Case Note & Summary
Mahindra & Mahindra Limited filed a writ petition before the Bombay High Court challenging the order of the Industrial Court which had dismissed its application raising a preliminary objection to the maintainability of a complaint filed by General Employees’ Union under the MRTU & PULP Act. The union had sought regularization of canteen workers employed through a co-operative society, alleging that the society was a mere camouflage and the workers were in reality direct employees of the company. The company argued that in the absence of an undisputed employer-employee relationship, the Industrial Court lacked jurisdiction to entertain the complaint. The Industrial Court rejected the application and the review, prompting the company to approach the High Court. The central legal issue was whether a complaint under the MRTU & PULP Act is maintainable when the direct relationship of employer and employee is disputed, particularly where the workers are employed by an intermediary like a co-operative society. The petitioner relied on Supreme Court decisions such as Vividh Kamgar Sabha v. Kalyani Steels Ltd., Cipla Ltd. v. Maharashtra General Kamgar Union, and Sarva Shramik Sangh v. Indian Smelting & Refining Co. Ltd., which held that the Act requires a clear employer-employee relationship and that disputes about the nature of employment must first be resolved under the Industrial Disputes Act. The union contended that the canteen was maintained under Section 46 of the Factories Act, thereby creating a deeming relationship, and that the society was a sham. The High Court extensively discussed the settled legal position, noting that the Industrial Court’s jurisdiction under the MRTU & PULP Act is contingent upon the existence of an undisputed master-servant relationship. Until such relationship is established, a complaint of unfair labour practice cannot be entertained. The court also referred to its own Division Bench rulings in Hindustan Coca Cola and Quadricon, which reiterated that the Industrial Court cannot adjudicate employer-employee relationships. The judgment highlighted the union’s argument based on Section 46 of the Factories Act, but the extract ended without recording the court’s final determination on that point. On the basis of the discussion, the court was evidently inclined to set aside the Industrial Court’s order and hold the complaint not maintainable. However, the precise operative direction was not included in the provided text. Thus, the case underscores the principle that the Industrial Court under the MRTU & PULP Act has a limited jurisdiction that does not extend to resolving disputed employment relationships.
Headnote
A) Labour Law – Unfair Labour Practices – Jurisdiction of Industrial Court – Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act), Schedule IV Items 5 & 9 – A complaint under the MRTU & PULP Act can only be entertained by the Industrial Court if there exists an undisputed or indisputable direct relationship of employer and employee. Where the complaint alleges that a contractor or an intermediary (such as a co-operative society) is a camouflage, that dispute must first be adjudicated by the appropriate forum under the Industrial Disputes Act, 1947. The Court followed Supreme Court judgments in Cipla Ltd. v. Maharashtra General Kamgar Union and others to hold that the Industrial Court lacks jurisdiction to decide such disputed relationships. (Paras 3-6)
Issue of Consideration
Whether a complaint alleging unfair labour practices under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 is maintainable before the Industrial Court in the absence of an undisputed employer-employee relationship, particularly when the employer claims the workmen are employees of a Co-operative Society running a canteen under Section 46 of the Factories Act, 1948
Law Points
- Under MRTU & PULP Act
- jurisdiction of Industrial Court to entertain unfair labour practice complaint requires existence of direct employer-employee relationship
- where such relationship is disputed due to interposition of contractor or society
- the dispute must be referred for adjudication under Industrial Disputes Act first
- interim orders cannot be made until status is determined
Case Details
2006 LawText (BOM) (07) 3
Writ Petition No. 1431 of 2003
C.U. Singh, Geetanjali Prabhu, Sushma Joshi, R.D. Bhat, R.N. Shah, Piyush Shah
Mahindra & Mahindra Limited
General Employees’ Union, Shri Ganpat Laxman Bambade, Mahindra & Mahindra Limited Central Jeep Plant Employees Co-operative Society Ltd.
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Nature of Litigation
Writ petition under Article 226/227 of the Constitution of India challenging the Industrial Court's order dismissing the petitioner's application that a complaint of unfair labour practices under the MRTU & PULP Act is not maintainable due to absence of employer-employee relationship.
Remedy Sought
The petitioner sought the quashing and setting aside of the Industrial Court's orders dated 28th June, 2006 and 27th March, 2003, and a declaration that the complaint is not maintainable.
Filing Reason
The Industrial Court dismissed the petitioner's application for rejection of the complaint despite there being a dispute about the direct employer-employee relationship between the company and canteen workers employed through a co-operative society.
Previous Decisions
The Industrial Court, Mumbai, by order dated 28th June, 2006 dismissed the application; a review application was also rejected on 27th March, 2003.
Issues
Whether a complaint under the MRTU & PULP Act is maintainable before the Industrial Court when the employer-employee relationship is disputed, particularly where the workers are employed through an intermediary co-operative society.
Whether the obligation to maintain a canteen under Section 46 of the Factories Act, 1948 creates a deeming relationship of employment between the factory occupier and the canteen workers, making the complaint maintainable without prior adjudication.
Submissions/Arguments
The petitioner argued that the Industrial Court has no jurisdiction to entertain the complaint since there is no direct employer-employee relationship; the workers are employed by a co-operative society and the society is not a camouflage.
The respondent union argued that the co-operative society is a fictitious contractor and a camouflage, that the company exercises complete control, and therefore the workers are direct employees of the company; also, since the canteen is maintained under Section 46, all employees are deemed to be employees of the occupier.
Ratio Decidendi
The Industrial Court under the MRTU & PULP Act has jurisdiction to entertain a complaint of unfair labour practice only when there is an undisputed or indisputable direct relationship of employer and employee between the complainant workmen and the person against whom the complaint is made. If the existence of such relationship is disputed on the ground that the intermediary (such as a contractor or co-operative society) is a camouflage, the dispute must first be adjudicated by the appropriate forum under the Industrial Disputes Act, 1947. The complaint cannot proceed under the MRTU & PULP Act until the employer-employee relationship is established.
Judgment Excerpts
The provisions of MRTU & PULP Act can only be enforced by persons who admittedly are workmen. If there is dispute as to whether the employees are employees of the company, then that dispute must first be got resolved by raising a dispute before the appropriate forum.
The sine qua non for application of the concept of unfair labour practice is the existence of a direct relationship of employer and employee. Until that basic question is decided, the forum recedes to the background in the sense that first that question has to be got separately adjudicated.
The Industrial Court constituted under the MRTU & PULP Act is not clothed with the jurisdiction to adjudicate the employer - employee relationship nor there is anything like prima facie consideration of relationship of employer-employee in the complaint under the said Act.
Procedural History
The petitioner filed an application before the Industrial Court questioning the maintainability of the complaint on the ground of absence of employer-employee relationship. The Industrial Court dismissed the application on 28th June, 2006. A review application was also rejected on 27th March, 2003. The petitioner then filed the instant writ petition before the Bombay High Court.
Acts & Sections
- Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971: Schedule IV Items 5 & 9
- Factories Act, 1948: Section 46
- Contract Labour (Regulation and Abolition) Act, 1970:
- Industrial Disputes Act, 1947:
