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SCOPE OF JUDICIAL ENQUIRY UNDER SECTION 33(2)(B) OF INDUSTRIAL DISPUTES ACT: AN ANALYSIS (PART-I)

This post is authored by Vidushi Gupta, a fourth-year B.A. LL.B. (Hons.) student at National Law School of India University, Bangalore.


1. INTRODUCTION


Section 33(2)(b) of the Industrial Disputes Act, 1947 ("IDA") states that an employer has the power to discharge/dismiss workmen (who are involved in an industrial dispute) for any misconduct unconnected with the dispute, during the pendency of that dispute. However, the employer is required to pay one month’s wages to the workmen and make an application for post-facto approval to the authority before whom the industrial dispute is pending. Thus, the de facto relationship of the employer and the employee ends after the order of discharge/dismissal, but the de jure relationship ends after the approval is granted.


This article aims to critically analyse the SC judgement in the case of John D’Souza v. Karnataka State Road Transport Corporation, which pertains to the scope of enquiry or jurisdiction of a Labour Court/Tribunal regarding approval under Section 33(2)(b). It is argued that the judicial interpretation of the scope of this enquiry, coupled with the legislative scheme of the IDA, is not conducive to the achievement of the object of the provision. Hence, this article suggests the need for amendment to provide real and effective protection to the workmen, i.e. the intended beneficiaries of the provision.


2. BACKGROUND


John D’Souza (appellant) was employed with the Karnataka Road State Transport Corporation ("KSRTC"). He remained absent from duty without prior permission, leading to an enquiry. He participated in the enquiry and was given an opportunity to produce documents, but failed to produce any evidence. Hence, the disciplinary authority passed an order of dismissal. KSRTC filed an application for approval of the order of dismissal under Section 33(2)(b). The Labour Court after perusing the evidence held that the enquiry was fair and proper, but refused approval. However, a Division Bench ("DB") of the HC held that the Labour Court could not have permitted the parties to adduce evidence. The matter was remanded back. The Labour Court reiterated its view, based on the documents produced by the appellant before the Court. However, a DB of the HC again reversed it, holding that the jurisdiction under Section 33(2)(b) could not be expanded to permit parties to lead evidence which was not produced in the enquiry. Against this order of the DB, the appellant approached the SC.


3. OBJECT OF THE PROVISION


The purpose of Section 33 is two-fold. Employers may try to deter workers from pursuing legal action against them by unfairly terminating or adversely altering their status. So, Section 33 is designed to protect workmen against harassment, victimization or mala fide action by the employer on account of their having raised industrial disputes. Further, it seeks to maintain status quo to ensure that the pending proceedings are resolved expeditiously in a peaceful atmosphere, undisturbed by any fresh disputes between the parties.


4. JUDICIAL INTERPRETATION


The IDA and the Rules are silent on the pre-requisites to be met for approval and the limits to the authority’s discretionary power under Section 33. Generally, the SC has confined the tribunal’s jurisdiction to be only supervisory, not appellate or revisional. In the Atherton West case, the SC held that in discharging its limited jurisdiction, the tribunal cannot evaluate “whether the discharge/dismissal was within the rights of the employer or to rule on the merits of the employer's action.” The tribunal only had to see whether there was a prima facie case made out for dismissal and the employer did not resort to any unfair practice or victimisation.


In the Automobile Products case, it was held that the authority can only grant or withhold permission. It cannot do complete justice between the parties. Further, it was held that the legislature could not have vested in a conciliation officer/board, the jurisdiction and power of adjudication which they normally do not possess and are not competent to exercise. Later, in the Lakshmi Devi Sugar Mills case, the SC elaborated on the requirement of a prima facie case and held that such a case would be made out if a fair inquiry was held by the employer (i.e. full and free opportunity was given to the employees to present and defend themselves), without violation of the principles of natural justice ("PNJ"), and if he had bona fide come to the conclusion that the workman was guilty of misconduct. Thus, the tribunal’s role was expanded considerably.


The decision in Martin Burn held that for a prima facie case to be established, an authority only has to consider if the employer’s conclusion was a possible one. It also indicated that the requirement of a fair inquiry is not absolute and widened the jurisdiction of the authority further, by holding that upon the employer’s failure to institute a formal inquiry, the authority could itself determine whether on the materials adduced, a prima facie case for termination had been made.


This decision paved the way for a new line of cases holding that if no domestic enquiry was held or where it was found to be defective, improper, unfair, or invalid, the authority could decide on the approval, after allowing the employer to prove his case by adducing evidence and establishing its veracity to justify the dismissal. But, once the tribunal is satisfied as to the truth of the management’s case, it cannot sit in judgment on the conclusion drawn by the employer.


In the Punjab National Bank case, the Court held that if there was a ‘proper’ inquiry and no ‘victimization or unfair labour practice’, the authority only had to determine whether a prima facie case has been made. The Court also affirmed that the authority should interfere when there is want of good faith, a violation of PNJ, or when the finding of the management is completely baseless or perverse.


These requirements were partially modified in the Mysore Steel Works case[L1] [VG2] , where it was held that if the domestic enquiry is not defective by reason of violation of PNJ, perversity of findings, victimisation or unfair labour practice, the tribunal only has to see if there is a prima facie case and if the employer had come to a bona fide conclusion. However, if the enquiry is defective, the authority would consider the evidence adduced before it to determine if the dismissal should be approved. The same view was reiterated in the Lalla Ram case. However, the difference here was that all the requirements stood at equal footing; none of them formed a pre-requisite for the prima facie requirement, as had been the case in the Punjab National Bank and the Mysore Steel Works cases.


Relying on these cases, the SC in the present case ruled that proceedings under Section 33(2)(b) are summary in nature and that the scope of enquiry by the authority is in two phases. First, if the domestic inquiry is not defective, it has to be evaluated whether a prima facie case of discharge/dismissal is made out, based on the record of the enquiry. Second, if the domestic inquiry is found to be defective, the authority has to come to its conclusion on assessment of evidence adduced by parties. Thus, it is the duty of the authority to see, as a preliminary issue, whether the enquiry is valid.


Though this case seems to follow the precedents decided on this issue, there are certain problems in the overall conclusion of the court and the outcome of the case. It is not clear why the SC held that the Labour Court could have permitted parties to adduce evidence but could not have relied on the same, especially since parties can be permitted to lead evidence, only once the enquiry is held to be defective. The SC’s partial approval of the views of both the Labour Court and the HC seems to be a forced attempt. Further, the SC erroneously states that the additional evidence to be adduced before it should pertain to the ‘legality and propriety’ of the enquiry, whereas it should actually pertain to the justifiability of the dismissal.


The Court also held that the authorities under Section 33(2)(b) cannot dwell on the proportionality of punishment, although this was not really an issue involved in the present case. Further, the SC remanded the case back to the Labour Court, but this may be problematic to the extent that the Labour Court has already twice held the domestic inquiry to be fair and proper, and the decision of the SC may now nudge the Labour Court to decide otherwise, in order to have additional evidence adduced before it.


This case was decided by a SC DB, and there are several cases on this issue decided by larger Benches of the SC. Hence, it would have been both difficult and somewhat inappropriate for the Court to go against the precedents. However, the SC failed to realise the unique facts involved in this case. It was only the worker who wanted to adduce additional evidence before the Labour Court, not the management, whereas the precedents have been largely centred on the employer’s right to adduce evidence in support of its decision of discharge/dismissal. The worker’s right to present evidence is only seen from the view of rebuttal of employer’s evidence.


What is evident from the case laws is that the SC has come a long way from Atherton West, and the grounds of judicial enquiry under Section 33(2)(b) have been expanded considerably. Thus, the Labour Court in the present case was indeed within its jurisdiction to find out whether “there was victimisation or unfair labour practices” by the management. However, it could not do so, due to the hurdle posed by the standard of proof/inquiry i.e. the prima facie standard.


Soon after the present case was decided by the SC, the Kerala HC decided the case of PN Surendran Nair v. Chairman/Managing Director, Bharat Petroleum Corporation Limited. The facts in the two cases were similar in that the domestic enquiry was held to be not defective, but approval for dismissal of worker was not granted. However, the outcome in the two cases is markedly different, since in the latter, additional evidence was allowed to be adduced before the Tribunal under Section 33(2)(b). An important thing to note here is the reversal of situation, as in the latter case, it was the employer who wanted to adduce evidence, not the worker. Another difference is that in the latter case, the Tribunal concluded perversity of findings, based on the evidence already adduced during the domestic enquiry, whereas in the present case, the Court’s conclusion about victimization was based on additional evidence, not adduced during the enquiry.


The next part of the post discusses the statutory remedies and the need for judicial reform in light of the issues brought to light in the present post.


The second part of the blog can be accessed here.