Case Note & Summary
This appeal by special leave arose from an industrial dispute. The appellant trade union espoused the cause of three workmen who were dismissed from service following an incident during a strike. The management and workmen were in conflict over demands; during conciliation, a settlement was reportedly agreed but later resiled by management, leading to strike. On 14 March 1983, while the three workmen and others were standing at BPL Bus Stop on Pollachi Road, National Highway Diversion, management officers passed by and were assaulted; the management alleged that stones were thrown and one officer sustained grievous injuries, and one workman hit him with a stick. The management issued show cause notice on 21 March 1983, received reply on 25 March 1983, then issued charge-sheet on 12 April 1983; an ex parte enquiry report was submitted on 19 April 1983, and the workmen were dismissed. The union challenged dismissal by raising an industrial dispute under Section 10 of the Industrial Disputes Act, 1947. The Labour Court in I.D. 4/86 by award dated 13 April 1987 set aside the punishment and directed reinstatement with 25% back wages, i.e., deduction of 75% back wages. The management filed writ petitions O.P. Nos. 4034/88 and 3841/89-EG; a learned Single Judge of the High Court by order dated 31 October 1989 set aside the Labour Court award. Thereafter, the workmen were dismissed on 3 November 1989. The Division Bench by order dated 22 August 1990 in Writ Appeal No.475/90 confirmed the Single Judge. The union then appealed to the Supreme Court by special leave. The main legal issues were whether the workmen's acts constituted misconduct under Clause 39(h) of the certified Standing Orders, and whether the Labour Court had properly exercised its discretion under Section 11-A of the Industrial Disputes Act in reducing the punishment. The appellant contended that the acts did not fall within Clause 39(h). The Supreme Court rejected this. Clause 39(h) had two limbs: first, drunkenness, riotous or disorderly behaviour during working hours within the premises; second, any act subversive of discipline either within or outside the premises. The Court held that the second limb covered acts against management officers outside the factory, as workmen must maintain discipline vis-à-vis the management. It noted that the Labour Court and High Court had recorded a finding that stones were thrown and officers attacked, causing grievous injuries. However, the Court emphasized that the Labour Court had discretion under Section 11-A to consider the quantum of punishment in light of the surrounding circumstances. Those circumstances included ongoing collective bargaining, a strike, and the management's resiling from a settlement reached in conciliation. The Labour Court had taken a lenient view, setting aside dismissal and ordering reinstatement with a 75% cut in back wages. The Supreme Court found this discretion proper and justified. The High Court had erred by focusing only on whether the act was misconduct and had not adverted to these mitigating circumstances. On the issue of back wages, the Court directed that if the workmen had been gainfully employed from 3 November 1989 till date, the management would not be liable to pay full back wages; the Labour Court was to conduct an enquiry into gainful employment. The management was directed to reinstate the workmen forthwith, and the Labour Court's decision on gainful employment was made final and not appealable by either party. The workmen were directed to report for duty on 1 October 1995. The appeal was allowed with no order as to costs.
Headnote
A) Labour Law - Misconduct - Interpretation of Standing Orders Clause 39(h) - Certified Standing Orders of BPL India Ltd., Clause 39(h) - Clause 39(h) had two limbs: drunkenness, riotous or disorderly behaviour during working hours within the premises, and any act subversive of discipline either within or outside the premises. The Court held that attacks on management officers outside the factory during a strike constituted an act subversive of discipline and thus misconduct under the second limb, while acts unconnected to service would not amount to misconduct. Held that the Labour Court and High Court findings of stone-throwing causing grievous injuries to officers established misconduct under Clause 39(h). (Paras Not mentioned) B) Labour Law - Punishment - Discretion under Section 11-A of Industrial Disputes Act, 1947 - Industrial Disputes Act, 1947, Section 11-A - The Labour Court had discretion to consider the quantum of misconduct and punishment. It took into account ongoing collective bargaining, strike, and the management's resiling from a settlement reached in conciliation, and directed reinstatement with a 75% cut in back wages. Held that the Labour Court's exercise of discretion was proper and justified; the High Court erred by focusing solely on whether the act was misconduct without adverting to these surrounding circumstances. (Paras Not mentioned) C) Labour Law - Back Wages and Reinstatement - Gainful Employment Enquiry - Industrial Disputes Act, 1947, Section 11-A - The Court directed that if the workmen had been gainfully employed from 3 November 1989 till date, the management would not be liable to pay full back wages and the Labour Court must conduct an enquiry into this question, with its decision being final and not appealable by either party. Held that management directed to reinstate the workmen forthwith and workmen directed to report for duty on 1st October 1995. (Paras Not mentioned)
Issue of Consideration
Whether the alleged acts of the three workmen constituted misconduct within the meaning of Clause 39(h) of the certified Standing Orders; whether the Labour Court properly exercised its discretion under Section 11-A of the Industrial Disputes Act, 1947 in modifying the punishment; whether the High Court erred in setting aside the Labour Court award without considering the surrounding circumstances; and the determination of gainful employment from November 3, 1989 onwards for the purpose of back wages.
Final Decision
Appeal allowed; orders of Single Judge and Division Bench set aside; Labour Court award restored; management directed to reinstate the three workmen forthwith; Labour Court to conduct enquiry into gainful employment from November 3, 1989 till date; if gainfully employed, management not liable to pay full back wages; workmen directed to report for duty on 1st October, 1995; no order as to costs.
Law Points
- An act subversive of discipline committed outside factory premises against management officers constitutes misconduct under the second limb of Clause 39(h) of certified Standing Orders
- what amounts to misconduct is a question of fact to be decided with reference to facts
- situation and attending circumstances
- Labour Court has discretion under Section 11-A of Industrial Disputes Act
- 1947 to consider quantum of misconduct and punishment
- High Court must not substitute its view without adverting to extraneous circumstances such as ongoing strike and management's resiling from settlement
- gainful employment after dismissal can be considered by Labour Court to reduce back wages
