days, management
considered him voluntarily terminated. He did not press for either reinstatement or
backpay, and two years later, in 1975, along with other workmen, applied to the Labour
Officer complaining that the management refused to accept the said workman without
assigning proper reason/inquiry. The workman demanded reinstatement with back wages,
and continuity of service. The matter was first referred to conciliation, which failed.
When the matter was referred to the Labour Court, it agreed with the contention of the
management that there was no industrial dispute, given the lack of an express demand.
The matter then went to a Single Judge Bench of the Madras High Court, who set aside
the order and ruled in favour of the workman.

Issues 

Whether a demand should be made either directly by the workman, or on his behalf of the
management to raise an industrial dispute? Holding: No

Whether a demand made by the workman on the management through the Conciliation
Officer is enough to raise an industrial dispute? Holding: Yes, and as such, the Single
Judge Bench’s order is affirmed

Important Excerpts of the Case’s Reasoning  “According to the definition of

Industrial dispute under S. 2(k) of the Act, any dispute between employers and workmen
is an industrial dispute. When the management dismissed the workman, in our considered
opinion, there automatically arose a dispute or difference between the management and
the workman. Thus, according to the plain meaning of the definition of industrial dispute,
the dispute or difference arose between the management dismissing the workman by
virtue of the management dismissing the workman from service.”

“It is nowhere stipulated in the Act particularly in S. 2(k) and the existence of the dispute
as such is not enough, but then there should be a demand by the workman on the
management to give rise to an industrial dispute.”

10. DENA BANK VS KIRITIKUMAR T PATEL

 (FULL WAGES LAST DRAWN MEANS THE WAGES WHICH THE PERSON WOULD HAVE
DRAWN HAD HE BEEN AN EMPLOYEE CURRENTLY)

Facts and Trajectory of the dispute: The Respondent was employed as Clerk-cum-
Cashier with the Appellant-Bank. After holding an inquiry into charges relating to
misappropriation of funds of the Bank to the tune of Rs. 5,000/- as contained in charge
sheet dated June 18, 1983 he was dismissed by order dated July 1, 1986. The said
dismissal of the Respondent gave rise to an industrial dispute which was referred for
adjudication to the Central Industrial Tribunal [hereinafter referred to as 'the Tribunal'].
The Tribunal found that the charges were not established and held that the dismissal of
the Respondent was illegal. The Tribunal directed reinstatement of the Respondent in
service. The Appellant Bank has filed a writ petition Under Article 226 of the
Constitution in the Gujarat High Court challenging the said award of the Tribunal and the
said writ petition is pending in the High Court. In the said writ petition the Division
Bench of the High Court on September 11, 1991 passed an interim order staying the
operation of the award on the condition that the appellant-Bank would comply with the
provisions of Section 17B of the Act and will pay to the Respondent during pendency of
the writ petition wages as per the said provisions subject to the Respondent complying
with its requirement meaning thereby that he will be paid wages last drawn or which
would have been drawn if he was not suspended. However, post the Division Bench of
the Hight Court – he submitted an application to modify the said order, seeking a
direction for payment of wages as on the date of the award. The said application was
rejected by the Division Bench. Files another application subsequently, about wage
revisions, saying that the said settlements had been implemented already in employment.
The respondent claimed that he was also entitled for revision in wage structure including
DA. Final bit about how it got to the SC: On the said application the learned Single Judge
on September 26, 1995 passed an order directing that the Respondent shall be paid the
wages as revised by the Appellant-Bank including the increments, D.A., etc. which are
granted to all the employees pursuant to two settlements signed during the pendency of
the writ petition between the banking industry and the All India Trade Unions which are
known as the Fifth and the Sixth Bipartite Settlements and that arrears be paid to him
from the date of the award accordingly. The Letters Patent Appeal filed by the Appellant
Bank against the said order of the learned Single Judge was decided by a Division Bench
of the High Court by the impugned judgment dated February 7, 1996 whereby the
direction given by the learned Single Judge regarding wages payable to the Respondent
has been maintained but the direction regarding arrears has been modified and it has been
directed that the Appellant-Bank shall deposit all arrears payable under that order up to
December 31, 1995 in a separate fixed deposit of three years in the name of the
Respondent and that from January 1, 1996 onwards the Respondent will be paid
according to the order of the learned Single Judge and that the deposit will abide by the
final result of the Special Civil Application but the interest accruing on the fixed deposit
shall be paid to the Respondent. Feeling aggrieved by the said judgment of the Division
Bench of the High Court the Appellant-Bank has filed this appeal

Held: Section 17B of ID Act intends to give relief to a workman who has been ordered to
be reinstated under award of a Labour Court or the Industrial Tribunal - Same is
effective during pendency of proceedings in which said award is under challenge - Object
underlying it is to relieve to a certain extent hardship that is caused to workman due to
delay in implementation of award - Payment which is required to be made by employer to
workman is in the nature of subsistence allowance - Such payment would not be
refundable or recoverable from the workman even if award is set aside - Full wages last
drawn mean wages which would have been drawn by workman if he had continued in
service if the order terminating his services had not passed - These must be given their
plain and material meaning - They cannot be given any extended meaning - Impugned
judgment is set aside - Appeal allowed. [19]

Important Aspects of the Judgment

Argument for the bank: Shri P.P. Rao, the learned senior Counsel appearing for the
Appellant-Bank, has urged that Under Section 17B of the Act the Respondent is only
entitled to payment of wages last drawn on the date of the termination of his employment
and that the High Court was in error in directing that he should be paid the wages as
revised by the Appellant-Bank including the increments, D.A., etc. which are granted to
all the employees pursuant to two settlements between the banking industry and the All
India Trade Unions which are known as the Fifth and the Sixth Bipartite Settlements
which were signed during the pendency of the writ petition in the High Court. It has been
urged that the expression "full wages last drawn" only means the quantum of emoluments
actually drawn by the workman at the time of termination of his employment and would
not mean the wages which the workman would be entitled in terms of the award whereby
the order of dismissal has been set aside. In support of his aforesaid submission the
learned Counsel has placed reliance on the following decisions of the various High
Courts: 1. International Air Cargo Workers Union v. International Airports Authority of
India, (1990) 1 Lab LJ 1192 (Mad); 2. Daladdi Co-op. Agriculture Service Society Ltd. v.
Gurcharan Singh, (1993) 5 Serv LR 719 (Punj. & Har.); 3. Elpro International Ltd. v.
K.B. Joshi, 1987 Lab IC 1468 at 1472-1743 (Bom); 4. The Kapurthala Central
Cooperative Bank Ltd. v. The Presiding Officer, Labour Court, Jalandhar, 1985 (2) 88
Pun LR 74.

Amicus curiae’s argument: In support of his aforesaid submission Shri Jitendra Sharma
has referred to the Objects and Reasons underlying the enactment of Section 17B and has
urged that the said provisions have been enacted to give protection to a workman who,
having succeeded in obtaining an award from the Labour Court, Industrial Tribunal or
National Tribunal setting aside the order of termination of his service and directing that
he be reinstated, is not allowed to resume work because the employer has filed
proceedings in the High Court or in this Court to challenge the said award. The learned
Counsel has urged that if the workman is to get only what he was getting at the time of
termination of his service, whether as subsistence allowance or wages, he gets no benefit
of the award in his favour and is put back to his position as a suspended or charge sheeted
workman notwithstanding the fact that termination order has been set aside. Shri Jitendra
Sharma has also emphasised that it takes years to get a matter decided and that it could
not be the intention of Parliament in enacting Section 17B that workman should only be
paid wages that he was drawing several years ago at the time of termination of his
service. In support of his submissions Shri Jitendra Sharma has placed reliance on the
following decisions of the High Courts: I. Vishveswaraya Iron and Steel Ltd. v. M.
Chandrappa, 1994 (84) FJR 46 (Kar); II. Carona Sahu Company Ltd. v. A.K. Munakhan,
1995 (70) Fac LR 25 (Bom); III. Kirtiben B. Amin v. Mafatlal Apparels, 1995 (2) Guj LR
804 (Guj); IV. Macneil and Magor Ltd. v. 1st Additional Labour Court, 1995 (1) Lab LN
1014 (Mad);V. Fouress Eng. (India) Pvt. Ltd. v. Delhi Administration and Ors., 1987 (1)
Lab LJ 485 (Delhi); and V.I.P. Channaiah v. Dy. Ex. Eng. R.R. Dist., 1996 (2) Lab LJ
240 (AP).

Refer to the cases and authorities cited for why such a liberal and literal meaning
interpretation is valid at the end of the case.
 11. State of Madras vs C.P. Sarathy
(V.Importnant case in terms of referencing of disputes as an administrative act.
The SC held that one must consider 2k alone when looking at or apprehending
IDs and not go into the details of the Facts)

Brief Facts – There were 24 cinema Houses that made specific demands against the
employers. The dispute went before a Conciliation Officer who suggested certain minimum
terms 6 Cinema Houses (including Prabhat Talkies) agreed with the CO. However, the
remaining cinema houses did not, and the employees decided to strike. The CO produced a
failure report, and transmitted the same to the Government. The Government constituted a
Tribunal, and the Tribunal provided a notice to all 24 cinema houses.

Trajectory of the Dispute - A Labour Union (South Indian Cinema Employees’

Association) makes a memo of such demands for improved wages, etc. to the Labour
Commissioner. He (LC) attempted to negotiate a settlement, and upon it failing, he came up
with a set of minimum demands. Upon such failure, the employees decided to strike, and he
recommended to the Government, to refer the matter to a tribunal under S. 10 (ref of
disputes). Govt implemented such an order, and the Tribunal was possessed of the matter.
Prabhat Talkies makes a contention claiming that they’re not parties to the case, as there is no
dispute between them and their employees. The Tribunal rejects this plea, and states that they
will decide on the basis of the facts made available to them, (post reference) and passed a
binding award on all employers. The Managing Director of Prabhat Talkies is charged under
S. 29 (penalty for breach of settlement/award) for failing to implement the award – He
approaches the Madras High, first to a Single Judge Bench, who refers the matter to a
Division Bench who ruled in favour of Prabhat Talkies. An appeal lay before the Supreme
Court.

Issues: 1) Whether the Government outside its jurisdictional mandate, and connectedly, does
the Government have a responsibility to ascertain particulars of a dispute under S. 10 while
making a reference order? – was this a competent reference? 2) And does this entail the
capacity to render the reference void?

Important Lines of Reasoning (by the S.C)

 1) S. 10(1) includes the term apprehension: The dispute needn’t subsist at the time at
which its proceeding. The temporal scope is quite enlarged, (the capacity to consider
whether disputes may arise)
2) The S.C doesn’t have the time to closely examine the conditions to identify which
establishments flout the memo demands, and which don’t. They make the reference
based on larger broad based public policy considerations, and the materials on record.
3) The Government is ultimately making an administrative order. It certainly does apply
some mind when ascertaining whether based on the material on record, an industrial
dispute exists. Such an assessment is limited only to the definition of S. 2k of the Act.
There is no need to go beyond that to the particulars of the case. The component of
ascertainment does not make it any less of an administrative decision.
4) The situation is not analogous to that concerning arbitration, where the reference
order limits the scope of the final award for the Arbitrator. Under the ID Act, the
scope is much wider, wherein the Tribunal based on the arguments/submissions,
crystallizes the issues in the conflict, and bases its award on those issues. So, it set
aside the HC Judgment, and upheld the Tribunal order.

S.C rejected the contention made by the respondent and dismissed the petition

12. Avon Services Production Agencies vs Industrial Tribunal Haryana

Overview of Facts – The Appellant is a private limited company engaged in the business of
manufacturing Fire Fighters Foam Compound. It had two factories: 1) Bombay, 2)
Ballabhgarh. This dispute relates to the Ballabhgarh factory. As per the appellant, the factory
was divided into two sections: 1) Manufacturing Section,  This was further sub-divided
into Chemical section, and the Boiler Section 2) Packing Material Section  This was further
sub-divided into the following: 1) Manufacturing Containers, 2) Painting Section. The
Respondents were employed in the painting sections.

Trajectory of the Dispute – On 13th July, 1971, the appellant purported to serve a notice on
respondents 3 and 4, and one Mr. Ramni intimating to them, that the management decided to
close down the painting section effective that day, due to unavoidable circumstances, and
hence the services of the three workmen would no longer be required – i.e., they’re
retrenched.
Important details raised during the Tribunal’s adjudication

1. The notice never reached respondents 3 and 4

2. By the notice, the workmen concerned were informed that they should collect their
dues under S. 25FFF, of the ID Act.
3. Since 13th July, they’ve been denied employment by the appellant. A Trade Union of
the employees of the appellant served a notice of demand, calling upon the appellant
to reinstate the three workmen and provide back wages.
4. There was initially, refusal to refer the dispute as it pertains to reinstatement, as there
was no work for painting in the factory – where these two workmen were working.
The company claims that the subsequent reference made by the Government was
invalid.

Central issues:

1. Whether the present reference is bad in law for the reasons given in para No. 1 of the
preliminary objection in the written statement? (On management). (NO- the present reference
is not bad in law as it was initially referred anyway)

2. Whether the statement of claim filed on behalf of the workmen is not in order ? (On
management). (NO, the claim is valid as the employees fall under 25 F only and not under 25
FFF as contended by the management)

3. Whether the retrenchment of Sarvashri Mohammed Yamin and Mohammad Yasin was
justified and in order? If not, to what relief they are entitled? (No, backwages and
reinstatement)

Primary Contention of the Management: 1) Once the Government declined to make a

reference in respect of termination of service, the Govt was not competent to refer the dispute
for adjudication, at a later date. –

Tribunal’s reasoning

Tribunal negatived this contention – plenty of precedential support. And additionally, held
that respondents 3 and 4 were retrenched, and the case would fall squarely under S. 25F of
the ID Act, and as the appellant employer had not complied with the conditions precedent to
25F, (1) notice requirement, and 2) payment of retrenchment compensation. Thirdly, the
Tribunal was of the opinion that both workmen have been in service for 15 years, and could
have been absorbed in some other department, and therefore deemed the retrenchment
unjustified. They accordingly directed reinstatement of respondents 3 and 4, with full back
wages.

The Appeal to the HC for a writ of certiorari to quash the Tribunal order was dismissed
in limine.

Arguments before the S.C

Appellant’s submission:

1. Govt lacks the competency to refer the same dispute at a later juncture in time, unless
new material is made available. Therefore, the question of reinstatement is a
materially different dispute from the one raised by the Union as per its initial
demands.
2. The termination of service of respondents 3 and 4 was consequent upon the closure of
an undertaking (painting division) which was a separate and independent undertaking
of the appellant and therefore governed by S. 25FFF, and not S. 25F, which differ in
the sense that there are no conditions precedent to S. 25FFF.

Observations of the Court

1. S. 10(1) of the Act confers power on the AG to render such a later reference validly –
re: statutory prescriptions: at any time, which exists or is apprehended. – It can and
ought to be on the lookout for the maintenance of industrial peace and harmony, and
confers discretionary power – and the material on record can be potential disputes
stemming from industrial disharmony. It is purely an administrative act – no judicial
function.
2. On the question of expectations set out by initial refusal – the mere refusal to refer a
dispute does not mean that the industrial dispute has ceased to exist. This would
provide a vital quasi-judicial power on the AG.

See:

In the light of the nature of the function of the Government and the object for which the
power is conferred on it, it would be difficult to hold that once the Government has refused to
refer, it cannot change its mind on a reconsideration of the matter either because new facts
have come to light or because it had misunderstood the existing facts or for any other relevant
consideration and decide to make the reference. But where it reconsiders its earlier decision,
it can make the reference only if the dispute is an industrial one and either exists at that stage
or is apprehended and the reference it makes must be with regard to that and no other
industrial dispute.

3. On the contention that, it can only refer that industrial dispute which it had once
declined to refer and no other dispute and that in this case the Government has
referred an entirely different dispute than the one raised by the Union and that in
respect of the referred dispute the demand having not been made from the employer,
there was no such dispute in existence and, therefore, the reference was invalid. The
contention in the form in which it is now canvassed was not raised before the
Industrial Tribunal and even before the High Court. However, as we find substance
in the contention we would not reject it on the technical ground that it was not
raised before the Industrial Tribunal or the High Court | Responding to this, they
look to the definition of retrenchment S. 2(oo) of the ID Act. Termination of service
can stem from discharge, dismissal, removal from service, or retrenchment.

The Union complained about the termination of service of respondents 3 and 4 and
demanded reinstatement with full back wages and the Government referred the
dispute about termination of service brought about by way of retrenchment and for
consequential relief for adjudication to the Industrial Tribunal. Therefore, there is no
substance in the contention that the original demand was someone other than the
one which is now referred to the Industrial Tribunal. The Union had espoused the
cause of two specified workmen and one other and the reference is with regard to the
termination of service by retrenchment in respect of the same two workmen. The
language or the format in which the demand is couched is hardly decisive of the
matter. The substance of the matter is as to what was the grievance of the workmen
complained of by them or espoused by the Union and what the Industrial Tribunal is
called upon to adjudicate.

Distilled point of examination:

 1) The infinite regress argument about undertakings (refer Bangalore Water Supply and
Sewerage Board vs Rajappa)
2) Policy of comprehensive definition for retrenchment: Termination for any reason
whatsoever: Opposing this, the case of: Management of Hindustan Steel Ltd. v. The
Workmen and Ors states to the effect: Section 25FFF appears to have been used in its
ordinary sense connoting thereby any work, enterprise, project or business
undertaking. It is not intended to cover the entire industry or business of the employer.
Even closure or stoppage of a part of the business or activities of the employer
would seem in law to be covered by this sub-section. This question has to be
decided on the facts of each case. Examining the facts of the case, this Court came
to the conclusion that it was a case of closure.
3) The tenor of the notice clearly indicates that workmen were rendered surplus and they
were retrenched. It is thus on the admission of appellant a case of retrenchment.

13. Secretary, Indian Tea Association v. Ajit Kumar Barat (2000) 3 SCC 93
(Definition of workman is looked and the decision is arrived at that any
managerial position or any decision making/powerful position in the present case
are not covered under the definition of workman.)

Respondent No. 1 was employed as Joint Secretary of India Tea Association – appellant. He
was dismissed from service for disobeying an order of transfer. He complained of his
proceedings to the Labour Commissioner. Conciliation proceedings under S. 12 were held,
leading to a failure report. The High Court was moved by the Government to take a decision
on this. Government communicated its decision in writing wherein it regretted its inability to
make a reference as respondent No. 1 was not a workman. Again respondent No. 1 moved the
High Court against the said order of State Government. The learned single Judge directed the
appropriate Government to make a reference as to whether the respondent No. 1 was a
workman. The appeal filed by the appellant was dismissed by the impugned judgment and the
State Government was directed to make an appropriate reference, keeping in view the nature
of the dispute raised by respondent No. 1. Hence this appeal.

The law on the point is as follows:

1. The appropriate Government would not be justified in making a reference under Section 10
of the Act without satisfying itself on the facts and circumstances brought to its notice that an
industrial dispute exists or apprehended and if such a reference is made it is desirable
wherever possible, for the government to indicate the nature of dispute in the order of
reference;

2. The order of the appropriate Government making a reference under Section 10 of the Act
is an administrative order and not a judicial or quasi-judicial one and court, therefore, cannot
canvass the order of the reference closely to see if there was any material before the
Government to support its conclusion, as if it was a judicial or quasi judicial order;

3, An order made by the appropriate government under Section 10 of the Act being an
administrative order no lis is involved, as such an order is made on the subjective satisfaction
of the Government;

4. If it appears from the reasons given that the appropriate government took into account any
consideration irrelevant or foreign material, the court may in a given case consider the case
for a writ of mandamus and;

5, It would, however, be open to a party to show that what was referred by the Government
was not an industrial dispute within the meaning of the Act;

Workman does not include any such person who is employed mainly in a managerial or
administrative capacity 2(s) of the Act

Additionally, the Government is obligated to form an opinion about whether the employee is
a workman, and to that effect consider whether an industrial dispute exists or is apprehended,
prior to making a reference under S. 10

Args about the advertisement: were not suited given that the position in question as that of
Assistant Secretary, however, the respondent had been promoted to the position of Joint
Secretary.

Rationale of the Court: After the promotion to Joint Secretary, he was receiving in addition
to basic pay, child allowance, house rent subsidy, furnishing allowance, house maintenance
allowance, transport subsidy, reimbursement of fuel and electricity charges, entertainment
expenses, monthly club subscription. Moreover, his duties included the power of sanction of
expenses on behalf of the Indian Tea Association. Therefore, the pay, perquisites, and power
of sanction suggest that he was part of the management, and held that it would not be able to
treat Mr. Ajt Kumar Barat as a workman, and the reference was not made.

CASES PERTAINING TO SUBSISTENCE ALLOWANCE

14. Fakirbhai Fulabhai Solanki v. Presiding Officer, AIR 1986 SC 1168

(Disproportionate punishment of dismissal was reversed with back wages in full.)

Review Hotel Imperial Prior to this Case

Facts of the Case

During the pendency of a reference under the ID Act (to the Industrial Tribunal, Gujarat), the
management served a charge-sheet on the appellant who was one of the workmen working in
the factory (that belonged to the Management, Alembic Chemical Works Co. Ltd. Baroda).
The appellant was asked to show cause for why disciplinary action should not be taken
against him for his misconduct: he was playing cards with two other workmen during
working hours of the factory. It was alleged that he had admitted his guilt, and tendered an
apology. The disciplinary enquiry was subsequently conducted, and at the conclusion of the
enquiry, the appellant was found guilty of the misconduct, and the management decided to
dismiss him.

Trajectory of the Dispute

The appellant was a protected workman (33(3) of the ID Act), and as such, permission had to
be obtained from the Tribunal (pending reference). Subsequently, the management made an
application before the Tribunal for such permission, but the appellant was suspended from
service with effect from 13.8.1979, pending disposal of the application before the Tribunal
(after the internal enquiry held that he was guilty, and was not entitled to wages or
allowances). The Appellant then filed an application before the Tribunal under S. 33A of the
Act, complaining a violation of S. 33 by the management. Both the application under S. 33(3)
of the Act (for permission to dismiss the appellant), and the complaint under S. 33A of the
Act, despite being filed in the year 1979, but the Tribunal only disposed of them on August 5,
1985. The Tribunal granted permission to the management to dismiss the appellant and
rejected the complain filed by him. Aggrieved by the decision, the appellant has filed these
two appeals by way of Article 136 of the Constitution of India.
Central Issue

Whether denial of payment of subsistence allowance during pendency of proceedings under

S. 33 of the Act, constitutes a violation of the principles of natural justice?

Applicable Law

1. There was no provision in the Standing Orders governing the appellant, for the
payment of any subsistence allowance (either the whole, or part payable thereof)
during the pendency of an application made by the management under 33(3) of the
Act – for permission to dismiss protected workman.
2. Look to 33(3), for definitions of protected workman, and the rules pertaining to how
employers may take action against any protected workman concerned in such dispute
(actions can include altering to the prejudice of such protected workman, the
conditions of service applicable to him, before the commencement of such
proceedings, or by discharging or punishing by dismissal or otherwise, such protected
workman). 33A authorizes an employee to file a complaint in writing to CO, Board of
Conciliation, Arbitrator, LC, Tribunal, NT, in the event that the employer contravenes
the provisions of S. 33 during the pendency of such proceedings.

Arguments of the Appellant:

1. The non-payment of subsistence allowance, renders it impossible for the appellant to

defend himself effectively before the Tribunal in the proceedings relating to the
permission prayed for by the management under S. 33(3).
2. Referenced the case of the State of Maharashtra v. Chanderbhan Tale – read para. 4 of
the judgment [Manupatra]. (Criminal Trial  Conviction  Bombay Civil Services
Rules (2nd proviso to Rule 15(l)(ii)(b) which directed the reduction of the subsistence
allowance to a nominal Rs. 1 per month) was held to be unreasonable and void | Held
that the civil servant under suspension was entitled to normal subsistence allowance
even after his conviction by the Trial Court pending consideration of his appeal.

Management’s Contentions:

1. Relied on the decision of this Court in the Management of Hotel Imperial New Delhi
and Ors vs Hotel Workers (refer para 6 of Manupatra). The Court in this case
discussed the validity of an implied term in the contract of employment (i.e., can
courts read such an implied term into existence, despite the absence of an express
 provision in S. 33) that gives the employer the right to suspend the employee, thus
relieving himself of the obligation to pay wages (S. 33) and relieving the servant of
the corresponding obligation to render service.

The Court’s holding on this question was: “We are, therefore, of the opinion that the
ordinary law of master and servant as to suspension can be and should be held to
have been modified in view of the fundamental change introduced by S. 33 in that
law, and a term should be implied for Industrial Tribunals in the contract of
employment, that if the master has held a proper enquiry and come to the conclusion
that the servant should be dismissed and in consequence suspends him pending the
permission required under S. 33, he has the power to order such suspension, thus
suspending the contract of employment temporarily, so that there is no obligation to
pay wages, and no obligation on the servant to work”
2. Insofar as the employer has done all that he could do to bring the contract of service
to an end, it is reasonable that he should not be expected to continue paying the
employee thereafter. This is referenced in Ranipur Colliery v Bhuban Singh and Ors.

Court’s Rationale in the instant case:

1. Neither the Hotel Imperial New Delhi case, or Ranipur Colliery examined the issue
from the perspective of principles of natural justice. They instead looked at it from the
angle of whether the common law right of a master to keep a workman under
suspension during the pendency of a domestic inquiry into acts of misconduct, or
during the pendency of an application filed under S. 33 of the Act.
2. PNJ are implicated in the instant case, unlike in the earlier cases (which discussed
common law rights) because of duration of time taken to dispose of such applications.
This case took nearly 6 years. Therefore, the ordinary workman is subjected to gross
unfairness when payment of at least a small amount by way of subsistence allowance
is denied to him.
3. On the question of master-servant relationship, the Court clarified the lack of a
distinction between the process under 33(1) and 33(3)  both require permission
from the authority concerned before action can be taken unlike for instance, under
33(2)(b) which requires approval to actions already undertaken.
4. In examining the effect of such a suspension (where the employer seeks to relieve
itself of the obligation to pay wages during the period of such suspension) – The
 Court held that it does not put an end to the relationship of master and servant
altogether. – and in answering this question, relied on Khem Chand vs Union of India,
which held that “the real effect of the order of suspension is that though he continued
to be a member of the Government service, he was not permitted to work, and further
during the period of suspension, he was paid only some allowance – generally called
‘subsistence allowance’ – which is normally less than the salary – instead of the pay
and allowances he would have otherwise been entitled to had he not been suspended.
There is no basis for thinking however, that because of the order of suspension, he
ceases to be a member of service.

Court’s holding on when the employee is entitled to subsistence allowance, and if so,
what quantum? Re: Paras 10, 11 Manupatra  When an order of suspension is passed
following a domestic enquiry is only of suspension (even though the management dismissed
him), where the workman still has a chance of being reinstated with back wages on the
permission being refused under S. 33(3) of the Act, it cannot be said that the workman is not
entitled to any monetary relief at all. The allowance amount shall be the amount fixed under
the Standing Orders, if any, which the management is liable to pay, and in the absence of any
such Standing Order, the authority before which such application is pending shall determine
the same, and the subsistence allowance will be effected from the date of suspension, and this
will be implied as a term in the contract of employment.

In cases where the management is not paying any subsistence allowance, it will be open to
the management to pay within reasonable time, to be fixed by the authority, the subsistence
allowance for the period during which the workman is suspended without wages. The Court
also clarified that in a case where the proceedings are completed, and the order of dismissal is
successfully challenged on the ground of non-payment of subsistence allowance for the
period of suspension during the pendency of application (either under 33(1) or 33(3)), it shall
be open to the management to ask for permission from the relevant authority after paying or
offering to pay to the workman concerned within a reasonable time to be fixed by the
authority concerned, the arrears of subsistence allowance. But they specified that in the
instant case, the Court did not wish to grant the management such an opportunity to apply for
permission again under S. 33(3) of the Act. While they didn’t base their decision on the
ground that they believed the punishment of dismissal to be excessive, they noted it to be the
case.
Decision: The Court set aside the order/award of the Tribunal and dismissed the application
made by the management under 33(3) of the Act. They accepted the complaint filed by the
appellant under S. 33(A) of the Act. The management was directed to reinstate the appellant
in its service, and to pay him all the wages and allowances due to him from August 13, 1979,
as if there was no break in the continuity of his service. Therefore, the appeals are
accordingly allowed with costs.

15. Ram Lakhan and Ors vs Presiding Officer and Ors (1999)

Facts of the Case & Trajectory of the Dispute: The appellants were employees of the
Swatantra Bharat Mill, against whom charge sheets were issued in the year 1986, and they
were subsequently suspended. An industrial dispute was already pending before the Industrial
Tribunal, and the management filed an application under S. 33(1), seeking permission to
dismiss the employees on the completion of their enquiry. The appellants claimed that they
were entitled to be paid subsistence allowance during the pendency of the disciplinary
proceedings for the period of suspension. The Tribunal subsequently framed the preliminary
issue as follows: At what rate, if any, the Management is to pay subsistence allowance to the
workmen?

The Tribunal relying on, The Management, Hotel Imperial New Delhi case, dismissed the
claims of the appellants, and held that they weren’t entitled to subsistence allowance. The
appellants then filed a writ petition before the High Court of Delhi, which was dismissed for
the same reason: “In view of the decision of the SC in Hotel Imperial…. We are not inclined
to interfere in this position” The High Court expressly preferred the judgment in Hotel
Imperial’s case above Fakirbhai Fulabhai.

In this case, the Court went through all the relevant cases that addressed the question of
subsistence allowance, and tried to resolve the apparent tension between Fakirbhai Fulabhai
and Hotel Imperial. Since the judgment in Hotel Imperial was rendered by a 3 Judge Bench, it
was deemed appropriate that these petitions also be listed before a 3 Judge Bench.

Rationale of the S.C – and its resolution of the question of the requirement of the
management to pay subsistence allowance during the pendency of proceedings –

The Court recognized that the ordinary law of master and servant can be and should be held
to have been modified due to the changes introduced by S.33 (insofar as it is a ban on the
undisputed common law right of the master to dismiss his servant for proper cause, until
permission is sought). The Court recognized that a term can be implied in the contract (by
Industrial Tribunals) to the effect that, if the master has held a proper enquiry, and come to
the conclusion that the servant should be dismissed then pending permission under S. 33, the
employer/master has the power to order such suspension – such that there is no obligation on
him to pay, or on the servant/employee to work:

1. Therefore, if the permission is provided – there is no further obligation to pay wages

after the date of suspension.
2. If the permission is refused, the suspension would be deemed wrong, and the
workmen is entitled to all his wages from the date of such suspension.

The Court addressed a slightly different but related question in Hotel Imperial: Which is,
“whether the Management during the pendency of an application under 33(1) can legally
suspend the employees after holding a proper departmental inquiry? – this is distinct from
the question in the present case, which is “is the employee entitled to subsistence allowance
during the period of suspension?” - The view that was endorsed in this case is as follows: If
the master has held a proper enquiry, and deems the servant guilty of misconduct, and comes
to the conclusion that the servant ought to be dismissed, and consequently suspends him
pending the permission required under S. 33, the master can do so legally with the result that
the contract of employment stands suspended temporarily, so the master needn’t pay wages,
and the servant needn’t work. When an employee is suspended, he does not get full wages,
and he is also not put on duty – he is only entitled to get a reduced salary (which is
subsistence allowance) prescribed by the rules.

The Court in Ram Lakhan, also went through several decisions of the Court that clarified this
issue:

1. The view expressed in Hotel Imperial was reiterated in T. Cajee v U. Jormanik Stem
& R.P. Kapur v Union of India.
2. In Balvantray Ratilal Patel v State of Maharashtra, the Court laid down that an
employer can suspend an employee pending an enquiry into his misconduct, and the
only question that can arise in such a suspension is the payment of his wages during
such period of suspension. The Court in this case clarified that the right to suspend
(i.e., the right to forbid employees to work) is not an implied term in an ordinary
contract. It can only be constructed via a statute governing the contract, or an express
term in the contract itself. In the absence of a statute, or an express term, the employer
 has no power to suspend an employee, and therefore even if he does, he will have to
pay the employee’s wages during the period of suspension. Therefore, the court held
that suspension is possible even in the absence of an express term or in the
rules/statute – however, the employee is entitled to remuneration
3. In the case of The Vice Chancellor, Jammu University and Anr vs Dushinant Kumar
Rampal, the Court clarified that when there is an express term in the contract, or in the
rules that provide for the right to suspend an employee, (that has the effect of
temporarily suspending the relation of master and servant) then the employee is not
entitled to receive any payment at all from the employer unless the contract of
employment or the rules provide for the payment of subsistence allowance.
4. State of MP v State of Maharashtra- an order of suspension does not put an end to
Govt service. Suspension merely suspends the claim of salary, but the employee can
still be paid suspension allowance during the period of suspension- reliance was
placed on Khem Chand v Union of India.
5. In Khem Chand vs Union of India, the Court read Art. 21 (the right to life) into
Service Rules relating to payment of Subsistence Allowance, and this was the
rationale for why the Court struck down the grossly unfair service rule in Maharashtra
v Chanderbhan (Rs. 1 payment as Subsistence Allowance)
6. The Court also referred Fakirbhai Fulabhai extensively (refer to case provided above
for that Court’s analysis on the distinctions between Fakirbhai (itself) and Hotel
Imperial, and how they don’t conflict with one another.
7. O.P Gupta v Union of India – Reiterated Khem Chand (order of suspension doesn’t
put an end to his service under the Government) Also clarified that the subsistence
allowance is normally less than the salary and allowances the employee would’ve
been entitled to had he not been suspended  and to come to this conclusion, it
referred to the dictionary definition of subsistence allowance.
8. Capt. Paul Anthony v Bharat Gold Mines and Anr: Held that to place an employee
under suspension is an unqualified right of the employer and situated this right within
service jurisprudence across several domains. It explores the statutory recognition this
right has received by referring to service rules framed by different authorities (Govt of
India, and SG)
9. Read Para. 20 and 21 of Ram Lakhan v Presiding Officer (1999) to get a review of the
legal standing of subsistence allowance, and the right to suspension. Briefly it’s as
follows:
 a) The management has the right to suspend an employee after holding a
departmental enquiry.
b) If the management believes that the employee ought to be dismissed from service,
but cannot provide a final order of dismissal, because of a reference raised under
the ID Act, which is already pending before the Tribunal – then the management
has to file an application under S. 33(1) requesting permission from the Tribunal
to dismiss such employee from service.
c) Pending disposal of such an application (for dismissal) – the management can
suspend the employee.
d) The employee cannot claim full salary while suspended, and the employer cannot
take any work from the suspended employee.
e) However, the management has to pay subsistence allowance to the employee so
that he may sustain himself until the application under 33(1) is disposed of.
f) Therefore, there is no real conflict between Hotel Imperial, and Fakirbhai
Fulabhai.

While the employer has no control over the disposal of the application under 33(1) of the ID
Act, the employee also has no control over the disposal of the application. However, the
employer has access to financial capital and will not be unduly affected by the dispute.
Contrarily, the employee has limited access to disposal income, and ought to be safeguarded
through the providing of subsistence allowance.

Decision of the Court: The judgments passed by the Delhi High Court, and the IT are set
aside, with the direction that subsistence allowance will be paid during the whole period of
suspension, at such rates as the Standing Orders or Service Rules provide. If none exist, then
they would be entitled to be paid full salary even during the period of suspension.

16. Ram Lakhan v. Presiding Officer (2000)10 SCC 201

Facts: The respondents from the case above, Swatantra Bharat Mills filed applications in the
instant case, to recall the order dated 17-11-1999, in which the civil appeal Nos. 6566-68/99
were allowed, (i.e., the above case), and for rehearing the cases on merits. The reason
Swatantra Bharat Mills filed such an application, is because the AOR for respondent No.2
was unable to be present for the hearing owing to ill-health, and the Advocate (Harvinder
Singh) who was supposed to replace him and be present for hearing, had to also leave on
account of his son’s ill-health. The applicant contended that the absence of lawyers when the
appeal was heard, was caused by circumstances beyond its control.

The Court decided to give an opportunity to the Counsel to place the case on merits, making
it clear that if the counsel fails to place any contention which if accepted would tilt the
balance in favour of the applicants, then the application for recall will be dismissed, as the
Court has already heard from learned Counsel for both parties on the merits of the case.

Contention of the Applicant: The senior counsel for the applicant (Shri. G.L. Sanghi) urged
that during the period when the application was filed by the management seeking permission
of the Tribunal to dismiss the workmen under S. 33(1) of the Act, there was no master-
servant relationship between the management and the workmen, and therefore, the
management is not liable to pay any amount as subsistence allowance to the workmen. He
relied on the Hotel Imperial Case, to make this argument.

Court’s Rationale: However, this very contention was extensively considered in the 1999
case, and the Court came to the conclusion that during the pendency of the management’s
application for permission to dismiss the workmen before the Tribunal, the relationship of
master and servant do not cease, and the Court further held that while the employer needn’t
pay a salary and allowances (which would have been payable had the workman not been
suspended), and the workman needn’t work, the workman is still entitled to receive wages at
the usual rate, or subsistence allowance at a reduced rate if there is a provision in the service
rules or regulations, or standing order applicable to the workmen concerned. The Court
separated the decision in Hotel Imperial from the present case (which is similar to decisions
in Fakirbhai Fulabhai) – i.e., the management has a right to suspend the employee, however,
the employee is entitled to subsistence allowance.

Decision of the Court: The applications are dismissed, and the Court was not satisfied that
the earlier order dated 17-11-1999 needs any reconsideration.

PENDENCY OF A CRIMINAL CASE – FOR STAY OF DEPARTMENTAL PROCEEDINGS

17. Delhi Cloth and General Mills vs Kushal Bhan

(Basically said that the employer need not wait to dismiss until the trial on the
criminal side reaches its decision)
Overview of Facts - This is an appeal by special leave in an industrial matter, before the
Supreme Court. The Appellant is a textile manufacturing company. The respondent Kushal
Bhan was employed by the company as a peon. The cycle of Ram Chandra, Head Clerk of
the Folding Department was stolen, and the matter was reported to the police. Sometime
later, the cycle was recovered from the railway station cycle stand at the instance of the
respondent who took the police there, and picked out the stolen cycle from among 50/60
cycles. – A criminal case was pending against him with the police.

Trajectory of the Dispute - This was brought to the attention of the company, who filed a
charge sheet against the respondent. He was asked to show cause for why he should not be
dismissed for misconduct, and his response/explanation was deemed unsatisfactory. On
November 14, 1957, the respondent Kushal Bhan was subjected to an enquiry, but refused to
participate in the proceedings, and left the place, owing to the fact that a criminal case was
still pending in court. The company completed the enquiry, and directed the dismissal of the
respondent on the ground that the misconduct had been proved against him. An application
was made under S. 33(2) of the ID Act, by the company, to the Tribunal for approval of the
action taken against the respondent. The matter came before the Tribunal on May 6 th, 1958,
and in the meantime, the respondent had been acquitted by the criminal court on April 8 th
1958. The copy of the judgment of the criminal court was produced before the tribunal, and it
refused to approve the order of dismissal. The company subsequently applied for special
leave, resulting in the appeal.

Company’s main contention: 1) Not bound to wait, 2) the enquiry that was conducted was
fair.

Respondent’s primary contention: 1) PNJ, 2) employee was justified in not taking part in the
disciplinary proceedings, given the identical subject-matter of trial in the criminal court.

Court’s Reasoning:

It is true that very often employers stay enquiries pending the decision of the criminal trial
courts and that is fair; but we cannot say that principles of natural justice require that an
employer must wait for the decision at least of the criminal trial court before taking
action against the employee. In Shri Bimal Kanta Mukherjee v. Messrs. Newsman's Printing
Works ((1956) L.A.C. 188), this was the view taken by the Labour Appellant Tribunal. We
may, however, add that if the case is of a grave nature or involves questions of fact or
law, which are not simple, it would be advisable for the employer to await the decision
of the trial court, so that the defence of the employee in the criminal case may not be
prejudiced. The present, however, is a case of a very simple nature and so the employer
cannot be blamed for the course adopted by him. In the circumstances, there was in our
opinion no failure of natural justice in this case and if the respondent did not choose to
take part in the enquiry no fault can be found with that enquiry. We are of opinion that
this was a case in which the tribunal patently erred in not granting approval under s. 33(2) of
the Industrial Disputes Act. Besides it is apparent that in making the order under appeal,
the tribunal has completely lost sight of the limits of its jurisdiction under s. 33(2). We
therefore allow the appeal and setting aside the order of the tribunal grant approval to the
order of the appellant dismissing the respondent. In the circumstances we pass no order as to
costs.

18. INDIAN OVERSEAS BANK, ANNA SALAI AND ORS VS. P GANESAN AND ORS

Facts of the Case: At the outset, the Court notes that the facts of the matter are not in
dispute. An FIR was lodged on 27th January, with the Thousand Lights Police Station,
Chennai, alleging that L. Balasubramanian (respondent No. 5) was assaulted on 27 th January
2005, within the bank premises by Respondents No. 1 to 4, as well as Mr. P. Rajalingam
(Deputy Chief Officer in the Regional Office of the Appellant Bank). All the Respondents are
employees of the bank. An enquiry was conducted leading to the discovery of certain facts.
Respondent No. 5 was admitted in the National Hospital for medical treatment, and a charge
sheet was filed by the Investigating Officer in the criminal case against Respondents No. 1-4,
under S. 341, 323, 324, 427, 307, and 506(ii). Respondents 1 and 3 were arrested, and let out
on bail. No. 2 and 4 absconded and obtained anticipatory bail. Respondents 1-4 also filed an
FIR against Respondent No. 5.

Trajectory of the Dispute: In addition to the institution of criminal proceedings,

Respondents 1-4 were placed under suspension by an order dated 28 th January, and charge
sheets were filed against them on 21st February, 2005. They were asked to show cause for
why disciplinary action should not be taken against them for their acts of indiscipline,
insubordination, murderous assault within the office premises, damage to valuable properties,
and reputational damage to the bank in the eyes of the public. The respondents filed a request
to revoke the order of suspension, assuring the authority that they would fully cooperate with
the bank authorities in the disciplinary proceedings instituted against them. However, they
attempted to delay the proceedings as long as they could, with the following actions:

1. They requested the bank to grant 1 month time to submit their reply to the show
cause.
2. The order of suspension was subsequently revoked, but the respondents did not reply
to the show cause despite several opportunities to do so.
3. Post their failure to reply to the show cause, the enquiry was fixed for 18.5.2005 and
the respondents were intimated in advance. However, they submitted a written request
for adjournment. Subsequently, the enquiry was adjourned.
4. The respondents did not turn up on the next date of the Enquiry (set as per the request
of the respondents). And they were set ex parte while adjourning the inquiry to a later
date 19.7.2005
5. On 19.7.2005  only respondents No. 2 and 4 attended the proceedings, and
categorically admitted to have received the List of Management Witnesses, whereas
Respondents 1 and 3 were still absent.
6. The enquiry was further adjourned to 29.7.2005, when Respondents 1,2, and 4
attended and requested for further postponement claiming that they would either bring
their Defence Representative or they would themselves conduct their defense, without
seeking postponement. The enquiry was accordingly adjourned to 19.8.2005
7. While they were seeking adjournments and delaying the process, the respondents
simultaneously moved the High Court, filing writ petitions under Art. 226, seeking a
stay of proceedings in the departmental enquiry on the basis that criminal cases had
been filed against them on the basis of identical facts.

The High Court’s Holding: The Court held that while it did not generally entertain WPs
relating to Charge-memos on the ground that criminal proceedings are pending, the question
as to whether the departmental enquiry and the criminal case are based on a similar set of
facts, and whether the case is of a grave nature which involves complicated questions of law
and facts, are factors to be examined in the WPs.

8. The interim order of stay was only given for four weeks, and the enquiry proceedings
continued. The respondents chose to examine some management witnesses, but not all
(they did not participate when MW2 was examined). The respondents then attended
the enquiry on 29the October, 2005, and nominated their Defence Representative to
 defend them. They prayed for a further adjournment, but that was declined by the
Enquiry Officer.

The appellants filed an application for vacating the stay order, and this was dismissed
by a Single Judge of the High Court: Single Judge of the High Court- It is not proper for
the Court to vacate the Interim stay at this stage, after the Learned Single Judge has indicated
the reasons behind exercising jurisdiction under Art. 226 of the HC. The interim stay granted
by the Court was made absolute. And the Court also expedited the WPs and posted the same
for final hearing in the second week of February, 2006.

The appellants then filed Writ appeals against this order, and they were disposed of by a
Division Bench of the Court for the reason that: The criminal action and the disciplinary
proceedings are founded upon the same set of facts. They held that disciplinary proceedings
were based solely on the criminal complaint, and that the bank had not concluded any
independent enquiry before initiating the departmental proceedings. They therefore held that
the prayer made by the petitioners for deferring the departmental proceedings till the
conclusion of the criminal trial has to be accepted, and ordered it.

It is at this stage, that the case reaches the SC

Arguments of the Appellants:

1. The HC committed an error in passing this impugned judgment, as it had failed to

take into consideration that the enquiry proceedings had proceeded to a great extent,
and the same should not have been stayed.

Arguments of the Respondents:

1. After the HC exercised its discretionary jurisdiction under 226, the Court should not
exercise its jurisdiction under Art. 136.
2. Since cases and counter cases have been filed by rival parties (respondent No. 5
belonged to a rival Union) – disciplinary proceedings would have been prejudicial to
the criminal case.
3. The officers of the appellant are proceeding with a bias.
4. The question of whether there is a complicated question of law, must be judged from
the employees perspective given that they belong to a weaker section of society.
Court’s Rationale

1. A departmental proceeding pending a criminal proceeding does not warrant an

automatic stay.- The Courts have to exercise discretionary jurisdiction, and take into
consideration whether the charges and evidence in both proceedings are common, and
whether there is a complicated question of law.
2. This Court relied on the precedent set in Delhi Cloth and General Mills Ltd. vs Kushal
Bhan
3. The Court also relied on the case of State of Rajasthan v. B.K. Meena and Ors, which
held that the staying of disciplinary proceedings is a matter to be determined having
regard to the facts and circumstances of a given case, and that no hard and fast rules
can be enunciated in this behalf. The grounds to look at are: a) is the defence of the
employee in the criminal case liable to be prejudiced? b) The charges have to be
grave, and must entail complicated questions of law and fact, c) advisability,
desirability, or propriety as the case may be has to be determined after taking into
consideration, all the facts and circumstances of the case.
4. The Court looked to Paul Anthony v Bharat Gold Mines Ltd to identify the law on
when departmental proceedings ought to be stayed during the pendency of criminal
proceedings: Refer to para 18 of the judgment –
i. Departmental proceedings and proceedings in a criminal case can proceed
simultaneously as there is no bar in their being conducted simultaneously,
though separately.

ii. If the departmental proceedings and the criminal case are based on identical
and similar set of facts and the charge in the criminal case against the
delinquent employee is of a grave nature which involves complicated
questions of law and fact, it would be desirable to stay the departmental
proceedings till the conclusion of the criminal case.

iii. Whether the nature of a charge in a criminal case is grave and whether
complicated questions of fact and law are involved in that case, will depend
upon the nature of offence, the nature of the case launched against the
employee on the basis of evidence and material collected against him during
investigation or as reflected in the charge sheet.
 iv. The factors mentioned at (ii) and (iii) above cannot be considered in isolation
to stay the Departmental proceedings but due regard has to be given to the fact
that the departmental proceedings cannot be unduly delayed.

v. If the criminal case does not proceed or its disposal is being unduly delayed,
the departmental proceedings, even if they were stayed on account of the
pendency of the criminal case, can be resumed and proceeded with so as to
conclude them at an early date, so that if the employee is found not guilty his
honour may be vindicated and in case he is found guilty, the administration
may get rid of him at the earliest.

5. In T Srinivas, the Court held that the stay of departmental proceedings cannot be and
should not be a matter of course (this was relied on by the Court in the Indian
Overseas Bank case)
6. The Court also identified defects with the High Court judgment: a) It failed to apply
the binding precedents, b) It didn’t apply the law as it ought to have, c) they did not
identify a complicated question of law (merely alleging bias on the part of authorities
is not constitutive of a complicated question) d) It went through the cases referenced
by the counsel for the Respondents to explain how they were ill suited for the present
case, e)

CASES:

19. Associated Cement Co. Ltd. V. Workmen (1964) 3 SCR 652

(even if a TU is a representative of a minority, but is registered then they can
issue notices)
Facts of the Case:
The Appellant’s workmen were represented by a Union called Kamdar Mandal
Cement Works, Porbandar. The registration was however cancelled, and two separate
Unions were formed –
a) Cement Kamdar Mandal (representing a minority of workers)
 b) Cement Employees Union (represented a majority of workers)
Cement Kamdar Mandal gave two notices to the Appellant, seeking to terminate two
awards that were previously issued when the defunct union (Kamdar Mandal Cement
Works) represented the workmen. Cement Employees Union was impleaded into the
case. Thereafter, the Mandal presented fresh demands, and the dispute was referred to
the Tribunal.
The Appellant objected challenging the competency of the reference – on the grounds
that the earlier award had not been properly terminated, given that the Mandal only
represented a minority of workers.
Attempts at conciliation failed, and upon the receipt of a failure report, the AG made
a reference (under 10(1)(x) of the Act) of the dispute was referred to the Tribunal
Central Issues of the Case:
The dispute ultimately boiled down to who can issue a notice of termination of an
award on the behalf of the workmen (under 19(6)). In the context of this case, the
conflict was centred around whether a registered trade union that represented only a
minority of workmen could give such a notice – given that under S. 18 of the ID Act,
the award was binding on the workmen.
Interpretation of S. 18 and S. 19:
To answer the central question addressed in this case, it’s necessary to interpret and
ascertain the true meaning and effect of S. 19(6) on its fair and reasonable
construction. The fresh demands raised by the minority Union, were mostly covered
by the two previous awards.
S. 18 provides that an award which has become enforceable shall be binding on all
parties to the ID. Re: 18(d) specifically 18(3)(d) which includes all persons who
subsequently become employed in the establishment as well.
S. 19(6) stipulates that notwithstanding the expiry period provided for in 19(3) 
shall remain in operation for a period of one year, the award shall continue to be
binding on the parties until a period of two months has elapsed from the date on
which the notice is given by any party bound by the award to the other party or
parties intimating its intention to terminate the award.
The Appellants contended that the termination of an award is a serious step and that
such a step can be taken by a party only if it claims to represent the will of the
majority on that point.
 The Court also referred to 2(k), which by referencing, “terms of employment”, and
“conditions of service”  imply a more broad based interpretation, which is non-
specific to a particular individual’s grievances. S. 33 is of course an exception to this.
The Central Provinces Transport Services Ltd. V Raghunath Patwardhan was
discussed: “the preponderance of judicial opinion is clearly in favour of the view that
an industrial dispute cannot per se be an industrial dispute but may become one if
taken up by trade union or a number of persons.”
The Appellant’s contention was that interpretations allowing a minority of workmen
to issue such termination notices, would be inefficacious to the resolution of industrial
disputes. They also claimed that Rule 83 passed by the Maharashtra Govt allowed
such an interpretation  However, it was inapplicable at the time of the proceedings.
However, the Court balanced this view against the justice claims that the minority of
workmen (unpresented by Unions) possessed. Additionally, the Court contextualized
the present state of union participation in industries before coming to the conclusion
that it would be unreasonable to proffer such a view that protected only the majority’s
claims.

20. Tata Oil Mills Co. Ltd. V. Workmen, AIR 1965 SC 155
Facts of the Case:
Two employees, K.K. Raghavan and Mathews allegedly assaulted the Chargemen of
the Soap Plant Mr. C. A. Augustine (working in the Appellant, Tata Oil Mills).
Subsequently, charge sheets were issued against both the employees. Two officers
were appointed by the appellant to hold an enquiry, but the respondent Union
represented that it would be against the interests of justice to Raghavan and Mathews
unless somebody outside their offices (Tatapuram) held the enquiry, The Law Officer
of the Appellant employed in the main office, then held the enquiry and submitted his
report to the GM. At the time, an industrial dispute was pending, and so, the appellant
applied to the Tribunal seeking permission to approve the dismissal of both workmen.
The Tribunal approved the dismissal of Raghavan, but not Mathews, and so the
appellant dismissed Raghavan from service. Dissatisfied with the order of dismissal,
the respondent raised an industrial dispute in regard to the propriety and validity of
the said dismissal of Raghavan. Upon reference of this dispute, the IT has held that
the appellant was not justified in dismissing Raghavan, and so, has ordered his
reinstatement.
Central Issues of the Case:
I. Was the Tribunal wrong in holding that the workman’s misconduct was
not covered by Standing Order 22(viii)
II. Was the domestic enquiry held in accordance with the principles of natural
justice, and fairness after providing a reasonable opportunity to the
employee to produce evidence and make his case? – Connectedly, could
the Tribunal consider the same questions of facts in the event that the
former question is answered in the affirmative?
III. Was the domestic enquiry mala fide in nature, given the simultaneously
underway criminal proceedings against the workman?

Reasoning of the Court:

Considered whether the alleged assault took place within factory premises  It could
as the relevant S.O make it clear that it includes actions taking place outside factory
premises as well

Considered whether its positionality as a private matter, could be held to be true,

given that the assault was inextricably connected to the introduction of the incentive
bonus scheme and the animosity was a product of their participation in two rival
unions.

The domestic enquiry was in fact fairly conducted, with reasonable opportunity to be
heard, and compliant with the principles of natural justice.

Raghavan failed to intimate the two witnesses he sought to examine. He told the
Enquiry Officer that he wanted to examine them, and requested the Officer to invite
the said witnesses (not the Officer’s duty)

The Officer nevertheless assisted Raghavan and wrote two letters

The letter he possessed from Chalakudi (one of the witnesses he wished to examine)
was unsigned  and was received by the Enquiry Officer on the day he was returning
to Bombay. Therefore, the Enquiry Officer was not activated by mala fide intentions
while deciding his order of dismissal.

The Court discussed Phulbari Tea Estate, which proceeds “on the basis which is of
basic importance in industrial adjudication that findings properly recorded in
 domestic enquiries which are conducted fairly, cannot be re-examined by Industrial
adjudication unless the said findings are either perverse, or are not supported by any
evidence, or some other valid reason of that character.”

Offers clarity on when the domestic enquiry’s proceedings can be reopened

The Tribunal also considered the view that since criminal proceedings were
underway, the domestic enquiry should have been pending till the final disposal of the
said criminal proceedings. The Court examined Delhi Cloth and General Mills v
Kushal Bhan, to hold: “But to say that domestic enquiries may be stayed pending
criminal trial is very different from saying that if an employer proceeds with the
domestic enquiry in spite of the fact that the criminal trial is pending, the enquiry for
that reason alone is vitiated and the conclusion reached in such an enquiry is either
bad in law or malafide.”

21. Kusheshwar Dubey V. Bharat Coking Coal Ltd., AIR 1988

Facts of the Case:
The Appellant, an employee of Respondent No. 1 was subjected to disciplinary
proceedings as also a criminal prosecution simultaneously on the allegation that he
physically assaulted a supervising officer. He filed a civil action in a trial court asking
for an injunction. The Trial Court stayed further proceedings in the disciplinary action
till the disposal of the criminal case. Upon appeal, the court affirmed the aforesaid
order.
Reasoning of the H.C:
The High Court allowed the revision application of the Respondent and set aside the
impugned order on the ground that there is no bar for an employer to proceed with
the departmental proceeding with regard to the same allegation for which a criminal
case is pending

The H.C.’s order was vacated, and that of the Trial Court was affirmed. They were
constituted on the same set of facts (criminal and disciplinary proceedings), and as
such, the H.C had no right in interfering with the Trial Court’s order of injunction
which had been affirmed in the appeal.
 There is certainly no legal bar for simultaneous proceedings. However, there maybe
cases where it would be appropriate to defer disciplinary proceedings awaiting
disposal of the criminal case. It is still open to the employee to seek such an order of
stay or injunction from the Court however.

This ought to be resolved on a case by case basis, given the several seemingly
conflicting judgments on this matter.

22. Bharat Petroleum Corpn. Ltd. V. Maharashtra General Kamgar Union (1999) 1
SCC 626
Facts of the Case:
Appellant Corporation submitted Draft Standing Orders to the Certifying Officer for
certification under the Industrial Employment (Standing Orders) Act, 1946 in 1985.
The Standing Orders were not fully certified and the clause relating to the issue in this
case was not certified (in 1991). On Appeal, the Appellate Authority certified the S.O
as final, and set aside the Certifying Officer’s order with respect to this issue (in
1993). On appeal to the H.C., they allowed the workman to be represented by other
non-employee members of the Union during the pendency of the dispute (1994).
Finally, the H.C. passed an order setting aside the Appellate Authority order of 93,
and reaffirming the certifying officer’s order of 91.
Central Issue of the Case:
Whether an employee can be represented in disciplinary proceedings by another
employee who although is not an employee of the corporation, is a member of the
same Trade Union?
Holding of the Court:
The Standing Orders conform to all standards of reasonableness and fairness and,
therefore, the Appellate Authority was fully justified in certifying the Draft Standing
Orders as submitted by the Appellant. The HC’s ’96 judgment is set aside and the
Appellate Authority’s ’93 order certifying the rules is reaffirmed.
Reasoning of the Court:
“The order of the C.O is appealable before the Appellate Authority and the Appellate
Authority can legally interfere with the order passed by the C.O. and set it aside or
uphold it”  The Appellate Authority has the capacity to pass this order + Model
 Standing Orders will only hold weight until new orders drafted by the Company are
authorized by the C.O.
“The submission of the learned counsel for the respondent No.1, on the contrary, is
that the Standing Orders, as framed by the Management, have to be on the lines
indicated in the Model Standing Orders and there cannot be a departure either in
principle or policy from the Model Standing Orders.”

What is the scope of an employee’s right to representation?  “The basic principle is

that an employee has no right of representation in the departmental proceedings by
another person or a lawyer unless the Service Rules specifically provide for the same.
The right to representation is available only to the extent specifically provided for in
the Rules.”

“Our conclusion therefore is that a workman against whom an enquiry is being held
by the management has no right to be represented at such enquiry by a representative
of his Union: though of course an employer in his discretion can and may allow his
employee to avail himself of such assistance.”  The Court cited Kalindi and Ors
v Tata Locomotive & Engineering Company

Found that the contention the Draft Standing Orders must be in consonance with
Model Standing Orders is not a tenable argument  “In 1956, radical changes were
introduced in the Act by the Parliament as a result of which not only the scope of the
Act was widened, but jurisdiction was also conferred upon the Certifying Officer as
also the Appellate Authority to adjudicate upon and decide the question relating to
fairness or reasonableness of any provision of the Standing Orders.”

Certifying Authorities have wider powers now after the Amendments + Draft
Standing Orders do not efface the right to representation. The restriction is merely that
the representative must also be an employee, which is sensible because they will be
better informed to help out – which in turn is in consonance with the spirit of the
Model Standing Orders.

23. Depot Manager APSTRC v Mohd. Yousuf Miya (Supreme Court)

Facts of the Case:
 The respondent, while driving the double-decker vehicle near Gandhi Hospital in
Hyderabad city, had caused an accident in which a cyclist died. Two investigations
arose from this incident – 1) IPC (Sec. 304 and 338) by the police; and 2) a
Departmental inquiry for failure to anticipate and take due caution. On appeal to the
HC to stay the departmental proceedings as they would prejudice the criminal trial –
the Single Judge granted the stay. On further appeal, the Division Bench reaffirmed
the order.

Central Issue of the Case:

Are the departmental proceedings prejudicial to the criminal trial and was the HC in
error when staying them? Or “whether it would be right to stay the criminal
proceedings pending departmental enquiry?”

Holding of the Court:

The two proceedings are distinct, serve distinct purposes and address different facets
of the respondent’s actions. Therefore HC was in error and its judgment was set aside.

Reasoning of the Court:

“Stay of disciplinary proceedings cannot be, and should not be, a matter of course. All
the relevant factors for and against, should be weighed and a decision taken keeping
in view the various principles laid down in the decisions referred to above.” – Citing
Kusheshwar Dubey vs Bharat Coking Coal Ltd. & Ors 1988 AIR 2118.

Court held that the purpose of the criminal investigation and the departmental
proceedings are entirely different. The former is for breach of public rights, as crime
is committed against the public. On the other hand, the departmental inquiry is
directed at ensuring discipline is maintained in the workplace. Moreover, the
evidentiary requirements and burden of proof is very different in both of these
proceedings. “In this case, we have seen that the charge is failure to anticipate the
accident and prevention thereof. It has nothing to do with the culpability of the
offence under Sections 304A and 338 IPC.”

24. Dena Bank vs Kiritikumar T. Patel (S.C):

Facts of the Case:
Workman was a cashier-cum-clerk with the appellant bank. Certain disciplinary
proceedings were instituted against him and he was dismissed from service (in 1986).
This gave rise to an industrial dispute and the Central Industrial Tribunal reversed the
order and directed reinstatement. On appeal to the HC, an interim order was passed
staying the CIT’s order, but directed the employer to comply with the provisions of
Sec. 17B of the Act. The workman filed a petition for modification, seeking
compensation for the salary as on the date of the award – which was rejected by the
HC. A second application was filed stating that in the interim, two settlements were
signed and this altered the wages owed + any perks and DA as enhanced for the
workman. HC directed the employer to pay the revised sums. On Letters-Patent
Appeal, the Division Bench affirmed the order, but modified it in part directing the
bank to deposit three years’ of wages in the respondent’s name and from January 1,
1996 onwards the respondent will be paid according to the order of the learned Single
Judge. The deposit itself would depend on the outcome of the Special Civil
Application in the HC.
Central Issue of the Case:
Whether the expression "full wages last drawn" in Section 17-B of the Industrial
Disputes Act, 1947 means wages drawn by a workman at the time of termination of
his employment or wages which he would have drawn on the date of the award?
Holding of the Court:
The 1995 and 1996 judgments of the Single Judge and the Division Bench are set
aside and appeal is allowed, because “it amounts to directing payment of wages which
would have been drawn by the respondent if he had been reinstated and not the full
wages last drawn by him.”
Reasoning of the Court:
Bank’s contention – “It has been urged that the expression "full wages last drawn"
only means the quantum of emoluments actually drawn by the workman at the time of
the termination of his employment and would not mean the wages which the
workman would be entitled in terms of the award whereby the order of dismissal has
been set aside.”
On Behalf of the employee – “The learned counsel has urged that if the workman is to
get only what he was getting at the time of termination of his service, whether as
subsistence allowance or wages, he gets no benefit of the award in his favour and is
put back to his position as a suspended or charge sheeted workman notwithstanding
 the fact that termination order has been set aside.” And as a result, the intention of
Parliament in drafting Sec. 17B is to ensure that the workman has some interim relief
in the time it takes for the issue to be fully settled.
Sub question – To what extent does Sec. 17B intend to ensure interim relief to the
workman? There’s a host of conflicting HC opinions, some of which hold that the
workman is entitled to all the increments and salary last drawn as on the date of the
award and not the termination, while others hold the converse and that the workman
cannot be paid on par with workmen who are actually working at the time.
The SC prefers the latter position, why? “In substance these construction read the
words "full wages last drawn" as "full wages which would have been drawn". Such an
extended meaning to the words "full wages last drawn" does not find support in the
language of Section 17-B. Nor can this extended meaning be based on the object
underlying the enactment of Section 17-B.”

25. Regional Authority, Dena Bank & ... vs Ghanshyam (Supreme Court)
Facts of the Case:
Workman was a ‘personal’ driver the Regional Manager of the Dena Bank at
Lucknow and when the said manager retired, he was dismissed (in 1990). He raised
an industrial dispute, claiming to be an employee of Dena Bank and wanted
retrenchment, and the Labour Court ruled in favour of the workman, holding the
dismissal to be bad in law and ordered reinstatement + back wages (1996). On appeal
to the HC, first interim order (1996) was given. Bank petitioned for modification –
and in 1997, the HC modified the order.
The H.C. modified the order to: “the appellant shall pay salary to the respondent
regularly in accordance with law from the date of the writ petition filed on December
6, 1996 as stated by the counsel for the bank; and (ii) the arrears of salary from
December 6, 1996 shall be paid within a period of seven days and thereafter as and
when the salary is being paid to the other staff of the bank.” When the Bank did not
implement the order, a petition was preferred for enforcement was directed to pay the
workman regular pay scale from Dec. 1 1996 (2000).
Issue:
Whether the expression "full wages last drawn" in Section 17-B of the Industrial
Disputes Act, 1947 means wages drawn by a workman at the time of termination of
his employment or wages which he would have drawn on the date of the award?
 Holding of the Court:
HC has the power to grant more equitable relief than what is contemplated in Sec.
17B. However, in balancing the interests of the workman and the employer, if the
workman loses the cases, any amounts paid in excess of Sec. 17B as per the impugned
order must be refunded to the employer.
Reasoning:
“It may be noticed that Section 17B of the Act does not preclude the High Courts or
this Court under Articles 226 and 136 of the Constitution respectively from passing
appropriate interlocutory orders, having regard to the facts and circumstances of the
case, in the interests of justice.”
Interim order of the HC in 1996 – “Issue notice to the opposite parties nos.2 and 3. In
the meantime, the Award of the Tribunal shall remain stayed, provided petitioner is
reinstated in service and is paid his salary regularly in accordance with law.”
The workman as per the wording of the HC judgment must be paid his regular salary,
because the HC has the power to grant benefits over and above Sec. 17B. Moreover,
17B is not really a material aspect of this case, as the HC passed its orders to
implement the first interim order that was not followed - of stay on the condition of
reinstatement.

WEEK 6-13

CASE: General Manager B.E.S.T Undertaking Bombay v. Agnes

Facts: A bus driver by the name of P. Nanu Raman was employed by the transport service of
the Bombay Municipal Corporation, which is carried out through the Bombay Electric
Supply and Transport Undertaking. There are various bus depots in different parts of the city,
and buses servicing those parts of the city are garaged and maintained in the depots. Bus
drivers are required to reach the depot early in the morning and return home only post their
shift when the bus is lodged in the depot. For this reason, Rule 19 of the Standing Rules of
Bombay Municipality B.E.S.T Undertaking, permits up to four members of the traffic
outdoor staff in uniform to travel standing in a bus without payment of fares.

On July 20, 1957, Nanu finished his work at the jogeshwari bus depot, and on his way back
home to Santa Cruz, the bus he was travelling on collided with a stationary lorry parked.
Resultantly, he was thrown out on the road and injured, and ultimately expired on July 26.
1957.

Trajectory of the Dispute: The deceased’s widow (the respondent) filed an application in
the Court of the Commissioner for Workmen’s Compensation, Bombay, claiming a sum of
Rs. 3,500 as compensation by reason of the death of her husband in an accident alleged to
have arisen “out of and in the course of his employment”. The Commissioner dismissed the
application accepting the contention of the B.E.S.T Undertaking that the accident did not
arise out of and in the course of employment. On appeal, the H.C. at Bombay negatived this
view, and passed a decree in favour of the widow. The General Manager of the B.E.S.T
Undertaking preferred an appeal against the order of the H.C.

Interpretative Analysis of S. 3(1) of the Workmen’s Compensation Act:

Section 3(1) of the Act reads, “If personal injury is caused to a workman by accident arising
out of and in the course of his employment, his employer shall be liable to pay
compensation in accordance with the provisions of this Chapter”

The Courts discussed English jurisprudence on the subject (as raised by the counsel for the
appellant and respondent) which had authoritatively interpreted the terms “arising out of and
in the course of his employment”, due to the fact that these words are pari materia with those
found in the corresponding sections of the English Statute.

Select English Jurisprudence on the Subject:

Cremins v Guest, Keen & Nettlefolds – Brief Facts

Cremins was a collier (coal miner) who would use a train composed of carriages belonging to
the appellants, but driven by the Great Western Railway Construction Company, from
Dowlais (this train would convey many other colliers) to a platform at Bedlinog which was
erected by the appellants on land belonging to the Railway Company. The colliers were the
only persons allowed to use the platform. They walked from the platform by a high road to
the colliery. While Cremins was waiting to board the return train, he was knocked down and
killed by the train. His widow applied for compensation under the Workmen’s Compensation
Act, 1906, claiming that the accident arose out of and in the course of his employment.

Principle held in the case by Cozens-Hardy M.R.

“It was an implied term of the contract of service that these trains should be provided by the
employers, and that the colliers should have the right, if not the obligation to travel to and
from without charge”.

The Court recognized that while there was a right to use the train, it was doubtful whether
there was a legal duty to do so. However, the Court in this case decided to ascribe a popular
meaning to the word “duty”.

The House of Lords in St. Helens Colliery Company Ltd. v Hewitson, adopted a stricter and
legalistic view of the concept of duty.

They held that, “there being no obligation on the workmen to use the train, the injury did not
arise in the course of the employment within the meaning of the Workmen’s Compensation
Act”

However, Lord Atkinson made an important observation regarding the nature of the
obligation involved,

“It must however, be borne in mind that if the physical features of the locality be such that
the means of transit offered by the employer are the only means of transit available to
transport the workman to his work, there may, in the workman’s contract of service, be
implied a term that there was an obligation on the employer to provide such means and a
reciprocal obligation on the workman to avail himself of them”

The House of Lords in Alderman v Great Western Railway Company, laid forth an important
distinction that served to clarify under what considerations, the accident arose out of the
course of employment.

If the employee at the time of the accident occupies the same position as an ordinary member
of the public, it cannot be said that the accident occurred in the course of his employment.

In the case of Weaver v Tredegar Iron and Coal, the House of Lords after reviewing the case
law, gave a wider meaning to the concept of “duty”, asking not just whether there is a direct
obligation evidenced in the terms of the contract, but rather, “Is he doing something to
discharge a duty to his employer either directly, or indirectly imposed upon him by contract
of service.

The Court of Appeal in Dunn v A.G. Lockwood examined efficiency considerations and
whether they can lead to the formation of implied obligations  The terms of employment in
the instant case, were such that while it was not obligatory for workmen to travel from
Whitsable to Margate by the 7:40 am train, when they arrived at Margate by 8:15 am, they
would be paid from 8:00am. The workman in the instant case simply took the most
expeditious route to his work, and slipped and injured himself.

Therefore, the obligation was implied on the part of the employee to proceed as quickly as
possible to his work, by the most expeditious route, and as such, a wider meaning was given
to the “duty” test, by implying obligations into the case.

The Court of Appeal in Jenkins v Elder Dempster Lines Ltd, laid down a wider test, that,
“there should be a nexus between the accident and the employment”, asking more grounded
questions such as whether the workmen at the relevant time, was acting in the scope of his
employment?

THE DOCTRINE OF NOTIONAL EXTENSION

The Court in the case of Saurashtra Salt Manufacturing Co. Bai Valu Raja, accepted the
doctrine of “Notional extension” of the employer’s premises 

“As a rule, the employment of a workman does not commence until he has reached the place
of employment and does not continue when he has left the place of employment, and does not
continue when he has left the place of employment, the journey to and from the place of
employment being excluded. It is now well-settled, however, that this is subject to the theory
of notional extension of the employer's premises so as to include an area which the workman
passes and repasses in going to and in leaving the actual place of work.”

“There may be some reasonable extension in both time and place and a workman may
be regarded as in the course of his employment even though he had not reached or had
left his employer's premises. The facts and circumstances of each case will have to be
examined very carefully in order to determine whether the accident arose out of and in
the course of the employment of a workman”

The Relevance of the Applicable Rules in the Validity of the Doctrine of Notional
Extension:

Important factual determinants:

The working hours are fixed at 8 hours a day, and he is under a duty to appear punctually at
the depot at the calling time.

If he is late by more than one hour, he will be marked absent.

If he does not appeal at the calling time, or misses his car, he will not be given any work for
the day, unless work is available.

If he misses his car, more than 3 times a month, he will be reverted to the extra list.

Rule 19(a): Four members of the Traffic Outdoor Staff in uniform are permitted to travel
standing on a double deck bus irrespective of their designation, two on the lower deck and
two on the upper deck, On a single deck bus two members are only permitted.

(b) Traffic Staff in uniform shall not occupy seats even on payment of fares.

In the context of the employees, it would be futile to suggest that they could travel to the
commute either by walking or use the local suburban trains (owing to the distance, and the
cost).

Though the doctrine of reasonable or notional extension applies to employment developed in

the context of specific workshops, factories, or harbors, it equally applies to a bus service as
well. Just as decisions relating to accidents occurring to an employee in a factory or in
premises belonging to the employer providing ingress or egress, analogically, the entire fleet
of buses forming the service would be the “premises”

Notional Extension – Illustration for Bus Services:

Suppose, in view of the long distances to be covered by the employees, the Corporation, as a
condition of service, provides a bus for collecting all the drivers from their houses so that
they may reach their depots in time and to take them back after the day's work so that after
the heavy work till about 7 p.m. they may reach their homes without further strain on their
health. Can it be said that the said facility is not one given in the course of employment? It
can even be said that it is the duty of the employees in the interest of the service to utilize the
said bus both for coming to the depot and going back to their homes.

Holding of the Majority:

The Majority agreed with the H.C. that the accident occurred to Nanu, during the course of
his employment and therefore his wife was entitled to compensation.
Raghubar Dayal’s Dissenting Opinion:

His argument is that the rule allowing the members of the traffic out-door staff to travel free
under specific conditions, was more a concession granted by the grace of the employer, than
actual service conditions guaranteed to obtain the workmen’s punctuality in the efficient
discharging of their duties. He bases this on the following facts:

1. They have to be in uniform.

2. Even if they purchase tickets, they are still not permitted to be seated  If this were
about efficient discharge of their duties, then at least on the way to work, they should
be allowed to sit.

3. There could be more than 2-4 members of such staff travelling by a particular bus,
who may have to join duty or return from duty at about the same time.

4. Therefore, he could not construe r. 19 as a condition of service of the bus-drivers of

the corporation.

5. Held that Saurashtra Salt Manufacturing Co.’s determination on the theory of notional
extension do not apply in the instant case.

6. The route covered in his trip from his house to the place of employment (or vice
versa) cannot be considered an area covered by notional extension, as the expression
ought to include only areas which the employee had to pass as a matter of necessity
and only in his capacity as an employee.

7. He additionally held that such areas would constitute public places (that were
traversed by the employee on the way to his place of employment).

8. “It is well-settled that when a workman is on a public transport he is there as any

other member of the public, and is not there in the course of his employment unless
the very nature of his employment makes it necessary for him to be there. A workman
is not in the course of his employment from the moment he leaves his home, and is on
his way to his work.”

Saurashtra Salt Manufacturing Co. v Bai Valu Raja:

Brief Facts of the Case:

The appellant is the Saurashtra Salt Manufacturing Co. It employs both temporary and
permanent workmen. The salt works is situated near a creek opposite to the town of
Porbandar. There are two ways to reach the salt works. 1) The land route (6-7 miles long), 2)
The creek route which naturally has to be crossed by a boat.

Porbandar End (Asmavati Ghat) A  Sandy piece of land B  After traversing the sandy
area, one can reach the salt jetty C of the salt works and the works itself, and there is a public
footpath which takes one to the salt works D (the distance being 1.25 miles).

In the evening of 12-6-1952, a boat carrying workmen capsized due to bad weather and over-
loading The accident took place when the boat had practically reached point A of the map,
and several workmen drowned, resulting in 7 cases for compensation being filed under the
Workmen’s Compensation Act

Trajectory of the Dispute:

The Commissioner for Workmen’s Compensation found that the accident arose out of and in
the course of employment of the workmen, and subsequently awarded compensation. The
appellant appealed to the H.C. of Saurashtra, and after a discussion of the law (cited in the
earlier case) came to similar conclusions, and dismissed the appeal. The appellant did not
seek a refund of the compensation provided (in the event of a successful ruling in their
favour) and merely wished to have a conclusive decision about whether the appellant was
liable to pay compensation in such circumstances.

Court’s Rationale:

The Court clarified that in determining whether the drowning arose out of and in the course
of employment, it is unnecessary to consider:

1) Which route a workman ought to take to go and return from the salt works

2) Whether the workmen were temporary or permanent, given that they fell within the
definition of “workmen” in the Workmen’s Compensation Act

3) On the matter of whether there was an arrangement between the appellant and the
Kharvas (ferry-walas) for the carrying of workmen of the appellant by boat across the
creek to enable them to be ferried to and fro from the salt works, the High Court chose
not to have the evidence recorded as they believed that the material already on record
 proved that the accident arose out of and in the course of employment. The S.C. on
the other hand, considered it necessary to have evidence taken in this regard.

4) On the question of the existence of an arrangement, the Court held that there was none
subsisting between the appellant and the Kharvas. The only concession that existed,
was the cancellation of a charge to any member belonging to the Kharva caste. Both
the footpath leading to the salt jetty C and the footpath leading to the works itself D,
constitute public ways. They held that, it is well settled that when a workman is on a
public road or a public place or on a public transport he is there as any other member
of the public and is not there in the course of his employment unless the very nature
of his employment makes it necessary for him to be there. The Court held that the
theory of notional extension cannot be extended beyond D.

5) The Commissioner for Workmen’s Compensation and the High Court were in error in
supposing that the deceased workmen in this case were still in the course of their
employment when they were crossing the creek between points A and B.

6) The appeal is accordingly allowed and the order of the Commissioner for Workmen’s
Compensation directing the appellants to pay compensation is set aside. The
appellant, however, will pay the costs of the respondents of this appeal and will not be
entitled to recover the compensation money already paid.

Mackinnon Mackenzie & Co. Pvt. Ltd vs Ibrahim Mahommed Issak:

Brief Facts of the Case:

Sheikh Ibrahim who was employed as a deck-hand had been complaining of pain in the chest and
while no abnormality was detected clinically, the Medical Officer on board the ship prescribed tablets
for the missing seaman. After which, he reported fit for work on the next day. On December 15, 1961,
he complained of insomnia and pain in the chest for which the Medical Officer prescribed sedative
tablets. The Log Book of the ship shows that the missing seaman was seen near the bridge of the ship
at 2:30 am. He was sent back but at 3, he was seen on the Tween Deck when he told a seaman on duty
that he was going to bed. At 6:15am, he was found missing and a search was undertaken.

At 7:35 am, a radio message was sent by the Master of the ship stipulating that a seaman had gone
missing. Subsequently, relevant information was passed onto local authorities, and an inquiry was
held on board the ship by the local police and the British Consul General. The respondent filed an
application under S. 3 of the Workmen’s Compensation Act claiming compensation of Rs. 4810, for
the death of his son, the missing seaman, which according to him occurred on account of a personal
injury arising out of and in the course of his employment.

Additional Commissioner’s Reasoning:

In such circumstances where it is impossible to answer relevant questions owing to the non-
availability of evidence, e.g., “How did he fall down? From which place did he fall down? Did the
man fall down accidentally? Why was he at the time at the place from which he fell down?”

In the absence of evidence, he was unable to draw any presumption or conclusion that the man is
dead, or that his death was caused due to an accident arising out of his employment. Such a
conclusion or presumption would only be speculative and unwarranted by any principle of judicial
assessment of evidence, or permissible presumptions

H.C’s reasoning:

The respondent preferred an appeal to the H.C. from the judgment of the Additional Commissioner.
While there was an agreement that the appellant would pay the respondent a sum of Rs. 2000, by way
of compensation irrespective of the result of the appeal, the H.C. went ahead to answer these issues as
they were serious and important for future disputes. Chandrachud J. at the H.C. allowed the appeal
and reversed the judgment of the Additional Commissioner and granted the application for
compensation. (the death of the seam in this case must be held to have occurred on account of an
accident which arose out of his employment)

Court’s Rationale:

The appropriate way to understand “arising out of employment”  is to mean that during the course
of the employment, injury has resulted from some risk incidental to the duties of the service, which
unless engaged in the duty owing to the master, it is reasonable to believe the workman would not
otherwise have suffered. That is, there must be a causal relationship between the accident and
employment

This is of course subject to the caveat that if the workmen has exposed himself to an added peril by
his own imprudent act, then he would not be entitled to receive compensation in that regard. To that
effect, Lord Sumner’s ruling in Lancashire and Yorkshire Railway Co. v Highley is crucial:

To ask if the cause of the was within the sphere of the employment, or was one of the ordinary risks
of the employment, or reasonably incidental to the employment, or conversely, was an added peril and
outside the sphere of the employment, are all different ways of asking whether it was a part of his.
employment, that the workman should have acted as he was. acting or should have been in the
position in which he was, whereby in the course of that employment he sustained injury."
The Court’s Analysis of the Burden of Proof:

Lord Birkenhead L.C. in Lancaster v. Blackwell Colliery observed on the question of the burden of
proof:

“If the facts which are to be proved give rise to conflicting inferences of equal degrees of probability,
then the choice between them is a mere matter of conjecture  in these cases, since the applicant has
the onus of proving that the injury arose both out of and in the course of employment”  the
applicant would lose. However, when the facts are not equally consistent, and there is ground for
comparing and balancing probabilities, and where a reasonable man might hold that the more
probable conclusion is that for which the applicant contends, then the Arbitrator is justified in drawing
an inference in his favour.

English Jurisprudence on cases concerning the unexplained drowning of seamen:

The steward of a ship was told by the captain to prepare tea for the crew. He was shortly afterwards
missing, and the next day his body was found in the sea near the ship. The bulwarks were 3ft 5in
above the deck, and the Steward was a teetotaler. The arbitrator negatived the claims of murder and
suicide, and held that the accident arose out of and in the course of his employment as a steward. The
Court of Sessions reversed the same.

On this, the House of Lords clarified the nature of judicial responsibility: “Our duty is a very
different, a strikingly different one. It is to consider whether the Arbitrator appointed to be the judge
of the facts, and having the advantage of hearing and seeing the witnesses, has come to a conclusion
which could not have been reached by a reasonable man.

In Bender v. Owners, the County Court Judge drew the inference that the death was caused by an
accident arising out of and in the course of his employment (He was seen looking over the side of the
ship at 5:35 am, and the weather was bright, and the ship was steady, and the bulwarks were 4ft all
around the ship  seemingly no evidence for how he drowned)

The Court of Appeal however pointed out that there is no evidence to warrant such an inference, and
that it is equally conceivable that he had been larking or committed suicide.

Lord Tomlin in Simpson V.L.M & S. Railway Co. after reviewing all the authorities stated the
principle to be as follows 

where me evidence establishes that in the course of his employment the workman properly in a place
to which some risk particular thereto attaches and an accident occurs capable of explanation solely by
reference to that risk, it is legitimate, notwithstanding the absence of evidence as to the immediate
circumstances of the accident, to attribute the accident to that risk, and to hold that the accident arose
out of the employment; but the inference as to the origin of the accident may be displaced by evidence
tending to show that the accident was due to some action of the workman outside the scope of the
employment.

Holding of the Court:

In our opinion the Additional Commissioner did not commit any error of law in reaching his finding
and the High Court was not justified in reversing it.

Kerala State Electricity Board v. Valsala K:

Question of Law:

Whether the amendment of S. 4 and 4A of the Workmen’s Compensation Act, 1923, with effect from
15.9.1995, which sought to enhance the amount of compensation and rate of interest, would be
attracted to cases where the claims in respect of death or permanent disablement resulting from an
accident caused during the course of employment, took place prior to 15.9.1995

The Reasoning of Courts:

There are two broad positions that have been arrived at by the courts. First, the relevant date for the
claim of compensation under the Workmen’s Compensation Act, is the date of the accident. (The
relevant date being the date that determines the rights and liabilities of the parties)

Alternatively, the relevant date for the claim of compensation should be the date of adjudication (i.e.,
the benefits owed to workmen should be those that are owed on the date of adjudication) and not the
date of the accident

1. 4 judge Bench in Pratap Narain Singh Deo v Srinivs Sabata and Anr  employer becomes
liable to pay compensation as soon as the personal injury is caused to the workmen by the
accident which arose out of and in the course of employment. Therefore, the date of the
accident.

2. 2 Judge Bench in the New India Assurance Company Ltd v. V.K. Neelakandan and Ors. 
Since the Workmen’s Compensation Act is a special legislation for the benefit of the
workmen, the benefit is available on the date of adjudication, and should be extended to the
workmen from that date, and not the date of the accident.

3. Full Bench of the Kerala High Court in United India Assurance Co. v Alavi  held that the
injured workmen is entitled to compensation the moment he suffers personal injuries of the
types contemplated by the provisions of the Workmen’s Compensation Act, and it is the
amount of compensation payable on the date of the accident  in consonance with the ruling
of Pratap Singh Narain Singh Deo
 4. The two judge Bench in the New India Assurance Co. v. V.K. Neelakandan erred in not
taking cognizance of the other larger Bench decisions.

Court’s Holding:

We find that the accident took place long time back. Compensation became payable to the workmen,
as it is not disputed that the accidents occurred during the course of employment, as per the law prior
to the amendment made in 1995. Keeping in view the peculiar facts and circumstances of these cases,
pettiness of the amounts involved in each of the cases and the time that has since elapsed, we are not
inclined to interfere with the impugned orders, decided on the basis of the 1995 amendment

However, the Court did clarify the law and hold that the applicable date was the date of the accident
as held in Pratap Singh

Roshan Deen v Preeti Lal:

Brief Facts of the Case:

Roshan Deen was a workman of the respondents industrial establishment, and was drawing a monthly
salary of Rs. 1500. On 4.3.1995, he was operating a machine of the Mill, but unfortunately suffered
multiple injuries (he was crushed by the fast rotating machine)  neck, hands, legs, vocal cords, etc.
He had to be amputated as well.

He tiled for a petition before the Commissioner for Workmen’s Compensation, claiming a
compensation of Rs. 5 lakh plus Rs. 2 lakh for medical expenses .

However, the respondents denied all the averments of the appellant, including that the appellant was a
workman at the Mill.

Trajectory of the Dispute:

While the application was still pending before the Commissioner for Workmen’s Compensation, it
was allegedly submitted that the appellant and respondent had entered into an agreement with each
other, to the effect that the appellant did not want to pursue any claim against the respondent, and this
was submitted to the Commissioner to be recorded. There was however, no signature of the appellant
on the application, and only a thumb impression could be seen.

The appellant subsequently filed an application before the Commissioner praying for recalling the
above quoted order, and held that the thumb impression was fraudulently obtained after receiving a
payment of Rs. 9500.
Commissioner’s Reasoning:

The Appellant also stated that when he went to the office of the advocate, as required by him (that the
Commissioner had indicated), the advocate refused to go with the appellant. The Commissioner then
called upon the respondent to provide a reply, and the respondent denied even paying the 9500 rupees,
and claimed that the appellant had withdrawn the claim on his own.

However, the Commissioner passed an order after referring to S. 17 of the Act, which declares that
any agreement (by which a workman relinquishes any right to get compensation from the employer
for personal injury) is null and void.

High Court’s Reasoning:

Respondent challenged the order before the H.C under Art. 227 of the Constitution, and the Learned
single Judge of the High Court, despite his attention being drawn to Section 17 of the Act, went to the
extent of observing that no fraud was played on the appellant.

His holding was as follows:

In view of the clear intention on the part of Roshan Deen that he did not want to pursue his case and
withdraw the same, no other order was required. The application for recalling the order dated
16.4.1999 was moved after a period of about 27 days. It is not established on record that Roshan Deen
ever gave a notice to his counsel that he never gave instructions to him for the purpose of entering into
a compromise. Even in the review application Roshan Deen does not say that the thumb impression
on the original of Annexure-P1 is not his. In these circumstances, I am of the opinion that no fraud has
been practised upon the Court.

The only consolation provided to the victim, was that the crippled human being could adopt another
legal remedy against the order.

This Court’s Rationale:

The H.C. did not specify what alternate remedy even existed.

The H.C. was completely ignorant of the purport of S. 17 of the Act, and the decision of the Court in
United India Insurance Co. Ltd v Rajendra Singh and Ors, which were brought to the attention of the
judge.

He completely sidelined the legislative mandate and bypassed the binding decision to overturn the
correct decision of the Commissioner.

While writ powers under 226, and 227 are provided so that no man should be subject to any injustice,
the H.C actively through an erroneous view, erased the appellant’s justice claims in the name of
academically correcting the law
Actual Compensation Amount:

Permanent total disablement results from injury  an amount equal to sixty per cent of the
monthly wages of the injured workmen multiplied by the relevant factor

Errors in the H.C’s Reasoning:

The Single Judge seemed to believe that once a Commissioner happened to pass an order, however
illegal, unjust, or inequitable as it may be, and even if the Commissioner was convinced that the order
was produced through fraud, he (the H.C. judge) would be helpless and the parties thereto would also
be helpless except to succumb to such fraud.

The Court’s Holding:

We cannot allow the order of the Commissioner dated 19.3.199 to remain alive even for a moment. It
is the byproduct of fraud and cheating. We, therefore, set aside the impugned judgment and restore the
order passed by the Commissioner on 11.10.1999. As already a long period of six years has been
wasted we direct the Commissioner to expedite the proceedings and dispose of the claim without any
further delay.

The Court also directed the Bar Council of the State of Haryana to hold an inquiry into the allegations
made by the petitioner against the Advocate Rajpal Panwar of Jagadhri as to whether he defrauded the
petitioner by obtaining a thumb impression.

Rita Devi & Ors v New India Assurance Co. Ltd.:

Brief Facts of the Case:

Dasarath Singh was an auto driver, driving a vehicle owned by Lalit Singh. The auto was registered as
a public carrier vehicle used for hire by passengers. This vehicle was also insured with the respondent
insurance company. On 22nd of March, 1995, some unknown passengers hired Dasarath’s auto from
the stand at Dimapur between 5 to 6pm. The auto rickshaw was reported stolen, and the dead body of
the driver was recovered by the police on the next day. The auto was never recovered, and the
respondent Insurance Company paid forth a sum of Rs. 47,220 towards the loss suffered by the owner.
A man by the name of Darshan Singh claiming to be the power of attorney holder of the current
appellants (the deceased’s heirs who were later impleaded into the dispute) claiming compensation
under S. 163 of the MV Act claiming damages for the death of Dasarath Singh caused in an accident
arising out of the use of the vehicle.

Trajectory of the Dispute:

The Motor Accident Claims Tribunal at Nagaland, per its judgment dated 24 th June, 1996, came to the
conclusion that the death of the driver was caused by an accident, coming within the purview of the
MV Act, and held that the owner of the vehicle was liable to compensate the death of the driver in
money value. Since there was an agreement between the vehicle owner and the respondent insurance
company, the Tribunal held that the Insurance company was liable to compensate the same. The
Insurance Company preferred an appeal to the High Court which set aside the judgment holding that
the case in hand was that of murder, and not an accident arising under the Act.

Important Perspectives – The Court’s Reasoning:

Responding to the contentions of the respondent advocate, the Court held that the object of both the
Acts (the Workmen’s Compensation Act and the Motor Vehicles Act) are quite similar. They’re both
intended to provide compensation to the victims of accidents. Moreover, S. 167 of the MVA makes it
open to the claimants either to proceed to claim compensation under the WC Act, or the MV Act.
They’re both beneficial enactments operating in the same field, and therefore, the judicial
interpretation of the word death in the WC Act is applicable to the interpretation of the word death in
the MV Act also.

The Court looked into the interpretation of S. 92A of the MV Act, which specifically sued the phrase
arising out of, whereas other sections such as S. 95(1)(b)(i) and 96(2)(b)(ii) of the Act used the word
cause. The Parliament’s choice of using the expression arising out of indicates that there is no
requirement to prove the existence of a causal relationship between the use of the motor vehicle and
the accident resulting in death or permanent disablement.

On the question of maintainability, the appeal by the Insurance Company was not maintainable
because prior permission of the Court was required, and not obtained. Relying on Shankarayya & Anr
vs United India Insurance Co. Ltd, the Insurance Company when impleaded as a party by the Court
can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in S.
170 are found to be satisfied, and for that purpose, the Company is obligated to obtain an order in
writing from the Tribunal (with the requirement that such order be a reasoned order). There was no
such order of the Court that permitted the company which was impleaded to avail of a larger defence
on merits post satisfying the conditions set out in S. 170.

Supporting judgments that confirm a more expanded view of accidents  Re: Challis v London and
South Western Railway Company | Nisbet vs Rayne & Burn

MBA and CSS

Bostock v Clayton County:

Facts of the Case:

Gerald Bostock worked for Clayton County, Georgia, as a child welfare services coordinator. During
his 10-year career with Clayton County, Bostock received positive performance reviews and
numerous accolades. In 2013, Bostock began participating in a gay recreational softball league.
Shortly thereafter, his participation in the league became known, and he received criticism. During a
meeting in which Bostock’s supervisor was present, at least one individual openly made disparaging
remarks about Bostock’s sexual orientation and his participation in the softball league. Around the
same time, Clayton County informed Bostock that they would be conducting an internal audit of the
program funds he managed. Consequently, Clayton County terminated Bostock for “conduct
unbecoming of its employees”.

Trajectory of the Dispute:

Bostock filed a charge of discrimination with the Equal Employment Opportunity Commission
(EEOC). Three years later, in 2016, he filed a pro se lawsuit against the county alleging Title VII
discrimination based on sexual orientation. The District Court dismissed the lawsuit for failure to state
a claim, finding that prohibiting discrimination based on sexual orientation was contrary to Evans v
Georgia Regional Hospital. Bostock appealed, and the US Court of Appeals for the 11th Circuit
affirmed the lower court. The Eleventh Circuit Court, which is the Federal Appeals Court for Georgia
held that Title VII did not protect LGBTQ workers and held that it could not overrule a prior panel’s
holding in the absence of an intervening Supreme Court or Eleventh Court decision affirming
Bostock’s claims.

The Position of Law:

Context about LGBTQ protections prior to the lawsuit  Many states had already had legislations
prohibiting workplace discrimination for LGBTQ employees. So too, had numerous municipalities.
21 states didn’t have specific legislations. And attempts made legislatively to include sexual
orientation into Title VII failed ultimately.

Importantly, the Position of Law as far as Title VII is concerned is as follows  Title VII prohibits
employment discrimination based on race, color, religion, sex, and national origin.

In this case, sex became the operative basis for alleging that discrimination on the grounds of sexual
orientation could be prohibited.

• The Statute’s provisions that are relevant: S. 703(a)  it shall be unlawful for an employer
“to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against
any individual with respect to his compensation, terms, conditions, or privileges of
employment, because of such individual's race, color, religion, sex, or national origin."

The Inclusion of ‘Sexual Orientation’ Within the Category of ‘Sex’:

There are three reasons for construing sexual orientation from sex 

1. It’s impossible to consider someone’s sexual orientation without first considering their sex.

2. Sex must only be a “But for” cause of a person’s firing. It needn’t be the primary or
constitutive criterion on which the discrimination is alleged.

3. Title VII is about protecting individuals against discrimination, not groups.

Supreme Court’s Observations:

While the liberal judges on the Court were not reluctant to include the grounds of sexual orientation
within Title VII of the Civil Rights Act, Gorsuch a well-known conservative on the S.C passed the
judgment, and recognized Bostock’s grounds using a plain language reading of the Statute
(textualism).

Gorsuch’s Hypothetical  Let’s assume that the employer is firing anyone who is homosexual. Two
identical employees show up with a spouse named Mark. Whether either of them is liable to be fired
depends on their sex.

Justice Alito, who is also a conservative disagreed and held that a textualist reading doesn’t mean that
discrimination on the basis of sexual orientation is prohibited. He argued contrarily, that the ordinary
meaning of the word sex as used by legislators in 1964 during the passage of the Civil Rights Act did
not entail sexual orientation, and as such, Gorsuch’s textualist interpretation was incorrect.

Alito believed that this mode of disguised interpretation was a way of updating old statutes, a process
that the late J. Scalia categorically denounced.

Per Gorsuch’s assessment, it’s important to note that the test required to be satisfied is merely a but-
for test. Sex needn’t be the primary or constitutive basis upon which the discrimination is alleged. An
analogy used in the context of interracial marriages (Loving v State of Virginia) will explain:

Let's imagine that the decisionmaker in a particular case is behind the veil of ignorance and the
subordinate who has reviewed the candidates for a position says: I'm going to tell you two things
about this candidate. This is the very best candidate for the job, and this candidate is [married to a
person of a different race]. And the employer says: Okay, I'm going --I'm not going to hire this person
for that reason. Is that discrimination on the basis of [race], where the employer doesn't even know the
[race] of the individual involved?

The Court rejected such practices and held that the underlying social context within which such
decisions to hire/not hire people would be based on established animus that clearly constitutes racial
discrimination (Court’s holding in McLaughlin v. Florida, and Loving v State of Virginia).

J. Kavanaugh’s dissent was centered around two arguments:

 1. Prohibiting such discrimination would fall squarely within the Legislature’s ambit.

2. There is no substantiation for why textualism ought to override ordinary meaning.

Pooja Jignesh Doshi v State of Maharashtra & Hema Vijay Menon v State of Maharashtra:

Facts of Pooja Doshi:

Unable to bear a second child and desiring to provide a sibling for their then son, the woman with the
consent of her husband, the Petitioner, decided to attempt the route of surrogacy. The surrogate
mother gave birth to a baby girl on 5th November 2012.

Central Question of This Case:

Maternity Leave was denied on the ground that the Leave Rules and the Policy governing the
Rules did not permit maternity leave for a surrogate child.

Court’s Analysis:

The issue at the stage of Pooja Doshi was not particularly unresolved. The Court relied on the
judgments of Hema Vijay Menon v State of Maharashtra and Rama Pandey v Union of India to
conclude that mothers through surrogacy are also entitled to maternity leave, and the father, likewise,
to paternity leave (when applicable).

*The cases Rama Pandey v Union of India, and Hema Vijay Menon v State of Maharashtra will be
discussed below.

Facts of Hema Vijay Menon:

The work-woman was a lecturer who was highly qualified. Her only son who was fifteen years of age,
had died tragically. Resultantly, the parents tried to conceive of another child using the method of IVF
five times. After attempts at IVF failed, she applied for maternity and child care leave (CCL) to the
Principal of the College she was employed at. While the Principal approved the request, the Joint
Director of Higher Education stated that there was no provision that authorized this by the impugned
communication dated 07.05.2015  This was challenged in the petition.

The money spent on the procedures ultimately came up to 45 lakhs.  The Court believed this was a
fact worth noting

Applicable Law:
The Maharashtra Civil Services Leave Rules, recognizes the right of a woman to maternity leave.
Govt Resolution dated 28.07.1995 recognizes that maternity leave is available to adoptive mothers in
the same manner as is available to natural mothers.

Important Arguments:

The object of providing maternity leave is not restricted strictly to the health concerns of the mother,
but also entails considerations of the interests of the child.

To that effect, a bond of affection has to be created between the mother and the child in the first year
of his/her birth and this ought to be made available to women who become mothers through
surrogacy.

There’s no specific prescription that disentitles the petitioner in the instant case from availing
maternity leave.

The action then, of the respondent in denying maternity benefit is arbitrary and discriminatory.

Critical Review:

The Judgment appropriately notes that there ought not to be distinctions between biological mothers,
and adoptive/surrogate mothers 

“The object of maternity leave is to protect the dignity of motherhood by providing for full and
healthy maintenance of the woman and her child. Maternity leave is intended to achieve the object of
ensuring social justice to women. Motherhood and childhood both require special attention."

The judgment however, while appropriately recognizing the need to do away with essentializing
distinctions between adoptive/surrogate mothers and natural mothers, itself essentializes the role of
women by stating 

“It is said that being a mother is one of the most rewarding jobs on the earth and also one of the most
challenging. To distinguish between a mother who begets a child through surrogacy and a natural
mother who gives birth to a child, would result in insulting womanhood and the intention of a woman
to bring up a child begotten through surrogacy, as her own.”

The Court also rightly notes that even for women who become mothers through surrogacy, maternity
leave at a post-natal level is essential, as the child is handed over to the new mother immediately upon
delivery. And moreover, the commissioning mother needs to develop crucial bonds of affection with
their children. To that effect, the Court also noted the learning that takes place in the first year of the
baby’s life, and the need for child rearing.  Another essentializing feature

Perhaps the most self-contradictory feature of this judgment lies in the fact that while it notes the need
to do away with distinctions between adoptive/commissioning mothers and natural mothers, the Court
remarks that, “In our view, the case of the mother who begets a child through surrogacy procedure, by
implanting an embryo created by using either the eggs or sperm of the intended parents in the womb
of the surrogate mother, would stand on a better footing than the case of an adoptive mother” 
Essentializing distinctions between adoptive mothers and surrogate mothers.

Constitutional Perspectives:

The Court also notes the fact that the right to life under Art. 21 includes the right to
motherhood, and the right of every child to full development. It also recognizes the actions of
Respondent Nos. 1-3 as arbitrary, and discriminatory and violative of Arts. 14 and 21 of the
Constitution.

Order of the Court:

The Writ Petition is allowed. The impugned communication dated 07.05.2015 is quashed and set
aside. It is hereby declared that the petitioner is entitled to the maternity leave for a period of one year
from the date of the birth of the child, i.e., 04.12.2014

Rama Pandey v Union of India, 221(2015)DLT756:

Facts of the Case:

The petitioner entered into an arrangement with Ms. Aarti (the surrogate mother), requiring Ms. Aarti
to bear a child through IVF (using the genetic material of the father). The ovum was provided by a
designated donor. The embryo is then transferred to the surrogate mother. The arrangement laid out
the rights and obligations of the commissioning parents, and the surrogate mother. The
commissioning parents received twins, and her application for maternity leave and CCL was rejected.
While the respondents were ultimately willing to provide CCL, they did not provide maternity leave,
and it was conveyed to the petitioner that CCL could be sanctioned by virtue of R. 43A (which was
later realized to be Rule 43), but maternity leave could not.

Trajectory of the Dispute:

The aggrieved petitioner filed an application under Art. 226 of the Constitution, and the respondents
claimed on the basis of office memorandums issued by Ministry of Personnel, Public Grievances,
Pensions, DOPT, Govt. of India (in turn, issued by the Ministry of Human Resources and
Development), that there was no provision for grant of maternity leave to female employees who
obtained children through surrogacy. However, the DOPT recommended the grant of
maternity/adoption leave to the petitioner keeping in mind the welfare of the child. They
recommended that the petitioner be allowed 180 days of leave. This decision was however without
prejudice to the policy/rules that the Govt may frame in that behalf in due course.

Despite the potential lack of grievances in this case, the Court decided to take up the matter to answer
the issue of law that was unarticulated at that point, and it decided to pronounce a judgment on the
matter.

Important Arguments (of the petitioner):

The petitioner claimed (rightly) that there are no distinctions between commissioning mothers and
biological mothers  given the commissioning mother’s significant emotional interest in the well-
being of the surrogate mother and the child.

They also placed reliance on K. Kalaiselvi v. Chennai Port Trust, which held that commissioning
mothers are equivalent in position to adoptive mothers.

Important Arguments (respondent):

1. There is no extant provision of law that authorizes the grant of maternity leave to women who
become mothers through surrogacy.

2. The rationale for the grant of maternity leave, is to help a specific risk-group: i.e., lactating
mothers (who naturally do not coincide with the sub-set of commissioning mothers)

3. The physiological distinctions between biological mothers and commissioning mothers, i.e.,
the mental and physical fatigue of pregnancy) constitute relevant grounds for denying
maternity leave to commissioning mothers.

4. Could engender “problematic” precedent for same sex parents or single parents who chose to
go via the surrogacy route.

5. Similar to J. Kavanaugh’s claim in Bostock v Clayton County, the counsel for respondent
argued that it’s the legislature’s prerogative to enact necessary rules to deal with such
situations.

Court’s Reasoning:

1. Most rules and regulations don’t conceive of bifurcations between pre and post-natal care for good
reason. It allows women the right to claim and utilize maternity leave when most needed; post-natal
stage for child care. There is no logical reason to deny this for mothers who obtain children through
surrogacy.

2. On the count that there is no express provision authorizing the grant of maternity leave to mothers
through surrogacy, the Court recognized and applied the updating principle.  ”Advancement in
science and change in societal attitudes, often raise issues, which require courts to infuse fresh
insight into existing law”

Example of the updating of construction principle  Fitzpatrick vs Sterling Housing Association Ltd.
Where the word ‘family’ was read to include two persons of the same sex who were cohabitating and
living together for a long period of time with a mutual degree of inter-dependence. The gradual
acceptance of same-sex relationships and the shifting social attitudes regarding them, is reason to
update the relevant 1920 Act.

Indian Example  State (through CBI) vs. S.J. Choudhary where the Court applied the updating
construction principle when it was tasked with identifying whether the opinion of a typewriter expert
could be admissible in evidence per S. 45 of the Indian Evidence Act. The Court read into the word
‘science’ which appeared alongside handwriting, to include experts in typewriters.

Likewise, the introduction of New Reproductive Technologies should embolden the Court to use the
updating construction principle to recognize the plight of mothers who obtain children through
surrogacy.

3. A perusal of the applicable rules reveals that there is no restriction on the grant of maternity leave
only to those female employees who are themselves pregnant.

E.g., Rule 43-B, which enables female employees with fewer than two surviving children, to avail of
child adoption leave for a period of 180 days, on the condition that there should be a “valid adoption”
of a child below the age of one year.

The Court in addressing the respondents’ argument that maternity can only be reduced to those female
employees who conceive and carry the child during pregnancy, explains that commissioning mothers
remain the legal mother of the child, both during and after the pregnancy.

Surrogacy is recognized as a lawful agreement in the eyes of the law in India  Baby Manji Yamada
v Union of India

Even during the pre-natal period, the commissioning mother may need to attend to the
surrogate/gestational mother during the term of the pregnancy (emanating from an interest in the
health of the child)  this can be in the form of physical, emotional, or financial support.

6. At the post-natal stage, it is quite evident that commissioning mothers possess the same
responsibility as biological mothers.

7. Adopting such a view that protects mothers through surrogacy is consistent with constitutional
principles reflected in Art. 39(f) and Art. 45 of the Directive Principles of State Policy.
8. Such a view in addition to being in consonance with constitutional principles, is also in consonance
with important precepts of international human rights law. Namely, Art. 6 of the CRC, which provides
that State-parties are obliged to ensure, to the maximum extent possible, the survival and development
of the child. (India is a signatory to the UNCRC). In this regard, there is no municipal law which is in
conflict with the provisions of Art. 6 of the UNCRC, and as such, the State is required to act in a
manner which ensures that it discharges its obligations under the CRC (Jolly George Varghese v Bank
of Cochin| Vishaka v State of Rajasthan| National Legal Services Authority v Union of India)

Court’s Decision:\

An adoptive parent is no different from a commissioning parent, which seeks to obtain a child via a
surrogacy arrangement  ratio

1. A female employee, who is the commissioning mother would be entitled to apply for maternity
leave under Rule 43(1)

2. The competent authority based on material placed before it would decide on the timing and the
period for which maternity leave ought to be granted to a commissioning mother who adopts the
surrogacy route

The scrutiny would be keener and detailed, when leave is sought by a female employee, who is the
commissioning mother, at the pre-natal stage. In case maternity leave is declined at the pre-natal
stage, the competent authority would pass a reasoned order having regard to the material, if any,
placed before it, by the female employer who seeks to avail maternity leave. In a situation where both
the commissioning mother and the surrogate mother are employees, who are otherwise eligible for
leave, a suitable adjustment would be made by the competent authority.

4. Insofar as a grant of leave qua post-natal period is concerned, the competent authority would
ordinarily grant such leave except where there are substantial reasons for declining a request made in
that behalf. In this case as well, the competent authority will pass a reasoned order.

Radhakishan Ramnath v State of Bombay, 1959(61)BOMLR711:

Facts:

The applications are the proprietor and manager respectively of the Ramkrishna Ramnath Bidi
Factory at Kamptee. Both were convicted under S.9 of the Central Provinces and Berar Maternity
Benefit Act, 1930, read with S. 5(3) and under Rule 10 read with Rule 4 of the Central Provinces and
Berar Maternity Benefit Rules, 1930, for not paying maternity benefit to a female employee in their
factory, and for failing to maintain a muster-roll of female employees. They were fined Rs. 200 and
Rs. 25 respectively, for the above counts, and on default were asked to undergo simple imprisonment
for three weeks each.

Central Question of the Case:

What is being challenged in the instant case, is the applicability of the Central Provinces Berar
Maternity Benefit Act, 1930 to the Bidi Factory at Kamptee (and not the merits of the convictions).

This arises as a relevant question because by virtue of S. 2(a) of the Act, factory was to be defined as
it was defined in S. 2(j) of the Factories Act, 1911. However, the Factories Act of 1911 was replaced
by the Factories Act of 1934, and consequently, S. 2 of the Maternity Benefit Act was also amended
such that the definition of factory (under S. 2(a) of the MBA) was via reference to S. 2(i) of the
Factories Act of 1934.

However, the Factories Act of 1934 was further repealed and re-enacted as the Factories Act of 1948,
and the definition of factory here is significantly wider than what was in the earlier Act.

This raised a challenge: Under 2(i) of the Factories Act, 1934, the Bidi Factory would not be included.
Whereas if one makes reference to the enlarged definition provided for in the 1948 Act, it would be
included.

Applicable Law – On Such Matters:

S. 8(1) of the Central General Clauses Act

"Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals
and reenacts, with or without modification, any provision of a former enactment, then references in
any other enactment or in any instrument to the provision so repealed shall, unless a different
intention appears, be construed as references to the provision so reenacted."

The operative phrase in the above provision being, “unless a different intention appears”

The 3 Central Arguments of the Counsel- Convicted Applicants:

Mr. Phadke at the outset argued that a contrary intention appears in the instant case, and provided
three arguments to substantiate his case:

1. The nature of the change brought about in the definition of factory in the Factories Act, 1948 is so
fundamental and sweeping that it would include within its ambit several business premises which
were never factories in the accepted sense of the term and could never have been intended to be
included under the definition of factory.  Therefore, a contrary intention appears.

2. When the Factories Act was first repealed and re-enacted in 1934, S. 2(a) of the Maternity Benefit
Act was soon after amended in order to bring it into conformity with the Factories Act of 1934. He
claimed that it is of great significance that when the new Factories Act of 1948 was introduced, no
corresponding change was made in the Maternity Benefit Act.  To that effect, his contention is that
this omission was deliberate and shows a clear contrary intention on the part of the legislature, so far
as payment of maternity benefit is concerned, to define ‘factory’ with reference to the Factories Act of
1934, and not with reference to the Factories Act of 1948.

3. Mr. Phadke’s final contention was that the Unregulated Factories Act was in force at the time when
the Factories Act of 1948 was introduced, and that that was perhaps the reason why the Legislature
chose not to amend the Maternity Benefit Act. That is, that they took the view that the provisions of
the Unregulated Factories Act were sufficient to deal with the case of unregulated factories under
which class, the applicants’ factory fell, and that it was not necessary to apply the wider definition in
the Factories Act of 1948 to such unregulated factories so far as maternity benefit was concerned.

Court’s Rationale:

To identify a contrary intention, there must be evidence in the primary Act in question (i.e., the
repealing act). It is not possible to turn to circumstances outside those Acts or instruments to find
whether a contrary intention appears or not. The contentions raised by Mr. Phadke refer to such
circumstances outside the enactment, namely the Factories Act, 1948. There is nothing in the
Maternity Benefit Act to indicate a contrary intention.

Given that the Act has now been repealed, the effect of the repeal without re-enactment is that the law
has never existed, therefore no advantage can be taken of such a law.

Even if reference could be justified to the Unregulated Factories Act, the Judge noted that he could
not speculate as to the intention of the Legislature. Nor could he presume that because the
Unregulated Factories Act was then in force, the legislature did not amend the Maternity Benefit Act.

As to the first argument that the amendment of the definition of “factory” as contained in the Factories
Act of 1948 makes sweeping changes and indirectly lays a liability upon the applicants it is necessary
to examine the social justice considerations at stake: “The Maternity Benefit Act is a necessary and
very salutary measure of social amelioration and any hardship upon factory-owners like the
applicants is far outweighed by the benefits thereby conferred upon their female employees.”

Ram Bahadur Thakur v Chief Inspector of Plantations (1989):

Facts:

The Petitioner is a private limited company. The respondent is a woman worker (3 rd respondent) who
was employed by the Petitioner in the Pambanar Tea Estate. She availed of maternity leave in 1982,
and delivered a child on 29th September 1982. She claimed maternity benefit from the petitioner under
the MBA, 1961. Since she had actually worked only for 157 days apart from four half days during the
12 months immediately preceding the date of her delivery, the petitioner took the stand that she was
not entitled to maternity benefit under S. 5(3) of the Act. She complained to the 2 nd respondent, who
by Ext. P1 order held that the four half days should be treated as full days and directed the petitioner
to pay the benefits. The petitioner challenged that order.

The short question that arises for consideration is whether the four days during which the third
respondent worked for half a day each can be counted as full days for computing the period of 160
days as contemplated in Section 5(2) of the Act.

Applicable Law:

5(2) of the MBA  No woman hall be entitled to maternity benefit unless she has actually worked in
an establishment of the employer from whom she claims maternity benefit for a period of not less
than one hundred and sixty days in the twelve months immediately preceding the date of her
expected delivery.

The explanation to Section 5(2) quoted above shows that the period during which a woman worker
was laid-off during the 12 months immediately preceding the date of expected delivery should also
be taken into consideration for ascertaining the eligibility.

Court’s Reasoning:

The Court looked to other legal provisions to gain an understanding of what the statute really required
in the way of examining whether half days could be counted as full days.

Looked to 25B of the ID Act, which defines continuous service: The method of calculating
continuous service came up in: H.D Singh v Reserve Bank of India and Ors, where it was held that
even holidays and Sundays could be included in the calculation of continuous service.

S. 30 of the Plantations Labour Act, 1951 deals with the right of workers to have leave with wages.
Every adult worker is entitled to one day’s leave with wages for every 20 days worked. In fact, 30(1)
of the Act stipulates that any day on which the worker worked for half, or more than half of the day
shall be counted as one day’s work.

Court’s Decision:

I do not find any reason to take a different view in computing 160 days under the Maternity Benefit
Act. This view will advance the object of the Act. The Maternity Benefit Act is a beneficial piece of
legislation which is intended to achieve the object of doing social justice to women workers employed
in factories, mines or plantations. The Plantations Labour Act has also been enacted for the benefit of
workers engaged in plantations. Third respondent is also a recipient of the benefits under that Act. She
is entitled to annual leave with wages at the rate of one day for every 20 days work and in calculating
that 20 days, half a day's work should be counted as one day. The same mode of calculation must be
adopted in computing the number of actual days of work Under Section 5(2) of the Act as well. A
beneficent rule of construction which would enable a woman worker to get the benefits under the Act
has to be adopted by courts.

Neera Mathur v LIC:

FACTS:

The petitioner applied for the post of Assistant in LIC and was called for a written test and for an
interview. She was asked to fill a declaration form and undergo a medical examination. She was on
probation for a period of 6 months. She took leave from 9th December 1989 till March 8 th, 1990. And
she applied for maternity leave on the 27th of December 1989. She was discharged from service on the
13th of February, 1990, during her probationary period. There were no grounds assigned, and it was
claimed to be a discharge simpliciter.

Trajectory of the Dispute:

The petitioner moved the High Court under Art. 226 of the Constitution challenging that order on the
grounds that it was not a discharge simpliciter, and that it was on the basis of a discrepancy in the
declaration made by her before joining service. The Corporation claimed contrarily that her work was
not satisfactory and the High Court concurred on this point.

Court’s Reasoning:

The petitioner is blameless in the instant case. She was medically examined by the Doctor who was in
the panel approved by the Corporation, and was found to be medically fit. The real mischief “though
unintended” (certainly not the case) is about the nature of the declaration required from a female
candidate. The particulars to be furnished entail sensitive disclosures about personal information. The
Court recognizes this, (albeit in a slightly paternalistic manner), and claims the following 

The particulars to be furnished under columns (iii) to (viii) in the declaration are indeed embarrassing
if not humiliating. The modesty and self respect may perhaps preclude the disclosure of such personal
problems like whether her menstrual period is regular or painless, the number of conceptions taken
place; how many have gone full term etc. The Corporation would do well to delete such columns in
the declaration. If the purpose of the declaration is to deny the maternity leave and benefits to a lady
candidate who is pregnant at the time of entering the service (the legality of which we express no
opinion since not challenged), the Corporation could subject her to medical examination including the
pregnancy test.

Court’s Decision:

The interim mandamus order directing the respondents to put the petitioner back to service is made
absolute. We however, direct that the appellant is not entitled to the salary from the date of discharge
till her reinstatement. With this direction the appeal stands disposed of but no order as to costs.

Mini KT. V Divisional Manager, LIC 2018(1)KLJ245:

Facts of the Case

The petitioner Smt. K.T. Mini, was an Assistant with LIC, and had an unblemished and uninterrupted
17 years of service before she was removed. Her second girl child was afflicted with chicken pox, and
after two years, developed speech impairment and developmental disorders (mild autism).
Resultantly, she asked for a transfer to Chennai from Calicut and her husband was working at Tirupur.
She did so, to admit her child at the Priya Speech and Hearing Centre at Madipakkam, Chennai. Her
husband received a transfer to Bahrain. And she had already applied for extraordinary leave, and
during that period, she made another request to cancel her transfer to Chennai, and requested a no
objection certificate to receive a passport to travel to Bahrain to be with her husband.

She received the NOC from the Corporation and travelled to Bahrain. Upon finding out that the
facilities and childcare available at Bahrain were more conducive to her second girl child (suffering
from autism), she wished to stay at Bahrain with her husband, and requested transfers to the Bahrain
office. She also sought extension of her leave which was rejected. She was directed to join duty within
15 days, and she narrated her circumstances even moving the Chairman of the Corporation.
Unfortunately, disciplinary action was taken against her and she was removed from service as she was
found to be in violation of her service rules (LIC Staff Regulations) by overstaying her leave without
proper sanction.

Appellate Authority’s Consideration

It is important to note that the Appellate Authority was quite considerate with the petitioner’s reasons
for not joining duty. However, it found that a sympathetic approach was against organizational
interests and did not interfere with the order passed by the disciplinary authority.

Questions of Law

There are two charges levelled against the petitioner:

1) The first is that she remained absent from service

 2) The second is that she went abroad without seeking permission.

Court’s Response to the Questions:

On the first count, it is quite clear that she never desired to be absent from service. It is rather
unfortunate that there is no right to avail leave under circumstances such as those that afflicted Mini
K.T where familial responsibilities can conflict with the right to employment in practice. At every
instance, she attempted to harmonize her familial and motherly obligations towards her child with her
employment obligations by seeking transfer requests first both to Chennai, and then to Bahrain.

On the second count, it is worth noting that she obtained an NOC from the Corporation in obtaining a
passport to travel to Bahrain, so the claim that she did not inform the company is factually untrue.

Decision of the Court:

Thus, the disciplinary proceedings were initiated against the petitioner as the Corporation had no
measures to deal with the situation encountered by the petitioner. Incapacity of the organisation to
deal with woes of a woman employee cannot be capitalised to penalise her. The inevitable conclusion
thus has to be drawn is that the impugned orders have to be set aside and the petitioner has to be
reinstated in service forthwith. However, taking note of the fact that the petitioner was requesting for
extraordinary leave without pay, the Court did not order back wages. The petitioner was ordered to be
reinstated forthwith, and will be entitled to reckon the broken period of service for all other benefits.

Family Responsibility Discrimination:

What is it?  Family Responsibilities can entail having to take care of elderly persons, childcare,
diseases, etc. It is also important to note that while it should be gender-neutral, it’s often deeply
gendered with the women being forced to occupy positions of caregiving within familial units.
Resultantly, there are circumstances where their choices and decisions in furtherance of their family
responsibilities can conflict with their employment freedoms and opportunities, and there are
unfortunately, no available legal remedies for women in such circumstances, as this case points to.

The State’s Obligation

The Court reminded the State of a need to enact a legislation to protect the employee from
discrimination based on family responsibility. Family responsibility may be equally applicable to
male and female employees, and the State ought to be invested in protecting the family unit for its
own sustenance. It noted that employers both private and public remain oblivious to the right of
employees (as is recognized in international human rights law conventions) on account of family
responsibility, and remain equally insensitive to such rights.

International Law Perspectives

 1. Art. 5 of the Convention on the Rights of the Child

2. Art. 11 of Convention on the Elimination of All Forms of Discrimination Against Women

3. Indian courts have addressed the question of importing international legal obligations within
domestic settings, as recently as in the Puttaswamy judgment. If there is a conflict between
international law and municipal law, the latter will prevail. However, when there is no such
conflict, the court must adopt an interpretation which abides by international commitments
made by the country.

4. Noting the Court’s position on the Applicability of International Law is worthwhile 

5. The question of legality of disciplinary proceedings should not be assessed in the narrow
compass of rules or regulations of the Corporation, but rather within the framework of
fundamental rights qua principles relating to family responsibility developed through
International Human Rights Law embedded into our constitutional principles. The standards
and norms enunciated under the International Human Rights Law can be juxtaposed while
assimilating Fundamental Rights of citizens which are not inconsistent with domestic law in
India.

6. E.g., Vishaka v State of Rajasthan, and National Legal Services Authority v UOI

7. Constitutional Perspectives

8. The case Municipal Corporation Delhi v Female Workers already referred to and internalized
art. 11 of CEDAW.

9. Through drawing on religious philosophies from a wide variety of sources, the Court
constructed conceptions of dignity, specifically in the context of women, and held that for
women, Art. 21 entails motherhood protections. For instance, in the case of Bandhua Mukti
Morcha, the Court held that the right to live with dignity, free from exploitation enshrined in
Art. 21 actually derives from DPSPs, and the DPSPs are clear on the matter of such
protections, as are Art. 14, 21, 15(3)< and 16.

Ansu Rani v State of UP:

Facts of the Case:

The petitioner was an Anudeshak (educator) at PMVGN, District Bijnor. She had a female child, and
upon the advice of the doctor, she was subjected to bed rest. She submitted a request for maternity
leave seeking 180 days. However, the District Education Officer only provided 90 days of maternity
leave.
Applicable Law:

It is worth noting that the applicable legislation governing the grant of maternity leave during the
case, was the Maternity Benefit Amendment Act, which provided up to 26 weeks of maternity leave,
i.e. 180 days.

Court’s Reasoning:

1. The Maternity Benefit Amendment Act makes it pretty clear that the appropriate time period of the
grant of maternity leave is 180 days.

2. There are three important judgments that the counsel for the petitioner relies upon, Municipal
Corporation of Delhi v Female Workers (Muster Roll), Shikha Jain v State of UP, and Dr. Rachna
Chaurasiya v State of UP. The Division Bench in the case of Chaurasia, directed the State
Government to grant maternity leave to all female employees with full pay of 180 days, irrespective
of the nature of employment, i.e., permanent, temporary, ad-hoc, or contractual basis.

3. The Court reflected on the value of constitutional imperatives enshrined in the Directive Principles
of State Policy, Art. 42, 39(f), etc.

4. Made reference to the various provisions of the Maternity Benefit Laws, and the Government Order
which authorized the grant of a maximum period of two years (730 days) of Child Care Leave to look
after specific child-rearing needs, e.g., sickness, examination etc. It is only admissible till the age of
18 years (for the child).

Order of the Court:

Accordingly, the writ petition stands allowed with the following directions.

1. Respondents are directed to grant Maternity Leave to the petitioner with full pay as applied within
8 weeks from today.

2. The respondent-State is also directed to grant Maternity Leave to all family employees with full pay
for 180 days, irrespective of nature of employment, i.e., permanent, temporary/ad hoc or contractual
basis.

3. State-respondent is also directed to grant Child Care Leave of 730 days to all female employees,
who are appointed on regular basis, contractual basis, ad hoc or temporary basis having minor
children with the rider that the child should not be more than 18 years of age or older.

B. Shah v Presiding Officer, Labour Court, Coimbatore:

Facts of the Case:

The Respondent is a women worker employed in Mount Stuart Estate, a plantation industry. After her
delivery, she earned maternity benefit only for a period of 72 days, and not what she was expecting
(under the Statute) i.e., 84 days  what she should have received.

While calculating the aforesaid amount of maternity leave, the establishment admittedly excluded 12
Sundays being wageless holidays, which fell during the period of the respondent’s actual absence
preceding the date of her delivery, and the six weeks that followed that day.

Trajectory of the Dispute:

She made a representation to the employer which was not favourable. She the applied to the Labour
Court under 33C(2) of the ID Act, and the Labour Court agreed with the respondent women. The
establishment appealed under Art. 226 of the Constitution, and the Single Judge agreed with the
claims of the employer. The respondent appealed under an LPA, and a Division Bench agreed with
her. The case then went to the Supreme Court via special leave.

Arguments:

The central question came down to understanding the scheme of the Maternity Benefit Act, to gain a
sense of whether under S. 5(1) and (2) of the MBA, a ‘week’ meant 7 days or 6 days, i.e., days
actually worked.

To that end, the Court looked to key provisions of the Maternity Benefit Act to get a sense of what
this meant.

Important Provisions and their operative phrases

S. 5  Average daily wage for a period of actual absence,a nd for the six weeks.

3(n)  defines wages.

The explanation to S. 5(2) states that the days laid off will also be taken into account.

The term, period of actual absence is pretty informative on this count, as the legislature could have
suggested that they were intending to include only intermittent periods of absence, i.e., ”for the
working days falling within the period of her actual absence…”

The word period is quite strong in its implicature, and suggests the continuous running of time and
recurrence of the cycle of seven days.

It is also a beneficent legislation and ought to be interpreted alongside the constitutional vision
enshrined through DPSP’s (Art. 42).

The Court also ultimately rejected the reliance on Malayalam Plantations Ltd. V Inspector of
Plantations.
Decision of the Court:

Thus we are of opinion that computation of maternity benefit has to be made for all the days including
Sundays and rest days which may be wageless holidays comprised in the actual period of absence of
the woman extending up to six weeks preceding and including the day of delivery as also for all the
days falling within the six weeks immediately following the day of delivery thereby ensuring that the
woman worker gets for the said period not only the amount equalling 100 per cent of the wages which
she was previously earning in terms of Section 3(n) of the Act but also the benefit of the wages for all
the Sundays and rest days falling within the aforesaid two periods which would ultimately be
conducive to the interests of both the woman worker and her employer.

K. Chandrika v Indian Red Cross Society And Anr.:

Facts of the Case:

The Petitioner was a temporary lower division clerk, and the post while being temporary, was likely
to continue. However, she was susceptible to being terminated without notice. She was allegedly
terminated on 3rd May, 1980, but she never received the order of termination on that date. She had
applied for maternity leave o 28th of April, 1980, and had indicated a change of address during
pregnancy in her application fort maternity leave. However, the order of termination was sent to the
address that she had initially provided in her typing test and joining report address.

Question of Law:

Whether termination of Smt. K. Chandrika is illegal and/or unjustified and if so, to what relief is she
entitled to and what directions are necessary in that respect?

Findings of Industrial Adjudicator and Labour Court:

The Industrial Adjudicator examined the matter at length and held that the action of the management
could not be justified as neither opportunity had been given to the workwoman to explain her position,
nor any notice was given to her. The Industrial Tribunal clearly held that the services of the
workwoman were terminated illegally and unjustifiably.

These findings of fact by the Industrial Adjudicator have not ben assailed on behalf of the
respondent/management and consequently have attained finality.

The Labour Court, however, was of the view that the workwoman had received the letter dated 3 rd
May, and she did not disclose the same, and did not report for duty. For this reason, the industrial
adjudicator denied the relief of reinstatement and consequential benefits were denied to her. Only
salary for a period of 3 months of her maternity leave was awarded to her.
Court’s Observations:

1. On the question of whether she received the order of termination, it is quite clear that by the
application for leave dated 28th April, 1980, she had informed the employers of the change in address.
Therefore, assuming that she shirked responsibility and did receive the order of termination at the
earlier residence is incorrect.

2. S. 12 of the Maternity Benefits Act makes it evidently clear that the discharge or dismissal of a
woman at any time during her pregnancy but for prescribed gross misconduct, cannot have the effect
of depriving her of the maternity benefit or medical bonus which she is owed, and her employers are
in violation of the same.

3. The temporary status of her employment ought not to be a limiting factor in her gaining of
maternity leave as the Court has already held the same in the Municipal Corporation of Delhi v
Female Workers.

4. Art. 42 of the Constitution, and the beneficent object of the Act, and the DPSPs that undergird these
provisions make it clear that she deserves the grant of maternity leave and benefits. Moreover, the
constitutional schema is consistent with international legal obligations, such as Art. 11 CEDAW (look
to Arts. 14 and 15 of the Constitution).

5. The Court held in the case of Bharti Gupta v Rail India Technical and Economical Services
Limited, that the MBA being a benevolent and social welfare legislation, must apply in an expansive
manner.

6. On the matter of relief, specific to reinstatement, the Court was fairly clear that the employee was
deserving of the remedy. However, on the count of backwages, the Court after having perused a wide
variety of cases, held that:

i) Backwages could be prevented only on account of the employee seeking gainful employment
elsewhere.

ii) Backwages cannot be denied because of the availability of other places of employment

iii) Backwages cannot be denied because of a delay in seeking relief which causes an onerous
liability/cost to the employer.

However, the Court held that given the IRC being a humanitarian organization, the workwoman had
to undergo a compromise for the greater good and was only entitled to 50 per cent of her backwages.

Municipal Corporation of Delhi v Female Workers (Muster Roll):

Facts of the Case:

The Union claimed on behalf of the female workers on Muster Roll that they are of the same standing
as those of the regular employees. And that they have been employed in a continuous fashion for
extended periods of time and are forced to work demanding jobs such as digging trenches. However,
their employment is not regularized.

The Corporation claimed that the Maternity Benefit Act is not applicable, and neither is the ESI Act
as well.

Trajectory of the Dispute:

The Tribunal agreed with the claim that maternity benefits ought to be extended to the muster roll
employees.

The Corporation filed a Writ Petition which was dismissed by a Single Judge. The Letters Patent
Appeal was dismissed by the Division Bench on account of delay in filing the application. While the
Corporation contended that the delay was merely 33 days, and should’ve been condoned, the Court
did not look into the validity of this claim. It however, did take up the matter on its own contentions,
given the important question of law that undergirded this dispute.

Court’s Observations:

The Court embraced the constitutional schema to locate protections for underprivileged demographics
such as poor illiterate women in rural areas. It highlighted the import of Art. 14 and emphasized the
prohibition on the denial of equality to any person.

In Hindustan Antibiotics v Workmen – The Court held that labour to whichever sector it may belong
in a particular region and in a particular industry will be treated on an equal basis.

Post identifying the gamut of rights available to workwomen (Art. 14, 15, and 15(3) in particular), the
Court highlighted the constitutional schema outlined in the Directive Principles of State Policy –
namely, Art. 38, 39, 42, and 43.

It also explored legislative protections outlined in the maternity Benefit Laws in the Country, to prove
that there is no legislative justification for denying benefits under the Act to casual workers or
workers employed on a daily wage basis.

”We have scanned the different provisions of he Act, but we do not find anything contained in the Act
which entitles only regular women employees to the benefit of maternity leave and not to those who
are engaged on casual basis, or on muster roll on daily wage basis”

Responding to the contention that the State Government is required to issue directions to make the
provisions of the MBA applicable to women employees of the Corporation, and that such direction
ought not have been provided by the Tribunal – the Court held that the doctrine of social justice which
has been expressed by the Court in several cases – (Messrs Crown Aluminium Works v Their
Workmen and J.K. Cotton Spinning & Weaving Mills Co. Ltd v Badri Bali & Ors) can be used to
reject such a contention.

“The concept of social justice has now become such an integral part of industrial law that it would be
idle for any party to suggest that industrial adjudication can or should ignore the claims of social
justice”

On the contention that the benefits contemplated by the MBA can only be extended to workwomen in
an ‘industry’ and not to workwomen in a municipal corporation  The Court highlighted the
increasing recognition by Courts of the fact that Municipal Corporations or Boards have been held to
be ‘industry’ within the meaning of the Industrial Disputes Act.

Udge Budge Municipality v Sri P.R. Mukherjee: which observed that Municipal activity would fall
within the expression “undertaking” and as such would be an industry. This decision was reiterated in
Baroda Borough Municipality v It’s Workmen.

The Court also highlighted prescriptions found in international conventions that are applicable in the
Indian context – such as Art. 11 of the CEDAW, and held that the principles enunciated therein ought
to be read into the contract of service between the Municipal Corporation of Delhi and the women
employees (muster roll).

Decision of the Court:

The direction issued by the Industrial Tribunal shall be complied with by the Municipal Corporation
of Delhi by approaching the State Government and Central Government for issuing the necessary
notifications under the Proviso to S. 2(1) of the MBA, if it has already not ben issued. In the
meantime, the benefits under the Act shall be provided to the women (muster roll) employees of the
Corporation who have been working with them on daily wages.

Resultantly, the SLP was dismissed.

UOI v Asiya Begum

Madras High Court, WA No.4343 of 2019)

Facts of the Case:

Asiya Begum was a Sub-Inspector of Central Industrial Security Force, who had given birth to twins
during her first delivery. And in her second delivery, she gave birth to her third child. She sought after
maternity benefits, and upon its denial, approached he Madras High Court. The Single Judge ruled,
extending the benefits of maternity leave as well as other pecuniary benefits with a direction that the
180 days of maternity period shall be treated as maternity leave for all purposes. The Union of India
filed a writ appeal under Clause 15 of the LPA against the judgment passed by the Single Judge V.
Parthipan of the Madras High Court.

Applicable Law:

Rule 43 of the Central Civil Services (Leave) Rules, 1972 -

43(1): A female Government servant (including an apprentice) with less than two surviving children
maybe granted maternity leave by an authority competent to grant leave for a period of 180 days
from the date of its commencement.

43(2): During such period, she shall be paid leave salary equal to the pay drawn immediately before
proceeding on leave

Contentions of the Parties:

The appellant contended that the Single Judge’s decision was based on an incorrect application of the
applicable Rule, given that the claim of Maternity Leave is by a member of Central Industry Security
Force, to whom neither the Maternity Rules of the State or otherwise apply. And based on the
applicable Central Civil Services Rules it is quite clear that the grant of maternity leave is contingent
on having less than two surviving children.

The respondent contrarily, alleged that this constituted an exceptional circumstance given that Asiya
Begum had given birth to twins, and as such, the benefit of the Maternity Leave rules and 180 days
benefit with emoluments should be extended. The dispute is centered around the fact that the
pecuniary emoluments are not authorized by the applicable rule (which requires less than 2 surviving
children).

Court’s Reasoning:

A second delivery which results in a third child, cannot be interpreted in such a way that the conferral
of pecuniary benefits is authorized by the Rules. They go on to add that it is debatable whether this
constitutes a second delivery in the first place, given that when the twins are born, they are delivered
one after another. They clarify that the Rule is clear on recognizing the claimant’s right to seek
benefits only when they have no more than two children

Decision of the Court:

They set aside the impugned judgment of the Single Judge and allow the writ appeal. They however
clarified that in the event that the appellants have the power to grant relaxations in exceptional
circumstances, it would be worth considering granting the same – given the fact that the outcome
ultimately affects a newborn child who is in no way involved in or concerned with the framing of the
Rules, or the parents’ choice to have a child.

CLRA

CASES

Steel Authority of India Ltd. v. Union of India:

Important Points:

• The adjudication of whether contract labour should be abolished or not (as per the 1970
CLRA) cannot be decided either by a Labour Court or a Writ Court.

• However, on the question of whether the contract labour taken up in the particular instance is
a sham/ruse to avoid providing benefits guaranteed by legislation to workers — the
Industrial/Labour Courts are competent to decide the matter under a reference (as per Sec 10
of the Industrial Disputes Act).

• The Appropriate Government must apply its mind in passing an administrative order under
Sec 10 of the CLRA, as this is amenable to judicial review. Additionally, the abolition order
under the CLRA cannot coexist with an industrial reference under the 1947 Act, because they
share incompatible premises.

• In the case of the former, the government begins with the presumption that the workers are
hired not by the principal employer but rather by the contractor. In the case of the latter, the
very nature of the contractual relationship is disputed and must be decided by reference to a
Labour Court/Industrial Tribunal (and this relates to the Lex Specialis rule, about particular
legislation taking precedence over general ones).

On the question of the additional claim (filed in 1997) regarding the contract being a sham/ruse, the
SC held that the rules governing changes in pleadings and written statements differ. While it is not
possible to modify the former, as it can change the nature of the claim and the case entirely, adding
new defences and so on are usually permissible for the latter. Especially in cases before the Labour
Court where the basis of jurisdiction is determined by the scope of the reference.

Bharat Heavy Electricals Ltd. v. Mahendra Prasad Jakhmola:

Facts and Procedure:

• By a reference order (in 2004) under the UP I.D. Act, 1947 — the government referred the
question of whether the respondent’s (and 63 other like cases) was justified? And if not, what
reliefs were they entitled to?

• By a 2009 order, the Labour Court handed down four rulings - a) That the employees were
directly under the control of the principal employer and not under the contractor; b) As a
result, the contract was a sham/ruse to avoid paying benefits and they should be treated as
regular employees; c) Even if they were to be considered employees of the contractor, they
were to be treated as direct employees under the extended definition of “employee” as per the
I.D. Act, 1947; and d) Their termination was unjustified and they had to be reinstated with
back wages.

• Appellant filled a review petition, which was dismissed (in 2011) by the Labour Court, on the
grounds that the Court had ruled on the applicability of the 1990 contract labour notification
to BEL, and that could not be reviewed in a review petition, and any exemption claimed fell
under a 2010 notification which was passed after the award and could be applied to the same.

• Appellant preferred a writ petition which was dismissed by the HC in 2014, holding that —
“undisputedly” the workers performed duties identical to regular employees and that the
contract was a sham/ruse and upheld the Labour Court order.

• Appellant then preferred an SLP, which was dismissed by the SC with liberty to file a review
petition in the HC asking for modification of the term “undisputedly”.

• The review petition was dismissed on the grounds that there was no new material on record
which helped substantiate the appellant’s position and therefore, no need to review the
judgment.

• Issues:

• Does the 1990 notification apply to the Appellant in the current case?

• Was there sufficient documentary evidence to support the holding that the respondents were
direct employees?

• What is the determinative value of the concession made before the Labour Court by the
appellant’s representative?

• Holdings and Reasoning

• The Court observed that a reading of the bare text of the 1990 notification clearly showed that
it was inapplicable to the appellants (at least to their operations in Haridwar) and so the
 Labour Court had erred in applying that to the case. Furthermore, the Labour Court appears to
have primarily relied on a single piece of evidence (issuance of gate passes) to conclude that
they were direct employees and not contractual ones. This was held to be insufficient
evidence to arrive at such a conclusion.

• Concessions that are disputed by respondents (or their lawyers) do not bind them, and can be
disputed during the proceedings. Moreover in mixed questions of facts and law, any such
concession made does not prevent the Appellant from re-agitating the same at a later stage.

• The HC’s conclusions regarding the “indisputable” nature of direct employment of the
respondents is also wrong for three reasons. Firstly, because of the lack of sufficient evidence
to establish that the employees were under the control and superintendence of the appellant,
that the Labour Court failed to appreciate as well. Secondly, the claims that contracts about
the nature of employment, number of workers etc. were not provided is clearly untrue based
on the record. And finally, the salaries of the contractual employees were paid by the
contractors and not by the appellant. As a result no relationship of direct employment exists.

• Moreover, the reliance on gate-passes is unwarranted as those were issued for security
purposes, as CSIF controlled security measures for the site.

• On the question of whether the contract was a sham/ruse, the Court referred to the two-tier
test laid down in General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v.
Bharat Lala and Another, which stipulates that, in order to identify the true nature of the
employment the Court needed to examine - 1) Who was paying the workers? And 2) Whether
the principal employer directed the work of these employees entirely.

• The Court held that neither test was fulfilled in the present case. As to 2) the bench observed
that the control over the workers in the present case was merely secondary, i.e. post the
assignment of said worker to the employer by the contractor, and hence does not meet the
threshold of the aforementioned test.

Air India Statutory Corporation v. United Labour Union:

Facts:

• By a December 1976 notification, the Central Government (CG) prohibited the use of
contract labour for all “sweeping, cleaning, dusting and watching of buildings owned or
occupied by the establishment in respect of which the appropriate government under the said
act is the Central Government”.
• As per a 1972 letter the Regional Labour Commissioner had informed the appellant that the
appropriate government for them would be the State Government.

• However, an amendment was passed in 1982, changed the Industrial Disputes Act and
brought the appellant into a list of industries for which the appropriate government was the
Central Government.

• As the appellant had not done away with contract labour, and was in violation of the 1976
notification, a writ petition was filed by the respondents and a Single Judge (by a judgment in
1989) directed the regularisation of all contract employees.

• A day before said HC judgment the government referred the matter to the Central Advisory
Board which advised them to not remove contract labour. An appeal was preferred before the
Division Bench by the appellants, which in 1992 dismissed it. As a result, the SLP was filed.

• Issues

• What is the meaning of the word “appropriate government” under Sec 2 (1) (a) of the Act?

• Whether the view taken in the Heavy Engineering case is correct in law? [It narrowly
interpreted the words “appropriate government” on principles of common law no longer
relevant]

• Whether on abolition the contract labour is entitled to absorption, if so, from what date?
(Important)

• Whether the HC under Art. 226 has the power to direct such absorption, if so, from what
date? (Important)

• Whether it is necessary to make a reference as per Sec. 10 of I.D. Act for adjudication of
dispute with respect to absorption of such labour? (Important)

• Whether the view taken in Dena Nath and Gujarat Electricity Board’s case is correct in law?
[“The Division Bench in Dena Nath's case has taken too narrow a view on technical
consideration without keeping at the back of the mind the constitutional animations and the
spirit of the provisions and the object which the Act seeks to achieve.”]

• Whether the workmen get a right of absorption, if so, what is the remedy for enforcement?
(Important)

• Holdings and Reasoning:

• The appropriate government is the Central government and has been so since the inception of
the Act. Once the Central Advisory Board, based on extensive evidence recommended the
 abolition of contract labour and the 1976 notification was passed, the government does not
have the power under Sec 10 of the CLRA to appoint the Mohile Committee to look over the
same question. [Refer to judgment for 13 principles on instrumentality of state under Art. 12]

• If the appropriate government finds the nature of the work perennial and notifies the abolition
of contract labour under the CLRA, then the intention of the act is allow for regularisation.
The purpose of the act is to ensure “continuity” of the work for these employees, as it is a
beneficial legislation aimed at fulfilling the social justice principles encoded in Chap III and
Chap IV of the Constitution.

• Moreover, when the government abolishes contract labour it removes the contractor from the
tripartite relationship and creates a direct relationship between the principal employer and the
workers. This creates an obligation on the part of the employer to ensure that the works are
regularised.

• There is no limitation in the framing of Art. 226 on the power of the HCs to provide
appropriate reliefs as may be required by the merits of the case. As in this instance, to protect
the rights of works as per the constitution, the HCs should have the power to mould
appropriate reliefs.

• Even though there is no explicit provision in the statute that provides for the regularisation of
the works, the courts in their duty to protect the constitutional rights of the workers and
realise the social welfarist ideals behind the legislation have the power to order such
absorption.

Food Corporation Loading Workers Union v. Food Corporation of India:

Facts:

• The respondent has 11 food depots where the appellants have been hired as contract labour
for 14 years prior to the decision, who do the “loading and unloading, re-stacking, breaking,
weighment and other incidental work” for the FCI. They contend that their work is perennial
as it is connected with maintaining the depts in working condition, all-year round.

• From March 1985, there were no contractors in reality, even though they existed on paper and
complete control and superintendence rested with the respondent, including the payment of
wages which was done directly by the FCI.

• Furthermore, the appellant claims that the respondent or these independent contractors have
not obtained proper licenses under the provisions of the CLRA. And, especially after 1986,
 when the definition of “appropriate government” was changed by legislative amendment —
the appellants put forward the demand that they be considered as direct employees.

• According to the Advocate-General (AG), in response to this claim, the respondent shut down
all 11 depots in an allegedly illegal lock-out from March 1987, and foodgrains worth crores
were wasted due to lack of maintenance of the depots.

• On the other hand, the respondents show that they had obtained the necessary licenses and
have furnished copies for the record. On the basis of which they claim that these employees
were contract labour, properly hired. [The certificates were dated to 1987, and reflected the
1986 change in “appropriate government” from state to centre]

• And on conciliation, the officer concluded that based on the differences between the
appellants and respondents, no compromise was possible and filed a report of failure.
Following which the present appeal was preferred.

• Issues

• What are the licensing requirements under the 1970 CLRA for contract labour?

• What are the appropriate reliefs that can be granted?

• Holdings and Reasoning

• The ability to hire contract labour under the CLRA is dependent on two requirements - a) that
the principal employer has obtained a license from the appropriate government under Sec 7;
and b) that the contractors have also obtained a license under Sec 12.

• These are cumulative requirements and if either is not fulfilled, then the workers must be
recognised as direct employees of the principal employer.

• In the current case between Jan, 1986 and March 1987, there was no valid license obtained by
the respondent, under Sec 7. Similarly for the delays of the various contractors in obtaining
the license please refer to the table in the judgment.

• The Court further held that looking at the statutory schema, the respondents were an
instrumentality of the state and could be categorised under “other authorities” as stipulated by
Art. 12 of the Constitution.

• On the question of appropriate reliefs, the court held that based on the scanty record it was not
possible to declare outright that all employees of the Union were direct employees. Rather,
within 60 days of the judgments, employees would individually have the right to petition the
respondent and claim benefits, with the right to move appropriate authorities in case of an
adverse decision.
State of Punjab and Ors. V. Jagjit Singh and Ors.:

Issues

• Two division bench judgments of the P&H HC in State of Punjab v. Rajinder Singh and State
of Punjab v. Rajinder Kumar, set aside and upheld (at the same time) a single judge decision
in Rajinder Singh v. State of Punjab. (In 2009 and 2010)

• Observing this conflict, the matter was referred to a Full Bench of the HC for resolution.

• In Avatar Singh v. State of Punjab, the Full Bench, resolved the differences between these
judgments. In the present case, the SC clubbed the challenges to all three cases and heard the
matter.

• The core issue in all of these cases - “Whether temporary labour is entitled to be paid as
per the “minimum pay-scale + dearness allowance” offered to similarly situated,
regularised labour?”

State of Punjab and Ors. V. Jagjit Singh and Ors.

Key Arguments:

• The Court in summarising and analysing a litany of important cases on the question,
articulated several arguments in favour of and against ensuring parity between the two classes
of employees (temporary and regular).

• For Equal Pay :

• Denying the principle of “equal pay for equal work” is violative of the equal
protection guarantee under Art. 14 because it treats two classes of employees
differently in the absence of any significant intelligible differentia.
(Dhirendra Chamoli v. State of U.P)

• Moreover, this further violates Art. 38(2) and 39 of the DPSPs, which can be
seen as a positive obligation when read with Art. 14 and 21 of the
Constitution, to ensure that minimum, equal pay is guaranteed to all
employees in similar jobs. (Daily Rated Casual Labour v. UOI)

• Against Equal Pay:

Primarily such a principle could not be upheld in cases where the petitioners were unable to prove
strictly that their duties were significantly similar to other regular employees in similar
positions/roles. (State of Punjab v. Surjit Singh)
Key Holdings/Important Observations:

• The Court handed down three key holdings in this case:

• Firstly, that based on an exhaustive analysis of the relevant case law in the
field, a right to equal pay for equal work, was entrenched in both labour and
constitutional jurisprudence. This meant that all courts in India were bound to
apply the same under the stare decisis doctrine under Art. 141 of the Indian
Constitution.

• In holding that this right was an integral aspect of Indian constitutional law,
the court bolstered this argument by drawing from international sources for
the right: it pointed to its linkages with human dignity, as expressed in Art. 7
of the ICESCR, 1976. In doing so, the court held that this right extended
symmetrically to regular workers and temporary workers or those hired on an
ad-hoc basis;

• Finally, the court acknowledged the State’s concessions that - a) the duties of
these temporary employees were quite substantially similar to those of
similarly situated regular workers, and b) there were no tangible differences
between the qualifications of these two classes of employees. They utilised
this to further strengthen the conclusion that, temporary workers were entitled
to (as a matter of right) the minimum pay-scale and other benefits that were
usually extended to regular workers in similar roles.

BHEL Workers Assn., Haridwar v. UOI:

Facts:

• The petitioners under a Art. 32 petition, represent over a 1000 workers (out of a total of
16,000) at the Haridwar plant who are legally treated as “contract labour”, and paid as
contract labour (far lower when compared to direct employees) but for all other purposes they
are regular employees. In that they perform very similar duties when compared to other
similarly situated workers; their wages are paid by BHEL to the contractors who pay them a
small amount after taking a substantial commission; they are controlled and assigned work by
BHEL, and are under its control, direction and superintendence.

• So, the petitioners pray for two reliefs -

 • To be declared as direct employees and access those benefits otherwise
denied to them (as violative of Arts. 14 and 19(1) (f)); and

• To strike down the system of contract labour as illegal;

• The respondent’s contentions are primarily twofold -

• That the use of an Art. 32 petition is improper when alternative remedies are
available under the CLRA, Minimum Wages Act, and Equal Remuneration
Act as Art. 32 is meant to be used after the exhaustion of the other ones; and

• That there were jobs of various descriptions at BHEL which were not
perennial, and required varying amounts of labour at different periods of time
and hence are better served by the use of contract labour. Moreover, they
clarify that the contractors do not merely supply labour, but must also
complete the task entirely as the quantum of compensation is tied to the
quantum of work completed.

• Issues

• Can the Supreme Court strike down the contract labour system as a whole in an Art. 32
petition?

• Are contractors bound by the “equal pay for equal work” under the CLRA Act and the rules
framed thereunder?

• Holdings and Reasoning

• The Court held that under an Art. 32 petition, it was not equipped to discern the individual
cases of over a 1000 employees and whether they are in practice treated as regular employees
but denied all the benefits accruing to that class. It stipulated that there were multiple legal
forums that were designed to provide a tailored remedy as requested by the petitioners.

• On the larger question of whether the Court had the authority to strike down the system of
contract labour as a whole, the bench observed that based on several committee reports, and a
detailed analysis of the malaise of contract labour — the CLRA was framed and passed by
Parliament with the purpose of regulating the practice (ensuring that where it survives, it is
practiced in an equitable manner) and prohibiting it wherever deemed necessary by
Parliament. Therefore, the court could not strike down the practice, as that would involve the
usurping legislative authority.
 • The Court further looked at the various provisions of the CLRA and the Central Government
has made the Contract Labour (Regulation and Abolition) Central Rules, 1971, to determine
the scope of the employer’s and contractor’s liability:

• Section 16-21: They highlighted that these sections in the Act have specified
a range of protections for contract labour to prevent their exploitation at the
hands of employers and contractors. Specifically, Sec. 21 permits contractors
to pay their employees, but directs the principal employer to hire
representatives to monitor the process.

• Rule 25 (ii) (iv): This rule ensures that contract labour is paid as per the
standards mentioned in the Minimum Wages Act or as per agreement,
settlement or awards.

• Rule 25 (ii) (v) (a): Most importantly, this rule directs employers and
contractors to ensure that in cases where contract labour hired performs
substantially similar duties to regular employees, their pay and benefits must
be identical to such similarly situated workers. And any disputes regarding
the similarity of employment, will be decided by the Chief Labour
Commissioner.

• In keeping with these observations, the Court concluded by dismissing the writ petition, but
observing that there could be no invidious discrimination against contract labour, and directed
the Central Government to consider the question of abolishing contract labour in BHEL,
Haridwar under Sec 10 of the CLRA. It further directed the CLC to examine the issue of
whether, these workers named in the petition were indeed regular employees, or deserved the
benefits of such employees.

Gammon India Ltd. v. UOI:

Facts:

• The petitioners under Art. 32 challenge the constitutional validity of the CLRA, 1970 and the
Contract Labour (Regulation and Abolition) Central Rules and Rules of the States of
Rajasthan and Maharashtra. They are contractors who specialise in the construction of roads,
buildings, bridges and dams.

• They contend that they are not contractors, within the meaning of the Act (refer to Sec. 2(c) -
also see, Sec. 2(e) - establishment; Sec. 2(g) - principal employer; Sec. 2(i) - workman and
Sec. 2(b) - workman as contract labour) on the basis of two arguments.
 • Firstly, that the work they are contracted to do for the employer is not any
part of the ordinary work of the employer, nor is it connected in any
significant way to the work of the “establishment” of the employer.

• Secondly, the work that they are responsible for completing does not take
place on the “premises” of the establishment of the employer.

• In this, the petitioners appear to rely on the distinction between “actual” work done by the
employer, and work that is incidental to the employer’s business but bears no real connection
with the same. (An illustration provided in the judgment - “if a banking company which is an
establishment which carries on its business at Delhi employs the petitioners to construct a
building at Allahabad the building to be constructed is not the work of the bank. It is said that
the only work of the bank as an establishment is banking work and, therefore, the work of
construction, is not the banking work of the establishment.” [Para 11])

• Issues

• Do the provisions of the CLRA only apply to cases wherein contractors are hired by principal
employers to perform tasks that are within the scope of the “actual work” carried by the
employer on the premises of their establishment?

• Is the CLRA and the rules framed by by the Central Government and various State
Governments constitutional?

• Holdings and Reasonings

• The Court rejected the petitioner’s arguments with respect to this aforementioned distinction.
They held that the petitioner’s position was violative of the ordinary meaning of the words in
the statute, and that construction work qualifies as “work of any establishment”, as the
establishment plainly owns the property. The court bolsters this observation by noting that
businesses do fundamentally expand, and physical expansion in the form of construction and
development of new properties is an integral aspect of that.

• The Court concluded that the phrase “work of an establishment” must be interpreted in a
holistic and harmonious manner, with respect to the various definitions of workman,
contractor and principal employer. In doing so, it held that this phrase did include work done
in the construction site which is owned by the employer. In essence the court held that the
scope of the Act included not only all instances of the principal employer’s “actual” work, but
also, all instances of work on behalf and to the benefit of the employer.

• Finally on this question, the court observed that in deciding to issue a notification prohibiting
contract labour under Sec. 10 of the CLRA, it was the responsibility of the Appropriate
 Government to consider all the factors relating to whether the nature of the work was
perennial, and could be performed by ordinary/regular employees of the employer.

• Work of the establishment v. Work in the establishment?

• On the question of constitutionality, the Court first rejected the petitioner’s arguments that the
licensing fee imposed by the Rules amounted to a tax and was therefore beyond the
competence of governments. It held that the fee was not a text, nor was it arbitrarily imposed,
and the right to appeal against arbitrary revocation or denial was preserved.

• Secondly, the Court rejected the petitioner’s arguments that Sec. 16 and 17 r/w (Central)
Rules 40 to 56 and Rule 25(2)(vi) would impose requirements such as “provisions for
canteens, rest rooms, facilities for supply of drinking water, latrines, urinals, first aid
facilities” which in turn created unreasonably high costs for these contractors. As a result,
they were unconstitutional by virtue of being unworkable. The Court specifically observed -

• That these requirements formed an integral aspect of human dignity in labour

— an important goal that the legislation and the rules sought to achieve;

• That the Legislature was perfectly equipped to examine the public need and
make rules that were in consonance with the same;

• Finally, that the CLRA and the rules passed the rational basis test, and did
not amount to arbitrary classification under Art. 14.

• The Court then delved into specific sections and rules that were challenged as
unconstitutional, they are: (for a detailed overview refer to the judgment, paras 25-40)

• Section 16, 17, 18 and Rule 42,43: On providing the various aforementioned
amenities, the court held that it was not unreasonable to expect such measures
to be taken by contractors under the constitution.

• Rule 25 2(ii): Petitioners claimed that the number of possible workers to be

hired was fixed by the license and that was unreasonable. The Court rejected
this claim holding that the option to amend the license was open, and any
unreasonable refusal of amendment was appealable.

• Rule 25 2 (v) (a) and (b): The petitioners challenged the decision making
capacity of the Commissioner of Labour on the grounds that it lacked any
appeal. The Court upheld the section, observing that the special knowledge of
the Commissioner warranted the finality of their order. Moreover, the need to
 restrict the length of the litigation, owing to the temporary nature of the
workers further guided the government and is entirely reasonable.

• Section 14 and Rule 24: On the question of forfeiture, the Court observed that
the rule requiring a sum of Rs. 30/- to be deposited per worker, was entirely
reasonable and did not violate Art. 14 or 19(1)(f) because it was in the nature
of a “departmental penalty” on the contractor for any violation of the
principal conditions of the license. These conditions pertained to the payment
of wages as per the act, reasonable hours of work and a prohibition on the
transference of the license. And since these were all public welfare interests,
the penalty was entirely reasonable and not arbitrary.

• Section 34: This referred to a challenge to the power granted to the

government to remove any difficulties arising in implementation in a manner
consistent with the Act on the grounds that it constituted excessive
delegation. The Court rejected this challenge and distinguished Jalan
Trading Co. v. Mazdoor Union, on two grounds. Firstly, the power of finality
was not granted to the government’s orders unlike in Jalan. Secondly, the
power of alteration (unlike Jalan) is restricted merely to difficulties arising in
the course of implementation, as opposed to making substantive changes to
the Act itself.

• Section 28: This referred to the power assigned to the appropriate

government to appoint inspectors, who could enter employer’s premises at all
reasonable hours, to examine and seize any records if they have reason to
believe that the law has been violated. The Court rejected this challenge on
the grounds that it was raised by the intervenor, and that the intervenor could
not raise contentions that were not raised by the petitioner in their initial
pleadings.