The implications of Section 10A and 11A of the Industrial Disputes Act, 1947 (hereinafter referred to as ‘Section 10A and 11A’ and IDA respectively) on the jurisdiction of an arbitrator have been a subject matter of eternal debate. The aforementioned contradictory provisions and the opinions of various Courts boil down to one pertinent question. Whether an “arbitrator” qualifies as a “tribunal” for an industrial dispute settlement? To answer this question effectively, we need to take into account the subsequent factors-
- The Powers of an Arbitrator-
In the case of The Engineering Mazdoor Sabha and Ors. Vs. The Hind Cycles Ltd., Bombay, the Supreme Court laid down the powers of a tribunal before deciding on the question of whether an arbitrator qualifies as a tribunal. As per the SC, a tribunal has the authority to summon a witness, judge in conformity with principles of natural justice, including procedural laws and has the power to administer an oath. The aforementioned powers are termed as the “trappings of the court” which is also used as a test to comprehend if an authority qualifies as a tribunal.
The Court held that although an arbitrator is empowered with all the “trappings of the court” it does not qualify as a “tribunal” due to the lack of the “State’s inherent judicial power”. An arbitrator derives the jurisdiction to resolve a dispute from an arbitration agreement between the parties (Voluntary Arbitration under Section 10A). Additionally, as per Section 18(2) of the IDA, an arbitration award is only binding on the parties who have referred the dispute for arbitration via an arbitration agreement.
Thus, the appropriate government plays a very limited role in publishing the award and the act of reference is done by the private parties. An arbitrator cannot qualify as a tribunal as the state has not conferred upon them an adjudicatory power via statutory legislation. In furtherance, an arbitrator is not a tribunal as a statutory tribunal should have a mandatory duty for adjudicating a category of cases mentioned in the statute it derives its power from.
On the contrary in another judgement, the Supreme Court held that an arbitrator is well within its powers to make the award binding on interested parties who are not a party to the reference or the arbitration agreement. An award was binding and enforceable only after publication in the official gazette. Thus, the Court held that the source of authority of the arbitration award was the publication by the government and therefore stemmed from a statute. The aforementioned holding was also reiterated in the judgment of Gujarat Steel Tubes v. Gujarat Steel Tubes Mazdoor Sabha.
- Recommendations of the ILO and Section 11A
Section 11A was only inserted after the recommendations of the International Labour Organisation (No. 119); ‘termination of employment at the initiative of the employer’. The ILO explicitly used the word ‘arbitrator’ as a part of the appeal mechanism for wrongful termination. The underlying objective of Section 11A was to provide a forum for justice to the aggrieved workers facing hardship at the whims and fancies of their employer. A tribunal is considered to be a ‘seat of justice’ and if an arbitrator can efficiently undertake this function, it should be considered as a ‘tribunal’ under the IDA. The aforementioned section only provides a hierarchical distinction in the judicial mechanisms and is not based on functionality. Therefore, drawing a narrow interpretation which mutilates and not promotes the objective of the statute is problematic and violative of the ILO recommendations.
Furthermore, before the insertion of Section 11A via an amendment, a tribunal/arbitrator under Section 11 of the IDA had the jurisdiction to adjudge unfair orders of the management. In a scenario where the enquiry of the employer is unjust, crude, and mala fide it can be compared to a situation of ‘no enquiry’. If the arbitrator has the jurisdiction to decide on orders which are perverse on the face of it then it is well within its powers to decide upon the validity of an erroneous enquiry by the management. Hence, an arbitrator is well within the scope of the word ‘tribunal’ under Section 11A.
- Judicial Precedents
In the dissenting opinion of the Gujarat Steel Tubes, Justice Koshal stated that unless a statute is ambiguous, the black letter of the law should be the only source of interpretation. If the legislature specifically did not include ‘arbitrators’ under Section 11A even after its explicit mention in the ILO recommendations, then a court cannot add it via interpretation. Therefore, ‘arbitrators’ are not under the definition and purview of ‘tribunals’ as envisaged in Section 11A.
Additionally, J. Koshal relied on Section 2 of the IDA and opined that a term should have a universal meaning throughout the legislation. In Section 11 (1), (2) and (3) of the IDA, the legislature uses the word tribunals, arbitrators and National Tribunal attributing a distinct meaning to each of these expressions. Therefore, attributing a different definition to the word ‘tribunal’ in each sub-section of Section 11 will be against the legislative intent and will make the provisions redundant. Furthermore, Section 11A succeeds Section 11 and based on the same reasoning, it is deduced that the meaning attributed to the word should be the same.
On the contrary, Justice Krishna Iyer in the same judgement opined that definitions are subject to alteration as per the changing context. As mentioned before, the natural meaning of the word ‘tribunal’ is the ‘seat of justice’. In the changing paradigm of industrial relations, socio-legal circumstances and the growing economy of India, a court should be liberal in its approach when interpreting welfare legislations. Therefore, the meaning of the word ‘tribunal’ has a wide enough connotation to include ‘arbitrators’ under its scope owing to the ILO recommendations accepted by India, the policy and the purpose of the amendment.
Way Forward
In my opinion, the scope of Article 136 of the Indian Constitution and the rationale behind it is undisputed. The legislative intent would never be to provide a forum to adjudge on the disputes of the disadvantaged labourers which provided final and binding orders making recourse to judicial scrutiny of the Supreme Court impossible. Therefore, the holding of The Engineering Mazdoor Sabha case of not including ‘arbitrators’ under the purview of ‘tribunals’ is judicious.
Furthermore, I agree with the dissenting opinion of Justice Koshal as on the application of the principle of noscitur a sociis, the word ‘tribunal should be interpreted in line with the ‘immediate neighbourhood’ and its ‘statutory neighbourhood’. Therefore, the expression ‘tribunal’ will not include ‘arbitrators’ as in the statutory neighbourhood of Section 11 (1), (2) and (3) the word ‘arbitrator’ is explicitly mentioned and has a narrow meaning. Considering the ‘statutory neighbourhood’, of Section 11A, the meaning of the expression ‘tribunal’ should have a universal meaning as provided by Section 11 & Section 2 of the IDA. Therefore, ousting ‘arbitrators’ from the scope of ‘tribunal’.
Despite of the explicit mention of ‘arbitrators’ in the ILO recommendations, the Legislature did not include it under the scope of ‘tribunals’ as per Section 11A of IDA as it was not suitable for the socio-economic situation of India. The express mention of a term shuts the door for the inclusion of other things by interpretation as per expresso unius exclusio alterus.
Arbitration is a costly affair and the employees will never be able to hire an experienced arbitrator as opposed to the employer who certainly has the affordability for it. Additionally, the number of arbitrations for industrial disputes has reduced significantly.
Siddhant Thakar,
a fifth year BBA LLB student at OP Jindal Global Law School, Sonepat.
Image credits: India Corporate Law: A Cyril Amarchand Mangaldas Blog
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