Case Note & Summary
The Supreme Court dealt with an industrial dispute between a sugar mill employer and a workers' union concerning the employment of contract labour. The union, representing workmen, served a notice of change under Section 42(2) of the Bombay Industrial Relations Act, 1947, and made two references to the Industrial Court under Section 73A demanding abolition of the contract labour system and a permanent increase in the number of employees in respective departments. The employer raised preliminary objections: first, that the Industrial Court lacked jurisdiction because the matter fell under item (6) of Schedule III, which was within the exclusive jurisdiction of a Labour Court; second, that any award directing abolition of contract labour would violate the employer's fundamental right to carry on business under Article 19(1)(g) of the Constitution. The Industrial Court ruled that it had jurisdiction because the matter was covered by item (2) of Schedule II, and that there was no violation of fundamental rights. On appeal, the Labour Appellate Tribunal disagreed that item (2) of Schedule II applied, but held that the word 'employment' in item (6) of Schedule III had a restricted meaning and that the Industrial Court had jurisdiction because the dispute involved far-reaching changes not meant for summary disposal by a Labour Court. The Tribunal also held that the question of reasonableness of restriction under Article 19(1)(g) depended on facts and was outside its appellate power. It ultimately set aside the entire award on merits and remanded the matter. The employer then appealed to the Supreme Court by special leave. The Supreme Court upheld the Industrial Court's jurisdiction. It reasoned that under Section 73A, a registered union can refer matters contained in Schedule II only to the Industrial Court. The question of abolishing contract labour immediately raised questions of permanent increase in the number of persons employed, their wages, hours of work and rest intervals, which correspond to items (2), (9) and (10) of Schedule II. Even if the employer contended that the contract workers were not its employees, the dispute about permanent increase and employment conditions inevitably arose. Therefore, the dispute was inextricably linked to Schedule II matters and correctly before the Industrial Court. On the constitutional challenge, the Court held that Section 3(18) of the Act, which defined 'industrial matter' to include mode of employment, did not violate Article 19(1)(g). The power to decide whether contract labour should be abolished was conferred on a quasi-judicial tribunal, and such a regulatory measure was a reasonable restriction in the interest of the general public. Consequently, the appeal was dismissed, affirming the Industrial Court's jurisdiction and the validity of the statutory definition.
Headnote
A) Labour Law - Industrial Dispute - Jurisdiction of Industrial Court under Section 73A of Bombay Industrial Relations Act, 1947 - Schedule II items (2), (9), (10) and Schedule III item (6) - A dispute over abolition of contract labour inevitably raises questions of permanent increase in number of persons employed, wages, hours of work and rest intervals, which are matters contained in Schedule II; consequently, a reference by a registered union under Section 73A can only be made to the Industrial Court. The Court rejected the contention that Schedule III item (6) using the word 'employment' gave exclusive jurisdiction to a Labour Court. Held that the Industrial Court had jurisdiction to decide the dispute (Paras 1-3). B) Constitutional Law - Fundamental Right to Carry on Business - Article 19(1)(g) of Constitution of India - Bombay Industrial Relations Act, 1947, Sections 3(17), 3(18) - Defining 'industrial matter' to include mode of employment did not impose an unreasonable restriction on the employer's fundamental right, because the power to decide abolition of contract labour was vested in a quasi-judicial tribunal. The Court held that there was no contravention of Article 19(1)(g) and the provision was valid (Paras 4-6).
Issue of Consideration
Whether the Industrial Court had jurisdiction to decide a dispute relating to abolition of contract labour under Section 73A of the Bombay Industrial Relations Act, 1947, or whether the matter fell within the exclusive jurisdiction of a Labour Court under Schedule III item (6); and whether Section 3(18) of the Act, which includes mode of employment within the definition of 'industrial matter', violated the employer's fundamental right to carry on business under Article 19(1)(g) of the Constitution of India.
Final Decision
The Supreme Court dismissed the appeal, holding that the Industrial Court had jurisdiction to decide the dispute relating to abolition of contract labour because such dispute inevitably raised questions covered by items (2), (9) and (10) of Schedule II of the Bombay Industrial Relations Act, 1947, falling within the reference jurisdiction of the industrial court under Section 73A. The Court also held that Section 3(18) including mode of employment as an industrial matter did not violate the employer's fundamental right under Article 19(1)(g) of the Constitution, as the power of the quasi-judicial industrial court to decide abolition of contract labour was a reasonable restriction.
Law Points
- Industrial Dispute
- Contract Labour
- Abolition
- Jurisdiction
- Bombay Industrial Relations Act
- 1947
- Section 73A
- Schedule II items (2)(9)(10)
- Schedule III item (6)
- Industrial Matter
- Mode of Employment
- Section 3(18)
- Fundamental Right to Trade
- Article 19(1)(g)
- Reasonable Restriction
- Quasi-judicial Tribunal
