Source: Supreme Court

Why in News?

Recently, a bench of Justices P S Narasimha and Sandeep Mehta dismissed an appeal preferred against the order of the Industrial Tribunal.

• The Supreme Court held this in the case of Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers' Union.

What was the Background of Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers' Union Case?

• The case involves Mahanadi Coalfields Ltd., a subsidiary of Coal India Ltd., tendering a contract for transporting crushed coal.
• The respondent-union advocated for workmen employed by the contractor, seeking their permanent status based on clauses from the National Coal Wage Agreement-IV.
• After conciliation, a settlement was reached, regularizing 19 workers.
• The dispute escalated when the remaining 13 workers sought regularization.
• The matter was referred to the Industrial Tribunal, which ruled in favor of the 13 workers, considering their job nature as regular and perennial.
• The appellant challenged this in the Orissa High Court, which upheld the Tribunal's decision, citing evidence of the nature of work performed.
• Despite a review petition by the management, the High Court's decision was reaffirmed.
• The case involved legal arguments from both parties, with the court ultimately affirming the regularization of the 13 workers based on the nature of their work.

What were the Court’s Observations?

• Jurisdiction of the Tribunal:
  • The appellant objected to the Tribunal entertaining the industrial dispute and passing the award, citing a settlement under certain sections of the Industrial Disputes Act, 1947.
  • However, the court found that despite the settlement involving some workers, the Tribunal was rightfully tasked with examining the entire reference and giving independent findings on the issue.
  • Therefore, the Tribunal was justified in giving its award.
• Validity of the Settlement:
  • The court examined the settlement reached in 1997, which addressed the regularization of 19 out of 32 workers.
  • It was found that the remaining workers stood on the same footing as the regularized employees and were wrongly not made part of the settlement.
  • The Tribunal concluded that these workers held the same status as the regularized employees.
• Nature of Work and Regularization:
  • The court observed that there was no substantial distinction between the workers who were regularized and those who were not.
  • The evidence presented showed that the denial of regularization for the remaining workers was unjustified.
• Backwages:
  • The court affirmed the entitlement of the workmen to backwages, starting from a specific date as observed by the Industrial Tribunal.
  • However, the court modified the calculation of backwages, confining it to be calculated from the decision of the Tribunal, considering the long-drawn litigation and public interest.
• Dismissal of Appeals:
  • Based on the above reasons, the court dismissed the appeals filed by the appellant and directed that the concerned workmen shall be entitled to backwages. Additionally, no costs were awarded.

What is the Industrial Dispute Act, 1947?

• About:
  • The Industrial Disputes Act, 1947, enacted on 11^th March 1947, serves to address industrial disputes and related matters.
  • It encompasses the entire territory of India and applies to all industries, unless exempted by the government.
• Authorities Under This Act:
  • Works Committee: They serve as platforms for dialogue between employers and employees at the workplace.
  • Conciliation Officers: Conciliation Officers are tasked with conciliating disputes and fostering agreements between parties.
  • Board of Conciliation: Boards of Conciliation aim to aid in resolving disputes that remain unsettled by conciliation.
  • Courts of Inquiry: Courts of Inquiry are established to investigate and report on matters referred to them concerning industrial disputes.
• Notice of Change:
  • Employers must notify workmen of proposed changes in service conditions listed in the Fourth Schedule.
  • Changes cannot occur without prior notice or within 21 days. Exceptions apply under certain conditions.
• Unfair Labour Practices:
  • Prohibition of Unfair Labour Practices (Section 25T):
    • Offence: Engaging in unfair labour practices by employers, workmen, or trade unions.
    • Penalty: Imprisonment up to six months, or a fine up to one thousand rupees, or both.
  • Penalty for Committing Unfair Labour Practices (Section 25U):
    • Offence: Committing unfair labour practices.
    • Penalty: Imprisonment up to six months, or a fine up to one thousand rupees, or both.
  • Penalty for Breach of Settlement or Award (Section 29):
    • Offence: Breaching terms of settlements or awards binding under the Act.
    • Penalty: Imprisonment up to six months, or fine, or both. In case of a continuing breach, additional fines may apply, and compensation may be awarded to the injured party.
• Penalties:
  • Penalty for Illegal Strikes and Lock-outs (Section 26):
    • Offence: Engaging in illegal strikes or lock-outs.
    • Penalty: For workmen, imprisonment up to one month, or a fine up to fifty rupees, or both. For employers, imprisonment up to one month, or a fine up to one thousand rupees, or both.
  • Penalty for Instigation (Section 27):
    • Offence: Instigating or inciting others to engage in illegal strikes or lock-outs.
    • Penalty: Imprisonment up to six months, or a fine up to one thousand rupees, or both.
  • Penalty for Giving Financial Aid (Section 28):
    • Offence: Providing financial support for illegal strikes or lock-outs.
    • Penalty: Imprisonment up to six months, or a fine up to one thousand rupees, or both.
• Unfair Practices and Other Offences:
  • Penalty for Disclosure of Confidential Information (Section 30):
    • Offence: Willful disclosure of confidential information in contravention of the Act.
    • Penalty: Imprisonment up to six months, or a fine up to one thousand rupees, or both.
  • Penalty for Closure Without Notice (Section 30A):
    • Offence: Closing down an undertaking without complying with required procedures.
    • Penalty: Imprisonment up to six months, or a fine up to five thousand rupees, or both.
  • Penalty for Other Offences (Section 31):
    • Offence: Contravening provisions of the Act or rules made thereunder.
    • Penalty: For employers, imprisonment up to six months, or a fine up to one thousand rupees, or both. For other contraventions, a fine up to one hundred rupees may apply if no specific penalty is provided elsewhere in the Act.