Does the Labour Court have authority to order investigations into a Labour Dispute – Supreme Court decides
The Supreme Court (“SC”), in the case of John D’ Souza v. Karnataka State Road Transport Corporation has outlined the labour court’s power to order investigations for suspected contraventions of the Industrial Disputes Act, 1947 (“ID Act”).
The facts of the case are as follows:
Mr John D’ Souza (“John”) was employed by the Karnataka Road State Transport Corporation (“KSRTC”) since 1984. However, without seeking the prior permission of KSRTC, he did not come to work from October 29, 2005 to June 23, 2006. Accordingly, an enquiry under the ID Act was instituted. The enquiry was carried out by a retired joint law officer of KSRTC.
The enquiry was carried out between the period of September 05, 2008 and August 12, 2010 and found John guilty of misconduct. KSRTC according, filed a petition before the jurisdictional labour court seeking for enforcing the enquiry’s findings and allowing KSTRC to dismiss John under Section 33(2)(b) of the ID Act.
Section 33(2)(b) of the ID Act stipulates that an employee may be dismissed on grounds of misconduct.
The labour court, on reviewing the enquiry proceedings, determined that the enquiry was conducted in a fair manner and allowed KSRTC to dismiss John. Against the orders of the labour court, John filed a case before the Karnataka Hight Court (“Karnataka HC”).
A single judge bench of the Karnataka HC stayed the order of the labour court and ordered a fresh investigation to be initiated on the matter. Section 10 of the ID Act stipulates that a court can order the Board of Conciliation to investigate any matter.
KSRTC later appealed the case before a two judge bench of the Karnataka HC. The two judge bench of the Karnataka HC ruled that courts do not have the authority to order investigations under Section 10 of the ID Act when a case for dismissal is brought under Section 33(2)(b) of the ID Act. Against the order of the two judge bench of the Karnataka HC, John approached the SC.
What did the SC hold and why?
The SC upheld the decision of the division bench of the Karnataka HC and ruled that no courts of statutory bodies can order investigations under Section 10 of the ID Act when a case for dismissal has been sought for under Section 33(2)(b) of the ID Act. The rationale behind this was that the intention behind Section 10 of the ID Act is to ensure that only cases which are serious in nature should be further investigated. The SC opined that the intention behind Section 33(2)(b) of the ID Act is to ensure that the cases are dismissed in summary by courts. The SC ruled that courts should merely see if the enquiry conducted prior to initiating a proceeding under Section 33(2)(b) of the ID Act was conducted in a free and fair manner and not to question to quantum of punishment.
The ruling of the SC brings much needed clarity in the ID Act. Through this judgement, the SC has tried to make courts respect the internal enquiry process of organizations. At the same time, it has placed a responsibility on the courts to ensure that enquiry process has been conducted in a free and fair manner. In essence, it has tried to balance the interest of the employer and employee and at the same time ensure that there is no undue delay in the entire process. The SC hoped that this would help reduce the backlog of cases in labour courts which stood at over 5,00,000 a few years ago.
However, one important point that the SC did not touch upon in this case was the tests courts should follow to determine if the enquiry is conducted in a free and fair manner. For instance, in this case, the enquiry was chaired by a former employee of KSRTC. So, does this mean that former employees or even current employees of an organization can head enquiries into alleged misconduct of employees. There may be a conflict of interest or it may give the perception that the employer has complete control over the chairperson of the enquiry. This will lead to more cases being appealed and will lead to more delays, which is what the SC tried to tackle in this judgement.
Therefore, in order to make the whole system efficient, the SC will need to come up with concrete tests that courts will need to follow in order to determine if the enquiry was conducted in a free and fair manner.
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Disclaimer: This post has been prepared for informational purposes only. The information/or observations contained in this post does not constitute legal advice and should not be acted upon in any specific situation without seeking proper legal advice from a practicing attorney.