Under the Industrial Disputes Act, 1947 (“ID Act”), which inter-alia deals with the industrial disputes between an employer and employee (‘workman’)1 it has been discussed in several judicial pronouncements that the relationship of an employer and employee is unequal due to inequality of bargaining power between them and therefore, employers are prone to a number of legal as well as reputational risks which could result from not following due process for termination of workman. One such provision is Section 332 of the ID Act which requires an employer to follow certain
procedures when dealing with the change in service conditions of workmen or to terminate their services during the pendency of any proceeding involving an industrial dispute.
Applicability of Section 33 of ID Act has been a subject matter of examination in a judgment titled “Duncan Engineering Ltd.( “Company”) vs. Ajay C. Shelke and Ors.” decided on June 21, 2021 by Hon’ble Bombay High Court. The Hon’ble High Court held that non-compliance of mandatory provisions of Section 33 would render the dismissal order of a workman as void ab initio and the workmen would be entitled for reinstatement with all consequential benefits.
So far brief facts of the case are concerned, Ajay C. Shelke and others (“Workmen”) were employed, in one of the factories of the Company, and were served with charge sheets alleging wilful insubordination, disobedience, illegal strike, riotous and disorderly behaviour, etc. During a domestic enquiry, the enquiry officer recorded his findings that the Workmen were guilty of misconduct, leading to termination of services of Workmen in 2014. Such an action of the Company was challenged by the Workmen and the same was referred to the jurisdictional labour court. Workmen contended that dismissal was illegal as the same was a result of victimization for them having joined the Union viz. Maharashtra Rajya Rashtriya Kamgar Sangh (INTAK), which was espousing their cause. Further, the dismissal order was passed pending Reference i.e., Ref. (IT) No. 17 of 2014 pertaining to the Charter of Demands raised by the Union, which Workmen were members of, and therefore, without submission of an application to the authority before which the matter was pending.
The Labour Court vide its Award, while holding the enquiry to be fair, proper and in accordance with the principles of natural justice, ordered, on the ground of non-compliance of Section 33(2)(b) of the ID Act, reinstatement of Workmen, with continuity of service, full back wages and all consequential benefits. The said order was challenged by the Company before the Hon’ble Bombay High Court.
The Hon’ble High Court observed that Section 33 of ID Act, as amended in the year 1956 makes a broad division between action proposed to be taken by an employer regarding any matter connected with the dispute on one hand and action proposed to be taken regarding a matter not connected with the pending dispute.
Section 33(2)(b) of ID Act enables an employer to dismiss or discharge a workman for any misconduct not connected with the dispute provided the concerned employer makes an application to the concerned authority, before which a proceeding is pending, for approval of the action taken. Relying upon the Constitution bench judgment of “Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. vs. Ram Gopal Sharma and Ors.” passed by Hon’ble Supreme Court in the year 2002, the Hon’ble High Court held that proviso to Section 33(2)(b) contemplates three conditions mentioned therein viz. (i)
dismissal or discharge; (ii) payment of wages for one month; and (iii) submission of an application for approval, to be done simultaneously. Therefore, if an approval is not granted under Section 33(2) (b) of the ID Act, the order of dismissal becomes ineffective from the date it was passed and therefore, an employee becomes entitled to wages from the date of dismissal to the date of disapproval of the application. The Court while dismissing the petition observed that since despite the pendency of the reference relating to Charter of Demands, the Workmen were dismissed without
complying with the mandatory provision of Section 33(2)(b) of ID Act, the same renders dismissal order void and non-est.
Anhad Law’s Perspective
This judgment is a reminder of significant aspects required to be complied with by the employers in India under the ID Act while dealing with the termination of employees who will qualify as workmen. The Hon’ble High Court has reiterated the legal principle that if a statutory provision prescribes a particular step (s) required to be followed regarding an action of an employer (involving a workman), employer must follow the requirements provided, otherwise, action of an employer could become null and void ab-initio. This judgment reiterates that adherence to law and compliance therewith are obvious and necessary in a system governed by rule of law.
-Manishi Pathak, Founding Partner and Ranjan Jha, Partner
Disclaimer: The contents of the above publication are based on easier understanding of relevant contents of a Court order/ government notification/ guidelines/ publication and a reader should refer to such a Court order/ notification/guidelines/ publication for further or specific details/ information, which will override the contents hereof. These are personal views of authors and do not constitute a legal opinion, analysis or interpretation. This is an initiative to share developments in the world of law or as may be relevant for a reader. No reader should act on the basis of any statement above without seeking professional legal advice.
1 “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not
include any such person
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(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
2 33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings.
(1) During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before an arbitrator or a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall,
(a) in regard to any matter connected with the dispute, alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or
(b) for any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workmen concerned in such dispute, save with the express permission in writing of the authority before which the proceeding is pending.
(2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman,
(a) alter, in regard to any matter not connected with the dispute, the conditions of service applicable to that workman immediately before the commencement of such proceeding; or
(b) for any misconduct not connected with the dispute, or discharge or punish, whether by dismissal or otherwise, that workman: Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.
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