1. This is an appeal from the order of Balakrishna Aiyar, J. in W. P. No. 110 of 1958, quashing the award dated 30-12-1957 of the Labour Court, Coimbatore, in I. D. No. 60 of 1957, by which the Labour Court had directed the first respondent management to reinstate the first appellant before us in service.
2. The first appellant, who was an employee of the first respondent company as a weaving production clerk and who had put in a service of about 11 years, was dismissed by the first respondent on 28-11-1956 on the ground that he was found sleeping on three occasions while on duty on the night of 22-11-1956. As at that time an industrial dispute was pending adjudication by the Industrial Tribunal, now known as the Labour Court, at Coimbatore, the first respondent applied to that Tribunal under Section 33(2) of the Industrial Disputes Act, for approval of the order of dismissal.
At the same time, the first appellant also filed a complaint under Section 33-A of the Act questioning the order of dismissal. The Labour Court which heard the two petitions together, by its award dated 13-3-1957, held that the order of dismissal was unjustified and, directing the reinstatement of the first appellant with full back wages and continuity of service, dismissed the first respondent's application filed under Section 33(2) of the Act.
The award was published in the Fort St. George Gazette dated 10-4-1957 and had to be implemented by 9-5-1957. It was, however, not implemented untill 13-7-1957. In the meantime the first respondent sought the special leave of the Supreme Court to appeal against the award but leave was refused on 24-5-1957. On 13-7-1957 the first respondent reinstated the first appellant in service with effect from the forenoon.
On the same day it terminated the first appellant's service with effect from the afternoon, the order of termination purporting to be under the Standing Order 18 (a). We will presently refer to this order of termination in more detail. The order of termination of the first appellant's services became the subject-matter of an industrial dispute sponsored and supported by the second appellant, the union, which was eventually on 24-9-1957 referred under Section 10(2) of the Industrial Disputes Act for adjudication by the Labour Court, Coimbatore.
3. At this stage, it will be convenient to refer to some more facts, which furnished a background for and had a bearing upon the order of termination dated 28-11-1958. The first appellant, sometime before 26-3-1955, had complained to the Salem District Textiles Employees' Union that one Sadler, an officer in the employ of the first respondent, had abused him and insulted him when on duty. The secretary of that union took up that matter and addressed the manager of the first respondent by a letter dated 23-6-1955 of which copies were sent by him to the British High Commissioner, the British Trade High Commissioner, New Delhi, the Labour Minister, Union Government, New Delhi, the Chief Minister, the Labour Minister, Madras and others.
This letter recounted the incident in which Sadler was alleged to have abused and insulted the first appellant and how he also used abusive words against him in December 1954. The letter complained that such action and behaviour on the part of an European staff towards an Indian staff could not in the least be tolerated as it affected the self-respect of a man, leave alone his position, status etc., and demanded, at the end, an apology in writing from the management with an assurance that there would be no recurrence of such an unhappy incident.
What transpired thereafter is not clear from the materials on record. But on 28-11-1956, just before the enquiry by the first respondent against the first appellant on a charge of sleeping while on duty on the night of 22-11-1956 commenced, the first appellant had handed to the enquiry officer his letter dated 28-11-1956 which had reference to the question involving Sadler and the first appellant.
In that letter, the first appellant stated that he was personally not for making much of that incident, and that but for the instigation of another European employee by name Nigli, neither he nor the secretary of the Union would have developed the incident to such a magnitude as it had been, and addressed the letter dated 26-3-1955. The first appellant in that letter dated 28-11-1956 expressed regret for having been a tool at the hands of Nigli and complained against Sadler, not knowing that Nigli had his own axes to grind against Sadler.
The first respondent took no action against the first appellant on his letter dated 28-11-1956, until it was pressed into service on 13-7-1957. It may be remembered that on that day, the first appellant was reinstated in service in the morning, and his services were terminated with effect from the afternoon by another order of the same date. The order terminating the services of the first appellant was as follows :
'In your letter dated 28-11-1956, which you sent to the Manager on the same date, you have admitted that you falsely complained to the Union that Mr. Sadler, Shift Manager, grossly insulted and abused you on or about 24-3-1955, at the instigation of Mr. Nigli, another member of the staff. The management is satisfied that your allegation against Mr. Nigli is without foundation.
Your complaint to the Union was communicated by the Union to several officials including the British High Commissioner unnecessarily and maliciously only with a view to harm the reputation of the company.
In view of this and your past conduct and in view of the strained relations between you and the company, the management have lost confidence in you and consider that you are not a fit person to continue in the employment of the Mills. Your service of employment is therefore terminated under Standing Order 18 (a) as and from this afternoon. You are also informed that the Management is prepared to pay you compensation equivalent to Section 25-F of the Industrial Disputes Act.'
It is common ground that no charges were framed and no enquiry was held against the first appellant and that he was not even given an opportunity to show cause against the reasons for the termination of his services. The second appellant-Union, which espoused the cause of the first appellant, submitted to the Labour Court, to which the dispute in regard to the termination of the services of the first appellant had been referred for adjudication, that the first respondent would not respect the award of the Industrial Tribunal published on 10-4-1957 directing the reinstatement of the first appellant, that the Union thereupon moved the Government to prosecute the first respondent for non-implementation of the award, that it was after the Labour Officer, Salem, began to press the first respondent for the implementation of the award that it reinstated him with effect from 7 a.m. on 13-7-1957, and that the reinstatement in the morning and the discharge of the first appellant from service in the afternoon with reference to a letter said to have been written by the first appellant about 8 months earlier on which the first respondent had taken no action all the time, showed that the first respondent's conduct in discharging the first appellant was thoroughly mala fide and provided a glaring instance of the most intolerable type of unfair labour practice.
Contending that the discharge of the first appellant was illegal, as it was not preceded by any charge, that no opportunity was given to him to explain the circumstances alleged against him and that it was, therefore, against the principles of natural justice, the Union prayed the Labour Court to direct the first appellant's reinstatement. The position taken up by the first respondent before the Labour Court was that the termination of the services of the first appellant was in exercise of its power under the Standing Order 18 (a) under which the employment of any permanent workman might be terminated by 14 days' notice or by payment of 14 days' wages in lieu of notice and that no enquiry under that order was necessary, unlike in the case of a dismissal of a workman under the Standing Order 21 for misconduct.
The first respondent also reiterated that the reason for terminating the first appellant's services was that in his letter dated 28-11-1956 he admitted that he had falsely complained to the Union that Mr. Sadler, one of the Assistant Managers of the mill, grossly insulted and abused him on or about the 24th March 1955 and that the false complaint was made at the instigation of Mr. Nigli, that as the first appellant had been dismissed from service on 28-11-1956, there was no necessity at that time for the management to take any action separately on his letter dated 28-11-1956, and that the management, at no time, condoned the action of the first appellant in preferring the false complaint to the Union and was, therefore, entitled to consider the letter and take suitable action, when the dismissal of the first appellant was not upheld by the courts. The first respondent further maintained before the Labour Court that its decision to terminate the services of the first appellant was, in the circumstances, bona fide, and justified, as the management was satisfied that his retention in service would be prejudicial to its interests.
4. In an elaborate award dated 30-12-1957, the Labour Court, while it was prepared to grant that under the Standing Order 18 (a) the first respondent possessed power to terminate the services of a workman by giving 14 days' notice or by payment of 14 days' wages in lieu of notice, examined the reasons in the management's letter dated 13-7-1957, for the termination of the first appellant's services with a view to satisfy itself whether there had been an unfair labour practice or victimisation or whether the termination was vitiated by ulterior or improper motives or mala fides on the part of the management, and considered, in effect, that, as the termination of the first appellant's services was stated by the management to be based on the , first appellant's past conduct and alleged false complaint, the first appellant should have been given an opportunity to show cause before adverse conclusions were drawn against him and that, in the circumstances, the course of conduct pursued by the management in terminating the services of the first appellant could not be regarded as fair to him.
The Labour Court also observed that so far as the reference in the management's letter dated 13-7-1957 to the first appellant's alleged past conduct was concerned, there was absolutely no evidence to support the allegation. In the opinion of the Labour Court, the termination of the first appellant's services, in the circumstances and the manner in which it was done, was unjustified and it, therefore, directed the first respondent to reinstate the first appellant in service.
5. Seeking to quash that award, the first respondent management filed the writ petition out of which this appeal arises, under Article 226 of the Constitution for the issue of an appropriate writ. Balakrishna Aiyar, J. allowed the writ petition and quashed the award. The learned Judge did so in the view that the Labour Court erroneously thought that it too possessed a supervisory jurisdiction in a matter of this kind which related to the internal discipline of an industrial establishment in the hands of the management.
The learned Judge considered that the first respondent was entitled, on the letters that passed, to take the view that it was undesirable in the interests of the first respondent to keep the first appellant in its employ any longer, that the first respondent had the necessary power under the Standing Order 18 (a) to dispense with the services of the first appellant by giving him the requisite notice or payment of specific wages in lieu of notice and that it was not within the power of the Labour Court to interfere with the impugned order terminating the services of the first appellant. To quote the learned Judge :
'In paragraph 16, the Labour Court quoted from 1951 II LLJ 320 (sic), a case decided by the Labour Appellate Tribunal, this observation : 'The question, therefore, is whether this Tribunal in exercise of its supervisory jurisdiction, is entitled to know whether or not the conduct of the manager was arbitrary.'
The Labour Court whose award is now being challenged apparently thought that it too possessed a supervisory jurisdiction in a matter of this kind. That view of it is manifestly erroneous. The Labour Court and in fact the Labour Appellate Tribunal too are the creatures of statute and they have no power or authority whatever except those conferred by the relevant statutes which have been passed from time to time. When a Civil Court 'appoints a guardian for the person of a minor of a lunatic, or a Manager for the administration of his estate, the court retains certain powers of control and supervision over the person it has so appointed. But the position of a Labour Court is no wise similar. Neither employees nor employers are in relation to the Labour Court, its wards. The internal discipline of an industrial establishment is in the hands of the management and the Labour Court can interfere only where the statute permits it to do so. It has no powers whatever except those which can be traced to a statute, statutory rule or a statutory instrument.' The learned Judge drew attention to the distinction between the termination of an employment simpliciter and termination of employment as a punishment for misconduct and considered that, as under the Standing Orders applicable to the case, no enquiry was necessary in the case of termination of employment simpliciter, the first respondent acted within its powers in terminating the services of the first appellant without an enquiry, by recording its reasons in writing for the termination.
The learned Judge was further of the opinion that there was no scope for the application of the principles of natural justice to a relationship of the kind where the rights of parties were provided for and determined by statutes, rules framed under the statutes and other statutory instruments, that the Labour Court ignored the rights which the management had under the Standing Orders and that the principles of natural justice could not be invoked to set aside something properly done in the exercise of a lawful power.
6. In this appeal before us Sri Mohan Kumaramangalam, the learned counsel for the appellants, contended that the learned Judge was in error in taking a too narrow view of the nature and scope of the jurisdiction of the Labour Court in the matter and quashing its award on the ground that the first respondent was entitled in the exercise of its undoubted contractual power to terminate the services of the first appellant irrespective of other considerations.
We are of the opinion that the learned counsel is right in his contention. When a dispute between a workman and his employer regarding the termination of his services has developed into an industrial dispute, sponsored and supported by the concerned Labour Union, the matter is no longer confined to the limits of contractual rights but other considerations having a larger bearing upon industrial relations and industrial peace came into play.
The principle of the industrial law in providing for adjudications of labour disputes is obviously to conserve and promote just and equitable relations between employers and employees and secure industrial peace through the process of collective bargaining, negotiation, conciliation or adjudication of such dispute. In our view, it is inherent in the nature of things, therefore, that settlement of such dispute is above the realm of merely adjudging contractual rights as between an individual employee and his employer with reference to particular terms and conditions of employment.
An industrial dispute raised by a group of employees arrayed as a union, by reason of the collective force and exigencies of conserving equitable relations and industrial peace, opens up a wider field beyond individual contractual relations and may involve the question whether even though an action on the part of the management may be within the contractual power, it is an unfair labour practice, victimisation, mala fide or otherwise improper from the standpoint of just and equitable labour relationship.
The jurisdiction of the Labour Court or in Industrial Tribunal to which such a dispute is referred for adjudication, should necessarily extend and include a power to investigate and adjudicate upon such questions, unfettered by considerations based on contractual rights as between a particular workman and his employer. It is here that the nature and scope of the jurisdiction of the Labour Court or the Industrial tribunal adjudicating upon industrial disputes differ from those of the civil courts, which can only decide strictly confining themselves to the contractual terms and conditions.
7. That such is the nature and wide scope of the jurisdiction of Industrial Tribunals has been long settled. The point was specifically decided hy their Lordships of the Federal Court in Western India Automobile Association v. Industrial Tribunal, Bombay . The question in that case was whether an Industrial Tribunal had jurisdiction to order reinstatement of a dismissed employee of a non-Governmental industrial concern.
The argument on behalf of the employer was that to invest the Tribunal with jurisdiction to order reinstatement amounted to giving it authority to make a contract between two persons and that such a power did not exist in any Tribunal. It was further argued that in the absence of express words, the courts should not consider that the Tribunal had jurisdiction to order reinstatement on the ground that the power to do so was implied in the definition of an industrial dispute. Dealing with this argument, Mahajan, J., as his Lordship then was, delivering the judgment on behalf of the court, observed:
'This argument overlooks the fact that when a dispute arises about the employment of a person at the instance of a trade union, or a trade union objects to the employment of a certain person, the definition of industrial dispute would cover both those cases. In each of those cases, although the employer may be unwilling to do so, there will be jurisdiction in the Tribunal to direct the employment or non-employment of the person by the employer. This is the same thing as making a contract of employment when the employer is unwilling to enter into such a contract with a particular person. Conversely, if a workman is unwilling to work under a particular employer a trade union may insist on his doing so and the dispute will be about the employment of workmen by the employer and thus become an industrial dispute subject to the award of the Tribunal. Therefore, if the bringing about of such relationship is within the jurisdiction of the Industrial Tribunal, because such disputes are covered by the definition of the expression 'industrial dispute' there appears no logical ground to exclude an award of reinstatement from its jurisdiction. It can equally direct in the case of dismissal that an employer stall have the relation of employment with the Other party, although one of them is unwilling to have such relation.'
8. That no doubt was a case of dismissal of an employee. But it seems to us that in principle it makes no difference to the jurisdiction of the Industrial Tribunal whether it is a case of dismissal for misconduct or termination simpliciter of an employee's services. Both are cases of non-employment. If such a termination is the subject-matter of an industrial dispute referred to for adjudication, then the Tribunal will be well within its jurisdiction to deal with it in order to give or decline to give by its award the relief of reinstatement of an employee. In so dealing with the question of reinstatement, the jurisdiction of the Tribunal, in our opinion, is in no way limited or circumscribed by considerations based on contractual power permitting the employer to terminate an employee's services in terms of a particular contract or Standing Order governing the employment.
9. Though ostensibly the termination of an employee's services may be in conformity with the terms of employment or the relative Standing Order, it may, nevertheless, transpire on investigation into the relevant facts and circumstances surrounding and leading to the termination of service, that it is mala fide or is made with ulterior motives, or amounts to victimisation or an unfair labour practice or is arbitrary or is considered in any wise improper. With due respect, we are unable to agree with Balakrishna Aiyar, J. that an Industrial Tribunal will have no jurisdiction in such cases to investigate and if it thinks fit, direct reinstatement. The power of the Tribunal to find on the propriety or otherwise of an order of termination of the service of an employee is but incidental to its jurisdiction to adjudicate on an industrial dispute and direct reinstatement.
10. In the recent case of Assam Oil Co. v. Its Workmen, : (1960)ILLJ587SC , a certain employee's services were terminated by the management by giving one month's pay in lieu of notice. The employee's case was taken up by the workmen of the concern and the management having refused to reinstate the employee, it became the subject-matter of an industrial dispute which was referred to an Industrial Tribunal for adjudication. The Tribunal ordered reinstatement.
In challenging that order, the argument on behalf of the management was that the management had terminated the services of the particular employee in pursuance of the terms of the contract and that an order of discharge passed strictly according to the terms of the contract, could not be questioned before the Industrial Tribunal. On behalf of the management, it was further argued that even if the order of discharge was found to be unjustified because no enquiry was held, the whole evidence relating to the alleged misconduct of Miss Scott (the employee) had been led before the Tribunal and in the light of the said evidence, the order of discharge should not have been interfered with and reinstatement should not have been ordered.
Repelling these contentions, their Lordships of the Supreme Court held :
'If the contract gives the employer the power to terminate the services of the employee after a month's notice or subject to some other condition, it would be open to him to take recourse to the said term or condition and terminate the services of his employee; but when the validity of such termination is challenged in industrial adjudication it would be competent to the Industrial Tribunal to enquire whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the contract. If the discharge had been ordered by the employer in bona fide exercise of his power, then the Industrial Tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter and the Industrial Tribunal would be entitled to go behind the words and the form and decide whether the discharge is a discharge simpliciter or not. If it appears that the purported exercise of the power to terminate the services of the employee was in fact the result of misconduct alleged against him, then the Tribunal will be justified in dealing with the dispute on the basis that despite its appearance to the contrary the order of discharge is in effect an order of dismissal. The exercise of the power in question to be valid must always be bona fide. If the bona fides of the said exercise of power are successfully challenged, then the Industrial Tribunal would be entitled to interfere with the order in question. It is in this context that the Industrial Tribunal must consider whether the discharge is mala fide or whether it amounts to victimisation or an unfair labour practice, or is so capricious or unreasonable as would lead to the inference that it has been passed for ulterior motives and not in bona fide exercise of the power conferred by the contract.'
In that case though the termination of service was couched in words which did not impute any misconduct to the employee, in substance it was found to be based on misconduct and, therefore, considered as a punitive dismissal. Their Lordships observed that in such cases fair play and justice required that the employee should be given a chance to explain the allegations weighing in the mind of the employer, and uphold the jurisdiction of the Tribunal, to make an enquiry with a view to see whether the employee should be directed to be reinstated in service. The Supreme Court was further pleased to observe :
'Therefore, we are not prepared to accede to the argument urged before us by the learned Additional Solicitor General that whenever the employer purports to terminate the services of his employee by virtue of the power conferred on him by the terms of contract, Industrial Tribunal cannot question its validity, propriety or legality.'
Evidently realising this position, Sri. M. K. Nambiar, the learned counsel for the first respondent, did not support the judgment of Balakrishna Aiyar, J. on the ground that the Industrial Tribunal had no jurisdiction at all to consider the validity, propriety or legality of order of discharge or termination of the first appellant from service. But the learned counsel contended that inasmuch as the Industrial Tribunal in this case did not find that the first respondent, in terminating the first appellant's service in the exercise of its contractual power, acted mala fide, the Tribunal exceeded its jurisdiction in directing the reinstatement only on the ground that the first respondent had failed to observe the principles of natural justice before passing the order of termination o the first appellant's services.
The contention appears to us to be neither correct nor sound. In the first place, the jurisdiction of the Tribunal, as we have already held, includes within its ambit the power to order reinstatement. The basis of its jurisdiction is that an industrial dispute, which the Tribunal is called upon to adjudicate, comprehends within its definition a dispute as to the employment or non-employment of an employee.
The foundation of its jurisdiction is not based upon its finding whether the order of discharge was mala fide. If the order was mala fide, that Could be a proper ground on which the Tribunal might consider that the order of discharge should be set aside and the discharged employee directed to be reinstated. But, in our opinion, that is not the only ground on which the Tribunal can give the relief of reinstatement.
In the second place, a perusal of the award leaves us with the impression that in the opinion of the Labour Court the order of discharge was not bona fide. It is true that it did not in so many words find that the order was mala fide. But it has stated enough to indicate that the order of discharge was not fair and proper. In fact Balakrishna Aiyar, J. recorded his impression on a reading of the award in the following words :
'Though the Labour Court does not expressly record such a finding its observations in various paragraphs suggest that in its view the action of the management in this particular case was not bona fide.''
We are in entire agreement with the learned Judge that was the trend and tenor of the reasoning of the Labour Court in its award. There is, therefore, no substance in the above contentions of the learned counsel for the first respondent.
11. Sri M. K. Nambiar next contended that the Standing Order 18 (a) was admittedly applicable to the case of the first appellant and that, in so far as the order of termination of service was in conformity with its terms and conditions, it could not be interfered with by the Tribunal. In support of his contention, the learned counsel referred us to the decision in Nagpur Electric-Light and Power Co. Ltd. v. K. Shreepathirao, : (1958)IILLJ9SC .
That was not a case of an industrial adjudication. There the order of discharge was straightaway challenged in the High Court of Nagpur on a petition under Article 226 of the Constitution for the issue of a writ of certiorari to quash that order. We fail to see how that case helps the first respondent in this case. As held by a Division Bench of this court, to which one of us was a party, in Working Journalists of Tamil Nadu v. The Management of Tamil Nadu Madurai, : (1959)IILLJ84Mad , there is nothing in the Industrial Employment (Standing Orders) Act, (XX of 1946) or the rules or standing orders made thereunder which in any way affects the wide jurisdiction of the Industrial Tribunal to adjudicate upon industrial disputes involving the question of reinstatement of an employee in service and give effective relief in such cases.
12. We, therefore, set aside the order of Balakrishna Aiyar J. in W.P. No. 110 of 1958, and allow this appeal. The first respondent will pay the costs of the first appellant throughout. Counsel's tee Rs. 100/-.