Shruti Khaitan

Sections 10A and 11A of the Industrial Disputes Act, 1947 (IDA) have been introduced into the legislation by means of amendments in order to provide for speedy settlement of disputes, protecting the interests of workmen and promoting peace and harmony in the industry.

Section 11A of the IDA:

The International Labour Organisation (ILO) in 1963 recommended that an employee terminated from service should have the opportunity for his punishment to be reviewed by a neutral body such as court or arbitral tribunal within a reasonable time. It was based on this recommendation that Section 11A was introduced into the IDA through the Industrial Disputes (Amendment) Act, 1971. This Section provides a tribunal, labour court or national tribunal the authority to modify an order of discharge, dismissal or termination of an employee by the management if they deem necessary. It was noted in Indian Aluminium Co. Ltd v Labour Court (1991) that the object is to reassess the evidence presented during the domestic inquiry conducted before the management and to ensure that the workers are provided adequate relief.

Over the years however, the interpretation of this section has altered significantly. In Scooter India Ltd. v Labour Court (1989), the Supreme Court (SC) gave a broad interpretation to this section, wherein they held that the power under Section 11A is wide and the labour court can modify the punishment of the employee as they think fit. But by the time Hombe Gowda Education Trust (2006) was decided, the SC has narrowed the scope of this section to include only those situations where the quantum of punishment was arbitrary and grossly disproportionate to the employee’s misconduct. This change in the ideology of the SC can be credited to the need to maintain a balance with an earlier notion of protecting the interests of the workers to now seeking to expand industrial growth.

Section 10A of the IDA:

Pursuant to the ILO’s recommendation in 1951, Section 10A was introduced into the IDA through the Industrial Disputes (Amendment and Miscellaneous Provisions) Act 1956. This section provided the opportunity of referring an industrial dispute to voluntary arbitration by means of a written agreement. It was observed in Karnal Leather Karamchari Sangathan v Liberty Footwear Co. (1990) that such arbitration allows for speedy redressal of industrial disputes. An arbitrator appointed under this Section (Industrial Arbitrator) is a private person appointed by the parties who makes a reasoned decision according to the provisions of the law. The role of such Industrial Arbitrator raises critical questions, as neither are they bound by precedents and judicial powers like a judge, nor are their powers of legislators or investigators. Should an Industrial Arbitrator therefore, be considered a ‘tribunal’ under Section 11A?

Scope of Section 10A:

In Rohtas Industries Staff Union v State of Bihar (1962), the Patna High Court (HC) held that Industrial Arbitrators appointed under Section 10A are a statutory body. The Bombay HC in Air Corporation Employees Union v D V Vyas (1962) further stated that the decisions of the industrial arbitrator would be subject to the superintendence of the HC under Article 227 since they would come under the meaning of ‘tribunal’.

The SC however when deciding the status of an arbitral tribunal under Article 136 of the Constitution in Engineering Mazdoor Sabha v Hind Cycles (1962), held that an Industrial Arbitrator is not a tribunal and their decisions cannot be made subject to special leave under Article 136. As per that decision, even a statutory arbitrator like the Industrial Arbitrator did not fulfil the conditions of being a tribunal. The court observed that while the Industrial Arbitrator may embrace certain trappings of the court, they lack the state’s inherent judicial powers as the arbitrator is appointed by the parties to the dispute.

In 1973 however, the SC noted in Rohtas Industries Ltd v Rohtas Industries Staff Union (1976) that the meaning of laws change over the course of time and since the decision in Engineering Mazdoor Sabha, the powers of the arbitrator have expanded and could now affect even those who weren’t parties to the dispute. It was observed  that, “it is legitimate to regard such an arbitrator now as part of the methodology of the sovereign’s dispensation of justice, thus falling within the rainbow of statutory tribunals amenable to judicial review.”

This position was further affirmed in Gujarat Steel Tubes vs Gujarat Steel Tubes Mazdoor Sabha (1980), when the SC held that an Industrial Arbitrator has powers of a tribunal under Section 11A of the IDA, as the functions performed by both arbitrator and tribunal are the same, i.e. they act as a seat of justice. The SC considered the socio-economic conditions of the country and stated that the judiciary cannot keep their hands folded when injustice will be caused by reading the law exactly as stated in the legislation.

The evolution of the judiciary’s opinions as observed above, can somewhat be credited to the governance goals and socio-economic conditions of the country during the periods in which the decisions were made. Immediately post-independence, the state’s focus was on nation building and providing minimum standards to a vast majority of people. This stands in the context of the Engineering Mazdoor Sabha decision, where the court did not hold industrial tribunal to be a tribunal, as they wanted to provide minimum protection to the employees, which was being done through the arbitration process anyway. However, with boom in the industrial revolution and worker protection became supremely important in the 1970s and 80s, which provided the context for the Rohtas Industries and Gujarat Steel Mills decisions while included industrial arbitrators as a tribunal.

Effects of considering Industrial Arbitrator as ‘tribunal’:

Including an arbitrator within the meaning of a ‘tribunal’ under Section 11A allows that the arbitrator will have power to review, modify and replace arbitrary and unfair decision made by the management. This allows the employees a chance to challenge the justification of their dismissal under a statutory body.

As per Section 10A, the award of the arbitrator is final and binding. Recognition of the arbitrator as a tribunal will also provide more opportunities for appeal of the arbitrators’ decision, which will allow a more stringent system of checks and balances on the arbitrators’ actions. Apart from the narrow scope of Article 226 of the Constitution of India, even Article 136 could then be invoked to review the arbitrator’s decision.[i] Article 226 can be used by bringing the matter in front of a HC as a writ petition for reviewing the decision and confers wide powers on the HC under which such matter has been brought, to take such decision as may be necessary. A matter may however only be taken under this Article if the arbitrator’s award is in violation of any rights mentioned in Part III of the Constitution. Under Article 136, ‘any’ matter may be brought before the SC through special leave to appeal.

Conclusively, while the merits of including an arbitral tribunal formed under Section 10A of IDA can be questioned, the benefits prevail over the apprehended disadvantages. Therefore, for the collective benefit of workmen and industrialists, such inclusion of an Industrial Arbitrator as a ‘tribunal’ under Section 11A is in a greater good.

[i] Anand Prakash (ed), ‘Labour Law and Labour Relations’ (Indian Law Institute 1987).

Shruti Khaitan, a 5th year student at JGLS, Sonepat.

Picture Credits: iPleaders

Leave a Comment

Your email address will not be published. Required fields are marked *