LOKMAT NEWSPAPERS PVT. LTD. V/S SHANKAR PRASAD IN THE TIME OF THE INDUSTRIAL RELATIONS CODE, 2020: A GOOD OR A BAD PRECEDENT?

Introduction

The concept of precedents has its origin in the English Common Law. Salmond defines it as the part of a judicial decision having a legal authority, also called as ratio decidendi. The significance of law of precedent is to establish uniformity and consistency in decision-making and ensure equality in treatment.

Recently, the Industrial Relations Code, 2020 (hereafter ‘the IR Code’) received the President’s assent. The Code was proposed to simplify the matrix of country’s labour laws for better and easier compliance with the various laws. Albeit there being a shift to a new Code, certain provisions remain unchanged. Hence, it is crucial to examine whether the most significant precedent is in concord with the new Code.

Interpretation of legal provisions and its application play a crucial role in shaping a judicial decision. At first the Courts interpret a legal provision independent of the facts of a given case, and then apply them depending upon the different circumstances of the case. However, where the words of a provision are not put to question, Interpretation does not permit to read words into an Act or Provision. In such circumstances, the Courts adopt the rule of strict interpretation.

However, in Lokmat Newspaper’s case, the concerned provision, i.e. Section 9A of the Industrial Dispute Act, 1947 (hereafter ‘ID Act’) was not put to question, yet the Apex Court went a step forward from strict interpretation and interpreted the Section liberally. The paper, thus, seeks to ascertain the true stand of the Court by analyzing the matter from the lens of rules of interpretation of statutes.

The Background of Lokmat Newspaper’s case

Lokmat establishment published a newspaper and carried its work in such a format that the composing part was done manually by hands and printing was done via machines. However, to meet the growing demand of the newspaper, the establishment opened another branch. Later, it went on to install two photo-type machines introducing the new technique of rationalization, standardization and improvement of technique. When the machines became fully operative, Shankarprasad (the respondent) along with twenty four other employees became redundant. The Company asked these employees to move to its new branch in Jalgaon. The said order of transfer was challenged by the respondent before the Industrial Court.

Now, the Company issued a notice under Section 9A of the ID Act stating that installation of photo-type machines have left employees with no work in hand. The Conciliation proceedings also failed. The employers waited for the Conciliation proceeding to end and for 21 days to elapse after which they discharged the employees. This renders the entire procedure within the purview of Section 9A of the ID Act which states that any change in the conditions of service shall be effected- a) when a notice has been served to the worker; b) within 21 days of giving such notice.

The Supreme Court held as follows: firstly, it is evident that incorporation of the machines would change the working factor and scheme leading to future retrenchment. Secondly, a notice under Section 9A must have been served before the scheme of rationalization. Thirdly, noncompliance with Section 9A has made the action void ab initio rendering the termination of employees arbitrary. Lastly, employees were entitled to payment of wages since the day it was withheld citing cessation of employment and Shankarprasad would get his payment until his retirement.

Rules of Interpretation of Statutes and the first side of the coin

Statutory interpretation aims at determining the intention of the legislature behind the enactment of a statute in general and a legal provision in particular. Interpretation could be done liberally or strictly. By virtue of rule of strict interpretation, a legal provision is read only by the letters of the law as opposed to liberal interpretation where the spirit, i.e. object and reason, background, international thoughts, popular understanding, contextual connotation and suggestive subject-matter are looked into.

Strict interpretation is the first step taken while reading a statute. It says that where the words are clear and plain and the language employed is not put to question, Courts are bound to accept the express intention given therein. It averts deriving wrong inferences of a statute and prevent Judges from moving away from the text of the statute which carries the true intent of the Legislature.

Further, mandatory and directory provisions are construed differently. Mandatory enactments are obeyed exactly. An act done in breach of a mandatory provision is invalid.

Section 9A of the ID Act is a mandatory provision. Firstly, it uses the word ‘shall’ which prima facie raises a presumption that the particular provision is imperative. Secondly, law recognizes that a mandatory provision clothes the command in a negative form. Such as, Section 9A being with a ‘no’ and the Supreme Court has time and often devised that use of ‘no’ renders a provision mandatory.

From the above discussion, it can be concluded that, in the Lokmat’s case, Section 9A was assuredly a mandatory provision. The clause was not even into dispute. Also, all the essential requirements of the said Section were fulfilled making the act procedurally correct. This implies that the Court should have placed strict reliance on the wording of the provision while adjudicating the matter. This is pertinent to save the precious time of the Court. With a huge number of cases running in line every day, it is not realistic and feasible to cull out every aspect even when there’s a prima facie solution to them.

Flipping the coin: Defending the stand of the Court

Principles of interpretation of statutes distinguish between ‘interpretation’ and ‘construction’. Former is the art of finding the true sense of the words and derive the exact same idea which the author intended to keep. On the other hand, the latter looks beyond the direct expression of the text to draw conclusions which are in spirit. As Blackstone quotes:

“The most fair and rational method for interpreting a statute is by exploring the intention of the Legislature through the most natural and probable signs which are either the words, the context, the subject-matter, the effects and consequence, or the spirit and reason of the law.”

Therefore, in circumstances where strict interpretation would give rise to an absurd and unjust situation, the Judges use their good conscience to remedy it by reading beyond the express wordings of the clause.

In the present case, firstly, the purpose of Section 9A of the ID Act was to provide the employees with an opportunity ‘to consider the effect of a proposed change’ and if the situation demands, put forth their views on the proposal. Thus, when Lokmat Newspaper establishment released the notice of change at the time when the employees could not afford the opportunity to discern the effect of such a notice, it clearly failed to meet the purpose of the said provision.

Secondly, the goal of Section 9A is to show the management that retrenchment of scheme is not necessary and that the employees could work side-by-side the machines. It was to make such negotiations possible and to avoid conferring arbitrary powers in the hands of the employers that Section 9A was incorporated. In the present case however, the chance to negotiate, i.e., whether employees wanted to join the other branch or other department of the same branch etc. was not provided.

Additionally, it is practically understandable that machines would always be more productive than manual labour, and it could be apprehended that employees would become redundant in the near future. In this situation, it would only be reasonable to give the notice of change before the period of rationalization. Hence, the Court has rightly decided in favour of the employees.

Conclusion

From the above discussion it can be gathered that process of construction is a combination of literal and purposive approaches. To verify the intent of the legislature, the true or legal meaning of the words is to be harmoniously construed with the object behind it. Also, it has been recognized that when literal and mechanical construction of a provision leads to conflict with the requirement of fair play and justice, the rule of strict interpretation could be disregarded.

In the instant matter, the employers had given a notice within 21 days w.r.t. change in condition of services and thereby complied with the two requirements of Section 9A. However, the right time to serve the notice should have been before the scheme of rationalization. This was necessary to ensure adherence to the purpose of the provision which requires that the employees get an opportunity to negotiate with the employers. Had the Court adjudicated by strictly interpreting Section 9A, it would have been unjust and contrary to this purpose. Therefore, the stand of the Supreme Court in Lokmat’s case is absolutely justified and within the purview of the law. In the present time, the ID Act has been replaced by the IR Code. Under the Code Section 40 is the verbatim of Section 9A of the ID Act. Hence, it was pertinent to verify the validity of precedents laid down as per the previous Act to guard the roots of continuity and certainty of law.


Aayushi Swaroop, a 3rd year student at NUSRL, Ranchi

Picture Credits: Careersmart


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