Case BriefsHigh Courts

Bombay High Court: Reiterating the well-settled position that, contractual employees are not the employees of the principal employer, N.B. Suryawanshi, J., held that,

Contractual employees are engaged through contractors, their service conditions are governed by the contracts between them, hence in case of any grievance, they shall approach the contractor and not a principal employer.

Two Primary Questions:

  • Whether a complaint of contractual employees seeking to exercise their rights, as provided under the Maharashtra Industrial Relations Act, 1946 and Bombay Industrial Relations Rules, 1947, is maintainable under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971?
  • Whether contractual employees can file a complaint under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 for challenging the impugned order, which is not passed by the Principal Employer?

Factual Matrix

Petitioner-Original Respondent Company had 806 permanent employees working. Petitioner outsourced its peripheral activities to several contractors and for that purpose registered itself as the principal employer under Section 7 of the Contract Labour (Regulation and Abolition) Act, 1970.

Contracts of the petitioner have obtained license under Section 13 of the Act of 1970, there was no registered Trade Union in the local area of the petitioner establishment.

Respondent 16 – Government Labour Officer declared the election programme for conducting elections under Section 28 of the MR Act, for electing 5 representatives of the employees. 301 contractual workers submitted a representation stating to add their names to the voter’s list and to give them a right to vote.

For the above-stated representation, Management informed the contractual workers that the decision in the said regard cannot be taken by the Management and they may approach the Government Labour Officer or the Labour Commissioner. Some contractual workers submitted their representation to the Labour Commissioner seeking inclusion of their names to which the Commissioner rejected while citing the decision in Sunflag Iron & Steel Co. Ltd. v. State of Maharashtra, 2008 III CLR 983 contractual workers are not directly employed by the principal employer, and therefore, their names cannot be included in the voter’s list.

Respondents approached the Industrial Court and stated that the Labour Commissioner has committed unfair labour practice within the meaning of Item 9 o Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

Petitioner opposed the complaint stating the there was no employer and employee relationship between the complainants and the petitioner.

Industrial Court rejected the application but prima facie held that complaint is maintainable and it has jurisdiction to entertain it.

Petitioner submitted that Industrial Court has no power of superintendence over respondent 2 and therefore, the complaint is not maintainable and the same is liable to be rejected summarily.

Analysis, Law and Decision

Settled Legal Position

Contractual Employees are not employees of the principal employer.

In the decision of Supreme Court, Vividh Kamgar Sabha v. Kalyani Steel Ltd., (2001) 2 SCC 381, it was held that “the provisions of MRTU and PULP Act can only be enforced by persons who admittedly are workmen. If there is dispute as to whether the employees are employees of the Company, then that dispute must be first be gotten resolved by raising a dispute before the appropriate forum. It is only after the status as a workmen is established in an appropriate Forum that a complaint could be made under the provisions of MRTU and PULP Act”

In Central Labour Union (Red Flag) Bombay v. Ahemdabad Mfg. and Calico Printing Co. Ltd., 1995 Supp (1) SCC 175, the Supreme Court held that “where the workmen have not been accepted by the Company to be its employees, then no complaint would lie under the MRTU and PULP Act.”

High Court opined that for a complaint to be maintainable under the MRTU and PULP Act, admitted employer and employee relationship is a pre-condition. The provisions of the MRTP and PULP Act can be enforced only after the status of a workman is established before an appropriate forum.

In the present scenario, the contractual employees are the employees of the contractor and not of the petitioner. Hence they are not entitled to file a complaint against the petitioner claiming commission of unfair labour practice.

Therefore, the complaint filed under MRTU and PULP Act by the respondents/contractual employees, is not maintainable.

Under MIR Act, jurisdiction is conferred with the Labour Court and the Industrial Court are conferred with the power to decide the disputes on reference. For enforcing the rights under the MIR Act, forum is provided.

Bench opined that for enforcing the rights available under the MIR Act, a complaint cannot be filed under the MRTU and PULP Act.

Contractual employees are engaged through contractors, their service conditions are governed by the contracts between them. The appointment orders to the contractual employees are not given by the principal employer, but are given by the contractor. They work with the principal employer through contractor, only during the contract period. After the contract period is over, their contractor may enter into a contract with another establishment and shift them to work there. From that view of the matter also, they cannot be treated like permanent employees of the principal employer, and therefore, they cannot claim voting rights at par with the permanent employees.

Since the contractual employees are governed by the contract between contractors, their service conditions, wages, etc. are also governed by the same, hence in case of any grievance they shall approach the contractor and not the principal employer.

Misread and Misconstrued

Industrial Court had ignored the settled legal position that the complaint of unfair labour practice was maintainable only if there was admitted employer and employee relationship between the parties. The contractual employee, being the employee of the contractor and not of the principal employer, cannot file a complaint under the MRTU and PULP Act.

Therefore, Industrial Court’s decision was unsustainable.

While allowing the petition, Court concluded stating that complaint filed under the MRTU and PULP Act by the contractual employees for exercising their rights under the MIR Act is not maintainable and the Industrial Court has no jurisdiction to entertain it. [Mahindra and Mahindra Ltd v. Satish, 2021 SCC OnLine Bom 3003, decided on 20-09-2021]

Advocates before the Court

Shri. R. B. Puranik, Advocate for the Petitioner

Shri. S. B. Dhande, Advocate for the Respondent Nos.2 to 11 and 13 to 15

Ms. T. H. Khan, Asst. G. P. for the Respondent Nos. 16 to 17.

Case BriefsHigh Courts

Delhi High Court: Prathiba M. Singh, J., while reiterating that there is no absolute bar on legal practitioners representing Management before Labour Courts, observed that:

Judicial decisions on the question of consent, including implied consent, have primarily turned on the facts of each case.

Instant petition challenged the order by which Counsel for the Petitioner-Management was not permitted to represent his client before the Industrial Tribunal.

Counsel for Petitioner-Management submitted that the impugned order was completely contrary to the prevailing law on the issue inasmuch as Advocates are permitted to represent the management, so long as there was no objection by the workman or the litigation expenses were paid.

Further, the Counsel submitted that the authorized representative of the Management was appearing at the time when pleadings were being exchanged and other procedural formalities were being completed. However, when the matter reached the stage of trial, the Management thought it fit to engage the services of an Advocate for tendering evidence and conducting cross-examination. Accordingly, Counsel Sabharwal had been engaged in the matter.

Adding to the above, Counsel submitted that it is the usual practice before Labour Courts that Advocates appear and represent the management as well as the workmen.

In the present case, Rajesh Khanna was an authorized representative for the Workmen and one such representative of the trade union, regularly appearing for workmen before the Labour Courts. He submits that the Management would be enormously prejudiced if the Workmen are permitted to be represented by an expert and the Management is not allowed to engage an Advocate.

Analysis, Law and Decision

Question for consideration is in respect of the representation of Advocates before the Labour Courts.

As per Section 36(4) of the Industrial Disputes Act, 1947, both parties i.e., the workmen and the management, are permitted to be represented by a legal practitioner with the consent of the other party and with the leave of the Court

From the judgement in Paradip Port Trust, Paradip v. Workmen, (1977) 2 SCC 339, it is clear that there is no absolute bar and if consent is given by the workmen, a lawyer can appear before the Labour Court.

Whether there was consent – implied or expressed, and whether leave ought to be granted by the Adjudicator concerned.

In the recent decision of the Supreme Court in Thyssen Krupp Industries India Private Limited v. Suresh Maruti Chougule [Civil Appeal No. 6586/2019], the clear conclusion would be that a legal practitioner can represent the management before the Labour Court, if the litigation expenses for the workman to engage the advocate are paid by the management.

“…as the matter reaches trial, it would be inapt to say that the management or the workmen would not be entitled to engage Advocates or legal practitioners to represent them, in accordance with law. If the Management wishes to be represented by a legal practitioner, the Court can consider the question of whether the workman has given consent or not, whether impliedly or otherwise. “

Court directed that the parties shall appear before the Labour Court on 20-09-2021.[A&B Fashions (P) Ltd. v. Ramesh Kumar, WP (C) 8929 of 2021, decided on 24-08-2021]

Advocates before the Court:

For the Petitioner: Vinay Sabharwal, Advocate

Mr Raj Birbal, Ms Raavi Birbal and Mr Gunjan Singh, Advocates assisting the Court

Case BriefsHigh Courts

Jharkhand High Court: S.N.Pathak, J., held that the employees of Telco Recreation Club cannot claim parity in pay and other benefits at par with the regular employees of Telco Ltd. The Bench held that,

“When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise.”

Factual Matrix of the Case

The petitioner Company-Telco Ltd., was a leading manufacturer and seller of automobiles in the Country. In 1958, the company had started a separate department under the name and style of “Telco Recreation Club” for carrying activities of welfare and recreation of its employees. The said Telco Recreation Club was a Society registered under Societies Act having a separate legal entity of its own with its own source of income, its own constitution and bye-laws and had no direct connection with the petitioner-company and the petitioner company, under its corporate responsibility, provide financial assistance to several Societies in the area including the said Club.

The case of the petitioner-company was that it had no control over TELCO Recreation Club, which was run and managed by a Managing Committee elected/ selected by its members, yet one Indra Deo Prasad on behalf of 21 persons employed in Telco Recreation Club made a claim of parity in pay and other benefits at par with the regular employees of Telco Ltd. It was also the stand of the company that the government of Bihar had found Telco Recreation Club to be an independent establishment and had made a reference being Ref. Case No. 06 of 1991 to Industrial Tribunal, Ranchi, which was never challenged or objected by the employees of the said Club and therefore, the petitioner-company could not be treated to be the employer of the workmen of Telco Recreation Club.

Decision by the Labour Court

 The Labour Court held that there existed a relationship of employer and employees between the parties, and Telco Recreation Club was a department/wing of the company, and that petitioner-company provided all facilities to said Club and had direct control over the Managing Committee of the said Club as the General Manager of Telco Ltd. was the President of the Club; the reference was maintainable. The Labour Court had further held that the concerned workmen were also permanent employees of  Teclo Ltd., and hence, they were entitled to get pay and other benefits at par with the employees of Telco Ltd. Accordingly, the issue was decided in favour of the workmen.

Findings of the Court

Considering the rival submission of the parties and on perusal of Judgments brought on record, the Bench reached the conclusion that the impugned Award suffered from patent illegalities and was based upon errors of law. Admittedly, there was no relationship of employer-employee between the petitioner-Management and the concerned workman. The Bench clarified,

“Neither in the appointment of workmen nor in the process of their engagement, the petitioner-Management has played any role, therefore, the industrial disputes against the petitioner-Management is wholly illegal and uncalled for.”

The concerned workmen were being governed by the rules, regulations and bye-laws of the Club and not the petitioner-Management. Even the disciplinary control was of the Club and not of the Management. Hence, the findings of the Tribunal were totally perverse and error of law. Finding force in the arguments of the petitioner-company that the Club was incorporated as a separate body and concerned workmen were admittedly appointed by the Club and not by the petitioner-Management, the Bench opined that the claim of the concerned workmen was not sustainable.

Reliance was placed by the Court upon the decision of Supreme Court in Bengal Nagpur Cotton Mills v. Bharat Lal, (2011) 1 SCC 635,  wherein it had held that two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are-

  • Whether the principal employer pays salary instead of the contractor?
  • Whether the principal employer control and supervises the work of the employees?

Accordingly, the Bench held that in the instant case on both these counts, the workmen had failed to establish their case as they could not establish that they were working directly under control and supervision of the management, hence, the question of the employer-employee relationship did not arise at all.

Placing reliance on Bhuwanesh Kumar Dwivedi v. Hindalco Industries, (2014) 11 SCC 85,wherein, the Supreme Court had held that, “where Labour Court commits patent mistake in law in arriving at a conclusion contrary to law, the same can be corrected by the High Court. In the instant case, the Tribunal has committed a patent error of law to hold that the employer-employee relationship exists between the petitioner-Management and the concerned workman”; the Bench opined that

“In the instant case, the concerned workmen have sought for parity in pay and other benefits at par with the regular employees of TELCO Ltd. whereas the fact is that the petitioner-Management has never issued appointment letters to them rather these workmen were appointed by the Club, which is a separate entity.  When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise and as such the impugned Award suffers from patent illegalities and is fit to be interfered.”

In the backdrop of above, the impugned Award was quashed.  [Management of Motors Ltd. v. State of Jharkhand, 2021 SCC OnLine Jhar 413, decided on 18-06-2021]

Kamini Sharma, Editorial Assistant has reported this brief.

Appearance before the Court by:

For the Petitioner: Sr. Adv. Kamal Nayan Choubey, Sr.Adv. V.P. Singh, Adv.  Amit Kumar Das, Adv. Rashmi Kumar and Adv. Arun Kumar Singh

For the Respondents:     Sr. Adv. Ajit Kumar and Adv. Kumari Sugandha

For the State: GP-III O.P. Tiwari

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao, Navin Sinha and Indu Malhotra* has set aside the impugned judgment of Uttaranchal High Court, whereby the High Court had set aside the award passed by the Labour Court on the ground that no disciplinary enquiry was held by the School regarding alleged abandonment of service by the respondent.


 The Respondent was initially engaged as an Assistant Teacher in Jai Bharat Junior High School, Haridwar during the period July, 1993 to 21-05-1994, which was an unaided private institution. Subsequently, she worked as a Clerk from 01-07-1994. From 24-05-2005 the School started receiving grants-in-aid from the State, and came to be governed by the Uttaranchal School Education Act, 2006. The Respondent filed a complaint before the School contending that she had worked continuously up to 07-03-2006. It was that her services were illegally retrenched since 01-07-1997 without granting her any hearing, or payment of retrenchment compensation. The school, on the other hand, argued that on account of her continuous absence, the School had to engage another clerk in her place. The Respondent never made any grievance about her alleged termination till 2006, which was made after 9 years only when the School started receiving grants-in-aid from the State and became a Government School. It was further argued that the employment of the respondent was illegal, since the father of the respondent was a member of the Managing Committee, and her mother was the Chairman employed by the School. It was also stated that minimum qualification requirement for teachers was of B.Ed. and Teacher training while the respondent was only 12th passed.

Findings of the Courts Below

Labour Court vide Award dated 22-08-2016 held that the respondent was not entitled to get any relief as there was sufficient evidence adduced by the Management to prove her continued absence from the School since 01-07-1997. However, the said award of the Court was set aside by the High Court on the ground that the respondent had failed to discharge the onus to prove her employment till 08-03-2006. It was only after the School started receiving grants-in-aid, the respondent filed the present application after over 9 years. Hence, the High Court had set aside the Award dated on the sole ground that no disciplinary enquiry was held by the School regarding alleged abandonment of service by the respondent.

 Observation and Decision

The Bench cited Workmen of the Motipur Sugar Factory Private Ltd. v. Motipur Sugar Factory, (1965) 3 SCC 588, wherein, it had been held that, “A defective enquiry stands on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the facts and the employer would have to satisfy the tribunal that on facts the order of dismissal or discharge was proper.”

Reliance was also placed on Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. Management of Firestone Tyre & Rubber Co. of India (P) Ltd., (1973) 1 SCC 813, wherein the Court had made following observations:

  • Even if no enquiry had been held by an employer or if the enquiry held by him is found to be defective, the Tribunal in order to satisfy itself about the legality and validity of the order; had to give an opportunity to the employer and employee to adduce evidence before it. It is open to the employer to adduce evidence for the first time justifying his action, and it is open to the employee to adduce evidence contra.
  • The effect of an employer not holding an enquiry is that the Tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal or discharge is at large before the Tribunal, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. A case of defective enquiry stands on the same footing as no enquiry.
  • It has never been recognised that the Tribunal should straightaway, without anything more, direct reinstatement of a dismissed or discharged employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.
  • It has to be remembered that a Tribunal may hold that the punishment is not justified because the misconduct alleged and found proved is such that it does not warrant dismissal or discharge. The Tribunal may also hold that the order of discharge or dismissal is not justified because the alleged misconduct itself is not established by the evidence. Section 11-A now gives full power to the Tribunal to go into the evidence and satisfy itself on both these points.

The Court observed that full opportunity was given to the parties to lead evidence to substantiate their respective case and the High Court had not even adverted to the said evidence, and had disposed of the case on the sole ground that the School had not conducted a disciplinary enquiry before discharging the respondent from service. The School had led sufficient evidence before the Labour Court to prove that the respondent had abandoned her service from 01-07-1997 when she got married, and moved to another District, which was not denied by her in her evidence. The record of the School also revealed that she was not in employment of the School since July 1997.  The Bench stated,

“Only because some documents had not been produced by the management, an adverse inference could not be drawn against it.”

 In the light of above, it was held that initial employment of the respondent as a teacher from July 1993 to 21-05-1994 was itself invalid, since she was only inter-mediate, and did not have B.Ed. degree, which was the minimum qualification to be appointed as a teacher. Therefore, the impugned judgment of the High Court was set aside and the award passed by the Labour Court was restored. [State of Uttarakhand v. Sureshwati, 2021 SCC OnLine SC 34, decided on 20-01-2021]

*Justice Indu Malhotra has penned this judgment.

Kamini Sharma, Editorial Assistant has put this story together

Case BriefsHigh Courts

Bombay High Court: Anil S. Kilor, J., reiterated that the strict rule of pleadings as applicable to civil suits is not applicable under the Industrial Disputes Act, 1947.

The petitioner’s application under Section 33-C(2) of the Industrial Disputes Act, 1947 was rejected by the Labour Court, Nagpur and the Judgments and Order passed has been assailed in the present petition.

Petitioner had worked as a skilled worker with respondent scheduled employment “Printing Press”, to which provisions and schedule prescribed under the Minimum Wages Act, 1948 are applicable.

Claimed Permanency

He filed a complaint before the Industrial Court under Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices, 1971 claiming permanency.

On filing the above complaint, the petitioner was treated as a permanent employee by the respondent and therefore he withdrew his complaint.

However, the non-payment of the wages of permanent employee drove him to approach this Court.

Respondent stated that the petitioner was working as a skilled worker since 1989 and was getting benefits of permanent employee.

Further, the petitioner, subsequent to this, tendered his resignation, citing a reason that despite a statement made by the respondent before the learned Industrial Court and this Court that, the petitioner was a permanent employee, minimum wages have not been paid to him as per the provisions of the Minimum Wages Act.

Petitioner again took resort to the legal remedy by preferring n application under Section 33-C (2) of the Act, 1947 before the Labour Court for grant of arrears of wages and bonus for the period 11-08-1989 to 31-12-2013, as a ‘fitter’.

Analysis and Decision

Questions for Consideration:

1. Whether the Labour Court, possesses jurisdiction under Section 33-C(2)of the Act, 1947, to grant arrears of wages due under the Minimum Wages Act, particularly where there is no dispute regarding the rates of wages and it is admitted by the parties that minimum rates of wages were fixed by the Government?

2. Whether the strict rule pleadings is applicable to the Industrial disputes?

The purpose of enacting the ID Act, 1947 was to make provisions for the Investigation and settlement of Industrial Dispute and for certain other purposes.

Court also referred to Section 33-C (2) of the Act, 1947, which read as follows:

33C. Recovery of money due from an employer

(2) Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be diecided by such Labour Court as may be specified in this behalf by the Appropriate Government.”

Language of the said Section makes it clear that:

“…if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by Labour Court.”

Further to add to the above, if there is no dispute as to rates between the employer and the employee and the only question is whether a particular payment at the agreed rate is due or not, then Section 20(1) of the Minimum Wages Act would not be attracted at all, and the appropriate remedy would only be either under Section 15(1) of the Payment of Wages Act, 1936, or under Section 33-C(2) of the Industrial Disputes Act.

Court in view of Section 33-C(2) of the Act, 1947 and the facts laid, held that the Labour Court committed error in not exercising jurisdiction under Section 33-C (2) of the I.D. Act and further applicant also failed to prove that he was having the pre-existing right.

Bench referred to the decision of the Supreme Court in, Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai, (1976) 3 SCC 832 and observed that 

I.D. Act, 1947 being beneficial legislation protects labour, promotes their contentment and regulates situations of crisis.

Mechanism of the Act is geared to conferment of regulated benefits to workmen and resolution, according to a sympathetic rule of law, of the conflicts, actual or potential, between managements and workmen.

Moreover an industrial dispute where the process of conflict resolution is informal, rough-and-ready and invites a liberal approach. Procedural prescriptions are hand-maids, not mistresses of justice and failure of fair play is the spirit in which courts must view processual deviances.

Hence, in light of the ID Act, 1947 being a beneficial legislation and strict rule of pleadings not made applicable, as applicable to the suits filed under the provisions of the Civil Procedure Code, Court stated that it is erroneous that the application was rejected under Section 33-C (2) on the ground of not sufficient pleadings being made.

Therefore, the impugned judgment and order passed by the Labour Court needs to be set aside and sent back to the Labour Court to decide the same afresh. [Tularam Manikrao Hadge v. Sudarshan Paper Converting, 2020 SCC OnLine Bom 965, decided on 21-09-2020]

Case BriefsHigh Courts

Uttaranchal High Court: Sharad Kumar Sharma, J. contemplated the writ petition where the petitioner raised questions related to the order of the Labor Court passed in 2014.

The brief facts as involved in the instant writ petition were that the petitioner in the capacity of being an employer as a registered company under the Companies Act, had got different units and plants situated at various places, which required the services of certain workman in order to discharge the industrial work, which the unit had to undertake and in order to get the work performed in an efficient manner they required the services of Tool Room Trainee. Hence, the respondent was engaged as a Trainee with the said company and appointment made of the respondent for Trainee was governed by the terms and conditions of letter of appointment as it was provided in the letter of appointment itself issued. A certain stipend was fixed for the respondent. Subsequently the services of the respondent were put to an end on the grounds that the work and services were not satisfactory. The issue that arose afterwards was resolved between the parties.

Hence, the respondent filed an industrial dispute against the petitioner; consequently a proceeding was drawn before the Conciliation Officer and on the culmination of the said proceedings before the Conciliation Officer under Section 2-A of the U.P. Industrial Disputes Act, reference was sought to be made with regards to an adjudication of the controversy as raised by the workman. Consequently, a reference was made to the effect that as to whether and the act of the employer of dispensing the services of the petitioner as a tool room trainee was just and valid and to what benefit the trainee would be entitled to receive.

Labour Court ultimately by the impugned award had held that the act of the employer of dispensing the services of the respondent by an order was illegal and the workman was directed to be reinstated into the services.

Counsel for the petitioner Sudhir Kumar, submitted that in the said letter of appointment a clause was mentioned where the employer had reserved the rights to terminate the services of the trainee as any desired time without assigning any reason and even with put any prior intimation. He argued that while holding the termination as to be illegal the Labor Court had not treated that it was a reference which was made for defining the status of the workmen, as that of the respondent being of a regular employee.

Labor Court to the particular issue related to the status of the workman held that, it cannot in any manner be interpreted as if the petitioner was providing a regular status to the respondent as the effect of the award would be that as soon as the order was dispensed, the service of respondent was held to be bad in the eyes of the law, it will only give the respondent the same status of that being of a Tool Room Trainee from where he was removed, the post which he had acquired prior to his removal and thus he would be acquiring back the status of that of a Tool Room Trainee only, and the said award cannot be read as if it was giving him the status as that of a regular employee.

The Court observed that the clause of the terms of appointment would not come into play at the stage where the respondent was given a reason for his termination. More particularly, when had it been a simplicitor dispensation of service without attaching any stigma, then the employer could had exercised its power to dispense the services, but as soon as the employer attached a stigma and made any observation affecting the credibility with regards to the manner in which the work was performed by the trainee, it amounted to be a stigmatic order and in that eventuality, the adherence to the principles contemplated under the Industrial Disputes Act or under the principles of natural justice was required to adhere to prior to terminating the services of the workmen.

Hence, it may not be treated to have an effect of providing the status of a regular employee to that of the respondent was absolutely a misconception which was  drawn, because logically even otherwise also, if the order of termination was set aside, it goes without saying that the effect of setting aside of the termination order would only be revival of the status of the workmen, which was existing or he was enjoying in relation to the trainee which was prevailing at the time when the services were dispensed.[L.G. Balakrishnan & Bros Ltd. v. Virendra Singh, 2019 SCC OnLine Utt 646, decided on 02-07-2019]

Case BriefsHigh Courts

Madhya Pradesh High Court: Prakash Shrivastava, J. allowed the petition of the petitioner and held that in the absence of consent or in case of opposition by a party before the Labour Court, the other party cannot be permitted to be represented through an advocate as per Section 36(3) and (4) of the Industrial Disputes Act, 1947.

The petitioner has challenged the order of the Labour Court dated 8-10-2012, whereby the objection of the petitioner in respect of representation of the respondent in the proceedings before the Labour Court through the advocate has been rejected.

The facts of the instant case is that the reference has been made to the Labour Court under Section 10 of the Industrial Disputes Act in respect of retrenchment of the petitioner and in the proceedings before the Labour Court, the petitioner had raised an objection that the respondent cannot be allowed to be represented through the advocate as the petitioner has not appointed any advocate to represent him and in this regard has placed reliance upon Section 36(3) & (4) of the Industrial Disputes Act, 1947 and the Labour Court considering Section 30 of the Advocates Act has rejected the said objection.

The High Court held that since the petitioner has not consented to it and opposed it, the respondent-employer cannot be permitted to be represented before the Labour Court through the Advocate. In this regard, the Court placed reliance on the judgments of Uttam Kumar Pardasani v. Petcare Divin of Tetragon (P) Ltd. in Civil Appeal No. 561/11 and Itnas Pharmaceutical Ltd. v. Yogendra Singh Chouhan in WP No.6445/15.[Prakash Meena v. Ultratech Cement Ltd., 2019 SCC OnLine MP 1788, decided on 25-07-2019]

Case BriefsHigh Courts

Patna High Court: The Bench of Shivaji Pandey, J. dismissed a writ petition filed by an employer, challenging the amount of compensation directed to be paid to its employee by the Labour Court, on the ground that the petitioner had not exhausted the alternative statutory remedy.

The instant petition was filed is challenging the order passed by the Presiding Officer of Bhagalpur Labour Court whereby and whereunder petitioner’s employee was awarded a compensation of around Rs 4.72 lakhs. Additionally, it was also ordered that if the said amount was not paid to the concerned employee within a period of thirty days, it would carry a simple interest of 12 percent on the principal amount of around Rs 2,03,771.

The Court noted that Section 30 of the Employee’s Compensation Act, 1923 has a provision of appeal. But instead of exhausting the alternative remedy of appeal, the present petition was filed directly before this Court. In view thereof, the petition was held to be not maintainable.

Accordingly, the petition was dismissed with a liberty to the petitioner to file an appeal as provided under Section 30 of the Employee’s Compensation Act.[Frontline (NCR) Business Solutions (P) Ltd. v. Anita Devi, 2019 SCC OnLine Pat 564, Order dated 19-04-2019]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Anu Malhotra, J. gave a decision by upholding the decision of Presiding Officer of Labour Court-X, Karkardooma, Delhi, regarding the illegal termination of services of the workmen.

In the present case, services of two work persons Laxmi and Raj Kumar were allegedly terminated by the management i.e. New Delhi Institute of Management.

It was contended by the management; both the work persons were appointed on ad hoc basis and thus the Minimum Wages Act, 1948 would not be applied. Nevertheless, both of them were paid the salary higher than the market standard. As per the statement of claim, the management was not providing the legal facilities such as PF, ESI, appointment letter, attendance card, leave book, payslip, annual and casual leave, overtime wages, bonus etc. to its employees and on their demanding the minimum wages, the management got annoyed with them and terminated the services of both the stated work persons on obtaining their signatures on blank papers. Further, their claim was entertained by the Labour Conciliation Officer but no settlement was arrived at.

Management had failed to prove that Raj Kumar had made a request for settlement of his dues as he had taken up some other job and similarly Laxmi had made a request for settlement of her dues as she was not in a position to continue her services and thus it was held that the management had failed to prove that the resignations were voluntary, which led to illegal termination of the workmen. Management had assailed the award contending the impugned award to be erroneous and proceeded on wrong presumption of law and facts.

Workmen had submitted that the management was misleading the Court by interpreting the salary vouchers as being towards ‘full and final’ settlement. The phrase ‘full and final payment’ was later inserted by the management malafide to thwart the course of justice. Further, the workmen contended that they had never resigned and their services were terminated by the management.

Hence, on consideration of the record available, the Court was of the view that the Labour Court’s decision cannot be faulted as there is no error of law that is apparent on the face of record of the impugned award. No requisite notice was issued to the workmen for termination of their services; they could have been terminated in accordance with Section 25 F of the Industrial Disputes Act, 1947, which having not been done so, it was rightly concluded by the labour Court that the termination of services of the workmen was in contravention of the law and was illegal.

The writ petitions were disposed of accordingly. [Laxmi v. New Delhi Institute of Management,2018 SCC OnLine Del 12290, decided on 03-11-2018]

Case BriefsSupreme Court

Supreme Court: Interpreting the provisions of Sections 33C(2) of the Industrial Disputes Act, 1947 vis-à-vis a Voluntary Retirement Scheme framed by the State of Andhra Pradesh, the Court said that though there is cessation of relationship between the employee and the employer in VRS but if it does not cover the past dues like lay-off compensation, subsistence allowance, etc., the workman would be entitled to approach the Labour Court under Section 33C(2) of the Act.

Explaining the position of law, the Court said that if the VRS had mentioned about the lay-off compensation, needless to say, the claim would have been covered and the amount received by the workmen would have been deemed to have been covered the quantum of lay-off compensation. If it is specifically covered, or the language of VRS would show that it covers the claim under the scheme, no forum will have any jurisdiction. However, on a perusal of the VRS framed by the State of Andhra Pradesh, the Court noticed that it did not deal with the lay-off compensation and hence, said that the workmen is entitled to approach the Labour Court.

The 3-Judge Bench of Dipak Misra, V. Gopala Gowda and Kurian Joseph, JJ was deciding the reference made by the 2-Judge Bench in an appeal from the decision of the Andhra Pradesh High Court where it was held that once the workmen had availed the Voluntary Retirement Scheme and received the special compensation package, they could not have put forth a claim for lay-off compensation under Section 33C(2) of the Act. [A. Satyanarayana Reddy v. Presiding Officer, Labour Court, 2016 SCC OnLine SC 1059, decided on 30.09.2016]