Umang Agarwal & Rakesh Kumar Sahu
Introduction
After constituting any judicial or quasi-judicial body, the very first essential is to set forth the jurisdiction of such body within the limits of which it can exercise the given authority. The jurisdictional difference between the National Consumer Disputes Redressal Commission (“NCDRC”) and Labour Commission exist in the nature of disputes entertained as the former addresses’ disputes pertaining to purchase of goods and services and the later involves application and interpretation labor laws to the matters presented.
Though on a prima facie examination, the jurisdiction of the above stated bodies seems to be well settled. However, delving upon the intricacies of the disputes dealt in these bodies suggests a situation otherwise. In such situation of a consistent overlap of jurisdiction in recent years, the question that arose is whether the service rendered by any person as an ‘employee’ can come within the meaning of ‘services rendered’ under the Consumer Protection Act, 1986 (“CPA”). This creates a jurisdictional flaw for the Consumer Redressal Forum in adjudicating upon the question relating to service laws such as payment of the gratuity amount by the employer to the employee. Moreover, the conflicting judicial pronouncements in this regard have further complicated the issue mandating a critical analysis into such ambiguities.
Dispute Resolution Under the Labour Laws
Different labour and service laws suggest different means for dispute resolution. For instance, under the Payment of Gratuity Act, 1972(“Gratuity Act 1972”),employers are obliged to pay certain gratuity amount within 30 days from the date of retirement.
In case of a failure to pay such gratuity amount or if there arises any dispute with regards to the quantum of gratuity to be paid, Section 7(4)(a) of the Gratuity Act, 1972 lays down the detailed procedure for the manner in which such disputes can be settled. It allows the employer or employee or any other person raising the dispute to make an application to the Controlling Authority who has the power to try the application as a suit under the Civil Procedure Code, 1908.
Furthermore, any party aggrieved by the decision of the controlling authority can prefer an appeal to the authorities as specified by the central government vide Notification dated 24 December, 2019.
So far as the jurisdiction of the Consumer Forum is concerned, CPA confers it the jurisdiction to entertain the matters in which the dispute is regarding the purchase of any goods or services rendered.
Despite having a specialized dispute resolution forum established by both the statues as mentioned above, the problem arises when the employee calls upon the Consumer Forum to resolve the dispute concerning the application and interpretation of the Gratuity Act 1972 arguing that they fall under the definition of ‘service provider’ within the meaning of the CPA. This creates overlapping jurisdiction between the NCDRC and the Labour Commissioners which requires immediate attention.
Conflicting Opinion Of The Judiciary
Though there have been numerous instances where the courts have tried to settle the ambiguity pertaining to the jurisdiction of Consumer Forum in the service matters, all such instances have been considered to be contradictory to each other.
In the case of Satish Kumar Saini v. M/s Sarthak Logistic Pvt Limited, (“Satish Kumar Saini case”)complainant in service of the employer as Regional Manager, who had resigned from the services after serving continuously for more than 5 years, was denied the gratuity amount. The complainant approached the district consumer forum, which upon relying on the apex court’s decision in the case of Regional Provident Fund Commissioner v. Shiv Kumar Joshi, held that a person claiming the amount of gratuity under the Gratuity Act, 1972 falls under the category of a consumer and thus it has jurisdiction to decide this case.
On the contrary, in Hooghly Mills Company Ltd. v. Sachin Kundu, the Court held that such dispute is not maintainable before the Forum constituted under the CPA citing that no relationship of consumer and/or service provider under CPA exists with an ‘employee’ under the 1972 Act. After careful analysis of the definition of the term ‘Consumer’, ‘Service’, and ‘Deficiency’ as mentioned in the CPA, the commission further observed that payment of gratuity to an employee is not a condition of service, it is lawful entitlement of the employees as statutorily provided by 1972 Act. Thus, the ousting any claim related to gratuity presented before a consumer forum.
Indeterminate Stance Of The Apex Court
In Jagmittar Sain Bhagat & Ors. v. Director, Health Services, Haryana & Ors., the Supreme Court has quite clearly held that Consumer Forum cannot deal with the service matters of the government servants. National Consumer Disputes Redressal Commission further relied upon this case to dismiss the plea of the Indian Railway employee expressing grievances with respect to non-payment of gratuity stating that it does not have the jurisdiction.[i]
The Court further stated that by no stretch of imagination can a government servant raise any dispute regarding his service conditions or for payment of gratuity or any of his retiral benefits before any of the forum under the Gratuity Act, 1972. Government servant is entitled to claim his retiral benefits strictly in accordance with his service conditions and regulations or statutory rules framed for that purpose. The appropriate forum, for redressal of any of his grievance, may be the State Administrative Tribunal, if any, or the civil court but certainly not a forum under the Act.[ii]
It is evident that interpretation of the Supreme Court can hardly be generalized to the private employees. It is therefore the question of applicability of Consumer Protection Act to the private employees still remains unanswered.
CONCLUSION
The primary purpose of establishing bodies like Consumer Forum or Labor Commissioners is that the cases would to be tried and adjudicated only by the authorities who have some expertise in the respective subject matter of the dispute. The conflict in jurisdiction between these two schismatic institutions would defy the very purpose of this distinction.
Moreover, unless the question whether an employee fall under the definition of ‘service provider’ within the meaning of the CPA is answered, the deadlock between NCDRC and the Labour Commissioners to adjudicate the claims will continue to exist. Since NCDRC is generally a consumer centric institution, employees would always prefer to approach NCDRC over the Labour Commissioners and in contrary, the employers will always argue against the NCDRC’s authority to entertain such matter.
Additionally, in absence of any legislative or judicial clarification, there is every possibility that different branches of the same forum may start practicing different jurisdiction. For instance, the District Consumer Forum on one district may adjudicate the matter relating to payment of gratuity and the Forum at another district may dismiss the same. Such differentiation in the jurisdiction of the same forum has a potential to adversely effect the entire justice delivery system. It is therefore a paramount importance that the Apex Court or the Legislature addresses this dispute and fills the void in the law.
[i] Sheo Muni Prasad vs. Northern Railway and Ors., I (2016) CPJ 134 (NC).
[ii] The Joint Labour Commissioner and Registering Officer and Ors. vs. Kesar Lal, civil appeal No. 2014 of 2020.
Umang Agarwal and Rakesh Kumar Sahu 4th Year BA.LLB Students at National University of Study and Research in Law, Ranchi
Picture Credits: Patrika
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