AN ANALYSIS ON DISCRETIONARY POWER OF ADJUDICATORY BODIES UNDER SECTION 11A OF INDUSTRIAL DISPUTES ACT, 1947 BY - ILAMPARI. M, VARSHA. M AND HEMEENA WISE CHRISTY. M. H
AN ANALYSIS ON DISCRETIONARY POWER OF ADJUDICATORY
BODIES UNDER SECTION 11A OF INDUSTRIAL DISPUTES ACT, 1947
Author
: ILAMPARI. M
Co-Author
: VARSHA. M
Co-Author
: HEMEENA WISE CHRISTY. M. H
Designation:
II Year LL.M (Labour and Administrative Law)
Affliliation:
Tamil Nadu Dr. Ambedkar Law University , SOEL
E mail
Id - m.ilampari@gmail.com
Contact
No.- 7338801709
ABSTRACT:
“Absolute
Power, Corrupts Absolutely”. It is a well known principle that whenever a body
is vested with a discretionary power, they have a tendency to use that
discretionary power in the arbitrary manner. Discretion when exercised
arbitrarily will be essentially considered as going against the concept of Rule
of Law. So, it is necessary to not vest any bodies, especially bodies that
exercise a quasi-judicial function with excessive discretionary power. But the
provision of Sec.11A of Industrial Dispute Act, 1947 which was inserted via
amendment of 1971, vests the adjudicatory bodies under the act with a
discretion to reinstate a discharged or dismissed employee if they are
satisfied that the order of termination is unjustified. In this paper, we are
going discuss about the scope of discretion given to adjudicatory bodies, how
the adjudicatory bodies use such discretion, what are the grounds on which they
exercise such discretion and what are the controls available to prevent such
unbridled discretion.
This paper is made on Doctrinal
Research Methodology with the help of statutes, text books, articles and
judicial pronouncements.
Keywords
: Discretion, Arbitrariness, Labour Court, Review, Proportionality
I. INTRODUCTION
Industrial
Dispute Act, 1947 was enacted with a view to solve the industrial disputes that
arise between the employer and employee on various matters. Originally, the act
didn’t have any provisions for adjudication. It has provided mechanism for
dispute resolution only via conciliation and works committee. But it was soon
realized that the conciliation machinery are not very satisfactory to put an
end to an industrial dispute and maintain the industrial peace. The need for a
adjudicatory body to deal with the industrial dispute was felt and a three tier
system of adjudicatory bodies was introduced via amendment of 1956.[1]
The jurisdiction of all three adjudicatory bodies were clearly demarcated in
that amendment. The amendment also provided for the insertion of schedules
which deals with the subject matter of the adjudicatory bodies.
II. ADJUDICATORY BODIES UNDER THE ACT
There
are three adjudicatory bodies under the act. They are:
I.
Labour Court
II.
Industrial Tribunal
III.
National Tribunal
Labour Court
Labour Court
is vested with the power of adjudication the matters given under 2nd
Schedule of the Act. Those matters include but not limited to, Legality of an
order passed by an employer under the Standing Order, Application and
Interpretation of Standing Order, Discharge or Dismissal of workmen etc.[2]Apart
from this, the labour court also has power to decide any matter falling in the
3rd schedule if it affects less than 100 workmen.[3]
Industrial Tribunal
Industrial
Tribunal is constituted by the appropriate government by a way of notification
in the official gazette.[4]
Industrial Tribunal is vested with power to deal with matters specified in 2nd
schedule as well as 3rd Schedule. The matters enumerated in 3rd
schedule include but not limited to Wages, Allowances, Leaves, Bonus, Profit
Sharing etc.
National Tribunal
Sec.7B of the
act deals with National Tribunal. Compared to other two adjudicatory bodies,
National Tribunal has only limited Jurisdiction. National Tribunal shall have
jurisdiction in cases where the central Government is of opinion that the
dispute involves a question of national importance or the dispute is of such
nature that the industrial establishment situated in more than one state are
likely to be interested or affected by the dispute.
III. POWER OF ADJUDICATORY BODIES AS TO REINSTATEMENT
Position
prior to the 1971 Amendment
It is very
much necessary to understand the position prior to the amendment to fully
realize the scope of discretion vested with the adjudicatory bodies post
amendment. Prior, to the amendment, the situation was entirely different. The
interference of the adjudicatory bodies on the decision of the management to
discharge or dismiss the employee was kept at bare minimum. The Apex Court, in
the case of Indian Iron & Steel Co. Ltd v. Workmen[5],
has provided the limits of interference by the adjudicatory bodies on the
matter of managerial discretion. It was held in that case that the adjudicatory
bodies cannot act as a court of appeal and they can only interfere on the
following grounds:
i.
When there is a want of good faith
ii.
When there is a victimization or
Unfair Labour Practice
iii.
When the Management has been guilty
of error or violation of principles of natural justice
iv.
When the finding is completely
baseless or perverse
So,
unless and until the case falls on any one of the above mentioned grounds, the
adjudicatory bodies will not have power to interfere with decision of the
employer. This position was again reiterated in the case of Ritz Theater
Private Ltd. v. Their Workmen[6],
where it was held that, the adjudicatory body
will derive the jurisdiction to deal with the dispute, only when the
domestic enquiry which resulted in discharge or dismissal was not held properly
or no enquiry was held.[7]
Position Post 1971 Amendment
By the start
of 1970, the judicial pronouncements have started to show a pro-labour stance.
The government on the other hand realized that the power of adjudicatory body
is limited and there is a need to vest them with power to set aside the order
of discharge or dismissal of the employee and order reinstatement whenever
necessary. To meet this end, Sec.11A was inserted via an amendment and the
above mentioned reason was provided as the statement of object to the amendment
bill. The amendment vested the adjudicatory bodies with the power to set aside
the order of discharge or dismissal and direct reinstatement of the workman, if
it is satisfied that the order of discharge or dismissal is not justified. The
adjudicatory body also has power to give such other relief as it deem fit.
Essential Ingredients for Sec.11A
So, to
provide relief under Sec.11A , following conditions has to be satisfied. They
are:
i.
There must be an industrial dispute
relating to discharge or dismissal of the workman,
ii.
Such industrial dispute must have
been referred to any of the adjudicatory bodies.
iii.
The adjudicatory body must have come
to the conclusion that the order of dismissal or discharge is not justified.
It
must also be noted that, while proceeding under this section, the adjudicatory
body has to only rely upon the materials on record and they cannot take any
additional evidence.[8]
IV. SCOPE OF DISCRETION UNDER SEC.11A
From
the bare reading of the provision, we can clearly see that the adjudicatory
bodies have been vested unfettered, unbridled and unconditional discretionary
power to reinstate the discharged or dismissed workman. To understand how this
discretion is exercised, we have to analyze the grounds on which the
adjudicatory bodies interfere with the order of dismissal and order
reinstatement.
GROUNDS ON WHICH DISCRETION IS EXERCISED
1)Doctrine of Proportionality
Doctrine of
Proportionality is a doctrine owes its origin to Administrative Law. According
to the doctrine, the punishment imposed must be proportionate to the offence
committed by the employee. So , on this ground, the adjudicatory bodies tends
to interfere and order reinstatement of the dismissed workman. In the case of P
Orr & Sons v. LC[9],
the workman was dismissed for theft of oil tin worth 30p. For this, order
of termination was passed against the workman. This order of dismissal was set
aside on the ground that it was disproportionate to the offence committed by
the workman, especially considering the fact that the workman has put in 24 yrs
of service with no priors. So, the workman was reinstated in this case.
Similarly, in the case of P.Rajanna
v. LC[10],
aa driver was terminated for being found in drunken state in his rest seat,
after the completion of his journey. The employer has passed the order of
dismissal, which was reversed by the labour court on the ground that it was not
proportionate to the misconduct committed by the workman.
2)Principle of Fairness and Improper Enquiry
As stated in Indian
Iron & Steel case, when the order of dismissal is passed with no regard to the principles of
natural justice, then that order of dismissal is liable to be set aside by the
adjudicatory body. In the case of Ramprasad Ambaram Verma v. Presiding Officer,
Industrial Court[11],
the standing orders of the company provided that the employee, in case of
any misconduct cannot be terminated without providing a warning, one severe
warning and one suspension. But in the case in hand, the workman was dismissed
directly from frequent absence. This was held to be violative of principle of
fairness and the order was set aside and the tribunal ordered for
reinstatement. Similarly, in the case of Management of English Electric
Company of India Ltd. v. Presiding Officer, Labour Court, the conductor who
was discharged was found not guilty on two out of three major charges. The
third charge which is essentially a failure on his part to give explanation was
taken as a ground to pass an order of termination. In this case, the labour
court interfered and ordered reinstatement on the ground that failure of explanation did not itself
constitute a misconduct meriting punishment.
3)Principle of Uniformity
When a
workman is discharged or dismissed, he has a right to have a fair hearing and
equal treatment to that of the other employees. If there is a lack of
uniformity or discrimination by the employer in order of dismissal, then such
order is liable to be set aside. This ground is mostly invoked in the cases of
mass dismissal owing to a strike or a gherao. In the case of Northern Doors
Tea Co. v. Workmen[12],
the labour court has set aside the order of dismissal on the ground of
discrimination. It ordered for reinstatement, holding that “ Imposition of
penalty on some workmen out of many is irrational and Unreasonable
discrimination, if no special reason is given as to why some alone were picked
for punishment and particularly when evidence did not specifically bring home
the charge of incitement and no clear distinction could be made between the
workmen dealt with and the very large number of workmen who had been taken back
into service although they participated in illegal strike”
SITUATIONS IN WHICH DISCRETION CANNOT BE EXERCISED
Even though
the adjudicatory bodies are conferred with absolute discretion under the Act,
they don’t tend to use that discretion to their whims and fancy. On certain
situations, they restrain themselves from interfereing with the order of
dismissal passed by the employer. Even if they exercise their discretion and
order for reinstatement, there are certain instances where the courts have
interfered and set aside the order of reinstatement. Some of those Instances
are:
1)No Reinstatement on Sympathetic Grounds
When an
employee has been terminated from the service and the dismissal is proper and
justified, the adjudicatory bodies cannot provide reinstatement on the
sympathetic grounds. In the case of Ashok Leyland v. Presiding Officer,
Labour Court,[13]
the workman was dismissed for assaulting his departmental head. The labour
court in this matter has ordered for reinstatement on the sympathetic grounds.
Interfering in the order of reinstatement, the High Court held that, the award
of labour court, ordering reinstatement on sympathetic ground is perverse and
cannot be sustained. Similarly, in the case of Janathan Bazar v. Secretary[14],
it was held that when the misappropriation of money is proved, whatever the
amount may be, the workman cannot be reinstated on the sympathetic ground.
2)No reinstatement for offence involving Moral
Turpitude
The
Judicial trend shows that, when a workman is terminated for an offence
involving moral turpitude, the adjudicatory bodies have always shown a degree
of caution and restraint while ordering reinstatement. In the case APSRTC v. Raghuda Siva Shankara Prasad[15],
an employee of the Corporation was found guilty of involving in committing
theft of property of the Corporation. The employee also admitted his guilt. The
act of theft, being a serious misconduct and an offence involving moral
turpitude, there was nothing wrong in the Corporation losing confidence in such
an employee and the awarding punishment of removal from service. The labour
court too held the same view, and held that the removal from service was proper
after taking into consideration of entire facts and circumstances of case.
Similarly, in the case of PGIMER
v. Labour Court[16],
the chowkidar of ladies hostel was terminated for causing nuisance under
the influence of alcohol by undressing himself at the canteen beyond the duty
hours. He was terminated by the employer and such order of dismissal was upheld
by the labour court on the ground that the offence committed by the workman is
of serious moral turpitude and he is liable to be terminated.
3)No Reinstatement when the punishment is proportionate
When the punishment imposed on the workman
is proportionate to the offence committed, then the adjudicatory bodies tends
to refrain from ordering reinstatement. But again, it must be noted that,
deciding whether the punishment is proportionate or note is solely on the
prerogative of the adjudicatory bodies. For instance, In the case of Bangalore
Hospital v. Workmen[17],
seven workmen were dismissed for going on an illegal strike causing serious
hardships to patients .The labour court, having recorded a finding that the
workmen resorted to an illegal strike, nevertheless ordered reinstatement on
the ground that no untoward incident happened due to the strike. Quashing the
order of the labour court,the Karnataka High Court held that merely because no
untoward incident happened, the dismissal could not be held to be
disproportionate.
Similarly, in the case of IMH
Press v. Additional IT,[18]
it was held that, when a workman assaults the superior officer, it will
constitute a misconduct of riotous or disorderly character. In such cases, the
order of dismissal is warranted and cannot be said to be disproportionate to
the offence.
V. OTHER APPROPRIATE RELIEF
The adjudicatory bodies are not only vested with the power to
order reinstatement. But they are also vested with power to provide such other
relief, including the award of lesser punishment in lieu of discharge of
dismissal. Most of the times, when the reinstatement of the workman is not
possible because of loss of confidence or other similar circumstances, the adjudicatory
bodies, tends to order for compensation in lieu of punishment. In some cases,
they also tends to order of withholding of increment in lieu of punishment.
For instance, In the case of Rolston John v. C. G. I. T. cum Labour Court,[19]
also, the Supreme Court did not consider it appropriate, in the facts and
circumstances of the case, to give the relief of reinstatement and directed the
employer to pay a sum of Rs. 50,000/- to the workman in full and final
settlement of all his claims and in lieu of reinstatement and consequent
benefits.
Further
in the case of In the case of U.P.S.R.T.C. v. Subhash Chandra Sharma,[20]a
driver was dismissed from service on the charge of entering the cash room in a
drunken state, demanding money from the Cashier and, on his refusal, abusing
and threatening to assault him. The Labour Court set aside the order of
dismissal, substituted the same by the punishment of stoppage of one wage
increment and awarded 50% of back wages.[21]
VI . FINDINGS AND SUGGESSTION
Findings:
Following are the
findings arrived after thorough study on the topic.
i.
The
scope of discretion provided to the adjudicatory bodies is not exercised
arbitrarily. There seems to a clear demarcation as to when the discretion must
be used and when it shouldn’t be used.
ii.
Reinstatement
is not ordered in case of termination on the grounds of offences of serious
nature
iii.
When
the punishment is proportionate to the offence, reinstatement is not granted.
iv.
Reinstatement
is not provided on sympathetic grounds when the charge is proved beyond
reasonable doubt.
v.
Reinstatement
is not provided in the cases where the employer has complete loss of confidence
in the employee.
vi.
The
discretion provided to the adjudicatory bodies has greatly helped the employees
in case of termination for trivial matters.
vii.
In
the cases which doesn’t call for reinstatement, the adjudicatory bodies have
provided other appropriate relief like compensation in lieu of punishment.
Suggestions:
Following are the suggestions given on the topic taken
for this study.
i.
The
provision must be amended in such a way that the adjudicatory bodies shall not
have the power of reinstatement or providing any other relief if the
termination is for serious offences like theft, assault etc.
ii.
Even
though we can see that the adjudicatory bodies has exercised their discretion
carefully, it is not advisable to provide them with absolute and unfettered
discretion. There is a need to provide restrictions explicitly on the scope of
discretion enjoyed by adjudicatory bodies.
iii.
The
provision must be amended in a way to make the adjudicatory bodies to provide a
reasoned decision. i.e they must not pass on order of reinstatement to their
whims and fancy. They must state the grounds on which they have arrived at a
particular conclusion.
iv.
The
power to provide other appropriate relief in lieu of reinstatement must be used
more frequently
VII. CONCLUSION
Thus, after going through the provision
of Section 11A under the Industrial Disputes Act, 1947 as well as the
judicial pronouncement while discussing the scope of Section 11A for
the Tribunal or the Court of law to interfere with punishment, it is therefore
settled that the power of review is very
limited and it can interfere only if there is unreasonableness in the finding
or in case of violation of the principle of natural justice. Moreover, it must
also be noted that the judicial trend which was prevalent at the time of 1971
amendment is not in existence now. Since the new economic policy formulated in
90s the judiciary has started to take the side of employer more frequently.
This can be ascertained by carefully analyzing the shift of trend over the
years.
The provision of S.11A is a double edged sword. The
interest of both the employer and employee must be considered by the
adjudicatory bodies while proceeding under S.11A of the act. Because, on one
hand there is an employee whose livelihood is being affected because of
termination and on the other hand, an employer who has a right to run his
enterprise in a way he deem fit with the men he deem fit. The arduous duty of
striking the balance between these two is placed on the adjudicatory bodies
under this section.
It is evident from the analysis of judicial
pronouncements with reference to S.11A, the adjudicatory bodies has set
themselves a proverbial glass ceiling which prevents them from performing the
functions of an employer, i.e running an enterprise. They have shown to
cautiously exercise their powers of discretion whenever necessary. They are
also shown to protect the working class from any unjustified or unfair
dismissal. But, it cannot be stressed enough that the discretionary power under
this section has a huge scope to be misused.