This article is written by Gaurav Kumar, from Surendranath Law College (University of Calcutta). This article depicts the landmark judgments pertaining to labour laws.
Table of Contents
Introduction
The Labour law is the area of law that regulates the relationship between the employer and the employee. An employer could be government agencies or private entities, companies, organizations, industry. It also mediates the relation between trade unions, employing entities. Recently, the Parliament of India passed three long-awaited labour codes compiling the 29 central laws. The three codes are:
- The Industrial Relations Code Bill, 2020;
- Code on Social Security Bill, 2020;
- The Occupational Safety, Health and Working Conditions Code Bill, 2020.
They received Presidential assent on September 29, 2020, bringing a major change in the arena of Labour and Employment Laws. Since, “Labour” falls under the concurrent list of the Constitution of India, so both the Parliament and the State legislature can make laws on the subject. Prior to the existence of newly formed labour codes, there were more than 40 central laws related to the subject “labour and employment”.
The second National Commission on Labour (2002) found the existing laws were complex with anarchic provisions, so it proposed the consolidation of the existing laws. In this article, we will discuss twenty landmark judgements pertaining to the Labour Laws that every HR manager should learn. However, the new labour codes have not been enforced yet. It will be tentatively enforced by the upcoming financial year (April 2021).
Social Welfare Act
Workmen of M/S Firestone Tyre and Rubber Co. Of India v. Management, AIR 1973, SC 1227 AIR 1227, 1973 SCR (3) 587
In this case, the workmen of the Firestone Tyre and Rubber Company had a dispute with its employer as the employer had terminated its workmen on the basis of a Domestic Inquiry Finding. During the pendency of the case, the Industrial Tribunal Act was amended in 1971 and Section 11A was inserted conferring the power over the Appellate Authority to the Industrial Tribunal over the domestic enquiry into the arising disputes.
The Tribunal decided in the favour of the employer, denying to have the retrospective effect of Section 11A. Aggrieved from the decision of the tribunal, the workmen moved to the apex court against the employer.
The issue before the Supreme Court was on the interpretation of Section 11A of the Industrial Disputes Act, 1947. Since, the section was inserted through amendment amidst the pending suit, the question in issue was whether the said section shall be applicable on the case which is instituted prior to the insertion of the said section.
The Supreme Court stated that the Industrial Disputes Act, 1947 was a beneficial piece of legislation, enacted by the legislature for the betterment of the employees. The Court found the legislation to be a welfare one so it decided to apply the beneficial rule of legislation. It was further held that in case of arising disputes among the two parties, leniency will be applied over the view which will be in the best interest of employees.
However, the suit was instituted prior to the amendment so the said section shall not be applicable in this case. It shall be only applicable to the cases which are instituted after the amendment in the Industrial Dispute Act, 1947.
Appropriate Government: Central Government as well as State Government
Steel Authority of India Limited v. National Union Waterfront Workers, AIR 2001, Appeal (civil) 6009-6010 of 2001
In this case, the appellants, a Central Government Enterprise, along with its manager is having their business of manufacturing iron and steel products. The Company is also engaged in import-export of its goods through the Central Marketing Organisation, which is the marketing unit of the company. The company has its branches located in different parts of the Indian territory. The work of goods handling at the stockyard was provided to the contractors.
The Government of West Bengal vide its notification issued under Section (10)(1) of the Contract Labour (Regulation and Abolition) Act, 1989 prohibited contract labour at four specified stockyards in Calcutta.
However, the Government of West Bengal put the said notification into abeyance through the notification vide dated August 28, 1989, but further extended that period from time to time till August 31, 1994.
The contract labourers filed a petition before the Calcutta High Court seeking the direction for the appellants SAIL for the absorption of contract labour in their regular establishment in view of the prohibition notice issued by the West Bengal State Government. The primary question in the issue was who is an appropriate government with regard to the Contract Labour (Prohibition and Regulation) Act, 1970.
The Division Bench of the Calcutta High Court dismissing the writ petition stated that on the relevant date of prohibition notification, the appropriate government was the “State Government”.
Aggrieved from the decision of the High Court, the appellant preferred an appeal before the apex court. The issue before the apex court was with regard to the correct interpretation of the term “appropriate government” as defined in Section 2(1)(a) of the Contract Labour (Regulation and Abolition) Act, 1970.
The apex court held that any company which was being run on the power bestowed by the Central Government to the central government companies or its undertaking if fails to operate due to the lack of conferment power the company shall be considered to be an industry under the Central Government. The Court held that the appropriate government was Central Government under the Contract Labour (Regulation and Abolition) Act, 1970.
State Government
Hindustan Aeronautics Limited v. Workmen AIR 1975, 1975 AIR 1737, 1976 SCR (1) 231
In this case, the appellant Hindustan Aeronautics Limited is a company registered under Section 617 of the Company Act, 1956. The Central Government purely owns the share of the company. This case is regarding 1000 workers who were working in the company’s repairing unit situated at Barrackpore, West Bengal. The major issues were with regard to the allowance of the education of employees, revision of lunch allowances and for the permanency of their job.
In this case the West Bengal Govt. referred to the dispute under Section 10(1) of the Industrial Dispute Act, 1947
The Industrial Tribunal partly granted relief to the workmen. The appellants approached the apex court with the issue that whether the West Bengal government was the appropriate government to refer the dispute or not. The Supreme Court held that the appropriate government was the West Bengal government as the branch or industrial unit of the company was carrying out a “separate” kind of work in West Bengal.
The workers were being paid at the company and they were totally regulated by the officials of the company’s branch at Barrackpore in West Bengal. In such a case, if any kind of disputes or disturbances arises, the onus lies on the West Bengal government for the settlement of those disputes and maintaining industrial peace.
Industry Definition
Bengaluru Water Supply and Sewerage Board v. A Rajappa AIR 1978, 1978 AIR 548, 1978 SCR (3) 207
In this case, the dispute was between the appellants Bengaluru Water Supply and Sewerage Board, its management and the respondents employees. For some kind of misconduct, the board had levied a fine over the employees and recovered the money from them. The respondents approached the labour court against such a fine under Section 33C(2) of the Industrial Disputes Act, 1947 alleging that such imposition of a fine was against the principle of natural justice.
The appellant board put the contention that it was a statutory body serving the citizen, so it doesn’t come under the ambit of the definition of the term “industry” as provided in the Act. The labour court rejected the contention and held that the board comes under the ambit of “industry” as under Section 2(j) of the Industrial Disputes Act, 1947.
The board management aggrieved from the order of the Labour Court approached the High Court of Karnataka with a writ petition objecting that the board was not covered under the definition of “industry” as held by the Labour Court. The High Court of Karnataka rejected the objection, and upheld the labour court’s order.
The board management approached the Supreme Court with the issue of whether it was covered under the definition of industry or not. The apex court in order to declare the identity of industry, laid down a test to determine the activities carrying out by the industry This test was called the “Triple Test method”:
- Whether there is a systematic activity carried out on the cooperation between the employer and the employee for the purpose of production and services all the satisfaction that the human being wants and wishes;
- It is material to know whether there is an absence of profit gainful objective behind the corporation or venture;
- The major focus is on the employer-employee relation;
- If the organisation is for trade or business purpose it would not cease to be one based upon its philanthropic nature.
Hence, an organization having all the said elements not being a trade or business would be considered as an industry. The apex court held Bangalore Water Supply and Sewerage Board an industry as per section provided under the Industrial Disputes Act.
Individual dispute vs. Industrial dispute
Central Provinces Transport Limited Nagpur, v. Raghunath Gopal Patwardhan 1957 AIR 104, 1956 SCR 956
In this case, respondent Raghunath Gopal Patwardhan was working under the appellant “Central Provinces Transport Limited Nagpur”. The appellant alleged that the respondent stole some of the goods from the appellant’s company. A domestic inquiry was conducted by the company where the respondent was found guilty. He was dismissed on the ground of misconduct and gross negligence.
The respondent approached the Industrial Court for reinstatement, where the appellant contented the maintainability of the case as it was an individual dispute, not an industrial dispute.
The Industrial Court decided in the favour of the respondent claiming the dispute to be an industrial one. This position was upheld by the Labour Appellate Tribunal while deciding the appeal filed by the appellant.
Aggrieved by the order of the Labour Appellate Tribunal, the appellant approached the Supreme Court. The apex court held that the dispute was an individual one and not an industrial one. The court further added that the dispute would have been industrial if the cause had been taken by the union or a mass of workmen.
The court was of the opinion that the definition of Section 2(k) of the Industrial Dispute’s Act was wide enough to include a dispute between an employer and an employee. Further, the dispute must attract the workmen’s support from the industry to become an industrial one otherwise it will be an individual one.
Employer definition
Hussainbhai Calicut v. Alath Factory Thozhilali union, AIR 1978, 1978 AIR 1410, 1978 SCR (3)1073
In this case, the petitioner was the owner of the factory engaged in the manufacturing of ropes. He had hired some contractors for the purpose of engaging workmen in his factory. Some of the workers were denied employment stating that they were not factory’s workers but hired by the contractors.
The dispute was raised by the respondent in the Industrial Court against the denial of their employment. The Industrial Court decided in the favour of the workmen union and this position was upheld by the High Court of Kerala on an appeal filed by the appellant.
The owner of the industry preferred an appeal before the Supreme Court stating that there was no employer-employee relationship between him and the workers as they were hired by the contractors.
The apex court held that in an industry or a factory where the employees produce goods and services for the business of another person, then the other person shall be the employer. In order to find whether he is an employer or not, the factors of continued employment and the economic control upon the workers by the industry is to be taken into consideration. The court further added that if the livelihood of the workmen is directly dependent on the service provided by him in the industry, then it would not leave an effect on whether there is a direct relationship or not. One who has been in charge throughout the period shall be the real employer.
Workman definition
Arkal Govind Rajrao v. Ciba Geigy of India Ltd, 1985 AIR 985, 1985 SCR Supl. (1) 282
In this case, the appellant Arkal Govind Rajrao joined the respondent’s company as a stenographer-cum-accountant on 18 January 1956. After almost 10 years of time, the appellant was promoted to the post of assistant. However, in 1972 the company terminated him with the contention that he was not a “workman” defined as under Section 2(s) of the Industrial Disputes Act. The District Commissioner Labour (Administration), Bombay referred the dispute before the Labour Court.
The Labour Court dismissed the petition with the view that the claimant was not a workman as he was carrying out administrative and supervisory work along with clerical work, so he could not be kept under the definition of workman as provided under Section 2(s) of the Industrial Dispute’s Act.
The appellant filed an appeal in the Supreme Court against the aggrieved order of the Labour Court. The apex court was of the view that the appellant was a workman under the definition provided in Section 2(c) of the Industrial Disputes Act. The court held that the person would not be a workman if he is indulged in some supervisory activities.
The apex court further added that while adjudicating such matters one has to put in mind what are primary and basic duties along with the secondary duties of the person, as the secondary duties do not change the character and nature of the person. The court said that basic duties have to be considered first and it doesn’t affect the nature and character of the duties of the person.
National Engineering Industries Ltd. v. Kishan Bhageria, 1988 AIR 329
In this case, respondent Kishan Bhageria was working as an internal auditor. He was absent from the office for a period of time, so the company stopped his salary and sent him on suspension. The respondent filed an application but he was dismissed from the service.
The respondent filed an application before the Labour Court against his dismissal. The appellant contended that respondent’s claim was not maintainable as he was not under the term “workman” provided under the act. The Labour Court held that the respondent was a workman as under the definition of Section 2(s) of the Industrial Disputes Act.
The appellant moved the High Court of Rajasthan against the order. The single bench judge of the Rajasthan High Court held that respondent Kishan Bhageria was not a workman as under the said act. The appeal was again filed before the Division Bench of High Court where the order of the Ld. single bench judge was reversed.
The management company moved to the apex court against the order. The Supreme Court stated that the fact in issue was whether the person was working for the managerial post or supervisory post, and for the purpose of deciding it, one has to look into the nature of the duties of the claimant.
The Supreme Court stipulated that a supervisor is a person taking decisions on the behalf of the company. The person can’t be held as a supervisor if he is merely reporting the affairs of the company and the management.
In the said matter the apex court held the respondent as “workman” as he was not engaged in managerial work or administration work. The Court also held that the person if would have been engaged in work of assigning duties among the other staffs then he shall qualify the criteria of being a “supervisor”.
Strikes and lockout
Syndicate Bank and Ors v. K. Umesh Nayak, 1995 AIR 319, 1994 SCC (5) 572
In this case, the major issue before the Supreme Court was whether the workmen were to get paid during the period of strike despite the fact that the strike was legal or illegal. The apex court decided the matter in the light of conflicting opinions rendered by itself in other decisions of the smaller bench.
The apex court held that the strike can be held illegal if it contravenes the provisions of the Industrial Disputes Act, 1947. For the purpose of deciding the legality of the strike the Court had to take certain things into consideration such as; whether the demands of the workmen like pay scale, service issues were justified or not. The Court stated that in every case the detailed inquiry on facts and circumstances of the strike shall be taken into consideration.
The SC held that the strike is a result of a long struggle between the employer and the employee. It is the last weapon available to the employees in order to allow their demands to be fulfilled by the industry. The court stated it as an abnormal act and the Industrial Legislation doesn’t deny the worker’s right to protest and it seeks the concept of the strike to be regulated with the right of the employer to lockout and provide machinery for peaceful inquiry and settlement of disputes between them. The court ordered the employer to pay the workers for the “strike period”.
Excel Wear v. Union of India, 1979 AIR 25, 1979 SCR (1)1009
In this case, Excel Wear is a garment manufacturing firm/petitioner having 400 employed workers in its firm. The relationship between the employer and employee deteriorated as the workers became very militant and aggressive. The appellant was the management of Excel Wear. The workers of the company started doing unjustifiable strikes.
The petitioner approached the government-respondent for the closure of the undertaking. The Government disallowed the closure of the undertaking.
Aggrieved from the order of the government/respondent, the appellant approached the Supreme Court of India. The apex court held that the right to business is not equal to the carry on business as both things can’t go together. The court further held that the right to close the business is not an absolute one and can be restricted and regulated by the legal provisions.
The Constitutionality of Section 25(o) of the Industrial Disputes Act, 1947 was scrutinized and the court found it unconstitutional. The said section didn’t require the government to provide any reasons for the closure of the business. However, in this case, as the workers had become violent, it was not safer for the employer to continue the business.
The Court added that the employer’s life can’t be put at risk.
Retrenchment
Municipal Corporation of Greater Bombay v. Labour Appellate Tribunal of India, AIR 1957 Bom 188
This question of retrenchment was discussed in this case. The term “retrenchment” means the termination of the employee by the employee for reasons other than awarding punishment by way of disciplinary action, as defined under Section 2 (gg)(oo) of the Industrial Disputes Act, 1947. The section also states providing compensation to the employee. Retrenchment of employees is generally done so as to relieve them from a job in good faith.
In this case, the employee company sent the show-cause notice to the employer with regard to some misconduct as an inquiry was held. The employee was found guilty and thus unfit for the company. So, the company terminated him from the service.
The claimant filed the petition against the company for reinstatement and compensation as he claimed that the company had illegally terminated him. The Labour Court found merits in the case and allowed the claim of the claimant.
Aggrieved from the order of the Labour Court the appellant approached the High Court of Bombay. The Bombay High Court held that there was no retrenchment in this case as the claimant was removed on the basis of the disciplinary proceedings initiated against him. The High Court further held that retrenchment can only take place when the employer is relieved from the services in good faith and not as a disciplinary action taken as a punishment.
Lay off
Management of Kairbetta Estate, Kotagiri Po v. Rajamanickam, 1960 AIR 893, 1960 SCR (3) 371
In this case, Ramkrishna Iyer the manager of the appellant was violently assaulted by the workers which resulted in serious injury along with multiple fractures. The staff of the company was also threatened by the workers. The staff of the lower division denied going on work in the lower division as a threat to their lives. The management closed the company’s lower division for a period of time.
The respondents filed a complaint in the Labour Court under Section 33A of the Industrial Disputes Act, 1947 as they contended that the work in the division was stopped without any prior notice. The said section deals with the adjudication of the disputes whether the conditions of the service changed during the pendency of the proceedings. The respondents also claimed compensation for the layoff as under Section 25 of the Industrial Disputes Act, 1947. The Labour Court allowed the claim of the respondents.
Aggrieved from the order of the Labour Court the appellant approached the apex court. The apex court while deciding the issue made the distinction between the layoff and the lockout and held that the present case was “lockout” not “lay-off” as there was a work stoppage initiated by the management of the company due to the labour dispute. In the layoff, the management has to provide compensation if the work is stopped due to different reasons such as shortage of coal or anything similar.
The lockout was a tool available to the employer to force his demands against the employee. The Supreme Court held that in this case, the workmen had become aggressive and went out of control of the employer and not adhering to his request, so the employer can make a closure and such closure shall be considered as a lockout not layoff, hence no compensation shall be provided to the workman.
Suits of Employment
Indian Express Newspaper v. State of West Bengal (2005) IILLJ 333 Cal
In this case, the appellant was Indian Express, a print media agency. The claimant was posted in the Calcutta office of the appellant the Indian Express. The claimant was transferred to Bombay from the Calcutta office but he didn’t join the office at the prescribed time. The appellant served him with show-cause notice and the domestic inquiry was conducted against him. Subsequently, the appellant terminated him from the service.
An industrial dispute had arisen and it was referred for adjudication by the Government of West Bengal/respondent. The appellant contended that the reference had no jurisdiction in the case, the appropriate government for the referral was not the Government of West Bengal, as the claimant was transferred to Bombay.
The dispute was sent before the Labour Court for adjudication, and the court held that the appropriate government was the Government of West Bengal.
Aggrieved from the order of the Labour Court the appellant approached the High Court of Calcutta. The High Court stated that the situs of the employment needs to be kept in mind as to where the dispute arose. The court held that the transfer order was made to Bombay and mere the presence of the termination order at Calcutta doesn’t provide the cause of action to the State of West Bengal for adjudication.
The situs of the employment is more important than the control of the employer over the employee for the purpose of referring to the dispute before the Industrial Tribunal.
Settlement
Bata Shoe Co. Ltd. v. D.N Ganguly, 1961 AIR 1158, 1961 SCR (3) 308
A dispute arose between the Bata Company/appellant and the workers/respondent. The dispute went in course of the conciliation where the parties in disputes amicably reached a settlement. However, after the settlement, the workers went on strike. The company claimed the strike as illegal and irrelevant in light of the settlement done by the respondent. The company held the inquiry and dismissed the workers who had gone on strike.
With regard to the dispute of termination of workers, the conciliation proceeding was again preferred reaching an agreement signed by both parties of the dispute. However, in the whole process of conciliation, no conciliation officer was present.
The question in issue before the apex court was whether the settlement was done by the company and the workers were as per as provided under Section 12 and Section 18 of the Industrial Dispute Act, 1947. The apex court held the settlement at which the parties had arrived was according to the provisions of the sections provided under the Industrial Dispute Act and the settlement was binding over the parties as they can’t deny the terms at which they had arrived upon at the time of settlement.
However, the court further held that the second settlement done by the parties after the first one was non-binding as it was contrary to the provided provisions of the Industrial legislation.
Execution proceedings
M/S Kasturi and Sons Pvt Ltd. v. N. Salivateswaran, 1958 AIR 507
In this case, the respondent/Salivateswaran used to work with the private newspaper company appellant- The Hindu. The respondent was a journalist who used to share the news with different journals, newsagencies. He worked in the said company on an honorarium basis. Contrary to the advice and instructions of the appellant the respondent left India for Zurich and came back after a short period of time. The appellant relived him from his services, under the arrangement he was supplying news to the company. On his return to India, he requested the company to reconsider his termination decision but the company refused reconsideration. The respondent approached the Labour Minister of Bombay against the order of the company under Section 17 of the Working Journalist Act, 1955. The State of Bombay on receiving the application of the respondent appointed M.R Mehar (Retired ICS) as the second respondent for the inquiry in the application of the First respondent’s claim.
The appellant contended on the basis of the jurisdiction issue, but respondent no-2 found that it was having the appropriate jurisdiction to inquire of the matter as under Section 17 of the Journalist Act.
Aggrieved from the order of the appointed respondent the appellant filed a petition in the Supreme Court with regard to the arising jurisdiction issue in the matter.
The apex court in this case exhaustively dealt with Section 17 of the Working Journalist Act in this case. The court said that Section 17 of the said act was similar to Section 33C of the Industrial Disputes Act. The Court further held that Section 17 of the act, provides the mechanism for the recovery of the amount which is due from the employer towards his employee. However, the same can only be done once the due amount is decided by the Labour Court.
Equal work is equivalent to equal pay
Randhir Singh v. Union of India, 1982 AIR 879
In this case, petitioner Randhir Singh was a driver working with the Delhi Police Force. He claimed that his salary was not as per standard with the other drivers working in the Delhi Administration. It was stated that the drivers of the Delhi Administration perform a similar function as the drivers of the other department.
The apex court while dealing with the matter said that the Constitution of India doesn’t include the provisions for equal pay, and so it can’t be kept under the ambit of the fundamental right. However, Article 39(d) of the Constitution of India provides the provision for equal pay for equal work for both man and woman, and it is included under the Directive Principles of the State Policy.
The apex court interpreted Article 14 and Article 16 of the Constitution of India in the light of the Directive Principles of the State Policy as provided under Article 39(d) and construed the principle of equal pay for equal work. According to such interpretation, the apex court ordered the Delhi Police to fix the salary of the driver in accordance with the other drivers working under the Delhi Administration.
Bonded Labour
Bandhua Mukti Morcha v. Union of India, 1984 AIR 802
In this case, the petitioner- an association wrote a letter to Justice P.N Bhagwati with regard to the poor condition of the large number of reinforced workers who were working in the stone quarries in some part of Faridabad, Haryana. The association described the brutal and insufferable conditions of the labourers and stated the different provisions of the Constitution of India that was not being actualized with respect to these workers. The petitioner in the letter referred to the name of the stone quarries and the point of interest of the workers to be implored under a writ as the different social welfare legislation provides for the same.
The letter of the petitioner was treated as a writ petition and the apex court constituted a commission for the inquiry into the truth of the matter as stated by the petitioner. The commission inquired into the matter and found the statement of the petitioner to be true as bonded labour existed there, and there were severe violations of the labour laws.
The apex court on the basis of inquiry made by the commission held the petition maintainable stating that it was the duty of the state government to make rectification as it failed to ensure proper compliance of the labour laws. The apex court further added that the workmen were being held under bondage and in pathetic condition, and it not only violated the Constitutional provision of Article 21 but also the human right laws. Such act of the stone quarries companies had curtailed the fundamental rights of the petitioner as Article 21 provides that the “right to live with dignity” is a part of the fundamental rights and the onus is on the State for proper compliance of such rights if it is curtailed.
Miscellaneous
People union for Democratic Rights v. Union of India, 1982 AIR 1473
In this case, the PUDR, which is an organization formed for the purpose of protecting the democratic rights of the Citizen, appointed three scientists for the purpose of inquiry to be made in the ASIAD Projects.
Based on these investigations, the petitioner wrote a letter to Justice P.N Bhagwati which further transformed into Public Interest Litigation. In the letter, allegations of violation of various labour laws were stated and the apex court was requested to intervene in the issue. The letter was treated as a writ petition by the Supreme Court and notices were issued to the Union Government, Delhi Development Authority and the Delhi Administration.
The major allegations made in the letter were the violation of the Equal Remuneration Act, 1976 as the women workers were not paid properly and there was a misappropriation of money. There was a violation of Article 24 of the Constitution of India and the Employment of Children Act, 1938 and 1970 as the children below 14 years were deployed at the construction site by the contractors. There were also violations of the Contract Labour (Regulation and Violation) Act, 1970 which had resulted in the exploitation of the workers and denial of their various rights.
The apex court in this case found serious violations of the labour laws as the workers were not being paid adequately and there was a misappropriation of the funds. The court also found that there was a disparity in the remuneration paid to the male and female workers.
The court said that the workers were forced to work taking fewer wages against the minimum per-day wages fixed by the government. The court held that there were violations of labour laws in masse and the State was obligated to take action against such violation ensuring that the fundamental rights of the labourers are protected.
Delhi Transport Corporation v. D.T.C Mazdoor Congress, 1991 AIR 101
In this case, the respondent/D.T.C Mazdoor Congress were the regular employees working under the appellant-Company Delhi Transport Corporation. The respondents were alleging that they were being terminated by the appellant on the ground of non-satisfactory work.
They were terminated from their job paying reverence over the regulation of the transport corporation which allowed them to terminate their workers from the job by providing 1-month notice or 1-month pay in lieu of notice.
The matter reached before the apex court by the appellant. The apex court held that the regulation of the corporation of terminating their permanent employees without hearing them and just providing one-month prior notice or one-month pay in lieu of notice was contrary to the principles of natural justice, as there was no reasonable cause.
The court found the regulation of the corporation arbitrary, unreasonable and in violation of Article 14 of the Indian Constitution. The court held that the principle of audi alteram partem is a part of Article 14 and it is equally applicable over the regulations of the corporation. Hence, the termination of the employees was held unreasonable.
Marathwada Gramin Bank Karmchari Sangthan v. management of Gramin Bank, (2011) 9 SCC 620
In this case, Marathwada Gramin Bank is the respondent Bank. The provisions of the Employees Provident Fund Scheme, 1952 became applicable in the bank from 1979.
The respondent till 1981, complied with the provisions of the said scheme and after that, it formed its new scheme by establishing its new trust for the payment of provident fund to its employees. So, the employees were getting the provident fund in excess of the Employees Provident Fund Scheme, 1981. The Regional Provident fund Commissioner vide a notification dated 29.09.1981 permitted the bank with regard to its own trust and compliance with the new scheme, but later on it cancelled and the bank was directed to comply with the provided statutory rule for the purpose of paying provident fund to its employees.
The respondent Bank issued a notice under Section 9A of Industrial Disputes Act, 1947 expressing its intention to discontinue the provident fund in excess of its statutory liability, but it continued to continue towards the Employee Provident Fund.
The Central Government referred the dispute to the Central Government Industrial Tribunal, Nagpur. The Tribunal relied upon the Employees Provident Fund and Miscellaneous Provisions Act, 1952 held that the management can’t reduce the wages of the employees directly and indirectly to whom the scheme of the said act applies. The Tribunal further directed that the employees can draw an equal amount of money from the provident fund as earlier according to the scheme without any ceiling cap on their salary.
Aggrieved from the order of the tribunal the respondent bank filed a writ petition before the Ld. Single Judge Nagpur Bench of Bombay High Court. The High Court reversed the order of the Labour Court and the same was upheld by the Division Bench of the High Court.
The appellants filed an appeal before the Supreme Court. The apex court held that the action of the respondents was not contrary to the law, as they had continued to pay the Provident fund, but the contributions were made limited which was required by the statute to pay. The apex court further held that the employer can’t be compelled to pay more than the provided statutory ceiling.
Conclusion
The twenty aforementioned law judgements are the important ones that a human resource manager in every company needs to learn. The judgements have brought a new discourse in the jurisprudence of labour law. The precedent set by the apex court helps the judicial bodies across the country to decide the cases, if they face matters on similar issues. Since, the Industrial Disputes Act, 1947 has been stated as the law made by the parliament to protect and serve for the welfare of the employees against their employer.
Reference
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