APPROPRIATE GOVERNMENT CANNOT ADJUDICATE THE DISPUTE AND CANNOT ASSUME THE POWER OF LABOUR COURT.

[Mr. M. GOVINDARAJAN]

                        The Industrial Disputes Act, 1974 (‘Act’ for brevity) gives the workman various mechanisms to settle his grievance.   Once a dispute is raised by the workman or the Trade union the matter will be referred to conciliation to settle the dispute amicably.   If the dispute could not be settled then the matter would be referred for adjudication by the appropriate Government to a Board/Labor Court/Tribunal/National Tribunal.  Sec. 2(a) of the Act defines the term ‘appropriate government’.  According to this section the appropriate government is central government or state government. 

                        The Conciliation Officer is having power to investigate the dispute and all matters affecting the merits and right settlement thereof.  In case the parties arrive at a settlement, the Conciliation Officer is required to send a report thereof to the appropriate Government together with the memorandum of settlement signed by the parties to the dispute.  In cases where settlement is not reached between the parties, in terms of Section 12(4), the Conciliation Officer is required to send full report to the appropriate Government specifying therein the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of facts and circumstances and the reasons on account of which a settlement could not be arrived at. 

                        Under Section 12(5) as well as Section 10(1) of the Act the appropriate Government is empowered to make reference of the dispute to the Board, Labor Court, Tribunal or National Tribunal.  Where the appropriate Government does not make a reference even after receipt of report of the Conciliation Officer, it is duty bound to record reasons and communicates the same to the parties concerned. 

                        In ‘Rajasthan State Road Transport Corporation and another V. Krishan Kant’ – 1995-II-LLJ-728 the Supreme Court discussed about the power of the Government to make a reference.   The Supreme Court observed that the power to make a reference conferred upon the Government is to be exercised as effectuate the object of the enactment and hence not unguided.  The rule is to make a reference unless, of course, the dispute raised is totally frivolous one ex facie.  The power conferred is the power to refer and not the power to decide, though it may be that the government is entitled to examine whether the dispute is ex-facie frivolous, not meriting adjudication.   

                        In ‘Ram Avatar Sharma and others V. State of Haryana and another’ AIR 1985 SC 915 the Supreme Court interpreted the relevant provisions and ruled that the view that while exercising power under Section 10(1) the Government performs administrative function can be supported by an alternative line of reasoning.   Assuming that making or refusing to make a reference under Section 10(1) is a quasi judicial function, there is bound to be a conflict of jurisdiction if the reference is ultimately made.   A quasi judicial function is to some extent an adjudicatory function in a lis between two contending parties.   The Government as an umpire, assuming that it is performing a quasi judicial function when it proceeds to make a reference, would imply that the quasi judicial determination of lis prima facie shows that one who raised the dispute has established merits of the dispute.   The inference necessarily follows from the assumption that the function performed under Section 10(1) is a quasi judicial function.   Now by exercising power under Section 10, a reference is made to a Tribunal for adjudication and the Tribunal comes to the conclusion that there was no merit in the dispute.   Prima facie a conflict of jurisdiction may emerge.   Therefore the view that while exercising power under Section 10(1) the function performed by the appropriate Government is an administrative function and not a judicial or quasi judicial function is beyond the pale of controversy.  If the Government performs an administrative act while either making or refusing to make a reference under Section 10(1), it cannot delve into the merits of the dispute and take upon itself the determination of lis.   That would certainly be in excess of power conferred by Section 10 which requires the appropriate Government to be satisfied that an industrial dispute exists or is apprehended.  This may permit the appropriate Government to determine prima facie whether an industrial dispute exists or the claim is frivolous or bogus or put forth for extraneous and irrelevant reasons and not for justice or industrial peace and harmony.   Every administrative determination must be based on grounds relevant and germane to the exercise of power.  If the administrative determination is based on the irrelevant, extraneous or ground not germane to the exercise of power it is liable to be questioned in exercise of the power of judicial review.

                        In ‘Sant Lal, Workman V. State of Haryana and others’ – 2012-II-LLJ-312 (P&H) the workman has joined the management of Mitaso Appliances Limited on 01.04.1979 as a Die-Casting Operator on permanent basis.   He proceeded on sanctioned leave from 12.11.1990 to 30.11.1990 to his village where he fell ill.   He was stated to have informed the management through letters.  He reported duty with medical certificate but was not allowed to resume his work by the management despite his requests.   The services of the workman was terminated on 10.12.1990 by the management.

                        The workman issued a demand notice on 12.12.1990.   The conciliation proceedings were conducted and the failure report was sent by the Conciliation Officer to the appropriate authority.  The State of Haryana ultimately rejected the demand notice of the workman, by virtue of impugned order dated 31.5.1991 on the ground that he himself has abandoned the services.   It further sent the cheque of the management for full and final settlement of the workman to the workman to accept the same.   The workman moved the representations for referring the matter for adjudication, but in vain.  The workman being dissatisfied filed a writ petition before the High Court challenging the illegality of the order of the State of Haryana.  He contended that the order is not only illegal against the principle of natural justice and arbitrary, but against the statutory provisions of the Act as well.   The appropriate government ought to have referred the matter to Labor Court for adjudication, but it fell in error in this regard. The Government has declined the reference, based on irrelevant and extraneous consideration. The appropriate Government should not purport to reach a final decision because that would normally lie within the jurisdiction of industrial tribunal/labor court. He prayed for the quashment of the order of the State Government.  The Management contended that the workman willfully absented from duty and his services were rightly terminated. 

                        The High Court observed that it is not a matter of dispute that Section 10 of the Act deals with the reference of dispute between the workman and Management, while sections 11 and 11A postulate the procedure and powers to give appropriate relief by the Conciliation Officers, Boards, Labor Court, Tribunal and National Tribunal.  Section 12(5) of the Act provides that if on a consideration of the report referred to in Sec. 12(4) the appropriate Government is satisfied that there is a case for reference to a Board/Labor Court/Tribunal or National Tribunal, it may make such reference.   Where the appropriate Government does not make such a reference it shall record and communicate to the parties concerned the reasons therefor. 

                        The High Court held that a co-joint reading of these provisions would leave no manner of doubt, that the power of Government is only to refer and it cannot adjudicate upon the matter.  There is a clear distinction in the demarcated functions of reference by the Government and the Court’s adjudication.  The power of reference of the Government under Section 12(5) of the Act has to be read with Section 10(1) of the Act.   In dealing with an industrial dispute in respect of which a failure report has been submitted under Section 12(4), the appropriate Government ultimately exercises its power under Section 10(1) of the Act, subject to this that Section 12(5) imposes an obligation on it to record reasons for not making the reference when the dispute has gone through conciliation and a failure report has been made under Sec. 12(4).

                        The High Court further held that the Joint Secretary of the State Government has slipped into deep legal error in this regard.  It has been vaguely presumed that the absence of the workman, even without indicating the period of his absence and without any inquiry that he willfully remained absent and without any cogent material on record, as well.  The Joint Secretary has illegally assumed the power and jurisdiction of the Industrial Tribunal and Labor Courts and has decided the factual matrix and law point, which was in the domain of the Industrial Tribunal.   Therefore the impugned order cannot legally be sustained in this relevant connection. 

                        Thus a writ of mandamus would lie against the Government if the order passed by it under Section 10(1) is based or induced by reasons as given by the Government are extraneous, irrelevant and not germane to the determination.