NATIONAL LAW UNIVERSITY ODISHA

LABOUR LAW- I

INDIAN SUPREME COURT AND WORKER ORIENTED

INDUSTRIAL JURISPRUDENCE

SUBMITTED TO:
DR. SOHINI MAHAPATRA

SUBMITTED BY:
ANKIT ORAON (2018/BALLB/019)

IMLIKABA JAMIR (2018/BALLB/042)

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 TABLE OF CONTENTS

TABLE OF CONTENTS...........................................................................................................2

I. A BRIEF SUMMARY OF THE ARTICLE.....................................................................3

II. RESPONSE IN AGREEMENT WITH THE AUTHOR.................................................7

III. ARGUMENTS IN DISSENT WITH THE AUTHOR.....................................................9

IV. CASE ANALYSIS OF ONE OF THE CORE ISSUES IN THE PAPER....................13

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 I. A BRIEF SUMMARY OF THE ARTICLE

This project has been made as a response paper based on the article titled, “Indian Supreme
Crourt and Worker Oriented Industrial Jurisprudence” authored by Mr.Praveen Pavani. In
accordance to the instructions given, this response paper has been formatted and divided in
the following sections:Summary of the Article Response in Agreement with the
authorResponse in Dissent with the Author and Case Analysis. The author, Mr. Praveen
Pavani in the above-mentioned paper i.e. “Indian supreme court and worker oriented
industrial jurisprudence” has written an extensive paper in the domain of labor laws in our
country. The author works revolves around the concepts of jurisprudence of labour related
laws which even though regulates both the employers and employees but as per the practice
of these laws and based on various legislation and judicial pronouncements it is evident that it
is tilted more towards protecting the rights and interest of the employees i.e. the labour class
in the industries. The author in the article focuses on the idea of the “worker oriented
industrial jurisprudence”, in order to understand or fathom the true meaning of this, it is
pertinent to break down the term “worker oriented industrial jurisprudence”, jurisprudence is
a study which aims to understand the philosophy of law or the science behind the law which
is in effect. And the science behind law is based on a structure which is fixated on norms.
Norms are the benchmarks which answers questions relating to what is law, what all
constitutes ingredients of law and segregates the balance between the rights and liabilities
emerging from a law. Now, for the sake of this paper, “Industrial Jurisprudence” is relevant,
it means or it entails the norms which tend to regulate the relationships of people working in
the industry and it seeks to promote a culture which leads to management i.e. control and
distribution of the material resources in a just and fair manner1. The definition of industry
was laid down in case decided by Supreme Court of India, wherein, it held that an industry is
a device to produce goods and services which have essential roles in the society2. History and
the present and presumably has, have and will witnessed the conditions of the labour around
the world in india and abroad, it is ubiquitously accepted fact that the conditions of labour is
worse than what has been guaranteed to them like as enshrined under the Constitution of
India3 so that puts the work on the judiciary to uphold the rights of the labour class. So to
conclude with the meaning of worker oriented industrial jurisprudence, it can be defined as
the protection of the rights endowed on the labour working in industries, the protection is
1
Constitution of India, art. 39(b)
2
Bangalore Water Supply and Sewerage Board v. A. Rajappa, A.I.R. 1978 S.C. 548.
3
Constitution of India, art. 43A
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 offered the appropriate participation in relation to each and every process which is taken
during the industrial process and also the labour is to be remunerated in a just and principle
manner out of the profits that the company makes through the hard work of labour who
makes sure the output products is optimal from the very beginning of industrial process to the
end stage. The author has managed to bundle most of the cases decided by the Supreme
Court of India, which shows the predilection of the court to promote or advocate worker
oriented industrial jurisprudence or essentially judgments of Supreme Court of India which
tends to expound the principles of natural laws albeit principle of equality, right to have a
health and appropriated conditions of live at work and off work too
The Supreme Court of India, in order to promote the worker oriented industrial jurisprudence
have been interpreting the statutes relating to the labor laws in India, to bring about a nexus
between the employers and employers engaged in the industries in India. These statues4 deal
with a plethora of issues relating to the members of the industries such as, disputes existing
between the labor class and management in an industry, salary of the workers, insurance
coverages in case an accident occurs and results in the damage of the labor class or individual
labor, work conditions provided to the workers and lastly social security’s pertaining to the
safety of workers.
Supreme court in the case of Bangalore Water Supply and Sewerage Board5, dealt with the
issues relating to the definition and scope of the work “industry”6 as per the Industrial
Disputes Act, 1947m the present case was first rejected by the Karnataka High Court on the
ground that the worker employed in the sewage board of the city municipal corporation are
not working for an industry as under the statute of ID Act and therefore are not protected by
the realm of the act and further the worker union appealed before the Supreme court by a
special leave petition under art 136 of Constitution of India wherein the appeal was accepted
and the Supreme court interpreted the scope of the work “industry” by referring to the
earlier judgments relating to the present issue decided by supreme court and various high
court, the court held that sewage board do constitute as an industry under the meaning of
“industry” and also laid down certain test to identify what is an industry.

4
The relevant statutes are Industrial Disputes Act 1947, Minimum wages
1948, Equal Remuneration Act 1976, Payment of Bonus Act 1965, Payment of
Gratuity Act 1972, Workmen's Compensation Act 1923, Factories Act 1948,
Employees' Insurance' Act 1948, Employees' Provident Funds and Miscellaneous
Provisions
1952 and Maternity Benefit Act 1961.
5
Supra note 2

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S. 2(7).

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 1. Triple Test: Has to be a systematic activity with the cooperation of employers and
employees for the production of goods or services to satisfy human wants. This
excludes spiritual or religious wants, however material services provided by religious
establishments are included.
2. Absence of profit motive is irrelevant.
3. True test is functional test of activity that it is systematic with employee-employer
relationship.
4. Philanthropic aspects are to be ignored if they are not the predominant nature of the
establishment.
5. “Undertaking” must be given interpretation as given in D.N. Bannerjee Case.
6. If activity is fulfilling triple test, that is enough to prove that it is industry.
7. Dominant Nature Test: The predominant nature of activities of the establishment must
be looked into to decide whether the establishment is an industry. If this predominant
activity fulfils the triple test, then the entire establishment is an industry, although
employees not fulfilling ‘workmen’ definition will not benefit from it.

The court also enumerated various exceptions to the industry which are as

following: Sovereign regal functions

▪ A restricted category of establishments which have a very minimal and marginal amount of
employer-employee relationships which do not destroy dominant non-employee nature of the
establishment

▪ Persons ‘employed’ have come to the establishment for the furtherance of a cause; services
provided are free or at a minimal cost; there is no employer-employee relationship. So,
basically this case held that municipal corporations, hospitals, educational institutions, clubs,
solicitor firms and charitable institutions are all industries and overruled any past cases which
held the opposite. List of cases overruled:

1) Management of Safdarjung Hospital v. Kuldip Singh Sethi

2) Management of Hospital, Orissa v. Their Workmen
3) University of Delhi v. Ram Nath
4) Cricket Club of India v. Bombay Labour Union
5) Madras Gymkhana Club Employees’ Union v. Madras Gymkhana Club
6) National Union of Commercial Employees v. M.R. Mehar

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List of cases upheld:

1) D.N. Bannerjee v. P.R. Mukherjee

2) Baroda Borough Municipality v. Its Workmen
3) Corporation of City of Nagpur v. Its Employees
4) State of Bombay v. Hospital Mazdoor Sabha
5) Bombay Pinjrapole v. Their Workmen

The Supreme Court also interpreted the meaning of the word “Workmen” in the case of
Hussainbhai v. Alath Factory7 in a very liberal fashion to include as many people working in
the industry to get the benefit of the protection provided in the Industrial Dispute Act,1947.
The court in the above-mentioned case tried to cover the damage caused to the workers due to
the narrow interpretation of word “Workmen” in the case of Dharangadhra Chemicals Works
v. State of Saurashtra8 , in the Hussain Bhai case, the petitioner is Hussain Bhai who has a
factory which manufactures ropes, the petitioner entered into a contract with some
contractors which appointed the respondent workmen, the issue before the court was whether
these respondents are to be considered “Workmen” of the petitioner, the matter was first
heard by the labour tribunal which decided in the favour of the workmen and then heard by
Kerala High Court which also decided that the respondents are the workmen of Hussain Bhai,
now again an appeal was filed before the Supreme court of India, the supreme court held that
workmen are indeed the employees of Hussain Bhai, Justice Krishna Iyer laid down the test
to identify the scope of the term workmen as following:
Where a worker or group of workers labours to produce goods or services and these goods or
services are for the business another, that other is, in fact, the employer. He has economic
control over the workers' subsistence, skill and continued employment. If he, for any reason,
chokes off, the worker is virtually laid off. The presence of intermediate contractors with
whom alone the workers have immediate or direct relationship ex contractu9is of no
consequence when, on lifting the veil or looking at the conspectus of factors governing
employment we discern the naked truth, though draped in different perfect paper arrangement
that the real employer is the Management, not the immediate contractor10.

7
(1978) II Lab. L.J. 397 (S.C.).
8
(1957) 1 Lab. L.J. 477 (S.C.).
9
Actions Ex contractu are actions arising out of breaches of contract, express implied. See Mozley and Whitely,
Law Dictionary

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(1978) TI Lab. L.J. 397 (S.C.).

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 II. RESPONSE IN AGREEMENT WITH THE AUTHOR

The author in his extensive research paper “INDIAN SUPREME COURT AND WORKER
ORIENTED INDUSTRIAL JURISPRUDENCE” has followed a pragmatic approach in the
research paper, one can easily comprehend the intent of the author by reading the research
paper, the author intended to establish the nuanced principles from field of jurisprudence i.e.
worker oriented industrial jurisprudence was followed by the supreme court when it came to
handling cases which were in the domain of labour laws in the country, the author in order to
meet the objectives of his study used the help of numerous cases decided by the Supreme
Court of India which tend to be in the favour of the labour class in the industry in most cases
over the people who managed or had ownership over such industries, the Honourable Judges
of the Supreme Court have adopted numerous techniques from the Interpretation of Statutes
which helped in the cause of labour in the sense it tend to upscale the value given to the
labourers, the amount of freedom and other matters related to the industrial process. The
Supreme Court in innumerable cases concerning labour laws statutes in India have given
Broad and Liberal interpretation which effectively in most cases tend to protect the rights of
the labour in terms of free of association, working condition, duration of work and other
important issues pertaining to the labour in India

that even a person belong to non-legal fraternity will be able to appreciate the text and
comprehend the values ingrained in the supreme court judges which believe in rising the level
of the condition of living and work of the labourers in India with the international standards.
The author of this response paper candidly believes the points laid down by the author in his
research paper, that, even though, India is a signatory to almost all the fundamental
conventions governing labour laws internationally such as

 Freedom of Association and Protection of the Right to Organize Convention 1948

 Right to Organize and Collective Bargaining Convention 1949
 Forced Labour Convention 1930
 Abolition of Forced Labour Law Convention 1957
 Minimum Age Convention 1973
 Worst Forms of Child Labour Convention 1999
 Equal Remuneration Convention 1951
 Discrimination (Employment & Occupation) Convention 1958

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India has ratified number 4 to number 8 conventions from the abovementioned list. Others
need not be ratified as there already existed adequate provisions in India, concerning those
issues, these conventions were applied in our domestic laws by ratification to the protect the
rights of the labour which were evidently made mockery of by the industrialists however to
no avail as the punitive actions against such corporations or industries were very less which
only lead to give them more power to abuse the rights of the labourers. So, in effect the
legislations which were meant to protect to the rights of workmen in industries were proven
inefficient to fulfil the task for which it passed as a law by the parliament in the first place, in
order to do away with such incompetence, the supreme court is empowered to lay down its
interpretation of the statutes to comprehend the intention behind the legislation to decide the
issues before it. The supreme court in such cases were interpreting the case in a manner
which seem tilted towards the side of labours as the reason behind such inclination is simple,
since the labour of the country are the actual people who are effectively changing the
dynamics of a nations GDP which in effectively help the economy of our country, it the
labourers hard work and consistency at work which helps the citizens and other people in the
country to avail services which makes our lives easier, and even though after such intensive
works carried by them , the appreciation and the profits are drawn away by the industrialists
who literally does nothing but makes money of the other peoples hard work, so, that’s the
reason behind Supreme court supporting the labourers of country as they realize how
important are they to the nation and how badly are they treated in their workplace in the
sense what kind of atmosphere is provided for them to work in, is it even healthy
environment or not, for how long are the workers made to work , do the industrialist stick to
the contract or do they make the workers do work beyond their stipulated time. The author
has made a case study of cases decided by supreme court from 1978 to 83.whether in the
absence of any pleading orrequest by the employer, it is the duty of the labour court or
tribunal tocall Suomoto the employer to adduce additional evidence to justify thepenal
termination of service of a workman.

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 III. ARGUMENTS IN DISSENT WITH THE AUTHOR

An economic growth model that a country adopts has to have a clear notion of the basic
postulates of industrial relations (IR) as a facilitator. After Independence, India adopted the
static, import-substitution model of economic development. Economic planning, licensing,
foreign exchange rationing and regulation, and capital market regulation policies were
followed strictly so as to be aligned with the national priorities. Economic growth was
juxtaposed with "social justice" as an essential societal value. Many pieces of Indian labour
legislation have lost their relevance due to changes in the global and economic environment
and the onset of the intense competition. Research exists to testify that that perceived
rigidities in Indian Labour Law have been negatively impacting the development of the
Indian economy. The topmost concern of industry is the belief that too much of job security
promotes inefficiency and low productivity. It also reduces labour mobility that is necessary
condition for efficient working of firms in a competitive environment. The Industrial
Disputes Act envisages a conciliation-adjudication-arbitration model of industrial disputes
resolution. It empowers the appropriate government, in its discretion, to refer to an industrial
dispute for adjudication either on failure of conciliation or even without any resort to
conciliation. Among others, it provides for a dispute prevention mechanism the form of
works committee conciliation officers, board of conciliation and court of inquiry. After the
failure of the dispute to get resolved through the preventive mechanism, it can be referred, for
adjudication to a labour court or industrial tribunal, depending upon the nature and type of the
dispute
Initially, only disputes espoused by a trade union or substantial number of persons were
treated as industrial disputes, but later on, a provision for processing individual termination
(including dismissal, discharge or retrenchment) disputes was inducted in the ID Act, thus
treating some individual disputes as industrial disputes. The question was raised in the case of
Tata Chemicals Ltd v Workmen11 Here, it was held that a minority union could validly raise
an industrial dispute as Section 2(k) of the Act did not restrict the ambit of industrial dispute
only to a dispute between an employer and a recognized majority union.
The 2010 amendment to the ID Act is the latest. Among others, it has provided that for the
individual termination disputes the parties can directly approach the labour court, and no
reference is required for the same.

11
Supra note 14
13
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There is a provision for entering into conciliated settlement under Section 12(3)12, which has
wider application on all present and future workers of the organization till the settlement is in
operation. Section 11-A13 was inducted in the ID A at the behest of trade union leadership,
which claimed rampant victimization of the workmen by the employers. This had the effect
of making a labour court virtually a court of appeal in termination cases. In these cases, the
labour court could alter the punishment even if the workman is found guilty of misconduct.
The provision is seen as an obstruction to maintain discipline. It is argued that under this
section courts have many times exonerated delinquent workers or given much less
punishment to them even when they were found guilty of having committed a misconduct.
This can be best explained through the case of ere raised in Gujarat Steel Tubes Ltd. v.
Gujarat Steel Tubes Mazdoor Sabha14 wherein these following issues were decided:

1) Does illegality of strike per se spell unjustifiability?

2) Can the management dismiss strikers for participating in an illegal strike?

It was held that even if a strike be illegal, it cannot be castigated as unjustified unless the
reasons for it are entirely perverse or unreasonable - an aspect which has to be decided on the
facts and circumstances of each case. The Supreme Court citing socio-economic security
rejected the dismissal of the workers and hence no action could be taken against the rebelling
workers. The strike provisions of the IDA are provided in sections 22 to 25. Workers
employed in a public utility service cannot go on strike without giving s notice of at least 14
days, and before the day specified in the notice. But there is no such provision that obliges
workers to give strike notice in non-public utilities. They may even go on a lightning strike
instantaneously, and yet the strike would not be considered as illegal for not serving any
notice. Also, there is no provision in the India for conducting a strike ballot amongst workers.
Thus even a minority of workers can call a strike. Section 36 of the Act15 bans the presence
of lawyers in conciliation proceedings. It also restricts lawyers’ appearance before the
adjudicatory bodies. But a lawyer can be allowed to appear before the bodies if the other
party gives his consent to this effect. Section 9-A provides a notice of 21 days to be given by
the employer before making any change in service conditions of the workmen. This
provisionis also being contested by the industry as it restricts its flexibility, and finds it

12
Industrial Disputes 1947, s 12(3)
13
Industrial Disputes 1947, s 11A
14
Industrial Disputes 1947, s 36
15
Tata consulting Engineers v Workemen (1981) 2 Lab LJ 147 (SC)
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difficult to adjust the needs of the changing business environment. For, workers raise an
industrial dispute once such notice is given, which further restricts the employer’s flexibility.
The Trade Unions Act confers on workers the freedom to register a trade union subject to the
requirements of the Act. There is a provision for payment of subsistence allowance during the
suspension period while the domestic inquiry is being conducted against the worker.
In Tata Consulting Engineers v Workmen16 the Supreme Court upheld the decision of the
Labout Tribunal in allowing the Tribunal to unilaterally revising the wages of the aggrieved
labourers who were on strike. The Supreme Court defended its decision by saying that in
their opinion, it is elementary and fundamental to the jurisdiction of the Industrial Tribunal in
revising wage scales on ad hoc basis. Similarly in Workmen of Williamson Magor and Co
Ltd v Williamson Magor and co. ltd17 where junior clerks were given promotions superseding
senior clerks, the Industrial Tribunal had held that the promotions were illegal. On appeal, not
only the Supreme Court upheld the decision of the Tribunal but also asked the Tribunal to
make proper rules/norms with respect to the promotions of the employees. In the above
mentioned cases, it is humbly submitted that the Supreme Court empowering the tribunal to
unilaterally decide on the managerial affairs of the industries is a clear example of judicial
overreach.
In the year 2008, the Unorganized Sector Social Securities Act18 was introduced in which it
sought to identify the casual workers, industrial outworkers and contract based workers under
the ambit of the employee regulatory authority so as to enable them to avail regular income
and job related benefits. The Act binds the Central Government in giving the workers of the
unorganized sector the minimum benefits that they deserve and this has been proposed to be
done by identifying the people working in the unorganized sector and gives him/her a social
security number and a social security card which will solve all their problems. However the
law does not really identify or define what is actually social security. It is also not clear if the
Act intends to provide social insurance or social security as the terms are not identical but are
different. Further it is also not clear how the people who need to avail the benefits are to be
identified or in another sense what kind of establishments under the unorganized sector can
be actually recognized as beneficiaries to the Act.
Another process confronting the process of labour laws in India is the problem of finding
definite wages for definite time of work. Further the process of finding wages for the

16
Workmen of Williamson Magor and CO ltd v Williamson Magor and Co. Ltd (1982) 1 Lab LJ 33 (SC)
17
Unorganized Sector Social Securities Act 2008

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employees of the unorganized sector is also more of an ambiguous nature as consumption
rates and time undertaken by the workers in different occupations to perform different kinds
of work may vary from establishment to establishment. Hence uniform labour wage standards
is required to be devised which would ensure proper wages for every worker. Before
concluding, it is important to note in India where almost a substantial part of its population is
below the poverty line and still suffers from unemployment, the relationship between an
employer and employee is essentially that of the power bearer and the oppressed. Workers
even today, in the absence of comprehensive laws, have to work in exploitative conditions.
The problem with perhaps every law in India is that it is not really well-equipped with the
dual character of the Indian labour market.

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 IV. CASE ANALYSIS OF ONE OF THE CORE ISSUES IN THE PAPER

The Supreme Court, from time to time has interpreted labor law which was oriented for the
wellbeing of the employees.

‘The actions taken by the court in order to save the employees from deduction of their wages
in order for their employers to cut losses as well as the payment of their back-wages’ with
respect to the same- this is the core issue that was identified from the research paper.

1. MANAGEMENT OF THE BARARA COOPERATIVE MARKETING CUM PROCESSING SOCIETY LTD

V WORKMAN PRATAP SINGH

FACTS:

The present appeal assailed order passed by the High Court of Punjab, whereby the High
Court reinstated the respondent employee into service with back wages.
The issue that fell for consideration before the Supreme Court was whether the respondent is
entitled to claim re-employment in the appellant’s services in terms of Section 25 (H) of the
Industrial Dispute Act?
Here it would be relevant to mention that Section 25(H) of the ID Act provides that where
any workman is retrenched and if the employer proposes to employ any person then he shall
give opportunity to his retrenched workmen to offer themselves for re-employment.

JUDICIAL ANALYSIS:

 The Supreme Court while referring to the facts of the case and the underlying
statutory provision under Section 25(H) of ID Act held that no case was made out
by the respondent (workman) seeking re- employment in the appellant’s services on
the basis of Section 25 (H) of the ID Act and that Section 25(H) of the ID Act had
no application to the case at hand.
 The Apex Court held that Section 25(H) of the ID Act applies to the cases where
employer has proposed to take into their employment any persons to fill up the
vacancies. It is at that time, the employer is required to give an opportunity to the
“retrenched workman” and offer him re-employment and if such retrenched

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 workman offers himself for re-employment, he shall have preference over other
persons, who have applied for employment against the vacancy advertised.
 The Court further noted that the object behind enacting Section 25(H) of the ID Act
is to give preference to retrenched employee over other persons by offering them
reemployment in the services when the employer takes a decision to fill up the new
vacancies.
 That Section 25(H) of the ID Act is required to be implemented as per the
procedure prescribed in Rule 78 of the Industrial Disputes (Central) Rules, 1957
which, in clear terms, provides that Section 25(H) of the ID Act is applicable only
when the employer decides to fill up the vacancies in their set up by recruiting
persons.
 That in order to attract the provisions of Section 25(H) of the ID Act, it must be
proved by the workman that firstly, he was the “retrenched employee” and
secondly, his exemployer has decided to fill up the vacancies in their set up and,
therefore, he is entitled to claim preference over those persons, who have applied
against such vacancies for a job while seeking re-employment in the services.

Thus, the Supreme Court Bench in the case has held that the regularization of an
employee already in service does not give any right to retrenched employee so as to
enable him to invoke Section 25 (H) of the ID Act for claiming re- employment in the
services.

2. JAYANTIBHAI ROOJIBHAI PATEL V MUNICIPAL COUNCIL, NARKHED &ORS

FACTS:

In the Jayantibhai Case, the appellant was a headmaster at a government school, who was
served a show cause notice in February 1994 for alleged misappropriation of funds. An inquiry
was conducted by the Municipal Council, and the appellant was found to not be guilty of the
misconduct alleged. However, soon after, a second inquiry was conducted, despite the
appellant objecting to the conduct of the same. In course of this second inquiry, the appellant
was found guilty and his employment was terminated. The appellant filed a writ petition at the
High Court, challenging his removal. The High Court, by its judgment and order dated 12th
August 2014 quashed the order of removal of the appellant. Since the appellant had already
attained the age of superannuation, the High Court held that no back wages should be paid to
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the appellant for the period for which he had not rendered service. However, at the same time,
the High Court directed the disbursement of retiral benefits to the appellant, treating him to be
in continuity of service until the date of superannuation.It is with respect to the issue of non-
payment of back wages that the appellant approached the Supreme Court.

JUDICIAL ANALYSIS:

The Supreme Court agreed with the High Court in that a fresh appointment of an inquiry
officer could not have been made without recording reasons why the disciplinary authority
disagreed with the first inquiry report. However, the bench disagreed with the High Court's
stance that back wages should not be paid for the period for which the appellant had not
rendered service.
The bench relied on several cases which had already clarified the legal position regarding
payment of back wages:

 In the case of Hindustan Tin Works (P) Ltd v Employee] it has been held by a three-
judge bench of the Supreme Court that "...Full back wages would be the normal rule
and the party objecting to it must establish the circumstances necessitating

departure." The bench also observed that this ratio has been subsequently followed in
various decisions by the Supreme Court.
 In the case of Surendra Kumar Verma v. Central Government Industrial Tribunal-
cum-Labour Court, a three-judge bench of the Supreme Court stated that, "... Plain
common-sense dictates that the removal of an order terminating the services of
workmen must ordinarily lead to the reinstatement of the services of the workmen.
It is as if the order has never been, and so it must ordinarily lead to back wages
too...". It further held that only in exceptional circumstances the court may exercise its
discretion to deny the relief of full back wages, for example: when it would place an
impossible burden on the employer.

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