Bombay High Court Examines Whether GlaxoSmithKline Decision on Territorial Jurisdiction Stands Overruled by Supreme Court. Issue Pertains to Determination of Territorial Jurisdiction of Labour/Industrial Courts Under MRTU Act When Employees Are Posted Outside Maharashtra But Employer's Office Is Within State.

Determination of territorial jurisdiction of Labour/Industrial Courts in Maharashtra under the MRTU Act over complaints alleging unfair labour practices by employers with offices in Maharashtra against employees posted outside the State.

Employees/unions sought a finding that Maharashtra Labour/Industrial Courts have jurisdiction; employers sought dismissal of complaints for lack of territorial jurisdiction.

Complaints were filed alleging unfair labour practices such as transfer and termination; the employers' registered/head/administrative offices were in Maharashtra, but the employees were working or transferred to places outside Maharashtra.

A Division Bench of the Bombay High Court in GlaxoSmithKline Pharmaceuticals Ltd. vs. Abhay Raj Jain and Ors. had held that the situs of the employee is the sole governing factor for territorial jurisdiction under the MRTU Act. The parties debated whether this decision stood overruled by subsequent Supreme Court rulings.

Whether Labour/Industrial Courts in Maharashtra have territorial jurisdiction to entertain complaints of unfair labour practices under the MRTU Act when the employer's registered/head/administrative office is situated within Maharashtra but the employee is posted and/or transferred outside Maharashtra. Whether the Division Bench decision in GlaxoSmithKline Pharmaceuticals Ltd. vs. Abhay Raj Jain and Ors., which held that the situs of the employee governs territorial jurisdiction, stands expressly or impliedly overruled by the Supreme Court in Nandram vs. Garware Polyester Limited and Rakesh Kumar Verma vs. HDFC Bank Ltd.

Employees/unions argued that employment was controlled from employer's offices in Maharashtra where decisions regarding appointment, transfer, and termination were made and communicated, thus a substantial part of the cause of action arose in Maharashtra; GlaxoSmithKline stands overruled by two Supreme Court decisions. Employers argued that the cause of action arises exclusively at the employee's situs because the effect of transfer or termination occurs there; MRTU Act has no extra-territorial application; GlaxoSmithKline remains good law and Nandram is distinguishable on facts.

These matters concern the determination of territorial jurisdiction of Labour/Industrial Courts in Maharashtra to entertain complaints of unfair labour practices alleged to be perpetrated by employers who have their registered/ head / administrative offices within the State of Maharashtra upon the employees posted at and transferred to place/s outside the State of Maharashtra in the context of the provisions of the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 [“MRTU Act”]. (Para 4) The issue of express or implied overruling needs consideration. It is not as if we, as a coordinate bench of coequal strength, are called upon to sit in appeal over GlaxoSmithKline. That would certainly be impermissible. But, given the subsequent decisions of the Hon’ble Supreme Court, the issue of express or implied overruling does require consideration. (Para 11)

Appeal No. 585 of 2009 was admitted and rule issued in the connected writ petitions. By administrative order, all matters were placed before this Bench for common hearing and final disposal.

• Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 (MRTU Act):