Domestic Enquiry under Labour Law Print this TABLE OF CONTENTS SERIAL NO. TITLE PAGE NO. 1 TABLE OF CASES 2 2 INTRODUCTION 3 3 RESEARCH METHODOLOGY 5 4 CHAPTER 1 7 5 CHAPTER 2 11 6 CHAPTER 3 8 CONCLUSION 26 9 BIBLIOGRAPHY 27 TABLE OF CASES 1. Air India Statutory Corporation v . United Labour Union , (1997) 9 SCC 377. 2. Baidhar Das v. The State and Ors, AIR 1970 Ori 320. 3. Bata Shoe Co. Ltd v . Ganguly , (1961) 1 LLJ 303. 4. Brooke Bond India Ltd. v . Subbaraman , (1961) 2 LLJ 417 (SC). 5. Cipla Ltd v . Ripu Daman Bhanot (1999) 4 SCC 188. 6. CL Subramanyan v . Collector of Customs, Cochin , AIR 1975 SC 951.
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Domestic Enquiry under Labour LawPrint this
TABLE OF CONTENTS
SERIAL NO. TITLE PAGE NO.
1 TABLE OF CASES 2
2 INTRODUCTION 3
3 RESEARCH METHODOLOGY
5
4 CHAPTER 1 7
5 CHAPTER 2 11
6 CHAPTER 3
8 CONCLUSION 26
9 BIBLIOGRAPHY 27
TABLE OF CASES
1. Air India Statutory Corporation v. United Labour Union, (1997) 9 SCC 377.
2. Baidhar Das v. The State and Ors, AIR 1970 Ori 320.
3. Bata Shoe Co. Ltd v. Ganguly, (1961) 1 LLJ 303.
4. Brooke Bond India Ltd. v. Subbaraman, (1961) 2 LLJ 417 (SC).
[4] D.R.K. Rao, “Domestic Enquiry Vs. Departmental Inquiry”, Labour Law
Journal, 2005-I LLJ at 49.
[5] Kharda & Co. Ltd v. Its Workmen, 1963-II LLJ 452.
[6] The courts have gone to the extent of saying such enquiries must also be
held in case of probationers. Even if there is an express term in the letter of
appointment of a probationer that his service can be terminated at any time
during the period of probation, the Tribunal can still interfere if the
termination is capricious and unjustified. See, Supra note 2, at 6.
[7] A, at 227.
[8] A, at 228.
[9] This basically means that if termination is on the basis of ill-health or loss
of confidence, etc , then no enquiry will be required. See, Supra note 2, at 7.
[10] A, at 228.
[11] Supra note 2, at 8.
[12] The charge-sheet should be personally served on the concerned
workman in the presence of atleast two witnesses. If the workman is
unavailable or refuses to accept it, it shall then be sent to his last known
address. The charge-sheet is deemed to be properly served if the letter is
delivered to the workman or returned unaccepted. See, A at 230. In the
event of non-delivery of registered letter, the charge-sheet has to be
published in a local newspaper with wide circulation mentioning the name
and other particulars of the concerned workman. This was observed by the
Supreme Court in Bata Shoe Co. Ltd v. Ganguly, (1961) 1 LLJ 303.
[13] Other situation where enquiry is not necessary is where the termination
is in the form of retrenchment, transfer or closure of the establishment. Also
an enquiry will not proceed where termination is in accordance with standing
orders (discharge simpliciter, loss of confidence, reasons not to be disclosed
in the interest of the company.
[14] G.Nageshwar Rao v. A.P. State Road Transport Corporation, AIR 1959 SC
308.
[15] A, at 231.
[16] A, 232.
[17] N.Kalindi v. Telco, AIR 1960 SC 914.
[18] The establishment’s witnesses are to be examined first in support of the
charges and afterwards the accused workman should be asked to examine
his witnesses, if any. If the accused workman has no evidence to produce or
refuses to name witnesses in his favour, such matter should be recorded by
the enquiry officer. See, Supra note 2, at 12.
[19] The interpreter should sigh an endorsement to the effect that the
evidence as recorded by the enquiry officer was interpreted to the accused
employee to his entire satisfaction. See, A, at 232,
[20] the report should contain all the facts and circumstances of the case,
evidences recorded at the enquiry, charges as well as the explanations given
to them. It is judgment of the case heard by him.
[21] A, at 233.
[22] The following punishments are generally imposed on the employees
depending upon the gravity of the misconduct committed by them: (i)
warning; (ii) Fine; (iii) withholding or stoppage of increments; (iv) Demotion
or reduction in rank; (v) Suspension; (vi) Discharge; (vii) Dismissal. The first
five are minor punishments, while the last two are major ones.
[23] Crescent Dyes and Chemicals Ltd v. Ram Naresh Tripathi, 1993 (66) FLR
537 (SC). The workman, Ram Naresh Tripathi, was charge-sheeted for
misconduct. A domestic enquiry was ordered to look into the alleged acts of
misconduct of the delinquent. The delinquent requested the enquiry officer
to permit him to be defended by one Talraja who claimed to be an office
bearer of the Bombay Mazdoor Union of which the delinquent was a member.
but the enquiry officer did not permit the delinquent to be represented and
defended by the said Talraja since he was not a member of the recognised
union or the unrecognised union functioning in the employer’s
establishment. Thereupon the delinquent did not participate in the enquiry
and the enquiry officer concluded the enquiry ex-parte. That led to the
ultimate dismissal of the delinquent by an order dated January 28, 1981. The
delinquent thereupon filed a complaint in the Labour Court, making a
grievance that the employer was guilty of unfair labour practice enumerated
at Item 1(f) of Schedule IV to the Act, in that, he was not allowed to be
defended by a person of his own choice in violation of the principles of
natural justice. In this case the question also came up as to whether a
workman can be represented by an advocate. The Court held that since the
standing orders permitted a representative to defend the workman, he
should resort to such a course alone and the right to be represented by an
advocate can be restricted and such a restriction would not vitiate the
proceedings as a violation of principles of natural justice.
[24] Prof. S.B.Rao, Handbook on Domestic and Departmental Enquiry, 3rd ed
(Allahabad; Law Publishing House, 1997) at 142.
IN HIGH COURT OF DELHI : NEW DELHI AT NEW DELHI.
SUBJECT: LABOUR LAW
CW No. 1485 of 1979
Judgement reserved on: March 5, 2004
Judgement delivered on: March 17, 2004
Domestic Inquiry
Delhi Transport Corporation
Indraprastha Estate, New Delhi
Through Ms. Geeta Sharma, Advocate .........Petitioner
Versus
1. N.L. Kakkar
Presiding Officer
Industrial Tribunal No.1
Room No.10, Ground Floor
(Civil Wing), Tis Hazari Courts Building
Delhi
2. Karan Singh
Conductor
Badge No.2650
Vill. & P.O. Kerala
Delhi
Through Mr. D.N. Vohra ,Ms. Rashmi
B. Singh, Advocates ........Respondents
CORAM:
HON'BLE MR. JUSTICE MADAN B. LOKUR
1. Whether the Reporters of local papers may
be allowed to see the judgement? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgement should be reported in the Digest? Yes
MADAN B. LOKUR, J.
1. The Petitioner (DTC) is aggrieved by orders dated 25th April, 1977 and 11th July, 1979 passed by the Additional Industrial Tribunal and the Industrial Tribunal No.1 respectively in O.P. No.85 of 1974 being an application under Section 33(2)(b) of the Industrial Disputes Act, 1947 (the Act).
2. The facts as they appear from the record are that on 4th May, 1972, two Assistant Traffic Inspectors Om Prakash and H.C. Dutta checked a DTC bus for ticketless travellers. Three ladies in a group, alighting from the bus after completing their journey from East Park Road to Fatehpuri, were found to be without tickets. On being asked, they stated that they had given a one-rupee note to the conductor (Respondent/workman herein) who returned 40 paise to them, but did not issue any ticket. On being confronted, the conductor stated that the tickets were lying on the foot-board of the bus. These ladies were immediately taken to a Special Metropolitan Magistrate/Mobile Court for being challaned for ticketless travel. The learned MM passed the following order:-
"Heard the accused in detail. I am convinced that the accused paid the fare to the conductor but he did not issue the ticket properly. The accused is, therefore, acquitted."
3. What seems to have transpired is that the fare payable by each lady was 25 paise and when the conductor saw the checking staff, he issued them tickets of 20 paise each. Two other passengers in the bus stated that the conductor threw these tickets on the floor of the bus. These tickets were seized by the checking staff and were found to be of inadequate denomination and not punched at the proper place. Since the fare was 25 paise each, the checking
staff asked the ladies to give another 15 paise to the conductor who then issued three more tickets of 5 paise each. A challan was then issued to the conductor and the checking staff prepared their report accordingly.
4. On these broad facts, the conductor was issued a charge sheet on 4th September, 1972 containing the following allegations:
"That on 4.5.72 you were conducting bus No.1675 of route No.25-X when the checking officials checked the tickets of the alighted passengers of your bus at Fatehpuri at about 10.55 hours. Three lady passengers in a group headed by Mrs. Tara Wati who had boarded your bus from East Park Road and from whom you had collected 60 paise as against the due fare of 75 paise alighted there without having been issued any tickets by you. You thus contravened the provisions of para 21(iv) of the Executive Instructions - Duties of a Conductor and para 19(b) of the Standing Orders governing the conduct of DTC Employees."
5. A domestic inquiry was held against the conductor, in which he was found guilty and subsequently awarded a punishment of removal from service on 14th August, 1974. The DTC moved an application under Section 33(2)(b) of the Act before the learned Tribunal seeking approval of their action.
6. By the first impugned order, the learned Tribunal held that the domestic inquiry was vitiated. Two reasons were given for holding so: firstly, the evidence did not point to the guilt of the conductor and secondly, the two passengers who said they saw the conductor throwing tickets on the floor of the bus when the checking staff arrived, were not produced as witnesses before the enquiry officer.
7. After holding the domestic inquiry to be vitiated, the learned Tribunal permitted DTC to lead evidence before it for proving the misconduct of the conductor. DTC examined the checking staff as its witnesses. The lady passengers were summoned as witnesses but were not available for evidence.
8. The learned Tribunal weighed the evidence and concluded that DTC was not able to prove that the conductor did not issue the tickets. On the contrary, it was held that the conductor did issue tickets to the ladies. The learned Tribunal also held that the ladies were the best witnesses to state whether the conductor had issued tickets or not. Since they were not produced, no case was made out against the conductor. Accordingly, the application under Section 33(2)(b) of the Act was dismissed by the second impugned order.
9. Challenging the correctness of the first impugned order, learned counsel for the Petitioner contended before me that the evidence on record, including the conclusion of the learned Magistrate, shows that even though tickets may have been issued by the conductor, the fact remains that they were not valid tickets for the journey since the fare was 25 paise per head but the tickets issued were for 20 paise each. Moreover, the tickets were not punched in the proper place and were not handed over to the ladies but were thrown on the floor of the bus when the checking staff arrived. According to learned counsel, it can hardly be said that the conductor had "issued tickets" to the ladies and the inquiry officer had correctly assessed the evidence. There was, therefore, no reason for the learned Tribunal to differ with the views of the inquiry officer. It was further submitted that the learned Tribunal was unduly influenced by the fact that the two passengers were not produced as witnesses.
10. The second impugned order was challenged by learned counsel on similar grounds. It was alternatively contended that the Presiding Officer of the
learned Tribunal was not specifically empowered to deal with the case. However, in the view that I am taking, it is not necessary to deal with the alternative contention.
11. Two issues arise in this case: the extent of interference permissible with the findings in a domestic inquiry and the necessity of passengers being produced as witnesses, that is to say, whether hearsay evidence can be accepted in a domestic inquiry.
12. Both the aforesaid issues are squarely covered in favour of DTC by several decisions, including a leading decision of the Supreme Court and a Division Bench decision of this Court.
Passenger witnesses
13. In a similar fact situation, a Full Bench of the Punjab & Haryana High Court in State of Haryana vs. Ram Chander 1976 (2) SLR 690 laid the foundation for its discussion in paragraph 3 of the Report. It was held that a domestic tribunal is not bound by the strict rules of evidence and can evolve its own procedure as long as it is in accordance with the principles of natural justice. It was said :
"The first question for consideration is, whether the evidence of the checkers as to what they were told by the passengers was not legal evidence in the domestic enquiry against the respondent. Time and again, it has been repeated by the Supreme Court that domestic tribunals in the absence of statutory guidance, have the right to regulate their own procedure and are also not bound by the strict rules of evidence. The rules of procedure and the rules of evidence observed in Courts are often misplaced in domestic enquiries. A Domestic tribunal whose procedure is not regulated by a
statute is free to adopt a procedure of its own so long as it conforms to principles of natural justice. It is equally free to receive evidence from whatever source if it is 'logically probative'."
14. Thereafter, the Full Bench considered earlier decisions of the Supreme Court and also referred to cases from England to lay down the law in paragraph 4 of the Report with regard to the value to be attached to hearsay evidence. It was held :
"... ... where a bus is checked and it is found that tickets have not been issued to several passengers and the passengers state in the presence of the conductor that they paid the fare, the enquiry officer would be justified in acting upon the evidence of the checkers stating these facts even though the passengers themselves are not examined as witnesses. A finding of guilt arrived at by him would not be based on pure hearsay. It would be based on (1) the evidence of the Checker that he found passengers travelling without tickets and (2) the statements made by the passengers to the checker at the time of checking. The second item of evidence alone would be hearsay but it would be hearsay of high probative value because of the circumstance that statements were made in the presence of the conductor and on the spot. In such a case, it cannot be said that the enquiry officer's findings are based on pure hearsay or hearsay of unreliable nature."
15. The most important judgement on the subject is State of Haryana vs. Rattan Singh (1977) 2 SCC 491. The facts of that case are similar to the facts of the present case. What must be mentioned, however, is that in Rattan Singh the Civil Court declared the domestic inquiry a nullity. The appellate Court affirmed this conclusion and the High Court dismissed a second appeal. Yet, the Supreme Court entertained a petition for special leave to appeal and upset the conclusions of three Courts.
16. The contentions urged before the Supreme Court are also of some importance. They are:
(i) None of the passengers travelling without tickets were examined in the domestic enquiry.
(ii) The checking inspectors had violated a departmental instruction by not recording the statements of the passengers.
(iii) The co-conductor in the bus had affirmed the innocence of the conductor.
17. The Supreme Court held in paragraph 4 of the Report that a domestic inquiry can take into consideration all materials logically probative for a prudent mind and that there is no allergy to hearsay evidence, provided it has reasonable nexus and credibility. It was said that the passengers are not required to be chased and brought before the domestic tribunal.
18. On the scope of permissible interference with the conclusions of a domestic inquiry, the Supreme Court said in the same paragraph that what has to be seen is whether there was some evidence or was it a case of no evidence. As long as there is some evidence, sufficiency thereof in proof of a finding by a domestic tribunal is beyond scrutiny. The Supreme Court found that there was some evidence before the inquiry officer and, therefore, the order passed in the domestic inquiry could not be held invalid.
19. I think it is worth quoting the view of the Supreme Court as reflected in paragraph 4 of the Report. This passage really answers both the issues before me. This is what the Supreme Court says:
"It is well settled that in a domestic enquiry the strict and sophisticated rules of evidence under the Indian Evidence Act may not apply. All materials which are logically probative for a prudent mind are permissible. There is no allergy to hearsay evidence provided it has reasonable nexus and credibility. It is true that departmental authorities and administrative tribunals must be careful in evaluating such material and should not glibly swallow what is strictly speaking not relevant under the Indian Evidence Act. For this proposition it is not necessary to cite decisions nor text books, although we have been taken through case law and other authorities by counsel on both sides. The essence of a judicial approach is objectivity, exclusion of extraneous materials or considerations and observance of rules of natural justice. Of course, fairplay is the basis and if perversity or arbitrariness, bias or surrender of independence of judgement vitiate the conclusions reached, such finding, even though of a domestic tribunal, cannot be held good. However, the courts below misdirected themselves, perhaps, in insisting that passengers who had come in and gone out should be chased and brought before the tribunal before a valid finding could be recorded. The 'residuum' rule to which counsel for the respondent referred, based upon certain passages from American Jurisprudence does not go to that extent nor does the passage from Halsbury insist on such rigid requirement. The simple point is, was there some evidence or was there no evidence -- not in the sense of the technical rules governing regular court proceedings but in a fair commonsense way as men of understanding and worldly wisdom will accept. Viewed in this way, sufficiency of evidence in proof of the finding by a domestic tribunal is beyond scrutiny. Absence of any evidence in support of a finding is certainly available for the court to look into because it amounts to an error of law apparent on the record. We find, in this case, that the evidence of Chamanlal, Inspector of the flying squad, is some evidence which has relevance to the charge levelled against the
respondent. Therefore, we are unable to hold that the order is invalid on that ground."
20. With regard to the second contention relating to non-compliance of departmental instructions, the Supreme Court found them to be rules of prudence and not rules that bind so that their violation will not vitiate the exercise. Absence of written statements of the passengers (the statements were orally made) was explained by Supreme Court as being understandable given the psychology of the passengers, though not worthy of approval. But, it was held that merely because their statements were not recorded, it would not invalidate the order in the domestic inquiry.
21. Finally, with regard to the third contention, the Supreme Court held that "re-evaluation of the evidence on the strength of co-conductor's testimony is a matter not for the court but for the administrative tribunal."
22. Two facts are noteworthy in the decision of the Supreme Court. Firstly, the only evidence against the conductor was what was told by the passengers to the checking staff. The passengers did not enter the witness box, nor did they give written statements to the checking staff. Secondly, the co-conductor supported the conductor and apparently entered the witness box. Yet the Supreme Court accepted the finding of the domestic inquiry and reversed the conclusion of three Courts.
23. Soon after the decision of the Supreme Court in Rattan Singh, a Division Bench of this Court had occasion to deal with a similar situation, wherein again, both the issues before me had also arisen. In Delhi Transport Corporation vs. Presiding Officer, Additional Industrial Tribunal (1979) XVI DLT 220, the Division Bench noted two competing principles, that is, non-reviewability of a finding of fact based on evidence and violation of the rules of natural justice. The Division Bench laid down the law on page 224 of the
Report and then referred to and relied upon Rattan Singh in support of its conclusions. This is what the Division Bench said:
"The alleged violation of natural justice pre-supposes that it was necessary that the passenger witness should have been made available for cross examination. This assumption is baseless. Firstly, the notice by registered post sent to the witness was received back with the remark that the witness had left the address and the notice could not, therefore, be served on that address. This made it impossible for the Inquiry Officer to serve the passenger witness. Secondly, the question whether the hear-say evidence of the checking staff about the statement of the passenger should have been admitted in evidence by the Inquiry Officer because of the impossibility of enforcing his attendance which may arise in a suitable case did not arise in this case. Even when no such impossibility of enforcing the attendance of the passenger was proved the Supreme Court observed in State of Haryana and another v. Rattan Singh ......"
24. On the question of interference with a finding of fact arrived at in a domestic inquiry, it was held :
"Therefore, in the present case, the principle (sic) finding of fact of the Inquiry Officer which is based on some evidence independent of the written statement or oral evidence of the passenger witness is unassailable."
25. On page 225 of the Report, the Division Bench made an important observation, which I think should be taken serious note of. It was said:
"We may take judicial notice of the fact that the checking of the conductors of the buses of the appellant is a salutary practice. Its effectiveness cannot be defeated by technicalities. When the misconduct is proved by the
common sense standards before the Inquiry Officer, legal ingenuity and technicalities should not be allowed to impugn the common sense findings and defeat the operation of the system of checking."
26. The above Division Bench decision was followed by a learned Single Judge of this Court in Sultan Singh vs. Delhi Transport Corporation, 1987 I LLN 399. In that case, grant of approval under Section 33(2)(b) of the Act was challenged by the petitioner on the ground that the passenger witness who had given a statement against the petitioner was not examined and so the petitioner did not have any opportunity to cross-examine this witness and, therefore, the inquiry against him was vitiated. The learned Judge also referred to Mahinder Singh vs. Presiding Officer (CW No.136 of 1975 decided on 10th February 1979) and observed that in these cases, it had been held that:
"... ... even if the passenger witnesses are not examined and if there was enough other evidence to prove the misconduct of the employee the inquiry is not vitiated. In the present case also, there is a clear finding that the checking officers were examined and they gave evidence to prove the misconduct and the statement of the passenger was recorded in the presence of the petitioner. Thus, even if the statement of the passenger witness is held to be inadmissible since there was other evidence, the order cannot be held to be invalid."
27. Shyam Sunder vs. Delhi Transport Corporation (CW No.922/76 decided on 5th February, 1996) dealt with an identical issue. In that case, the learned Single Judge referred to DTC vs. Presiding Officer (CW No.7/79 decided on 16th July, 1979), the Division Bench decision mentioned above and Rattan Singh and held that since the inquiry officer based his findings on the examination of the checking staff (who were also cross-examined), there was independent evidence to link the petitioner with the charges levelled
against him. Consequently, the statement of the passengers, not being the sole material against the petitioner, the domestic inquiry was not vitiated.
28. The learned Judge also held that:
"It is settled law that this court is not competent and has no jurisdiction to reappraise the evidence on record and come to a different finding from that of the Enquiry Officer."
29. It is quite clear that the consistent view of this Court over the last few decades has been that the non-production of passenger witnesses is not fatal to the domestic inquiry and that findings of fact arrived at in a domestic enquiry should not be interfered with so long they are based on some evidence. The value of that evidence and what weight is to be attached to it is within the jurisdiction of the tribunal.
Law laid down by some other High Courts.
30. What is the view of some other High Courts? The view of the Karnataka High Court is clear from three Division Bench decisions. In Karnataka State Road Transport Corporation vs. Sathyanarayanan, 2003-II-LLJ 301, a conductor failed to issue tickets to a group of seven passengers despite collecting the fare from them. With a view to misappropriate the amount, he also closed the waybill. After a disciplinary enquiry, the conductor was found guilty and dismissed but the Labour Court held that the charge against the conductor was not established. A learned Single Judge upheld the view of the Labour Court. The Division Bench concluded that simply because the passengers, whose statements were recorded by the checking officials, were not examined in the domestic enquiry, it cannot be said that the evidentiary value of those statements is lost. It was also found that to cover up his
misdeeds, the conductor had closed the waybill. The Division Bench held that the misconduct by the conductor was proved.
31. Similarly, in North West Karnataka Road Transport Corporation vs. K.S. Raghunathappa, 2003-II-LLJ 989, the allegation against the conductor was that he had not issued tickets to six passengers despite having collected the fare from them. After a disciplinary enquiry, he was dismissed from service. The Labour Court before whom an industrial dispute was raised held that the domestic enquiry was fair and proper but the charge against the conductor was not proved, inter alia, because none of the passengers were examined. The Division Bench rejected the reasoning of the Labour Court after relying upon Rattan Singh. It was also held that apart from the statement of the passengers, there was other material such as unpunched tickets, offence memo checking report etc.
32. In North West Karnataka Road Transport Corporation vs. S.S. Poleshi, 2000 III CLR 203, the conductor of a bus had not issued tickets to some passengers despite taking the fare. Disciplinary proceedings were initiated against him and he was dismissed from service. He raised an industrial dispute and the Labour Court held that the charges against him were not proved because none of the passengers had been examined during the adjudication proceedings. A learned Single Judge upheld the view of the Labour Court. In appeal, the Division Bench relied upon Rattan Singh to set aside the order of the learned Single Judge and restored the penalty of dismissal from service.
33. The view of the Bombay High Court is to be found in Pandurang Kashinath Wani vs. Divisional Controller, 1996-I-LLJ 540. In that case also, the conductor failed to issue tickets to some passengers despite having collected the fare from them. After a domestic enquiry, the conductor was dismissed from service and though the Labour Court held that the domestic enquiry was conducted fairly, the punishment of dismissal from service was found to be disproportionate.
34. In a writ petition filed before the High Court, it was contended that the domestic enquiry was not fair because the passengers were not subjected to cross-examination.
35. The High Court rejected the contention on the ground that the statement of the passengers was recorded in the presence of the conductor who made an endorsement at the foot of each statement and put his signatures. It was not as if the statement of the passengers was taken at the back of the conductor. Relying upon Rattan Singh, it was held that even though the passengers were not called at the domestic enquiry and permitted to be cross-examined, there was no violation of the principles of natural justice. Additionally, it was noted that the conductor was found in possession of sufficient stock of tickets in his money bag for which the explanation given by him was fanciful and unsatisfactory.
36. The Madras High Court in Pandian Roadways Corporation Ltd. vs. Presiding Officer, 2000-II-LLJ 1593 also dealt with a case where the conductor did not issue tickets to some passengers despite having collected the fare from them. The statement of the passengers was recorded by the checking staff who was examined in the departmental enquiry held by the appellant. The conductor was dismissed from service but the Labour Court, upon an industrial dispute having been raised by the conductor, upheld the validity of the domestic inquiry but directed the reinstatement of the conductor on the ground that the punishment was excessive.
37. Relying upon Rattan Singh, the Madras High Court came to the conclusion that it was not necessary to examine the passengers. In that case, however, there was a slight difference on facts inasmuch as the conductor admitted that he did not have time to complete the necessary paper work at the time of issuing the tickets. Based on this admission, as well as the evidence of the
checking inspector and the fact that the conductor had not completed the invoice, the Madras High Court interfered with the order of reinstatement and approved the dismissal of the conductor.
38. The view of the Gujarat High Court is to be found in Gujarat State Road Transport Corporation vs. M.S. Patel, 1998 II CLR 473. In that case, the conductor of a bus did not issue tickets to two groups of passengers. The checking staff made a report after taking the statements of the passengers. In a departmental enquiry, the conductor was held guilty of misconduct and dismissed from service. The Labour Court, however, upset the finding of the disciplinary authority and reinstated the workman. The Gujarat High Court held that it was not a criminal prosecution where the allegations have to be proved against the conductor beyond doubt. The checking staff had produced the statements of the passengers and had withstood cross-examination. Relying upon the judgement of the Supreme Court in Rattan Singh, it was held that the finding of guilt against the conductor was not unjustified.
Conclusion
39. A perusal of the above judgements of various High Courts clearly shows that the production of passengers either in a domestic enquiry or before the Labour Court in an industrial dispute is not at all necessary. Indeed, I am of the view that in most cases this would be highly impractical because it would mean that passengers would have to be traced out, chased and brought before the enquiry officer or the Labour Court causing them unnecessary inconvenience. One has to take a pragmatic view of the situation as well as consider the amount of effort and energy that may have to be expended in producing the passengers as witnesses. DTC carries passengers who are residents of not only Delhi but also of other States. Is it practicable to expect a passenger, who goes back to his State after a trip to Delhi, to appear before an Inquiry Officer for confirming a statement already
given by him to the checking staff? As our Division Bench has cautioned us, one has to take a commonsense approach to the whole problem and not allow legal technicalities to come in the way.
40. The facts of the present case show that there was some evidence before the Inquiry Officer, in the form of the statements of Om Prakash and H.C. Dutta and the report prepared by them. More importantly, the conclusion arrived at by the Special Metropolitan Magistrate/Mobile Court should have really concluded the issue against the conductor. Unfortunately, the learned Tribunal did not approach the issues before it in the right perspective and on the basis of the law laid down, and that is why it fell into error. It was certainly not a case of no evidence. It was also not a case of perversity, because there was some legal evidence before the Inquiry Officer, evidence that had high probative value and that had nexus with the events that were being enquired into. Once this is established, and I think it has been established in this case, the question of upsetting the conclusions of fact arrived at by the Inquiry Officer does not arise, as held in Rattan Singh and consistently followed by this Court.
41. Under the circumstances, the learned Tribunal erred in holding that the domestic inquiry was vitiated. It must be held that the guilt of the conductor was correctly established by the inquiry officer. The first impugned order must, therefore, be set aside and the order of removal from service passed against the Respondent conductor on 14th August, 1974 is restored. Consequently, it is held there was no occasion for DTC to lead evidence before the learned Tribunal to establish the guilt of the conductor. The second impugned order is required to be quashed for this reason alone.
42. The writ petition is allowed. The order dated 25th April, 1977 passed by the learned Additional Industrial Tribunal in O.P. No. 85 of 1974 is quashed. No costs.
March 17, 2004 ( Madan B. Lokur )
ncg/rkr Judge
Adjudication Under Minimum Wages Act, 1948Print this
4) Hellen and Gavin, Sourcebook on Public Law (Cavendish Publishing
Company : London, 1997).
5) Mahendra P. Singh, V.N. Shukla’s Constitution of India (Eastern Book
Company : Lucknow, 2001).
6) S.C. Jain, The Constitution of India-Select Issues and
Perceptions (Taxmann : New Delhi, 2000).
ENCYCLOPEDIA 1) 59 Am Jur 2d, Pardon and Parole.
2) 67A C.J.S Pardon and Parole.
[1] Burdwick v. United States, 236 US 79; 59 L.ed.476 at 480.
[2] 59 Am Jur 2d, Pardon and Parole at 10.
[3] Id.
[4] P.J. Dhan, “ Justiciability of the President’s Pardon Power”, 26 Indian Bar
Review 1999, at 69.
[5] It reads as, “ The President…..shall have power to grant reprieves and
pardons for offences against the United States, except in cases of
impeachment”.
[6] 32 U.S. 150 (1833)
[7] 71 U.S. 333 (1866)
[8] 80 U.S. (13 Wall.) 128, 147 (1871).
[9] 95 U.S. 149 (1877).
[10] P.J Dhan, “Justiciability of the President’s Pardon Power”, 26 IBR 1999
70-71.
[11] Id.
[12] V.N Shukla
[13] The Deputy Inspector General of Police, North Range, Waltair and Anr. v.
D. Rajaram and Ors, MANU/AP/0162/1960.
[14] S.C. Jain, The Constitution of India-Select Issues and
Perceptions 57(Taxmann : New Delhi, 2000).
[15] 59 Am Jur 2d, Pardon and Parole, 5.
[16] Balkrishana, “Presidential Power of Pardon”, 13 J.I.L.I (1971) at 104.
[17] The definition that has been given in the Act is,” An act or omission
made punishable by law for the time being in force”.
[18] Supra Note Balkrishna at 105.
[19] Art. 372, Constitution of India.
[20] MANU/TN/0394/1954.
[21] AIR 1981 SC 112. The Supreme Court has, however, created an
exception to the above rule in K.M. Nanavati’s case where it held that the
Governor cannot exercise his powers under Article 161 when the matter is
sub judice in the Supreme Court during the time Article 142 is in operation.
[22] (2001) 5 SCC 714.
[23] AIR 1953 SC 325. the Court in this case observed that in order that the
protection of Art 20(2) be invoked by a citizen there must have been a
prosecution and punishment in respect of the same offence before a Court of
law or a tribunal, required by law to decide the matters in controversy
judicially on evidence on oath which it must be authorised by law to
administer and not before a tribunal which entertains a departmental or
administrative enquiry. The very wording of the Art.20 would indicate that
the proceedings therein contemplated are of nature of criminal proceedings
before a Court of law or a judicial tribunal, in accordance with the procedure
prescribed in the statute which creates the offence and regulates the
procedure.
[24] AIR 1964 SC 375.
[25] R.Raghupathy v. State of Tamil Nadu, 1984 Cri LJ (NOC) 117.
[26] Poornima Sampath and Priyadarshini Narayanan, “Mercy Petitions :
Inadequacies in Practice”, 12 Stud Adv (2000) 72 at 74.
[27] T.V. Vatheeswaran v. State of Tamil Nadu, (1983) 2 SCC 68.
[28] Upendra Baxi, “Clemency, Erudition and Death : The Judicial Discourse
in Kehar Singh”, 30J.I.L.I(1988) 501 at 503.
[29] 1987 Cri LJ 1088.
[30] Triveniben v. State of Gujarat, (1989) 1 SCC 679.
[31] Triveniben v. State of Gujarat, (1989) 1 SCC 679; Sher Singh v. State of
Punjab,1983 SCC(Cri) 461.
[32]Madhu Mehta v. Union of India,1989Cri.L.J. 2321.
[33] 3 U.S.(3 Dall.) 386 (1798).
[34] The Court said that a law that makes a amn Judge in his own cause…it
is against all reason and justice, for a people to entrust a legislature with
such powers; and, therefore, it cannot be presumed that they have done it.
[35] Brian C. Kalt, “ Pardon Me?: The Constitutional Case Against Presidential
Self Pardons”, 106 Yale Law Journal 1996 779 at 806..
[36] 61 U.S. (20 How.) 264, 266 (1857).
[37] Subhash C. Jain, “ The Constitution of India- Select Issues &
Perceptions”, Taxmann Publications Ltd., New Delhi, 2000) at 59.
[38] AIR 1980 SC 2147.
[39] (2001) 5 SCC 714.
[40] 1982-(CR1)-GJX -0161 –BOM.
[41] AIR 1980 SC 2147.
[42] AIR 1989 SC 653.
[43] AIR 1980 SC 2147.
[44] (1998) 4 SCC 75.
[45] Harbans Singh v. State of U.P., AIR 1982 SC 849. Facts: Three persons
were convicted of murder and sentenced to death. One of them was hung as
he did not file a special appeal. The one who filed a special appeal was
commuted and his sentence was reduced to life imprisonment. The third one
had appealed to the President for pardon and his appeal was rejected. On
the day he was to be hung he filed a special appeal.
[46] Shashi Alias Shashidharan And Others v. State Of Karnataka And Others,
2000-(CR1)-GJX -0625 –KAR.
[47] Hukam Singh v. State of Punjab, AIR 1975 Punj & Har 148.
[48] K. M. Nanavati v. State of Bombay, AIR 1961 SC 112.
[49] Ex parte Grossman, (1924) 69 Law Ed 527 (F).
[50] Kuljit Singh v. Lt. Governor of Delhi, AIR 19782 SC 774.
[51] (1989) 1 SCC 204, Ashok Kumar v. Union of India, AIR 1991 SC 1792.
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Domestic Inquiry14. (1) An employer may, on the grounds of misconduct inconsistent with the
fulfillment of the express or implied conditions of his service, after due inquiry:
(a) dismiss without notice the employee; or
(b) downgrade the employee; or
(c ) impose any other lesser punishment as he deems just and fit, and where a
punishment of suspension without wages is imposed, it shall not exceed a period
of two weeks.
Section 14(1) above only mentions "due inquiry" but does not provide specific procedures as
to how an inquiry should be conducted. Initially employers especially those without proper
HR department, had to do what they thought best. Their actions had been challenged and
the Industrial Court had handed over numerous decisions on the necessity of holding
"domestic inquiry". The Industrial Court always held that natural injustice had not been done
if an employer did not hold an inquiry or proper inquiry and the Court would invariably rule
against the employer who failed to do this. It is an important principle that no employee
should be dismissed for misconduct unless the employee concerned has been given an
opportunity to defend himself or had been given an opportunity to be heard.
In order for a domestic inquiry to be properly held, certain procedure need to be followed.
Stated below are some guideline for a proper inquiry:
A. Serve on the employee alleged to have committed misconduct a letter containing:
1. Specific charge of the type of offence, the date, the time and place where the offence
took place. Also state which rules of company's rules or regulations have been
violated.
2. The date, the time and the place where he has to be present for the inquiry.
3. Inform him his right bring along witnesses if any;
4. If necessary, suspend him for no more than one weeks pending the inquiry.
B. Set up a panel comprising of
1. Chairman (should be a person not involved in the investigation of the offence)
2. Two independent panel members (may be employees from another department)
3. A prosecutor (may be a personnel officer in the HR department)
C. In the hearing:
1. The prosecution will begin first . He is to make out a case against the accused first by
producing witnesses who have direct knowledge of case;
2. The accused i.e. the employee alleged to have committed the offence, is allowed to
question (cross examine) each of the witnesses on the evidence they have given;
3. After that the accused will be asked enter his defence i.e. to tell his side of the story;
4. The accused may produce witness or witnesses to support what he has said;
5. The accused as well as his witnesses are subject to cross examination by the
prosecutor.
6. The chairman will guide the proceeding and to record the evidence in writing;
7. Tape-recording of the proceeding may be used.
8. Lawyers are not allowed to appear in this type of domestic inquiry but official of the
employee's union is allowed.
D. After the hearing.
1. The panel will discuss the hearing and study the evidence given by both parties;
2. The chairman will submit the panel's finding and recommendations to the
Management
E. Management's decision.
(a) dismiss without notice the employee; or
(b) downgrade the employee; or
(c ) impose any other lesser punishment as he deems just and fit, and where a punishment
of suspension without wages is imposed, it shall not exceed a period of two weeks.
My company is very small and I don't have enough staff and to form a panel for the
domestic inquiry, what shall I do?
1. You may seek assistance from your business associates
who are familiar in domestic inquiry to help you out;
2. You can engage labour consultancy firm to give you the
necessary advice for which you have to pay;
3. You may even ask the pastor of your church to be the
panel chairman.
The important thing is that NO MAN SHOULD BE CONDEMNED
WITHOUT BEING HEARD.
For details please refer to Section 14 of the Employment Act
Disciplinary Action 1997-‘98
REFERENCE:
Question HeldSK SINGVSCENTRAL BANK OFINDIA [1997(I) LLJ 537 SC-DB]
IN ECIL VS KARUNAKAR [1994 ILLJ 162] THE SUPREME COURT HAD ORDERED THAT A COPY OF THE ENQUIRY REPORT SHOULD BE FURNISHED AND THE REPRESENTATION TO IT BE CONSIDERED BEFORE ANY PUNISHMENT ORDERS IS ISSUED AGAINST A DELINQUENT. WOULD FAILURE TO SUPPLY THE SAME MAKE THE ACTION FATAL?
MANY COURTS HAD HELD THAT IT WOULD BE FATAL AND ORDERED REVERSAL OF THE DISCIPLINARY PUNISHMENT. IN THIS LATEST JUDGEMENT THE SUPREME COURT HAS MODIFIED THE POSITION. THE PRESENT POSITION IS THAT EVEN IF THE REPORT IS NOT FURNISHED IT WOULD NOT BE FATAL. COURTS SHOULD CALL UPON THE EMPLOYEE TO SHOW WHAT PREJUDICE. HE HAS SUFFERED BEFORE PASSING AN ORDER OF REJECTING OR UPHOLDING THE DISCIPLINARY ACTION.
STATE BANK OF PATIAVSSK SHARMA [1997 LLR 268 SC-DB]
IN AN ENQUIRY THE MANAGEMENT HAD REFUSED TO GIVE THE PRELIMINARY REPORT OR PRE-RECORDED STATE-MENT OF SOME WITNESSES DEMANDED BY THE DELINQUENT WOULD THIS VITIATE THE DISCIPLINARY ACTION.
AS THESE WITNESSES WERE EXAMINED AT THE ENQUIRY AND OPPORTUNITY WAS GIVEN FOR THEIR CROSS EXAMINATION, NO PREJUDICE HAS BEEN CAUSED, HELD NOT VITIATED.
VIJAYA KUMAR NIGAMVSSTATE OF MP [1997 (77) FLR 8 SC-DB]
CAN THE STATEMENT OF A CO-ACCUSED BE TAKEN INTO ACCOUNT IN ADJUDGING THE GUILT OF ANOTHER ACCUSED.
THIS IS NOT EVIDENCE IN THE STRICT SENSE UNDER THE EVIDENCE ACT. BUT THE EVIDENCE ACT IS NOT APPLICABLE TO DOMESTIC ENQUIRIES AND HENCE THIS KIND OF EVIDENCE CAN BE RELIED UPON IN DOMESTIC ENQUIRY.
INDIAN OIL CORPORATIONVSASHOK KUMAR ARORA [1997 (75) FLR 949 SC-DB]
WHAT IS THE EXTENT AND SCOPE OF THE POWERS OF HIGH COURTS TO INTERFERE IN DISCIPLINARY PUNISHMENTS UNDER ARTICLE 226
WHILE THE SUPREME COURT HAS WIDE POWERS TO HEAR A CASE AS AN APPEAL AND GO INTO ALL ASPECTS OF DISPUTE UNDER ARTICLE 136,THE POWERS OF THE HIGH COURTS TO INTERFERE UNDER ARTICLE 226 IN DISCIPLINARY MATTERS IS RESTRICTED AND LIMITED. HIGH COURTS CAN INTERFERE ONLY IF THE FOLLOWING IS MADE OUT:
1) WHEN ENQUIRY IS VITIATED DUE TO NON-OBSERVANCE OF THE PRINCIPLES OF NATURAL JUSTICE
2) FOR DENIAL OF A REASONABLE
OPPORTUNITY FOR PUTTING UP A DEFENCE.
3) OR WHEN FINDING IS BASED ON NO EVIDENCE4) THE PUNISHMENT IS
DISPROPORTIONATE TO THE OFFENCE PROVED.
STEEL AUTHORITY OF INDIAVSDR RK DIWAKAR [1998 ILLJ-344-SC-DB]
MUST A CHARGE SHEET BE ISSUED BY THE DISCI-PLINARY AUTHORITY. CAN AUTHORITY BELOW THE RANK OF THE APPOINTING AUTHORITY WILL ISSUE IT. A CHARGE MEMO ISSUED BY A LOWER AUTHORITY BE INVALID?
. WHILE A PUNISHMENT ORDER MUST BE ISSUED ONLY BY THE DULY NOTIFIED DISCIPLINARY AUTHORITY A CHARGE SHEET COULD BE ISSUED BY ANY LOWER AUTHORITY ESPECIALLY WHEN THERE IS A PROPER DELEGATION OF POWER TO SUCH LOWER AUTHORITY
B BALAKRISHNAN REDDYVSELECTRICITY BOARD (APSEB) [WRIT PETITION NO.16852/1991 DELIVERED IN JANUARY 1998]
CAN THE DISCIPLINARY AUTHORITY ORDER A FRESH ENQUIRY AFTER THE ENQUIRY OFFICER HAS SUBMITTED THE REPORT HOLDING THE EMPLOYEE NOT GUILTY
THE DISCIPLINARY AUTHORITY CANNOT ORDER A FRESH ENQUIRY - THIS WOULD AMOUNT TO HARASSMENT.
THE DISCIPLINARY AUTHORITY COULD HOWEVER WRITE A DIFFERENT FINDING BASED ON THE RECORDS OF THE FIRST ENQUIRY AND COURTS WOULD UPHOLD A DIFFERENT FINDING IF IT IS A SPEAKING ORDER.
A Brief Note On Labour Legislation In India
Created: 2007-09-27
By Babu Mathew
Legislative history
The history of labour legislation in India is naturally interwoven with the history of British
colonialism. Considerations of British political economy were naturally paramount in
shaping some of these early laws. In the beginning it was difficult to get enough regular
Indian workers to run British establishments and hence laws for indenturing workers
became necessary. This was obviously labour legislation in order to protect the interests
of British employers.
Then came the Factories Act. It is well known that Indian textile goods offered stiff
competition to British textiles in the export market and hence in order to make India
labour costlier the Factories Act was first introduced in 1883 because of the pressure
brought on the British parliament by the textile magnates of Manchester and
Lancashire. Thus we received the first stipulation of eight hours of work, the abolition of
child labour, and the restriction of women in night employment, and the introduction of
overtime wages for work beyond eight hours. While the impact of this measure was
clearly welfarist the real motivation was undoubtedly protectionist!
To date, India has ratified 39 International Labour Organisation (ILO) conventions of
which 37 are in force. Of the ILO’s eight fundamental conventions, India has ratified four
- Forced Labour 1930, Abolition of Forced Labour 1957, Equal Remuneration 1951, and
Discrimination (employment and occupation) 1958.
The organised and the unorganised
An important distinction that is popularly made nowadays in all discussions relating to
labour legislation is between workers in the organised/formal sector and those in the
informal/informal sector. Many who make this distinction do so with ulterior motives, yet
we must reckon with it - especially because out of the total workforce in the country, 92
percent work in the informal sector while only eight percent work in the formal sector.
At the outset it must therefore be remembered that those who were unorganised
yesterday are organised today and those who are unorganised today aspire to become
the organised tomorrow. Moreover, many rights, benefits, and practices, which are
popularly recognised today as legitimate rights of the workers, are those that have
accrued as a result of the struggles carried out by the earlier generation of workers. The
attempt, prevalent in some circles to pit one section of workers against the others, must
therefore be carefully understood and deserves to be rejected outright.
Trade unionism and the Trade Union Act 1926
There are almost ten major central union organisations of workers based on different
political ideologies. Almost every union is affiliated to one of these. These central
organisations have state branches, committees, and councils from where its
organisation works down to the local level.
The first central trade union organisation in India was the All India Trade Union
Congress (AITUC) in 1920 - almost three decades before India won independence. At
about the same time workers at the Buckingham and Carnatic Mills, Madras went on
strike led by B P Wadia. The management brought a civil suit against the workers in the
Madras High Court and not only obtained an injunction order against the strike but also
succeeded in obtaining damages against the leader for ‘inducing a breach of contract’.
This was followed by widespread protests that finally yielded in the Trade Union Act
1926 giving immunity to the trade unions against certain forms of civil and criminal
action. Apart from this aspect the Trade Union Act also facilitated registration, internal
democracy, a role for outsiders and permission for raising a political fund subject to
separate accounting requirements.
The Trade Union Act facilitates unionisation both in the organised and the unorganised
sectors. It is through this law that the freedom of association that is a fundamental right
under the Constitution of India is realised.
The right to register a trade union however does not mean that the employer must
recognise the union – there is in fact no law which provides for recognition of trade
unions and consequently no legal compulsion for employers, even in the organised
sector, to enter into collective bargaining.
Yet in reality because of the strength of particular trade unions there is fairly widespread
collective bargaining, especially in the organised sector.
Wage determination in the unorganised sector
Wage determination in India has been achieved by various instruments. For the
unorganised sector the most useful instrument is the Minimum Wages Act 1948. This
law governs the methods to fix minimum wages in scheduled industries (which may vary
from state to state) by using either a committee method or a notification method. A
tripartite Advisory Committee with an independent Chairman advises the Government
on the minimum wage. In practice unfortunately, the minimum wage is so low that in
many industries there is erosion of real wage despite revision of the minimum wage
occasionally. A feeble indexation system has now been introduced in a few states only.
Collective bargaining in the organised sector
An important factor that is not much recognised, but which still prevails in many
organised sector units is fixing and revising wages through collective bargaining. The
course of collective bargaining was influenced in 1948 by the recommendations of the
Fair Wage Committee that reported that three levels of wages exist - minimum, fair, and
living.
These three wage levels were defined and it was pointed out that all industries must pay
the minimum wage and that the capacity to pay would apply only to the fair wage, which
could be linked to productivity. In addition to this the fifteenth Indian Labour Conference,
a tripartite body, met in 1954 and defined precisely what the needs-based minimum
wage was and how it could be quantified using a balanced diet chart.
This gave a great boost to collective bargaining; many organised sector trade unions
were able to achieve reasonably satisfactory indexation and a system of paying an
annual bonus. It is now the law, that a thirteenth month of wage must be paid as a
deferred wage to all those covered by the Payment of Bonus Act. The minimum bonus
payable is 8.33 percent and the maximum is 20 percent of the annual wage.
Strikes and lockouts
Workers have the right to strike, even without notice unless it involves a public utility
service; employers have the right to lockout, subject to the same conditions as a strike.
The parties may sort out their differences either bilaterally, or through a conciliation
officer who can facilitate but not compel a settlement which is legally binding on the
parties, even when a strike or a lockout is in progress. But if these methods do not
resolve a dispute, the government may refer the dispute to compulsory adjudication and
ban the strike or lockout.
Conciliation, arbitration, and adjudication
When parties engaging in collective bargaining are unable to arrive at a settlement,
either party or the government may commence conciliation proceedings before a
government appointed conciliation officer whose intervention may produce a settlement,
which is then registered in the labour department and becomes binding on all parties. If
conciliation fails it is open to the parties to invoke arbitration or for the appropriate
government to refer the dispute to adjudication before a labour court or a tribunal whose
decision may then be notified as an award of a binding nature on the parties. Disputes
may be settled by collective bargaining, conciliation, or compulsory adjudication.
Colonial dispute settlement machinery
The Industrial Disputes Act 1947 (IDA) provides for the settlement machinery above.
The framework of this legislation, which is the principle legislation dealing with core
labour issues, is of colonial origin. This law originated firstly in the Trade Disputes Act
1929, introduced by the British, when there was a spate of strikes and huge loss of
person days and secondly through Rule 81A of the Defence of India Rules 1942, when
the British joined the war efforts and wanted to maintain wartime supplies to the allied
forces. Interestingly the interim government on the eve of formal independence retained
this framework by enacting the IDA, which still remains on the statute book.
Developments after independence
Even though the IDA was primarily meant for industry in the organised sector, its
present application has now extended well into the unorganised sector, through judge-
made law. Its pro-worker protection clauses and safeguards against arbitrary job losses
have evolved over a period of time both through the process of sustained legislative
amendments and through the process of judicial activism spread over more than five
decades.
The original colonial legislation underwent substantial modification in the post-colonial
era because independent India called for a clear partnership between labour and
capital. The content of this partnership was unanimously approved in a tripartite
conference in December 1947 in which it was agreed that labour would be given a fair
wage and fair working conditions and in return capital would receive the fullest co-
operation of labour for uninterrupted production and higher productivity as part of the
strategy for national economic development and that all concerned would observe a
truce period of three years free from strikes and lockouts.
Regulation of job losses
Space does not allow a detailed discussion of this transformation in labour policy and
consequent amendments to labour law, but provisions that deal with job losses must be
noted. Under the present law any industrial establishment employing more than 100
workers must make an application to the Government seeking permission before
resorting to lay-off, retrenchment, or closure; employers resorting to any of the said
forms of creating job losses, is acting illegally and workers are entitled to receive wages
for the period of illegality. The Reserve Bank of India commissioned a study into the
causes of sickness in Indian industry and they reported cryptically, ‘Sickness in India is
a profitable business’. This chapter in the IDA, which has been identified as offering
high rigidity in the area of labour redundancy, has been targeted for change under
globalisation and liberalisation.
Protection of service conditions
A feature of the IDA is the stipulation that existing service conditions cannot be
unilaterally altered without giving a notice of 21 days to the workers and the union.
Similarly if an industrial dispute is pending before an authority under the IDA, then the
previous service conditions in respect of that dispute cannot be altered to the
disadvantage of the workers without prior permission of the authority concerned. This
has been identified as a form of rigidity that hampers competition in the era of the World
Trade Organisation.
Removal from service
A permanent worker can be removed from service only for proven misconduct or for
habitual absence - due to ill health, alcoholism and the like, or on attaining retirement
age. In other words the doctrine of ‘hire and fire’ is not approved within the existing legal
framework. In cases of misconduct the worker is entitled to the protection of Standing
Orders to be framed by a certifying officer of the labour department after hearing
management and labour, through the trade union. Employers must follow principles of
‘natural justice’, which again is an area that is governed by judge-made law. An order of
dismissal can be challenged in the labour court and if it is found to be flawed, the court
has the power to order reinstatement with continuity of service, back wages, and
consequential benefits. This again is identified as an area where greater flexibility is
considered desirable for being competitive.
Return to colonial days!
Almost all pro-worker developments that accrued since independence are now identified
as areas of rigidity and in the name of flexibility there is pressure on the government of
India to repeal or amend all such laws. Interestingly, if such a proposal is fully
implemented, labour law, especially for the organised sector, will go back to the colonial
framework where state intervention was meant primarily to discipline labour, not to give
it protection.
Globalisation
The most distinctly visible change from globalisation is the increased tendency for
offloading or subcontracting. Generally this is done through the use of cheaper forms of
contract labour, where there is no unionisation, no welfare benefits, and quite often not
even statutorily fixed minimum wages. Occasionally the tendency to bring contract
labour to the mother plant itself is seen. This is very often preceded by downsizing, and
since there is statutory regulation of job losses, the system of voluntary retirement with
the ‘golden handshake’ is widely prevalent, both in public and private sectors.
Regulation of contract labour
The Contract Labour (Prohibition and Regulation) Act 1970 provides a mechanism for
registration of contractors (if more than twenty workers are engaged) and for the
appointment of a Tripartite Advisory Board that investigates particular forms of contract
labour, which if found to be engaged in areas requiring perennial work connected with
the production process, then the Board could recommend its abolition. A tricky legal
question has arisen as to whether the contract workers should be automatically
absorbed or not after the contract labour system is abolished. Recently a Constitutional
Bench of the Supreme Court held that there need not be such automatic absorption - in
effect this ‘abolishes’ the contract labourer and has given rise to a serious anomaly.
Phase between organised and unorganised
We are already witnessing a reduction in the organised labour force and an increase in
the ranks of the unorganised. The above law is a kind of inter-phase in the process of
regulating the transition from regular employment to irregular employment. If contract
labour is seen as introducing a form of flexibility, a strict enforcement of this Act could
have had a salutary effect on the transition process. Instead the enforceability of the Act
is now diluted and consequently even the minimum protection envisaged under this law
to contract labourers is in jeopardy. Dominant thinking in relation to globalisation is
having its effect on the judicial process also, ignoring Directive Principles of State Policy
contained in the Constitution of India.
Employment injury, health, and maternity benefit
The Workman’s Compensation Act 1923 is one of the earliest pieces of labour
legislation. It covers all cases of ‘accident arising out of and in the course of
employment’ and the rate of compensation to be paid in a lump sum, is determined by a
schedule proportionate to the extent of injury and the loss of earning capacity. The
younger the worker and the higher the wage, the greater is the compensation subject to
a limit. The injured person, or in case of death the dependent, can claim the
compensation. This law applies to the unorganised sectors and to those in the
organised sectors who are not covered by the Employees State Insurance Scheme,
which is conceptually considered to be superior to the Workman’s Compensation Act.
The Employees State Insurance Act provides a scheme under which the employer and
the employee must contribute a certain percentage of the monthly wage to the
Insurance Corporation that runs dispensaries and hospitals in working class localities. It
facilitates both outpatient and in-patient care and freely dispenses medicines and
covers hospitalisation needs and costs. Leave certificates for health reasons are
forwarded to the employer who is obliged to honour them. Employment injury, including
occupational disease is compensated according to a schedule of rates proportionate to
the extent of injury and loss of earning capacity. Payment, unlike in the Workmen’s
Compensation Act, is monthly. Despite the existence of tripartite bodies to supervise the
running of the scheme, the entire project has fallen into disrepute due to corruption and
inefficiency. Workers in need of genuine medical attention rarely approach this facility
though they use it quite liberally to obtain medical leave. There are interesting cases
where workers have gone to court seeking exemption from the scheme in order to avail
of better facilities available through collective bargaining.
The Maternity Benefit Act is applicable to notified establishments. Its coverage can
therefore extend to the unorganised sector also, though in practice it is rare. A woman
employee is entitled to 90 days of paid leave on delivery or on miscarriage. Similar
benefits, including hospitalisation facilities are available under the law described in the
paragraph above.
Retirement benefit
There are two types of retirement benefit generally available to workers. One is under
the Payment of Gratuity Act and the other is under the Provident Fund Act. In the first
case a worker who has put in not less than five years of work is entitled to a lump sum
payment equal to 15 days’ wages for every completed year of service. Every month the
employer is expected to contribute the required money into a separate fund to enable
this payment on retirement or termination of employment. In the latter scheme both the
employee and the employer make an equal contribution into a national fund. The
current rate of contribution is 12 percent of the wage including a small percentage
towards family pension. This contribution also attracts an interest, currently 9.5 percent
per annum, and the accumulated amount is paid on retirement to the employee along
with the interest that has accrued. Unfortunately the employee is allowed to draw many
types of loan from the fund such as for house construction, marriage of children, and
education etc. As a result very little is available at the time of retirement. This is also a
benefit, which is steadily being extended to sections of the unorganised sector,
especially where the employer is clearly identifiable.
Women labour and the law
Women constitute a significant part of the workforce in India but they lag behind men in
terms of work participation and quality of employment. According to Government
sources, out of 407 million total workforce, 90 million are women workers, largely
employed (about 87 percent) in the agricultural sector as labourers and cultivators. In
urban areas, the employment of women in the organised sector in March 2000
constituted 17.6 percent of the total organised sector.
Apart from the Maternity Benefit Act, almost all the major central labour laws are
applicable to women workers. The Equal Remuneration Act was passed in 1976,
providing for the payment of equal remuneration to men and women workers for same
or similar nature of work. Under this law, no discrimination is permissible in recruitment
and service conditions except where employment of women is prohibited or restricted
by the law. The situation regarding enforcement of the provisions of this law is regularly
monitored by the Central Ministry of Labour and the Central Advisory Committee. In
respect of an occupational hazard concerning the safety of women at workplaces, in
1997 the Supreme Court of India announced that sexual harassment of working women
amounts to violation of rights of gender equality. As a logical consequence it also
amounts to violation of the right to practice any profession, occupation, and trade. The
judgment also laid down the definition of sexual harassment, the preventive steps, the
complaint mechanism, and the need for creating awareness of the rights of women
workers. Implementation of these guidelines has already begun by employers by
amending the rules under the Industrial Employment Standing Orders Act 1946.
Implementation of labour laws
The Ministry of Labour has the responsibility to protect and safeguard the interests of
workers in general and those constituting the deprived and the marginal classes of
society in particular with regard to the creation of a healthy work environment for higher
production and productivity. The Ministry seeks to achieve this objective through
enacting and implementing labour laws regulating the terms and conditions of service
and employment of workers. In 1966, the Ministry appointed the First National Labour
Commission (NLC) to review the changes in the conditions of labour since
independence and also to review and assess the working of the existing legal
provisions. The NLC submitted its report in 1969. The important recommendations of
NLC have been implemented through amendments of various labour laws. In the areas
of wage policy, minimum wages, employment service, vocational training, and worker’s
education, the recommendations made by the NLC have been largely taken into
account in modifying policies, processes, and programmes of the government. In order
to ensure consistency between labour laws and changes in economic policy, and to
provide greater welfare for the working class, the Second NLC was constituted in 1999.
All labour laws provide for an inspectorate to supervise implementation and also have
penalties ranging from imprisonment to fines. Cases of non-implementation need to be
specifically identified and complaints filed before magistrates after obtaining permission
to file the complaint from one authority or the other. Very few cases are filed, very rarely
is any violator found guilty, and almost never will an employer be sent to prison.
Consequently these powers are used by corrupt officials only for collecting money from
employers.
This does not however mean that no labour laws are implemented. On the contrary
experience has proved that the implementation of such laws is directly proportional to
the extent of unionisation. This generalisation is particularly true of the informal sector.
The unorganised sector
Many of the laws mentioned above apply to the unorganised sector also. In some cases
a separate notification may be necessary to extend the application of a particular law to
a new sector. It is useful to notice that some pieces of legislation are more general in
character and apply across the board to all sectors. The Trade Union Act 1926, The
Minimum Wages Act 1948, The Contract Labour (Regulation and Abolition) Act 1970,
The Workman’s Compensation Act 1923, and The Payment of Wages Act 1936 are
examples of this type. In certain cases, even the IDA 1947 would be included.
In addition to the above there are special sectoral laws applicable to particular sectors
of the unorganised. Under this category are laws like the Building and Construction
Workers Act 1996, the Bonded Labour System (Abolition) Act 1976, The Interstate
Migrant Workers Act 1979, The Dock Workers Act 1986, The Plantation Labour Act
1951, The Transport Workers Act, The Beedi and Cigar Workers Act 1966, The Child
Labour (Prohibition and Regulation) Act 1986, and The Mine Act 1952.
Broadly speaking these sectoral laws either abolish or prohibit an abominable practice
like bonded labour or they seek to regulate exploitative conditions by regulating working
hours and conditions of service.
A recent trend has been to seek the creation of a welfare fund through the collection of
a levy from which medical benefits or pension provisions are made. Workers and
management may contribute and attempt to set up tripartite boards for implementation
of welfare benefits. In some states like Kerala a large number of such boards have
already been set up to take care of welfare in different sectors of employment.
Another contemporary effort is to provide an umbrella statute to take care of
employment conditions and social welfare benefits for all unorganised sections.
Common central legislation for all agricultural workers is also on the anvil. Many powers
are vested in quasi-judicial authorities, labour courts, and magistrates’ courts. The
power of review is in the High Courts and finally in the Supreme Court.
The general experience, with the occasional exception, is unbearable delay. Even
where statutes prescribe reasonable time limits, they are not adhered to. Frustration
with labour-related justice is heightened by these unlimited delays. A case of dismissal
takes almost ten years for the labour court to decide and if the parties decide to seek
judicial review in the higher courts there can be unlimited delay.
For the unorganised sector a renewed attempt to focus on the core labour standard
identified by the ILO in its Declaration on Fundamental Rights at Work would still be
worthwhile, especially if we take steps to ensure the implementation of the first of those
core labour standards namely the freedom of association and the right to collective
bargaining. It is only through the organisation of potential beneficiaries that we can hope
for some benefits at least to percolate down into the hands of the needy.