Industrial Court Doesn’t Have Jurisdiction To Decide Complaint Of Unfair Labour Practice Where Declaration Is Sought About Contract Being Bogus: Bombay HC

The Bombay High Court observed that the Industrial Court does not have jurisdiction to decide a complaint of unfair labour practice where declaration is sought about contract being sham and bogus.

The Court observed thus in a writ petition raising usual issue of jurisdiction of the Industrial Court to decide Complaint of unfair labour practices filed under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act) when existence of employer-employee relationship is under dispute.

A Single Bench of Justice Sandeep V. Marne said, “In my view therefore neither the judgment in Indian Petrochemicals Corporation Ltd. nor in Hindalco Industries Ltd. can be read in support of an absolute proposition of law that the Industrial Court has jurisdiction to decide Complaint of unfair labour practice in every case where declaration is sought about contract being sham and bogus.”

Senior Advocate Sudhir K. Talsania appeared for the petitioner while Advocate Yogendra Pendse appeared for the respondents.

In this case, a complaint was filed on behalf of canteen employees working in the canteen established by the petitioner company (M/s. Tata Steel Ltd.), seeking a declaration that they are permanent employees and entitled to receive same service benefits as extended to the permanent ones. The company raised objection by filing an application to jurisdiction of Industrial Court to decide the complaint and prayed for framing of preliminary issue about maintainability of complaint and sought its dismissal. It also sought vacation of interim order. The Industrial Court rejected its application and directed continuation of interim relief till further orders. Being aggrieved, the petitioner approached the High Court.

The High Court in view of the above facts, noted, “The judgment in Uni Klinger Ltd., in my view is rendered in the facts of that case where there was an assertion by the workers therein that they were engaged directly by the Petitioner therein. In the present case there is no averment that the 26 workers were earlier engaged directly by the Petitioner. Therefore, the judgment in Uni Klinger Ltd. cannot be read in support of a proposition of law that in every case the burden of proving non-existence of employer-employee relationship since inception, would be on the employer and that the Court can infer absence of contractual engagement from inception even in absence of pleading to that effect.”

The Court added that the petitioner-company has clearly disputed existence of employer-employee relationship and that the complaint itself proceeds on footing that there is no employer-employee relationship and in fact seeks to establish the same.

“The judgment of Division Bench in Hindustan Coca Cola does not come to the assistance of Respondent-Union as there is no averment in the Complaint that any of the workers were ever treated as direct employees of the Petitioner-Company. In my view therefore, the Industrial Court has grossly erred in holding that there is subsisting employer-employee relationship prior to the year 2018 for the purpose of assuming jurisdiction”, it further said.

The Court, therefore, concluded that the order passed by the Industrial Court suffers from palpable error warranting interference by the Court in exercise of jurisdiction under Article 227 of the Constitution.

Accordingly, the High Court allowed the writ petition and set aside the impugned order.

Cause Title- M/s. Tata Steel Ltd. v. Maharashtra Shramjivi General Kamgar Union & Anr. (Neutral Citation: 2024:BHC-AS:42004)

Appearance:

Petitioner: Senior Advocate Sudhir K. Talsania, Advocates R.V. Paranjape, and T.R. Yadav.

Respondents: Advocates Yogendra Pendse, Priyanka Patkar, Shamika Dabke, and Vaibhavi Zaaude.

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