Power Of Labour Courts And Tribunals

The law relating to labour and employment in India is primarily known under the
broad category of "Industrial Law". Industrial law in this country is of recent vintage
and has developed in respect to the vastly increased awakening of the workers of their
rights, particularly after the advent of Independence. Industrial relations embrace a
complex of relationships between the workers, employers and government, basically
concerned with the determination of the terms of employment and conditions of
labour of the workers.
The original colonial legislation underwent substantial modifications in the post-
colonial era because independent India called for a clear partnership between labour
and capital. The Industrial Disputes Act [1] repealed the Trade Disputes Act 1929.
The Industrial Disputes Act, 1947 and other analogous State statutes provide the
machinery for regulating the rights of the employers and employees for investigation
and settlement of industrial disputes in peaceful and harmonious atmosphere by
providing scope for collective bargaining by negotiations and mediation and, failing
that, by voluntary arbitration or compulsory adjudication by the authorities created
under these statutes with the active participation of the trade unions. With the aid of
this machinery, industrial law covers a comprehensive canvas of state intervention of
social control through law to protect directly the claims of workers to wages, bonus
and retirement benefits such as gratuity, provident fund and pension, claims, social
security measures such as workmens compensation, insurance, maternity benefits,
safety welfare and protection of minimum of economic well-being. Job security has
been particularly protected by providing industrial adjudication of unfair discharges
and dismissals and ensuring reinstatement of illegally discharged or dismissed
workmen [2] .
The principal techniques of dispute settlement provided in the I.D. Act are collective
bargaining, mediation and conciliation, investigation, arbitration and adjudication.
Adjudication means a mandatory settlement of Industrial Disputes by Labour Courts,
Industrial Tribunals or National Tribunals under the Act or by any other corresponding
authorities under the analogous state statutes. By and large, the ultimate remedy of
unsettled dispute is by way of reference by the appropriate government to the
adjudicatory machinery for adjudication. The adjudicatory authority resolves the
Industrial Dispute referred to it by passing an award, which is binding on the parties to
such reference [3] . Adjudication of labour disputes by these courts and tribunals has
also been criticised by those seeking to reform labour laws, as they fail to work in the
desired manner, or are just too ineffective.

S. 11A DEFINITION, SCOPE AND

APPLICATION
S. 11A [4] of the Industrial Disputes Act speaks of the Powers of Labour Court,
Tribunals and National Tribunals to give appropriate relief in case of discharge or
dismissal of workmen.
Indian Iron and Steel Co. Ltd. v. Their Workmen [5] was the first time that reference
was made to the power of the tribunal to interfere with the managements decision to
dismiss, discharge or terminate the services of a workman. In this particular case the
Supreme Court in its judgement while describing the nature of this particular power of
the tribunal said that this did not in fact confer a power to the tribunal to act as an
appellate body and pass its own judgement overruling the decision of the management
but the tribunal shall only be allowed to interfere when in fact there is a clear case of
absence of good faith, victimisation, unfair labour practice or in short only if mala fide
can be shown on part of the management [6] .
The ILO recommended that any worker if he has been terminated from his
employment and is aggrieved thereof has the right to appeal against such termination.
This recommendation made by the ILO is a very clear example of the efforts on part
of the organization to protect the interest of the worker and provide some sort of
security in his employment to him especially against arbitrary termination of
employment. The recommendation further goes on to state that the appeal that the
worker may issue against such termination be in fact in a neutral body so as to provide
a fair and level playing field for both the parties i.e. the worker and the management.
The neutral body may in fact be an arbitrator, court or similar body and that such body
be empowered to examine the reasons given for termination and other pertinent
circumstances, and to render a decision on the justification of the termination. [7]
Under Sec 11A, the tribunals have been given the power to set aside the order of
discharge and dismissal of workers in whichever cases it thinks fit and the tribunals
have also been given the powers to in fact order direct reinstatement of the workers on
such terms and conditions that it thinks fit and if not that then to provide any other
relief to the workers. This relief may even consist of an award of a lesser punishment
in stead of discharge and dismissal, however the provisions clearly state that the
decision in this regard is strictly subjective and completely at the discretion of the
tribunals on a case to case basis. [8] Hence it has been held that the provision was
inserted in the act to in fact confer power on the adjudicators to reappraise the
evidence adduced in the domestic enquiry and to grant proper relief to workmen,
powers which the Tribunal did not possess earlier," [9]
Although it is expressly provided that any workman aggrieved by the discharge or
dismissal or termination of his services may in fact appeal and the tribunal may
subsequently override the managements decision, there is however a limitation with
regards to the scope of the particular section as observed by the 2nd National
Commission on Labour: where a worker has been dismissed or removed from service
after a proper and fair enquiry on charges of violence, sabotage, theft or assault and if
the labour court comes to the conclusion that the grave charges have been proved then
the court will not have the power to order reinstatement of the delinquent
worker. [10]
One of the most basic yet interesting aspects of this provision is the applicability of
the particular section. Not only is the applicability with regards to reason for discharge
or dismissal in question but the very fact whether a particular act of termination of
employment constitutes Discharge or Dismissal. [11] Although in common everyday
language both may be used interchangeably, there is in fact a substantial difference
between the two. Dismissal is clearly understood in industrial lingo to mean the
termination of service of a workman as a measure of punishment. However the
meaning of Discharge may in fact have 2 different meanings. Discharge may be of 2
kinds Penal Discharge and what may be called as Discharge Simpliciter. Penal
discharge is essentially the same as dismissal, however just a milder form of the same
and the provisions of S.11A apply to it in the very same way, however the difference
in application comes in when for example the employee was temporary and his
services were no longer needed. In such a case the termination is not what may be
called penal and hence it is what constitutes Discharge Simpliciter. In such cases, as is
made very obvious by the language of the provision the tribunals will not in fact have
the power to reinstate the workman or pass any other order with regards to the
managements decision thereof. [12]

Retrospective Effect
With regards to the retrospective effect of S. 11A the Supreme Court held that S. 11A
can only be applied to disputes that are referred to adjudication after it came into
force, and hence has no retrospective effect [13] . There was a clear reason for this by
the Supreme Court. This was that by the introduction of this section there was an
alteration of the law as laid down by the Supreme Court and that there was condensing
of the right of the employer as it gave power to the Tribunal for the first time to differ
both on a finding of misconduct arrived at by an employer as well as the punishment
imposed by him. Therefore for all disputes that had in fact been referred to the tribunal
before the introduction of this provision would continue to follow the law laid down
by the Supreme Court earlier on this subject. [14]
However, in what can be considered to be a very strong thrust in the implementation
of this provision and a bold one at that is that it was held in Workmen Employed in
Engine Valves Ltd. v. Engine Valves Ltd [15] that it was not necessary that the
workman should in fact plead the S.11A in his pleadings. Even if he has not
mentioned the same in his pleadings, the onus lies on the tribunal or adjudicator
thereof to incorporate the same and implement the very provision in its judgment.
Hence all adjudicators became bound by law to apply the provisions of the
section. [16]

Burden Of Proof And S.11A

It has been well established that only penal discharges come under the ambit of the
section. And those that fall under discharge simpliciter are not covered by the same.
Considering that the substance of both is essentially the same i.e. discharge and they
differ only in form and in the reasoning behind them, it is not difficult to envisage
especially in a country like India that there would be several cases where misuse of
the section would be attempted. Considering that this section is predominantly
incorporated for the protection of the workmen, there definitely exists a possibility
that employers would want to hide behind the curtain of Discharge Simpliciter or non
penal discharge even in genuine cases of dismissal and hence avoid the applicability
of this section and hence prevent the possibility of reinstatement of the dismissed
workers [17] .
For this all the employers who have the best legal help at their disposal have to do is
word the discharge orders conveniently in a manner that it seems a case of Discharge
Simpliciter rather than Dismissal. Hence the tribunal in most cases has to go behind
the attempted curtain and in fact deduce whether it was genuinely a case of discharge
or just a camouflage to cover what is in fact actually an order of dismissal. To make
the abuse of this section more difficult for the employer and to catch genuine cases of
dismissal, it has been held in State Bank of India v. Union of India [18] that the onus
lies on the employer to adducing evidence that it was not in fact an order of dismissal
for workmans misconduct. Hence this is a very essential aspect to this section and
makes the position of the aggrieved workman even stronger. [19]

Arbitrator And S.11A

The language of S. 11A is not ambiguous and clearly vests jurisdiction in Labour
Court, Tribunal or National Tribunal" without much scope for expanded interpretation.
However, the Supreme Court in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes
Mazdoor Sabha [20] held in a 2:1 verdict that an Arbitrator under S. 10A can be
included within the meaning of Tribunal in S. 11A, thus giving an Arbitrator the same
jurisdiction as a Labour Court, Tribunal or Labour Tribunal while adjudicating upon a
dispute relating to disciplinary discharge or dismissal of a workman [21] .
This seems to be an absurd proposition as the language of the section could not be
much clearer so as only to include labour courts, tribunals and national tribunals and
has correctly been severely criticised. The granting of the same position to an
arbitrator as that of a tribunal is in direct contravention to the I.D.Act as an Arbitrator
under S. 10A [22] and Tribunal as defined in S. 2(r) [23] are two distinct and mutually
exclusive entities [24] . If they start being treated at the same level then the appeal
against an arbitral award will be allowed to lie in the Supreme Court, however as only
cases disciplinary punishment are to be entertained by the tribunal, the arbitrator is
supposed to gain parity with tribunals in some cases and not in those of discharge
simpliciter and hence only some awards of the arbitrator may be appealed to the
supreme court. This has been termed to be nothing short of absurd by many authors.
Only when the discharge or dismissal of a workman is found by the adjudicator to be
unjustified and illegal does the question of exercising power under S. 11A to grant
relief arise. However, if the adjudicator concludes from the material on record that the
order of dismissal or discharge is not unjustified or illegal, then it is obviously not
competent to award any relief and the only option left is to reject the
reference. [25] Where the termination was illegal or unjustified though, S. 11A grants
the Labour Court or Tribunal extremely wide ranging powers for granting relief. The
relief generally granted by the Tribunal are reinstatement, any lesser punishment, or
compensation in lieu of reinstatement, which is usually in the form of a lump sum. But
the relief to be granted is wholly up to the discretion of the Tribunal, as is the option to
award interest on the amount determined as compensation. However, the mostly
widely granted relief is reinstatement with back wages [26] .

Reinstatement
Reinstatement means restoration of a dismissed or discharged workman to his original
post, and is different from re-employment, since the workman is entitled to be put
back in the same position as if he had never been dismissed or discharged, together
with all back wages, allowances and other privileges, [27] such as continuity of
service, right to promotion and entitlement to bonus, gratuity, pension and promotion
as if there had been no break in employment. However, it has been held that order of
termination is not nullified even if found illegal or wrongful, and continues to operate
until set aside by appropriate adjudicator as was held in Punjab Beverages Pvt. Ltd. v.
Suresh Chand, [28] Therefore, after setting aside the wrongful termination order, the
adjudicator must issue a separate order of reinstatement. [29]
Where the Tribunal finds that there was misconduct on the part of the employee, but
not so serious so as to warrant discharge or dismissal, it may award a lesser
punishment such as the minor punishments mentioned above. This is in accordance
with the fundamental principle of justice that punishment should be commensurate
with the guilt. Such a lesser punishment may even take the form of ordering
reinstatement without back wages, since reinstatement usually implies payment of
back wages for the period of time for which the workmans employment was
terminated. [30]
In M/s. Mukund Engineering Works v Banshi Purshottam [31] it was held that when
the alleged misconduct as been proved the workman must be bound to opt either for
reinstatement without back wages or vice versa. [32]
In certain exceptional situations where reinstatement would be inexpedient or
improper, the Tribunal has the discretion to award compensation in lieu of
reinstatement. However, it has to exercise its discretion judicially and carefully
examine circumstances of the case to decide if it is an exception to the general rule of
reinstatement [33] . However, it is not an easy task, and the Tribunal must consider
several factors like wages, length of service, loss of career prospects, circumstances of
dismissal, age, nature of work and custom before determining the quantum of
compensation, and it is awarded by the Tribunal less often. [34]

Judicial Review
Seeing as the powers of the industrial adjudicator are so vast under S. 11A, being able
to grant almost any kind of relief, the question of judicial review naturally arises, to
control arbitrariness on the part of the Tribunal. The discretionary power under S. 11A
is indeed subject to judicially review by High Courts under Art. 226 and 227 or by the
Supreme Court under Art. 136, though within limitations. [35] The reviewing Courts
can examine whether the Tribunal has properly approached the matter for exercising
or refusing to exercise its power under S. 11A. But when the award is well-reasoned
and the Tribunal has stated the various considerations for making its award, it cannot
be said to be illegal and void. [36] When the constitutional validity of S. 11A was
challenged in Delhi Cloth & General Mills Co. Ltd. v. Shriram Fertilisers Karamchari
Union, Chawani, Kota [37] a Division Bench of the Rajasthan High Court, while
upholding its validity, said that for the purpose of granting relief under S. 11A, there
was a clear indication that relief which was considered fit in the circumstances of the
case was to be given after a conclusion was reached that the termination was
unjustified. [38]
Therefore, there are sufficient guidelines for any authority discharging such functions
and whenever a challenge is made to the decision of the Tribunal, correctness of the
decision can be decided on the touchstone of these guidelines and in case of
contravention of such guidelines, the remedies by way of writ petition under Art. 226
or appeal by special leave under Art. 136 to the Supreme Court are available. Hence, it
cannot be said that wide powers conferred upon the Tribunal by S. 11A are arbitrary or
in violation of Art. 14 of the Constitution. [39]

CONCLUSION
The Report of Task force on Employment Opportunities made some recommendations
to reform the labour laws of the country. These included:
The provisions regarding dismissal after due process need to be streamlined. Section
11A of the Industrial Disputes Act which allows labour courts, Industrial Tribunals to
interpose the state in matters that are best left to established internal processes.
At present there is no time limit for filing disputes under the Industrial Disputes Act.
This encourages piling up of old disputes leading to delays in courts. A time limit of 3
years should be stipulated within which a dispute could be referred for adjudication
Compulsory adjudication may well have contributed to the weakening of the trade
union movement in India, and complicated matters by bringing disputes before a
centralised dispute resolution mechanism under the States authority, though they may
be addressed just as well internally. At present, while it is difficult for labourers to
secure their rights, even employers are restricted by the laws that reflect the socialist
bent of governance of the period in which they were enacted, though these are
hopelessly out of sync with contemporary realities. All the while, the government
holds too firm a grip, especially over dispute resolution.
However, there is no viable alternative to this system. Stringent provisions, therefore
are required for ensuring the time limit within which the orders /awards to be
implemented and clothe the courts and tribunal with powers of contempt of court for
non-implementation of orders /awards passed by them. It is submitted that the need of
the day is to evolve the frame-work in which workers and the management perceive
the need to co-operate. Bilateral regulation is the most effective method of evolving
norms which enjoy wide acceptance [40] and till happens the situation of labour laws
in India especially industrial dispute laws will not improve.