Report No. 122

Chapter III

Approach of the Bodies in the Past to this Question

3.1. The Law Commission submitted its Fourteenth Report on Reform of Judicial Administration in September 1958. By that time, Labour Appellate Tribunal was already abolished. The Law Commission, while examining the inflow of work in the Supreme Court, took special notice of the fact that the Court had to grant special leave to appeal against decisions of various Labour Tribunals. It was noticed that in the year 1956, as many as 257 special leave applications against decisions of Labour Tribunals were granted, out of which 140 such applications were allowed.

The Commission was of the opinion that the situation created by these large number of appeals admitted in labour matters causes concern in two respects. The first effect noticed was that it clogged the work of the Supreme Court notwithstanding the recent increase in its strength and secondly, that the disposal by the Supreme Court was not equal to the rising institution with which it was faced. According to the Commission, these matters have in a sense been forced upon the Court inasmuch as the Court could not refuse to entertain appeals against the decisions which appeared to be arbitrary and capricious and made in disregard of well-accepted principles of law and natural justice.

According to the Commission, a large number of applications for special leave in these matters made to the Supreme Court synchronised with the abolition of the Labour Appellate Tribunal. The situation of which notice was taken was that against the decisions of the Industrial Tribunals, no appeal lay to any forum. Accordingly, in most cases, a petition for special leave was filed in the Supreme Court contending that the decision was unjust and arbitrary.

The fact that the relief under Article 226 of the Constitution by the High Court would be by a writ of certiorari which would permit the High Court to set aside the award/order of the Industrial Tribunal ; but the High Court cannot make its own decision and substitute for that of the Tribunal, the rush to Supreme Court under Article 136 was inevitable. Having noticed this situation, the First Law Commission was of the opinion that:

"It is, therefore, imperative that the Legislature should intervene and provide for an adequate right of appeal in these matters. Such a right of appeal could be provided either by constituting Tribunals of Appeal under the labour legislation itself or by conferring a right of appeal to the High Court in suitable cases."1

1. LCI, Fourteenth Report, (1958), Vol. I.

3.2. It may be recalled that the situation noticed by the Law Commission in 1958 was the emerging scenario on the abolition of the Labour Appellate Tribunal and the situation had not deteriorated, to the extent it has now. The latest situation is more depressing. The figures tell their own tale. Let them speak for themselves-14,82,450. (Appendix W)-as per the information given to the Parliament on 18-11-87.

One aspect that unfortunately escaped the notice of the Law Commission was that on the abolition of the Labour Appellate Tribunal, the awards of the Industrial Tribunals scattered throughout the length and breadth of this country had finality subject to constitutional remedies. There was no body at an all-India level which can provide uniformity in this matter-a function discharged by the Labour Appellate Tribunal.

The awards of the Industrial Tribunals on questions of wages, dearness allowance, retirement benefits, different allowances, if not brought to some common denominator, were likely to introduce conflict and chaos. Uniformity in this behalf can only be introduced by an Appellate Tribunal having an all-India jurisdiction and a national perspective. Conferring appellate jurisdiction on the High Court over the awards of the Industrial Tribunal would not only not have improved the matter but the much desired uniformity would be shattered. The lack and absence of uniformity surfaced itself on the disappearance of the Labour Appellate Tribunal.

3.3. The Government of India constituted a Commission, chaired by Justice P.B. Gajendragadkar, Chief Justice (retired) of the Supreme Court, for a comprehensive review of various matters connected with labour. One of the important aspects dealt with by it is the power of the State to intervene in the settlement of industrial disputes commencing with the Trade Disputes Act, 1929, and ending with the Industrial Disputes Act, 1947.

Conceding that the ultimate legal remedy for the settlement of an unresolved dispute is its inference to adjudication by the appropriate Government, the Commission observed that during the last twenty years, the adjudication machinery has exercised considerable influence on several aspects of conditions of work and labour-management relations. It was noticed that 'adjudication is dilatory, expensive and even discriminatory as the power of reference vests in the appropriate Government'. It was also of the opinion that by and large 'it has failed to achieve industrial peace'.

The Commission felt that disadvantages noticed by it may have been over-stated. It indicated that greater scope should be given to collective bargaining. Ultimately, it recommended the setting up of an Industrial Relations Commission at National and State levels for settling disputes broadly covering matters listed in the Third Schedule to the I.D Act. The broad set up of the Industrial Relations Commission and the method of appointment of the President and the Judicial and Non-Judicial Members of the Commission was indicated.

The procedure for settlement of disputes was chalked out. The Commission was to replace Industrial, Tribunals and National Industrial Tribunal. Labour Court was to be set up in each State to be presided over by Judicial Members and appeal over the decision of the Labour Court in certain clearly defined matters may lie to the High Court within whose jurisdiction the Court is located.1 The recommendation remained unattended.

1. National Labour Commission, Chapter 23, paras. 23.61 to 23.65.

3.4. The National Labour Conference held on 17th and 18th of September, 1982, appointed a Committee under the Chairmanship of Shri Sanat Mehta, the then Minister of Finance and Labour, Gujarat, inviting it to examine important industrial relations issues, one of which being machinery and fora for resolution of industrial disputes. This Committee took note of the fact that a National Labour Conference had practically approved the recommendations of the National Commission on Labour for setting up of Industrial Relations Commissions at the Centre and State level for resolution of industrial disputes.

The Committee recommended that the new legislation dealing with industrial relations must provide for setting up of independent Industrial Relations Commissions and the constitution, set up, qualifications of Chairman, Members and the subordinate officers and staff shall be on the same lines as given in the recommendations of the National Commission on Labour.

It recommended setting up of Standing Labour Courts to work under the overall supervision of the Industrial Relations Commission and they would deal with disputes relating to rights and obligations, interpretation and implementation) of award etc. Reading the Report as a whole, it appears that the Industrial Relations Commission at the Centre as well as State level was to have original jurisdiction.

3.5. On receipt of the Report of the Committee chaired by Shri Sanat Mehta, the Standing Labour Committee formulated the infrastructure of the legislation to be introduced in this behalf. The State level industrial Commission was to have an appellate jurisdiction over the orders and decisions of the Labour Courts. The Industrial Relations Commission at the Centre will have both original and appellate jurisdiction.

3.6. Commencing from the setting up of the Labour Appellate Tribunal in 1950 upto the recommendations of the Committee chaired by Shri Sanat Mehta, and consequent upon its recommendations, the infrastructure drawn up by the Standing Labour Committee unambiguously converge on the view that there has to be a forum at the national level having both original and appellate jurisdiction which would enable that body to introduce an all-India perspective in the matter of industrial relations.

Of necessity, such body must be composed of such persons having intimate knowledge of labour problems, economic planning, just and fair distribution of wealth, socio-economic justice and legal formulations as would enable it to dispose of matters expeditiously and effectively. It also clearly emerges that the jurisdiction of the High Court in labour matter has to be abolished to avoid the confusion arising from different High Courts taking different view in matters of common interest.

The present approach is that apart from the advantages herein indicated, this new set up will help in reducing the workload in the High Courts and the Supreme Court, because the jurisdiction of the High Court in labour matters will be abolished and the jurisdiction under Article 136 of the Supreme Court will be sparingly exercised, as a specialist body with an all-India jurisdiction has examined the matter. This is the justification, if one is needed, for the present approach.