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Judgment
K. Chandru, J.—In all these 90 Writ Petitions, heard the arguments of Mr. S. Sanjay Mohan, learned Counsel appearing for M/s.
Ramasubramaniam and Associates and Mr. D. Hariparanthaman, learned Counsel appearing for the second respondents and Mr. K. Srinivasan
appearing for the third respondent and have perused the records.
In all these 90 Writ Petitions, the short question that arises for consideration is whether the prayer of the writ petitioner/Management seeking for
a restraint order against the Labour Court from proceeding with industrial disputes raised by the respective second respondents u/s 2A(2) of the
Industrial Disputes Act 1947 (for short I.D. Act) can be granted by this Court?
Since the issue raised in all these Writ Petitions are common, the petitioner is hereinafter referred to as the Management and the second
respondents are collectively referred to as the Workmen and the third respondent as the contractor.
The workmen were employed by the management and they were members of ""TAFE Employees Union"", which is a registered Trade Union.
These workmen were working under various capacities and they were claiming that they had put in six years of service. The Trade Union to which
they belong to, raised an industrial dispute u/s 2(k) of the I.D. Act seeking for permanency of their service on account of their having completed
480 days of service within a period of 24 calendar months in terms of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status
to Workmen) Act 1981. It is also their case that Provident Fund subscriptions were deducted by the management. Complaints were made to the
Labour Department when the Trade Union took up their cause of regularisation. It was stated by them that the management brought in a contractor
to make it appear that they were all the workmen of the contractor, thereby denying their right of regularisation and permanency. It is their positive
case that on 16.2.2005, a printed letter was sought to be obtained from them in order to make it appear that they have voluntarily gave statements
that they were working under the contractor and that they have been instigated by their Trade Union and they were always willing to work under
the contractor. When the workmen refused to sign under the dated line, it resulted in denial of employment.
Therefore, the matter was pursued before the Assistant Commissioner of Labour (Conciliation), Dindigul. The conciliation ended in failure and
its report dated 20.5.2005 was submitted to the Government. The said report contained several demands of the workmen. On the receipt of the
said report, the Government of Tamilnadu by G.O. D. No. 813 Labour and Employment dated 24.11.2006 refused to refer the dispute. With
reference to the demand No. 1, viz., that the workmen to be made permanent having worked for six years and also P.F. being deducted from the
salary. The Government stated that originally, the dispute was raised on behalf of 160 workers and thereafter, 127 workers were removed from
service and out of 127, 35 workers have signed settlement u/s 18(1) with the contractor and in respect of 92 workers, the Assistant Commissioner
of Labour has given a failure report u/s 2A(2) of the I.D. Act. Therefore, since the workmen''s non-employment was the subject matter of an
individual dispute, the dispute regarding their permanency can be raised after the disposal of the industrial dispute. In respect of the 8 demands for
which dispute was raised, the same reason was given by the Government.
Aggrieved by the said order, the trade union to which the workmen belonged has filed a Writ Petition being W.P. (MD) No. 6111 of 2007 and
the matter has been admitted and notice has been ordered to the Government and the Management and the matter is sub-judice.
In the mean while, even before the declining of that reference, the workmen have individually raised a dispute for which failure report has been
given by the Conciliation Officer and on the strength of the same, the workmen have filed individual claim statements before the first
respondent/Labour Court u/s 2A(2). The disputes have been taken on file by the Labour Court and different I.D. Numbers have been assigned to
all those 90 cases and notices have been ordered to the management and the contractor. The management instead of filing a counter statement in
respect of the disputes individually raised by the workmen have chosen to file the present Writ Petition with a prayer that this Court under Article
226 of the Constitution should issue a Writ of a nature of Mandamus forbearing the first respondent/Labour Court from proceeding with the
adjudication of the disputes raised by the workmen.
When questioned as to how such a Writ in the nature of Mandamus will lie against a constituted Labour Court and that too, against a
proceedings initiated by a workman u/s 2A(2) of the I.D. Act. Learned Counsel for the management submitted that this Court can mould the relief
and actually the prayer is one of Writ of Prohibition against the Labour Courts from proceeding with the disputes. An attempt to clutch on to any
jurisdiction can be thwarted by a Writ of Prohibition.
Thereafter, the learned Counsel for the management submitted that the petitioner management is not the employer in respect of the workmen
concerned in the disputes and the real employer is the third respondent contractor and therefore, the workmen cannot make any claim in respect of
the management. He also submitted that once a dispute u/s 2A(2) is raised, the workmen must choose a particular employer for making a
grievance. But based on the plea that the term of the appointment that they had with the contractor is sham and nominal and therefore, the relief
should be given against the principal employer cannot be a subject matter of adjudication u/s 2A(2) and the Labour Court will have no jurisdiction
in such a matter because such a dispute will fall u/s 2(k) and not under 2A(2) of the I.D. Act.
The learned Counsel brought to the notice of this Court, the judgment of the Supreme Court reported in 2007 (4) L.L.N. 99 Bharat Heavy
Electricals Ltd. v. Anil and Ors. After referring to para 13 and in light of the said observation, he submitted that the Writ is maintainable and this
Court should restrain the Labour Court from proceeding with the dispute. It is therefore necessary to quote the said passage:
Para 13: ...There is a difference between an individual dispute which is deemed to be an industrial dispute u/s 2A of the said 1947 Act on one hand
and an industrial dispute espoused by the union in terms of Section 2(1) of the said 1947 Act. An individual dispute which is deemed to be an
industrial dispute u/s 2A concerns discharge, dismissal, retrenchment or termination whereas an industrial dispute u/s 2(1) covers a wider field. It
includes even the question of status. This aspect is very relevant for the purposes of deciding this case. In the case of Radhey Shyam and Anr. v.
State of Haryana and Anr. 1999 (2) L.L.N 497, it has been held after considering various judgments of the Supreme Court that Section 2A
contemplates nothing more than to declare an individual dispute to be an industrial dispute. It does not amend the definition of industrial dispute set
out in Section 2(k) of the Industrial Disputes Act, 1947 (which is similar to Section 2(1) of the said 1947 Act). Section 2A does not cover every
type of dispute between an individual workman and his employer. Section 2A enables the individual worker to raise an industrial dispute,
notwithstanding, that no other workmen or union is a party to the dispute. Section 2A applies only to disputes relating to discharge, dismissal,
retrenchment or termination of service of an individual workman. It does not cover other kinds of disputes such as bonus, wages, leave facilities
etc.
Thereafter, the learned Counsel referred to the observation made in para 15 in the same judgement. As a dispute by the Union had already
been raised for which reference has been refused by the Government, will operate against the workmen as an estoppel.
When it was pointed out that the said order of reference is under challenge and it had not become final, yet the learned Counsel submitted that
notwithstanding the fact that the trade Union has raised a dispute by stating that the contract was not genuine and it is sham and nominal. The
workmen are bound by the action of their Trade Union and they have no separate right to raise any individual dispute. In such a situation, an
individual worker has no say in such matter and the judgment in Bharat Heavy Electricals Ltd.,''s case (cited supra) will apply in all four corners.
The learned Counsel further relied on the judgment of the Supreme Court reported in ANZ Grindlays Bank Ltd (now known as Standard
Chartered Grindlays Bank Ltd.) Vs. Union of India (UOI) and Others, and referred to para 13 which is as follows:
Para 13 : Mr Bhat, learned Counsel for the second respondent, has submitted that this Court should not interfere with the order of the Central
Government making a reference u/s 10 of the Act, as the appellant can ventilate its grievances before the Industrial Tribunal itself and if the decision
of the Tribunal goes against the appellant, the same may be challenged in accordance with law. According to learned Counsel the writ petition is
premature as the appellant has got a remedy before the Tribunal to show that the reference is either bad in law or is uncalled for. We are unable to
accept the submission made. It is true that normally a writ petition under Article 226 of the Constitution should not be entertained against an order
of the appropriate Government making a reference u/s 10 of the Act, as the parties would get opportunity to lead evidence before the Labour
Court or Industrial Tribunal and to show that the claim made is either unfounded or there was no occasion for making a reference. However, this is
not a case where the infirmity in the reference can be shown only after evidence has been adduced. In the present case the futility of the reference
made by the Central Government can be demonstrated from a bare reading of the terms of the reference and the admitted facts. In such
circumstances, the validity of the reference made by the Central Government can be examined in proceedings under Article 226 of the Constitution
as no evidence is required to be considered for examining the issue raised.
Therefore, the learned Counsel submits that this Court can go into the claim made by the workmen and decide whether the relief sought for by
the workmen can be granted by the Labour Court and in the absence of its jurisdiction, the Court must restrain the Labour Court from proceeding
with the reference.
Finally, the learned Counsel relied upon the judgment of the Supreme Court in Steel Authority of India Ltd. and Others etc. etc. Vs. National
Union Water Front Workers and Others etc. etc., and drew the attention of this Court to para 120, which is as follows:
Para 120 : We have also perused all the Rules and forms prescribed thereunder. It is clear that at various stages there is involvement of the
principal employer. On an exhaustive consideration of the provisions of the CLRA Act we have held above that neither they contemplate creation
of direct relationship of master and servant between the principal employer and the contract labour nor can such relationship be implied from the
provisions of the Act on issuing notification u/s 10(1) of the CLRA Act, a fortiori much less can such a relationship be found to exist from the Rules
and the forms made thereunder.
On the strength of the above, the defence is that on a analysis of the Contract Labour Regulation Abolition Act did not contemplate creation of
direct relationship of master and servant between the principal employer and the contract labour and no such relationship can be implied from the
provisions of the Act.
Therefore, the learned Counsel submitted that either workmen raise a dispute u/s 2(k) contending that the contract is sham and nominal or that
they should seek for abolition of contract labour in terms of the provisions of the Contract Labour Act.
Per contra, the learned Counsel Mr.D. Hari Paranthaman contended that this Court under Article 226 of the Constitution shall not interfere
with the dispute raised u/s 2A(2) of the I.D. Act before the 1st respondent/Labour Court and the workmen have got an excellent case before the
Labour Court on evidence. The learned Counsel also submitted that in industrial proceedings, a Writ Petition even before the issue could be
adjudicated by an appropriate Labour Court is not warranted by invoking the extra-ordinary jurisdiction vested on this Court. Further, he also
submitted that they are seeking for any abolition of contract labour or that they are seeking for any regularisation but it is a positive case of
termination by the management and they have nothing to do with the third respondent contractor. All along their case was that they had worked for
six years in their respective posts and Provident Fund contributions have also been recovered and it is only when the Trade Union sought for
permanency, the contractor was sought to be inducted into as it has been resisted by the workmen, it finally resulted in their non-employment.
He also relied upon the judgment of this Court in The Management of Blue Dart Aviation Limited Vs. Government of India and Others,
(rendered by me) where this Court has held that the burden of proof as to real employer lies on the workmen. Therefore, the management is not
put to any prejudice in the dispute being continued and by the self-imposed restriction, this Court should not thwart a proper adjudication of an
industrial dispute. He also submitted that the Government''s order declining to refer was illegal and the Trade Union had already challenged the said
denial in a separate Writ petition and denial of reference cannot estop the individual workman from raising a dispute.
In any event, the said refusal to refer the dispute cannot operate as a res judicata in an individual dispute being agitated. The learned Counsel
sought to place reliance upon a judgment of a Division Bench of this Court presided over by K.G. Balakrishnan, C.J., (as he then was) in W.A.
(MD) No. 189 of 2000 dated 10.2.2000 in Thanthai Periyar Transport Corporation Ltd., rep. by its Managing Director, Villupuram v. 1. M.
Lakshmanan and 2. The Presiding officer, Industrial Tribunal, Madras - 600104, wherein this Court held that declining to refer the dispute u/s 10
cannot be a bar for the workmen to pursue a complaint u/s 33A of the I.D. Act. Therefore, he pleaded for dismissal of the Writ Petitions.
Mr. K. Srinivasan, learned Counsel for the contractor orally submitted that some of the workers have entered into compromise and no relief
need be given to them. However, no memo showing the existence of any compromise had been filed before this Court. In any event, if that is the
arrangement between some of the second respondent/workman and the third respondent and if their demands are satisfied, the same can be
produced before the Labour Court. This Court is not going into that issues at the present juncture.
Before proceeding to deal with the rival contentions, it is necessary to trace the history of Section 2A of the I.D. Act. Section 2A of the I.D.
Act was introduced by the Parliament by the amendment made by Act 35 of 1965. Section 2A reads as follows:
2-A. Dismissal, etc., of an individual workman to be deemed to be an industrial dispute - Where any employer discharges, dismisses, retrenches or
otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or
arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other
workman nor any union of workmen is a party to the dispute.
Before the introduction of Section 2A, an individual worker has to rely upon the support of the Trade union and other fellow workers to have
his non-employment adjudicated by the Court. After the introduction, an individual dispute can be raised by a worker without other workers
supporting his case or not. Therefore, an exception has been carved out from the definition of industrial dispute given u/s 2(k) of the I.D. Act. Even
after the introduction of Section 2A still one were made to go through the process of conciliation. Reference has to be made for adjudication by the
appropriate Government u/s 10(1) of the I.D. Act.
As it imposed a cumbersome procedure, the Tamil Nadu State Legislature has amended Section 2A and added Sub-section (2), by the
T.N.Act 5 of 1988 with effect from 1.11.1988. The Section 2A(2), which is applicable to the State of Tamil Nadu, reads as follows:
(2) Where no settlement is arrived at in the course of any conciliation proceeding taken under this Act in regard to an industrial dispute referred to
in Sub-section (1), the aggrieved individual workman may apply, in the prescribed manner, to the Labour Court for adjudication of such dispute
and the Labour Court shall proceed to adjudicate such dispute, as if, such dispute has been referred to it for adjudication and accordingly all the
provisions of this Act relating to a adjudication of industrial disputes by the Labour Court shall apply to such adjudication.
Therefore, an industrial dispute with reference to the individual non-employment has undergone radical departure from the traditional concept
of industrial dispute. Now in any case of non-employment can be raised without the support of the Union and without there being any reference by
the appropriate Government. A worker can move the Labour Court/Tribunal as a matter of right. More or less the Labour Courts have now been
vested with an original jurisdiction without any technicalities attached to the same. This power of Labour Court to deal with an individual dispute
arose from the fulfilment of an obligation imposed by the international convenants and pursuant to the resolution made by the International Labour
Organisation (ILO) vide its resolution No. 119 (1963) by which member countries have agreed to create a mechanism by which in case of
dismissal, discharge or termination of workmen must have an approval by a third party neutral arbitrator.
In the light of the development of law, today, an industrial worker in case of non-employment can move the Labour Court without there being
any obstacle in law. Once such a petition is filed and the Labour Court issues notice, it is incumbent upon the management to enter appearance and
put-forth their stand in defence. Even if it goes to the root of the matter, it is necessarily for the industrial adjudicator such as the Labour Court to
deal with it and the Labour Court will have to pass an Award in terms of the contentions of parties.
The Preamble to the Industrial Disputes Act makes it clear that it has only two methods of resolving a dispute - one by conciliation and the
other by adjudication. Therefore, when the conciliation having failed, the only other method by which an industrial dispute can be resolved is by
adjudication and the present attempt by the management even to thwart such a process of adjudication can never be entertained by the Courts.
In the present case, the arguments on behalf of the petitioner/management that they are not the employer, is not an issue purely based upon
law. Even if it is a jurisdictional issue, the said issue cannot be decided based upon affidavits only. When the necessary statements are before the
Labour Court, only when it records a finding the fact upon which a legal premises can be built. Without such a foundation, the High Court under
Article 226 of the Constitution cannot interdict the proceedings which are otherwise validly instituted.
The submission that the petitioner/management is not the employer and that the third respondent contractor is the employer cannot be decided
on the basis of affidavit jurisdiction. On the other hand, it is a positive case of the workmen that it is the petitioner/management who is their
employer. Even before the Conciliation Officer, the third respondent who filed a counter statement had only contended that they have been unjustly
impleaded and they should be let off from the proceedings.
In the absence of the management filing a counter statement in respect of the pending dispute, the Court is unable to take up the Writ Petition
and decide the question of law and facts. Even though the learned Counsel for the management relied upon the judgment of Bharat Heavy
Electricals Ltd''s case (cited supra), it must be stated that in the present case, the workmen are not claiming that the contract being sham and
nominal but their positive case is it is the management who is their employer and their non-employment should be resolved.
It must be pointed out that the Supreme Court in Gujarat Electricity Board, Thermal Power Station, Ukai Vs. Hind Mazdoor Sabha and
Others, has held in para 53(ii), which reads as follows:
53(ii) If the contract is a sham or not genuine, the workmen of the so-called contractor can raise an industrial dispute for declaring that they were
always the employees of the principal employer and for claiming the appropriate service conditions. When such dispute is raised, it is not a dispute
for abolition of the labour contract and hence the provisions of Section 10 of the Act will not bar either the raising or the adjudication of the
dispute. When such dispute is raised he industrial adjudicator has to decide whether the contract is a sham or genuine. It is only if the adjudicator
comes to the conclusion that the contract is a sham, that he will have jurisdiction to adjudicate the dispute.
In Steel Authority of India Ltd. case cited supra, the Supreme Court gave a direction in paragraph No. 125(5), which reads as follows:
Para 125 : (5) On issuance of prohibition notification u/s 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an
industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the
question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or
for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/camouflage to evade compliance with
various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere
camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the
services of the contract labour in the establishment concerned subject to the conditions as may be specified by it for that purpose in the light of
para 6 hereunder.
Therefore, placing reliance upon the Bharat Heavy Electricals Ltd., case is inappropriate. In the present case, it is not as if the workmen are
clamouring for any new status but it is a positive case of non-employment. Further, reliance upon the ANZ Grindlays Bank Ltd.''s case (cited
supra), it must be seen that the very passage quoted above that in a case of reference u/s 10(1), the Court as the materials are before the
Government can find out whether such a decision of the Government was based on objective materials placed before the Government before
making a reference.
The present case is not one of reference u/s 10(1) of the I.D. Act and it is a case where the workmen had direct access to go to the Labour
Court as matter of right.
The other argument that the reference has been declined by the Government and it will be an estoppel, it must be stated that it is also under
challenge by the Trade Union in a separate Writ proceedings.
In any event, the principle laid down in Thanthai Periyar Transport Corporation Ltd.,''s case (cited supra), rendered on behalf of the Division
Bench by K.G.BALAKRISHNAN, C.J., (as he then was) in W.A. (MD) No. 189 of 2000 dated 10.2.2000 is more appropriate. In para 8, the
then Chief Justice had observed as follows:
Para 8 : Making complaint for contravention of the provisions u/s 33(2)(b) of the said act by the appellant is a statutory right to an employee, and,
merely because the Government refused to refer the matter to the Tribunal exercising powers u/s 10 of the said Act, exercising such a right by the
employee u/s 33A of the said Act cannot be denied.
With regard to the contention that even assuming that the management has made a wrong prayer and that this Court can mould the relief, as
this Court has taken a view that due to self-imposed restriction made on this Court, the Court should not interdict any process of adjudication even
before it can reach its finality. In fact, the Supreme Court had in more than one occasion has held that the Court should not entertain petitions at the
threshold and decide preliminary issues.
The Supreme Court in D.P. Maheswari v. Delhi Administration AIR 1984 SC 153, it has been held as follows (at pp.426 and 427 of LLJ)
It was just the other day that we were bemoaning the unbecoming devices adopted by certain employers to avoid decision of industrial disputes on
merits. We noticed how they would raise various preliminary objections, invite decision on those objections, invite decision on those objections in
the first instance, carry the matter to the High Court under Article 226 of the Constitution and to this Court under Article 136 of the Constitution
and delay a decision of the real dispute for years, some times for over a decade.
...
There was a time when it was thought prudent and wise policy to decide preliminary issues first. But the time appears to have arrived for a reversal
of that policy. We think it is better that Tribunals, particularly those entrusted with the task of adjudicating labour disputes where delay may lead to
misery and jeopardise industrial peace, should decide all issues in dispute at the same time without trying some of them as preliminary issues. Nor
should High Courts in the exercise of their jurisdiction under Article 226 of the Constitution stop proceedings before a Tribunal so that a
preliminary issue may be decided by them. Neither the jurisdiction of a High Court under Article 226 of the Constitution nor the jurisdiction of this
Court under Article 136 may be allowed to exploited by those who can well afford to wait by dragging the latter from Court to Court for
adjudication of peripheral issues, avoiding decision on issues more vital to them. Article 226 and Article 136 are not meant to be used to break the
resistance of the workmen in this fashion. Tribunals and Courts who are requested to decide preliminary questions must therefore ask themselves
whether such threshold part-adjudication is really necessary and whether it will not lead to other woeful consequences. After all Tribunals like
Industrial Tribunals are constituted to decide expeditiously special kinds of disputes and their jurisdiction to so decide is not to be stifled by all
manner of preliminary objections and journeyings up and down. It is also worthwhile remembering that the nature of the jurisdiction under Article
226 is supervisory and not appellant while that under Article 136 is primarily supervisory but the Court may exercise all necessary appellate
powers to do substantial justice. In the exercise of such jurisdiction neither the High Court nor this Court is required to be too astute to interfere
with the exercise of jurisdiction by special Tribunals at interlocutory stages and on preliminary issues.
At the moment, there are no rival pleadings before this Court and only the claim statement made by the Workmen is placed on record in the
form of typed set of papers. This Court cannot on the basis of averments made by the management in the affidavit construe them as its defence
before the Labour Court. It can only be adjudicated by the appropriate forum. If there any wrong assertions made in the counter statements it may
be brought out during the process of adjudication. Because u/s 11(3), the Labour Court has power of a Civil Court when trying a civil suit. Section
11(3) of the I.D. Act reads as follows:
Procedure and power of conciliation officers, Boards, Courts and Tribunals - (1)...Omitted....
(2)...Omitted....
(3) Every Board, Court Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Code of
Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters, namely:
(a) enforcing the attendance of any person and examining him on oath;
(b) compelling the production of documents and material objects;
(c) issuing commissions for the examination of witnesses....
Therefore, if any attempt is made to stall a properly laid claim before the Labour Court, it will not only result in unjust encroachment at the
powers of the Labour Court which after the T.S. State Amendment of 1998 has given plenary powers to Labour Courts in dealing with the dispute
of non-employment.
The prayer for issuance of a Writ either in the nature of Mandamus or Prohibition will not apply to an original jurisdiction. Unless a strong case
is made out, the Court need not take up the task of entertaining Writ Petitions on the basis of affidavit jurisdiction. In fact,the Labour Courts are
best suited to deal with them as the Labour Courts not only can receive documents in evidence but also can let in oral evidence and appreciate the
factual matrix of the case involved. No prejudice will be caused to the mighty-management in facing the trial. Unnecessarily, the adjudication has
been stalled for more than one year. Had the dispute been allowed to go for a logical end, the dispute itself would have been over by now. If the
management has an excellent case, then it is for them to plead such of those defences which are available to them both under law and on facts and
bring the disputes to their finality.
Even in the Bharat Electricals Ltd.,''s case (cited supra), the Supreme Court decided the legal issues upon the validity of adjudication by a
Labour Court and it is not an authority to forestall a dispute even before its conclusions.
Under the circumstances, the Writ Petitions will stand dismissed. Consequently, interim stay already granted will stand vacated and the
connected Miscellaneous petitions are closed. However, the parties will have to bear their respective costs.
As the matter is already one year old and considering that the issue in all 90 matters are identical, the Labour Court is directed to dispose of
the matter after notice to both the parties within a period of six months from the date of receipt of copy of this order on merits including the
preliminary objection raised by the management.