Case Note & Summary
The appeal arose from an industrial dispute between McKenzie & Co. Ltd. (employer) and its workmen. The dispute originated during the pendency of a reference before the Industrial Tribunal when, on 6 October 1953, workmen illegally confined E. L. D’Cruz, the acting Works Manager, from 9:15 a.m. to 2:15 p.m. and went on strike over payment of Puja bonus. The company issued notices to resume work, declared a lockout, and served charge sheets. After a domestic enquiry, the company found the workmen guilty of gross misconduct and sought permission under Section 33 of the Industrial Disputes Act, 1947 to dismiss 170 workmen. The Tribunal granted permission only for three workmen and refused for the rest due to reasonable doubt about identity and complicity. This was upheld by the Labour Appellate Tribunal. Subsequently, the company initiated fresh disciplinary proceedings against 64 workmen by sending registered notices and affixing charge sheets on its notice boards. Notices for workmen Nos. 2 to 24 were returned unserved; the company wrote to the union for addresses but received no reply. After an enquiry, the company terminated the services of all 64 workmen on 22 June 1955. On reference, the Sixth Industrial Tribunal held that workmen Nos. 2 to 24 were not properly served and ordered their reinstatement, while upholding dismissal of the rest. The Labour Appellate Tribunal allowed the workmen’s appeal, set aside all dismissals, and held that the works manager’s testimony could not be accepted and that there was no other evidence to identify the participants. The employer appealed to the Supreme Court by special leave. The core legal issues were whether the Labour Appellate Tribunal erred in reappreciating evidence, whether notice by affixing on the notice board was sufficient, and whether the second enquiry was barred by res judicata due to earlier Section 33 findings. The employer argued that the strike was illegal, the management had the right to terminate services, and the Tribunal was bound to accord sanction. The workmen contended that there was no proper enquiry, notice was not served, and principles of natural justice were violated. The Supreme Court held that the management has the right to determine what constitutes major misconduct under its standing orders, but must act in good faith, without caprice, discrimination, victimisation or unfair labour practice, and in accordance with natural justice. When the management so acts, its judgment cannot be questioned. The Labour Appellate Tribunal had proceeded as if sitting in appeal over the managerial enquiry, which was beyond its powers. The Court further held that the standing order permitted service of notice by fixing it on the company’s notice board, and the company had complied; therefore the Tribunals were wrong in holding that workmen Nos. 2 to 24 were not served. The Court also held that proceedings under Section 33 are merely to give or withhold permission and do not adjudicate an industrial dispute, so findings in such proceedings do not operate as res judicata. Consequently, the second enquiry and dismissal were not barred. The Supreme Court set aside the Labour Appellate Tribunal’s order and upheld the dismissal of the workmen.
Headnote
A) Industrial Dispute - Illegal Strike and Misconduct - Management's Right to Determine Punishment - Industrial Disputes Act, 1947, Section 33 - Workmen illegally confined the Works Manager and went on strike during pendency of an industrial reference; management held domestic enquiry, found gross misconduct and dismissed them; Labour Appellate Tribunal reappreciated evidence and set aside dismissal - Held that management's decision on misconduct cannot be questioned if made bona fide, in good faith, without victimisation and in accordance with natural justice; Tribunal cannot sit in appeal over management enquiry (Paras Not mentioned). B) Industrial Dispute - Domestic Enquiry - Service of Notice - Industrial Disputes Act, 1947, Section 33 - Charge sheets were sent by registered post to workmen's registered addresses and affixed on company notice boards; registered notices for workmen Nos. 2 to 24 were returned unserved; company wrote to union for addresses but received no reply - Held that standing order allowed service by affixing on notice board; company complied; both Industrial Tribunal and Labour Appellate Tribunal erred in holding that proper notices were not given (Paras Not mentioned). C) Industrial Dispute - Res Judicata - Application under Section 33 - Industrial Disputes Act, 1947, Section 33 - In earlier proceedings under Section 33, Tribunal granted permission to dismiss only three workmen and refused for the rest; subsequent fresh enquiry and dismissal led to industrial dispute - Held that Section 33 merely grants or withholds permission and does not adjudicate an industrial dispute; findings under Section 33 do not operate as res judicata and do not bar a second domestic enquiry or raising of industrial dispute (Paras Not mentioned). D) Industrial Dispute - Evidence - Works Manager's Testimony - Industrial Disputes Act, 1947, Section 33 - Labour Appellate Tribunal set aside dismissal on ground that works manager's testimony could not be accepted and no other evidence identified the participating workmen - Held that the Appellate Tribunal proceeded as if sitting in appeal over managerial enquiry, beyond its powers; management's conclusion based on evidence cannot be substituted by Tribunal unless perverse or vitiated by mala fides (Paras Not mentioned).
Issue of Consideration
Whether the Labour Appellate Tribunal erred in setting aside the order of termination of service; whether proper notice was given to workmen Nos. 2 to 24; whether the second enquiry was barred by res judicata due to previous findings under Section 33 of the Industrial Disputes Act, 1947
Final Decision
The Supreme Court allowed the appeal, set aside the orders of the Labour Appellate Tribunal, and upheld the dismissal of the workmen. It held that the management's enquiry and findings were bona fide and in accordance with natural justice; that service of notice by affixing on the company's notice board satisfied the standing order; and that the second enquiry was not barred by res judicata as proceedings under Section 33 do not adjudicate an industrial dispute.
Law Points
- Legal points not extracted
- Management's right to determine major misconduct within standing orders
- requirement of good faith and natural justice
- Tribunal cannot sit in appeal over management enquiry
- service of notice by affixing on notice board is sufficient
- findings under Section 33 Industrial Disputes Act not res judicata
- illegal strike during pendency of reference
