Top 20 Landmark Supreme Court & Important Judgments On Labour Law
Top 20 Landmark Supreme Court & Important Judgments On Labour Law

TOP 20 LANDMARK SUPREME COURT & IMPORTANT JUDGMENTS ON LABOUR LAW

I. SOCIAL WELFARE ACT

 

1.    Workmen of M/S Firestone Tyre And Rubber Co. Of India V. Management AIR, 1973 Sc 1227

 In this case, the question for determination before the Supreme Court was as to what was the interpretation of section 11 A of the Industrial Disputes Act, 1947. This section stipulated the powers of the Labour Courts, Tribunals and National Tribunals to provide relief to workmen who had been discharged or dismissed from service.

Since the section was added recently by way of an amendment another question for determination was that whether this section would apply to the cases which had already been instituted prior to the new amendment or not.

The Supreme Court held that the Industrial Disputes Act, 1947 was a beneficial piece of legislation which had been enacted by the parliament in the best interest of the employees.  Since it was a social welfare legislation, therefore the courts have to adopt a beneficial rule of construction.

It was further held that if two views arise in a case then the view which is going to help the employees is to be taken. Thus, the newly amended Section would apply to only the cases which had been instituted after the amendment had been brought in.

 

 

II. APPROPRIATE GOVERNMENT- CENTRAL GOVERNMENT

 

2.    Steel Authority Of India Ltd V. National Union Water Front Workers  AIR 2001 SC 3527

 

The facts of the case are that the appellant company was a central government company which was involved in manufacturing various types of iron and steel materials in various states of India. The State of West Bengal issued a notification prohibiting contract labour in some specified stockyards of the appellants at Calcutta.

In the meanwhile, the contract laborers filed a petition before the high court seeking directions for the appellants to absorb the Contract Labourers in their regular establishment. The primary question for determination, in this case, was as to who was the appropriate government with regard to the Contract Labour (Regulation and Abolition) Act, 1970 (for short CLRA Act).

The Supreme Court held that any industry which was being run by conferment of power or permission granted by the Central Government to a Central Government Company or undertaking and if due to the lack of the conferment power of power it would not be able to operate then that company would be considered to be an industry under the authority of the Central Government.

Thus the Supreme Court held that the Central Government was the appropriate government under the CLRA Act.

 

 STATE GOVERNMENT-

 

3.    Hindustan Aeronautics Ltd. V Workmen AIR 1975 SC 1737

In this case the government of West Bengal had referred a dispute under section 10(1) of the Industrial Disputes Act, 1947 for adjudication. The dispute was between the workmen working at the branch of the company’s workshop and the company. All the shares of the company were owned by the central government and it had an important role in controlling the industry.

 

The industrial Tribunal granted part relief to the workmen. In appeal the competency of the West Bengal government to refer the dispute for adjudication was challenged by the company on the ground that it was not the appropriate government to refer the dispute.

 

The Supreme Court while hearing the appeal filed by the Company held that the appropriate government to refer the dispute was the government of West Bengal since the branch of industry/company carrying out the work in West Bengal was a separate unit.

 

The workers were being paid at the branch and they were directly under the control of the officers of the company at that branch. In situations where there was a disturbance of industrial peace and a number of workmen were working, the appropriate government concerned for raising the dispute and maintaining industrial peace was the West Bengal government.

 

III.  DEFINITION OF INDUSTRY

 

4. Bangalore Water Supply and Sewerage Board V. A Rajappa AIR 1978 SC 548

 

In this case, the dispute was between employees of the Bangalore water supply and sewerage board and its management. The petitioners raised an objection before the Labour Court that it was not an industry and therefore the Labour Court had no jurisdiction to try the case.

The Labour Court rejected the objection and aggrieved by it the Management filed a Writ Petition before the High Court of Karnataka. The High Court too rejected the objection and thus the Management filed an appeal before the Supreme Court.

While hearing the Appeal, the Supreme Court laid down a test for declaring an entity as an Industry. It was held that in order to qualify as an industry the following requisites have to be fulfilled:

 

  1. when there is a systematic activity which is carried on cooperation between the employer and employee for the production and distribution of goods and services all the satisfaction on the human wants and wishes;
  2. It is in material as to whether there is an absence of profit gainful objective behind the venture India public joint other sector;
  3. the focus is on the nature of activity special emphasis on the employer-employee relation;
  4. if the organization is a trade or business then it would not cease to be one based upon its philanthropic nature.

Thus, all organized activities having the above-mentioned elements not being a trade or business would be considered as an industry. Thus the Supreme Court held that the Bangalore Water Supply was an industry as per the Act.

 

 IV. INDIVIDUAL DISPUTE V. INDUSTRIAL DISPUTE

 

5. Central Provinces Transport Services Ltd, Nagpur V. Raghunath Gopal, Patwaardhan AIR 1957 SC 104

 

In this case, the Respondent worked with the Appellant Company. It was alleged by the Appellants that some goods were stolen by the Respondent and in the domestic inquiry conducted by the Appellant Company; he was found guilty and dismissed on the grounds of misconduct and gross negligence.

The Respondent filed a case before the Industrial Court for reinstatement and it was argued by the appellant that the case was not maintainable since it was not an industrial dispute but an individual dispute.

The Industrial Court gave a finding in favor of the Respondent and when an appeal was filed by the Appellant before the Labour Appellate Tribunal, it confirmed the findings of the Industrial Court. Thus aggrieved by the order the Appellant filed an appeal before the Supreme Court.

The Supreme Court held that a dispute between an employer and an individual employee is not an industrial dispute. However, it may become an industrial dispute if the cause is taken up by the union or a number of workmen. It was held that the language of section 2 (k) of the Industrial Dispute’s Act is wide enough to bring within its ambit a dispute between an employer and a single employee.

In order to do so the individual dispute would have to gather support and backing from a substantial number of workmen from the industry. If the cause is not supported by a number of workmen then the same would be an individual dispute and not an Industrial Dispute.

 

 V.   Definition of EMPLOYER-

 

6.    HUSSAINBHAI V. ALATH FACTORY TEZHILALI UNION AIR 1978 SC 1410

 

In this case, the Petitioner was the owner of a factory and he was involved in the business of manufacturing ropes. He had hired independent contractors who had in turn hired workmen for carrying out the work. A dispute was raised by the Respondent which was a Trade Union against the petitioner on the ground that certain workers were refused work by the Petitioner.

The Industrial Tribunal gave an award in favour of the workmen and it was also affirmed by the High Court of Kerala. An appeal was filed by the owner before the Supreme Court and it was argued by him that there was no employer employee relation between him and the workmen.

The Supreme Court while hearing the appeal held that in cases where the employees produce goods and services for the business of another person, then this another person would be an employer. In order to find out as to whether he is an employer or not it has to be seen that whether there is economic control upon the workers and whether there was continued employment.

If the livelihood of the workmen depends on the services rendered then the absence of a direct relationship or the existence of a contractor will not make a difference. The real employer would be the one who had been in charge throughout.

 

 

VI. DEFINITION OF WORKMAN-

 

7. Arkal Govind Rajrao V. Ciba Geigy Of India Ltd. (1985) 3 SCC 371

 

In this case the Appellant was working as a stenographer and an accountant with the Respondent Company. He was later promoted as an assistant and subsequently his services were terminated. He filed a dispute and it was referred to the Labour Court for adjudication. The Labour Court dismissed the reference on the grounds that the claimant was not a workman since he was doing administrative and supervisory work along with clerical work and therefore he was employed in an officer cadre.

The Supreme Court while hearing the appeal filed by the Appellant held that the appellant was indeed a workman as per the definition enshrined in Sec 2(s) of the Industrial Disputes Act, 1947. It was further held that person would not to be a workman if he is having certain supervisory duties.

The Supreme Court observed that while adjudication on such a question court has to keep in mind as to what are the primary and basic functions of the person. It has to be further observed as to what are the additional duties since the additional duties cannot change the nature and character of the employee. The Supreme Court held that the basic duties have to be considered first and the additional duties will have no bearing on the nature and character of the duties of a person.

 

8.National Engineering Industries Ltd.  v. Kishan Bhageria, 1988 AIR 329

 

In this case, the Respondent/claimant was working as an internal auditor and he started absenting himself for a brief period of time. His salary was stopped and he was also placed on suspension by the management/appellant. The claimant filed an application for being given the salary and subsequently, he was dismissed from service.

The management objected that the claim was not maintainable since the claimant was not a workman. The Labour Court held that the Respondent was a workman, however a Single Judge Bench of the Rajasthan High Court held that the Respondent was not a workman.

The Appellant filed an appeal before a division bench of the High Court and the High Court reversed the order of the Single Judge bench and held that the Respondent was a workman. Thus aggrieved by the order, the Appellant filed an appeal before the Supreme Court.

It was held by the Supreme Court that in order to find that whether a person was working in a managerial or supervisory capacity is a question of fact and as such the nature of his duties has to be seen.

It was observed that a supervisor is a person who takes decisions on behalf of the company. It was further held that the person who was merely reporting the affairs of the company and overall work to the management was not a supervisor.

It was further held that the claimant in the instant matter was a workman since he was not employed in a managerial or administrative work. It was clarified that where person is vested with the power of assigning duties and distributing the work amongst other employees would qualify as a supervisor.

 

 

 VII. STRIKES AND LOCKOUT-

 

9.Syndicate Bank V. K. Umesh Nayak, AIR 1995 SC 319

 

In this case, the question before the Supreme Court was whether the workmen are entitled for wages for the period of Strike irrespective of the fact that is legal or illegal. The matter was settled by the Supreme Court in light of the conflicting opinions rendered by the Supreme Court itself in three other decisions of a smaller bench.

It was held by the Supreme Court that a strike will be illegal if it contravenes the provisions of the Industrial Disputes Act. A strike may be justified or unjustified depending upon the nature of demands of the workman, the service conditions etc. At the preliminary instance, a detailed inquiry in this regard has to be first taken depending upon the facts and circumstances of each case.

It was further held that a Strike is the result of the long struggle between the employers and employees and it is a weapon of last resort and withdraws the labour from working in the Enterprise. It is an abnormal act and therefore the Industrial Disputes Act seeks to regulate the concept of Strike while not denying the right of the workmen to carry out a strike.

 

 10. Excel Wear V. Union of India AIR 1979 SC 25

 

In this case, the relation between the Management/Appellant and its employees deteriorated severely. The workman working under the management became very aggressive and started indulging in unjustifiable or illegal strikes.

It became impossible for the petitioners to carry out the business and they duly applied to the Government/Respondent for the closure of the undertaking. The government refused to allow the closure of the undertaking. Aggrieved by the order passed by the Government/Respondent, the Appellant’s challenged it.

It was held by the Supreme Court that the right to business is not the same to start or carry on a business; it would be not justified to place these two at the same footing. If a person does not start a business then he cannot be compelled to begin it full stop that the right to close down a business is not an absolute one can be restricted and regulated by way of the law.

The constitutional validity of section 25 ‘O’ of the Industrial Disputes Act, 1947 was scrutinized and it was found to be unconstitutional it did not require the Giving of reasons by the government for refusing close down a business it was held that it would not be practical to carry out business even when the employer cannot manage the same and it was not safe for him to do so.

They cannot be put to risk at the cost of their life and property.

 

 VIII. RETRENCHMENT-

 

11.Municipal Corporation of Greater Bombay V. Labour Appellate Tribunal of India AIR 1957 Bom 188

 

In this case, the question of retrenchment was discussed. Retrenchment basically means the termination of an employee by the employer for any reason, other than punishment for a disciplinary action. The objective behind retrenchment is the relieving of an employee based on good faith.

The concept of retrenchment is defined in section 2 (oo) Industrial Disputes Act, 1947 and compensation is to be given to the retrenched employee.

In this case, a Show Cause Notice was issued to the claimant by the Appellant Company for some misconduct an inquiry was held. It was found that he was not a fit person to be kept in the establishment. As such his services were terminated by the Appellant.

Aggrieved by the order of termination the claimant filed a case before the Labour Court asking for his reinstatement and compensation since he was illegally discharged. The Labour Court allowed the claim filed by the claimant and thus aggrieved by the order the Appellant filed a petition before the Bombay High Court.

It was held by the Bombay High Court that since the services of the claimant were terminated in lieu of the disciplinary proceedings and his misconduct, thus there was no retrenchment in the instant case. Therefore no question of compensation arose. Retrenchment happens when a person is relieved in good faith and not as a punishment for disciplinary action.

 

 

IX. LAY OFF-

 

12. Management of Kairbetta Estate, Kotagiri Po V. Rajamanickam AIR 1960 SC 893

 

The facts of the case are that the Manager of the Management/Appellant Company seriously injured by the workman and the other workers of the lower division threatened members of the management of dire consequences if they worked in that division. Due to this the management closed the division for a brief period of time.

After this conciliation proceedings were started before the labour officer and the division was reopened.

The Workers/Respondents claimed compensation for layoff u/s 25C of the Industrial Disputes Act and thus filed a claim for it before the Labour Court. The Labour Court allowed the claim and hence aggrieved by the order of the Labour Court, the appellant filed an appeal before the Supreme Court.

The Supreme Court before deciding the dispute made a distinction between layoff and Lockout. It was held that in the present case it was a lock out and not a layoff. In a lay off the management is supposed to provide compensation in the absence of work due to shortage of coal etc.

Whereas a lock out is a tool which is available the employer to in force his demands just like a strike is used by the employees.

It was held by the Supreme Court that in a situation where the workmen have gone out of control and are not adhering to the request of the employer then a closure of the division would be considered as a Lockout and not a layoff and therefore no compensation is to be paid to the workmen.

 

 

X. SITUS OF EMPLOYMENT-

 

13. Indian Express Newspaper  v State Of West Bengal (2005) IILLJ 333 Cal

 

In this case, the claimant was posted at the Calcutta office of Indian Express/Appellant and he was transferred to Bombay. He did not comply with the transfer order and subsequently, he did not join his services. A Show Cause was issued to him by the Appellant and a domestic inquiry was conducted and subsequently, his services were terminated.

An Industrial dispute was raised which was referred for adjudication by the Government of West Bengal/Respondent. The Appellant argued that the Reference was without jurisdiction since the appropriate government to refer the dispute was not the Government of West Bengal since the services of the claimant were transferred to Bombay.

The Labour Court held that the appropriate government was the government of West Bengal. Thus aggrieved by the order the Appellant filed an appeal before the High Court of Calcutta.

While hearing the appeal the High Court held that the situs of employment needs to be seen and it also needs to be kept in mind as to where the dispute arose.

It was held that the order of transfer was made to Bombay and just because the order of termination was presented at Calcutta cannot give a cause of action to the state of West Bengal to refer the dispute for adjudication.

The control over the employee does not matter solely but the last situs of employment is important before referring a dispute to the Industrial Tribunal.

 

 

XI.  SETTLEMENT-

 

14. Bata Shoe Co. Ltd. v. D.N. Ganguly, AIR 1961 SC 1158

 

The facts of the case are that during the course of conciliation proceedings with regard to a dispute between the Management/Appellant and its Workmen/Respondent a settlement was arrived at between the parties.

In spite of the settlement, some of the Workmen went on strike. The management took action against these workmen on the ground that the strike was illegal in light of the settlement and dismissed them after holding an enquiry.

Conciliation proceedings were started with regard to the dismissal of the workman and an agreement was entered into between the parties, however, not before the conciliation officer and without his help.

While adjudicating on the question of a settlement arrived at as per the provisions of sec 12 and 18 of the Industrial Disputes Act, the Supreme Court held that a settlement which is arrived at according to the provisions, then the same is binding on the parties to the settlement and they cannot refuse to adhere to the terms and conditions of the binding settlement.

It was further held that in the present case the second settlement will not be binding since it did not happen as per the provisions of the law.

 

 XII. EXECUTION PROCEEDING

 

15. M/S. Kasturi & Sons Pvt Ltd. v. N. Salivateeswaran, 1958 AIR 507 SC

 

In this case, the Respondent worked with the newspaper Hindu/Appellant and after a certain while he was terminated from his duties. The Respondent asked the Appellant to reconsider its decision of termination and on the refusal of the management he preferred an application to the Labour Minister under section 17 of the Working Journalist Act, 1955.

The State of Bombay appointed a person as an authority under section 17 to conduct an enquiry for the same. The Appellant raised a preliminary issue on the point of Jurisdiction in front of the authority. The authority decided on the issue and held that it was having the Jurisdiction to adjudicate upon the matter under section 17 of the working journalist act.

Aggrieved by the order, the Appellant filed a writ before the Supreme Court. The Supreme Court, in this case, dealt exhaustively with section 17 of the working journalist act.

It was held that section 17 was similar to Section 33 C of the Industrial Disputes Act. It was further held that sec 17 provides for a mechanism to recover an amount which is due from the employer however the same can only be done once the amount due is decided by the Labour Court.

 

XIII. EQUAL PAY FOR EQUAL WORK

 

16. Randhir Singh V. Union of India AIR 1982 SC 879

 

In this case, the petitioner was a driver in the Delhi Police Force, and he claimed that his salary was not at par with the salary of other drivers employed in the Delhi administration. It was submitted by him that the drivers of the Delhi Police carry out the same functions as drivers of the other departments.

It was held by the Supreme Court that the principle of equal pay for equal work was not explicitly provided for in the constitution and therefore it was not accorded the status of a fundamental right. However article 39 (d) of the Constitution which provides for equal pay for equal work for both men and women is accorded the status of a directive principle of State Policy.

Therefore by interpreting Article 14 and 16 of the Constitution along with the Preamble and A. 39 (d) it was held that the principle of equal pay for equal work can be construed from these articles.As such directions were given to fix the salary of the drivers of the Delhi Police Force at par with the salary of the other drivers of the Delhi Administration.

 

XIV.  BONDED LABOUR

 

17. Bandhua Mukti Morcha v. Union of India 1984 AIR 802

 

In this case, a letter was addressed to Justice Bhagwati by an organization on the grounds that there were many stone quarries in the state of Haryana where bonded labour existed and the workmen were being made to work under inhuman conditions.

The letter was treated as a writ petition and a commission was constituted in order to find out the truth. The commission in its report agreed with the organization and stated that indeed cases of bonded labour existed and severe violation of the labour laws was being committed.

It was held by the Supreme Court that the petition was maintainable and the state government was under an obligation to rectify it’s failure of ensuring the compliance of the labour laws.

It was further held that the workmen were being held in bondage and were being made to work in miserable conditions and as such the fundamental rights of the workmen were being curtailed. It was held that the right to live with dignity is a part and parcel of article 21 and the same is to be ensured by the state.

 

XV.  MISCELLANEOUS-

18. People’s Union for Democratic Rights v. Union of India, 1982 AIR 1473 SC

In this case a Public Interest Litigation was filed by PUCL before the Supreme Court on the basis of a report made by three social scientist on the workers who were engaged for various projects in relation to the Asian games. They had found in their report that the Labour laws were being contravened by the contractors and the State.

 

It was held by the Supreme Court that the contractors who had been hired by the government had committed serious violations of the labour laws. It was observed that the minimum wages were not being paid to the workers and there was also disparity in the wages which was being given to the male and female workers.

 

It was held that the workers were being forced into labour by working under a compulsion to take wages lesser than the minimum rate fixed the government. As such the state was failing in its duty to ensure that the social welfare legislations were being complied with. It was held that it is an obligation on the state to ensure and take measures for the purpose of tackling such violations and ensuring that the fundamental right is not transgressed.

 

 

19.  Delhi Transport Corporation v D.T.C. Mazdoor Congress, 1991 AIR 101

 

In this case the Respondents were regular employees of the Delhi Transport Corporation Ltd. They were terminated from service by the Appellants on the ground that their work was not satisfactory and that they were also not allowing the other members to perform their duties.

Their jobs were terminated by placing reliance on a regulation of the Corporation which allowed the termination of the job by providing 1 months notice or 1 months notice pay in lieu of the notice. The High Court struck down the regulation since it vested unbridled power with the management.

The matter was appealed before the Supreme Court and it was held that the regulation of the corporation to terminate permanent employee by giving them a notice or one month’s pay in lieu of notice without assigning a reason or giving an opportunity of hearing to the employee was against the principles of natural justice.

It was found to be violative of article 14 and it was arbitrary. It was held that the principle of Audi Alteram Partem is a part and parcel of Article 14 and the same has to be applied by the Corporation.

 

20. Marathwada Gramin Bank Karamchari Sanghatana v. Management of Gramin Bank, (2011) 9 SCC 620

ThE provident fund contributions have to be made by the Employer where the person is having basic wages up to 15,000. The question before the Supreme Cour, in this case,e was that whether an employer can limit the contribution of provident fund for employees who were getting paid over and above the statutory ceiling.

In this cas,e the Respondent was a bank which had reduced the contributions to the provident fund and restricted itself as per the statutory norm. The Appellants raised a dispute before Industrial Tribunal due to reduction in the contribution made by the Appellant. The Industrial Tribunal found the act of the Respondent as a contravention of the law.

The Respondent filed a petition before the Nagpur High Court challenging the order of the Tribunal. The High Court reversed the order and the same was also upheld by the Division Bench of the High Court.

Thus the Appellants filed an appeal before the Supreme Court. The Supreme Court held that the action of the Respondents was not in contravention of the law since they had not stopped the contributions but rather they had limited the contributions to the amount which was required by the statute to be paid.

It was further held that an employer cannot be compelled to pay contributions over the statutory ceiling.

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