Industrial Adjudication is a process of resolution of industrial disputes byspecialized adjudicatory authorities, namely-Labour Courts, Industrial Tribunal and National Tribunal, constituted under the Industrial Disputes Act, 1947. When an industrial dispute is referred by the Government to the Labour Court, adjudication becomes compulsory. The doctrine of res judicata is a well-established concept under the Civil Procedure Code, 1908 (hereinafter ‘the Code’), that places fetters on the Court to adjudicate again, the same issue between the same parties as heard finally decided in an earlier proceeding by a competent Court.This articleseeks to examine whether res judicata should at all be applicable to industrial adjudication matters and the extent and scope thereof.
As a general rule, the entire Code is not applicable to industrial adjudication. However, the principle of res judicata, including constructive res judicata, applies to the Labour Courts. The Supreme Court has held that while Section 11 of the Code would not be directly applied; the principle behind the doctrine would be applicable. The underlying purpose is to avoid multiplicity of litigation and raising of the same disputes between employer-employee, having the effect of causing disturbance to industrial peace, maintenance of which is the primary objective of labour laws. As held in Burn & Co., the principle behind the doctrine is based on sound public policy and has universal applicability.
Development through the years
Burn & Co. was one of the first cases that answered the question of applicability of the principles behind res judicata to industrial disputes, in the affirmative. It was held that though the award is supposed to have long term application, it could be modified when there was a material change in circumstances. However, a series of cases post Burn & Co. took a different position.
Res Judicata not applicable
In the Balmer Lawrie case, it was held that technical considerations like that of res judicata do not find place in the special and distinct process of industrial adjudication, which requires decision on merits rather than being dismissed on a mere technicality. The principle of ‘gradual advance towards the living wage’ was cited by the Court as being contrary to the very principles of res judicata. This essentially meant that if due to certain factors, like cost of living increases or employer’s paying capacity goes up, there is a change in wage structure, then workers must be allowed to ask for revision in wages and if such claim is referred to adjudication, then the adjudicator must not be allowed to reject the claim on technical considerations like res judicata.
In the Associated Cement Co case, the Apex Court refused to apply the doctrine keeping in mind the ‘dynamic nature of industrial relations.’ Following this, the Court took notice of these aforementioned cases in a subsequent case and acknowledged the conflicting views taken. The judge, while expressing scepticism over applying the principle, proceeded to look at other circumstances. A principle analogous to that of res judicata could be applied.
Res Judicata Applicable
The decision in the Straw Board Manufacturing Co case changed the course of application of the doctrine in the industrial context and stands as good law even today. It was held in the case that ‘it is the matter directly and substantially in issue which is of material relevance in determining the question of res judicata.’ This was the most important question for consideration, which if answered in the affirmative would attract the doctrine. With respect to whether additional issues being framed for consideration by the Labour Court or Tribunal would attract res judicata, it was held that such considerations varied from case to case and no cast-iron rule could be laid down.
Further, the Court gave particular importance to substantial justice holding that purely technical considerations as applied in civil cases should not outweigh substantial justice under industrial adjudication. Essentially, what the Court emphasized was that the doctrine would not be applied as strictly to industrial disputes, as applied in civil cases. This kept in mind the fact that the parties involved had a power differential between them, where one could exploit the other and so substantial justice was above all.
Another relevant case is Village Industries Board, which related to termination of service and the High Court had dismissed the application after final hearing. The respondent then raised a dispute under the Industrial Disputes Act and the Labour Court ordered re-instatement to service. It was held that since the cause of action in both suits pertained to termination of service and refusal to allow re-joining of service, res judicata came into force and proceedings by the Labour Court were barred.
This case added another parameter for res judicata to be applicable to industrial disputes; in addition to the matter being directly and substantially in issue, a requirement of the satisfaction on part of the subsequent Court of (i) the previous Court’s competence to dispose of the matter and (ii) hearing and final decision on the matter was stated. These are essentially the elements of the doctrine as specified in the Code. Therefore, res judicata, in effect, operates on the Courts. Consequently, tribunals and labour courts are barred from adjudicating on a matter already decided by the Courts.
The current position can be understood through a 2019 judgment of the Supreme Court. The question in this case pertained to whether the State had the jurisdiction to refer the case which had already been decided by the High Court in earlier proceedings, to the Labour Court under Section 10 of the Industrial Disputes Act. The apex court cited three decisions in order to decide the res judicata issue. In the first cited case, it was held that even though the Labour Court is a tribunal and not a Court, the Code would not apply to it and that the principle behind res judicata finds application to the tribunal as well. The second cited case was the aforementioned Village Industries Board case. The third case summarised the position taken by the Court in the previous cases by re-iterating the settled position of law- ‘the general principle of res judicata applies to an industrial adjudication.’
The Court held that since the issues in question had already been decided by the Courts, no forum had the jurisdiction to try the matter on merits again, summing up the position of law in a concise manner. However, in the opinion of the author, no absolute rule should be laid down for such matters; the Courts must be willing to go into merits of a case if there is substantial proof of miscarriage of justice. Res judicata should be applied to industrial adjudication, but not in a strict sense.
The aforementioned decisions make it clear that although Section 11 of the Code does not apply to industrial adjudication per se, the principle behind the doctrine applies. This position keeps in mind both the letter and spirit of the law. While it does not blur the distinction between a Court and a tribunal by not applying Section 11 of the Code directly, it also efficiently applies the principle behind res judicata. It is also important to look at the nature of proceedings of the tribunals that do not apply rigid provisions of law. Tribunals have the authority to analyse contracts and create new rights and duties if so required in light of justice, equity and good conscience.
Although the workers, clearly at a socio-economic disadvantage as compared to their employers would lose out if their claims are dismissed on a mere technicality, it is also essential to respect the principles of law and not waste the time of the Court. On the flipside, the workers are prevented from being exploited by their employers raising new grounds and issues at different forums, if given the opportunity to do so by not applying the doctrine.
This doctrine, when made applicable in the industrial context seeks to benefit labourers by giving them an opportunity of fair trial and it also helps in maintaining a peaceful working environment by effectively addressing industrial disputes. If not applied, the same parties with the same issues will be able to approach the labour courts and tribunals even after obtaining a final decree or order from the Court, because they would not be barred by res judicata. This will defeat the very purpose of serving timely justice to the distressed, especially in an industrial background where pace of work and peaceful relation between labour and capital is extremely critical.
Examples of change in wage structures over the years had been given as a reason to keep industrial adjudication outside of the ambit of res judicata. Such changes are indispensable and are bound to take place. However, not applying the doctrine gives a leeway to a lot of activities that would in effect disturb industrial pace and peace. Employers who generally have more resources at their disposal tend to drag the employees from court to court if given the option of approaching different forums; making res judicata applicable to industrial adjudication would fairly restrict such practices. However, as explained by the Supreme Court, the highly technical concept of res judicata should be kept within strict confines in the industrial field, which should be free from such technicalities that thwart resolution of industrial disputes.
The issue of whether res judicata applies to industrial adjudication has been a relevant question for a very long time now. Although the matter was a highly contested one in the late 1960s, it has finally been settled by the Supreme Court by its decisions. Applying the doctrine in resolution of industrial disputes keeps in mind the required pace for industrial work, harmonious relations between labour and capital, as well as public policy considerations. Industries are, after all, the backbone of the economy and maintaining a work environment that encourages productivity, quality and employee commitment becomes extremely essential.
Tawishi Beria, a 4th year B.B.A., LL.B. (Hons.) student at JGLS, Sonepat.
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