reference of industrial dispute and natural justice

36?-391

Reference of Industrial Dispute andNatural Justice

C. ROBIN*

Industrial adjudication involves a 'diversity of inter-rela-tions' between two competing interests. The claims of the em-ployer based on the freedom of contract-have to be adjusted withthe claims of industrial employees for social justice.' Govern-mental intervention in the form , of compulsory adjudication wastherefore the logical outcome of it in India. The function of theGovernment in this process covers a wide compass, consider-ing the constitutional, political and socio-economic aspects ofthe matter. In particular the role of the Goverment under Sec-tion 10(1) of the Industrial Disputes Act, 1947 2 assumes vitalimportance in as much as the statutory function of decidingwhether to refer or not to refer a dispute for adjudication isvested solely on the Government.

Section 10(1) 3 of the Act, empowers the appropriate

B.Sc. (Madurai), LL.M. (Cochin); Junior Professor, Madras LawCollege, Madras-6/00104.

R. B. Diwan Badri Das v. Industrial Tribunal 1962(2)L.L.J.366, 376.

Hereinafter referred to as the 'Act.'

S. 10(1) runs as follows:—(1) Where the-appropriate Government is of the opinion that any indu-strial dispute exists or is apprehended, it may at any time by orderin writing,—

refer the dispute to a Board for promoting a settlement there-of: orrefer any matter appearing to be connected with or relevant tothe dispute to a Court for inquiry; or

f. n. contd.

370 COCHIN UNIVERSITY LAW REVIEW 19 fit

Government4 to refer an industrial dispute to a Board of Con-ciliation, or to a Court of enquiry or for adjudication to a LabourCourt, Industrial Tribunal or to a National Tribunal. Section10, read with Section 12(5) of the Act, confers a very widediscretion on the appropriate government either to refer or torefuse to refer an industrial dispute. Under Section 1(5) 5 theGovernment has to consider whether there is a case for refer-ence and if so it may make the reference by exercising its powerunder Section 10(1) of the Act. If there is no case, the Govern-ment may refuse to make the reference. In case of refusal, theGovernment must record and communicate to the parties con-cerned its reasons for the refusal to make the reference.

It is now well settled 6 that the appropriate Governmentwhile making an order of reference under Section 10(1) of theAct, would be performing an administrative act based upon itsown opinion with respect to the existence or apprehension of anindustrial dispute. But that does not mean that the Governmentcan exercise the power arbitrarily or capriciously. It is equally

refer the dispute or any matter appearing to be connected with,or relevant to the disputes, if it relates to any matter specified,in the second Schedule to a Labour Court for adjudication, or

refer the dispute or any matter appearing to be connected with,OT relevant to, the dispute, whether it relates to any matter speci-fied in the second Schedule or the Third Schedule, to a Tri-bunal for adjudication.

Section 2(a)

Section 12 - Duties of Conciliation Officers:

*** ***

(5) If on a consideration of the report referred to in Sub-section(4), the appropriate Government is Isatisfied that there is a case forreference, to a Board, Labour Court, Tribunal or National Tri-bunal , it may make such - reference where the appropriate Govern-ment does not make such a reference it shall record and communi-cate to the parties concerned its reasons therefor.

The State of Madras v. C. P. Sarathy 1953 (I)L.L.J. 174; WesternIndia Match Co. v. Its Workmen (1970(2) L.L.J. 256; Shambu NathGoyal v. Bank of Baroda 1978(1) L.L.J. 484; Avon Services (Pro-duction) Agencies Pvt. Ltd. v. Industrial Tribunal 1979(1) L.L.J. 1.

C. ROBIN irr

well settled ? that an order of reference may be amenable tojudicial review if it is made ntalafide or the appropriate Govern-ment had no material before it, or did not apply its mind to thematerial before it, or taken into account some irrelevant or ex-traneous considerations or has not taken into consideration cer-tain vital facts which it ought to have taken into consideration.

An important question, which has cropped up in the courseof the exercise of the power by the Government is that whetherthe appropriate Government, having once declined for reference,can reconsider its earlier decision and make a reference. Theconsensus of judicial opinion is that a prior refusal of the Go-vernment to refer a particular dispute, cannot affect the juris-diction of the Government to exercise the power on any sub-sequent occasion. 8 This view has been affirmed by the SupremeCourt Aso.9

Even though it has been held that the GovernMeat havingonce 'declined to refer a dispute for adjudication can re-exercisethe power on a subsequent occasion, a plea for observance ofthe printiple of Audi alterarn partem in such circumstances, hasbeen repeatedly raised before the Courts. The line of case law

7. Sindhu Resettlement Corporation Lid, v. Industrial Tribirnal, 1968(1) 834; Stale of Bombay v. K. P. Krishnan 1960(2) L.L.J.592; Rohtas Industries Ltd. v. Agg'arwal, AIR. 1969 S.C. 707;Bombay Union of Journalists v. State of Bombay 1964(1) L.L.J. 3151;Attila Bidi factory v. Industrial Tribunal - 1969(1) L.L.J. 356 andGouripore Co. Ltd. v. State of West Bengal 1975(I) L.L.J. 247.

8. British India Corporation Ltd. v. Mohd. Sadiq 1974 Lab. 1. C. 420(Punjab & Haryana); Srikrishna Jute Mills v. Govt. of A.P. 1977(2) L.L.J. 363 (Andhra Pradeish); Indian Telephone Industries v.State of Karnataka 1978(1) L.L.J. 544 (Karnataka); American Ex-press International Banking. Corporation v. Union of Inc& 1979(2)L.L.J. 22 (Calcutta); G. Muthukrishnan v. New Horizon SugarMills (P) Ltd. 1980(1) L.L.J. 215 (Madras) and Abdu RahimanHO v. Abdu Rahiman 1980 Lab. I. C. 910 (Kerala).

9. State of Madras v. C. P. Sarathy 19531(1) L.L.J. 174. Western IndiaMatch CO. Ltd. v. Western India Match Co. Workmen's Union 1970(2) I..L.J. 256; Mahabir Jute Mills v. Shiban Id! Saxena 1975(2)L.L.J. 326 and Avon Services (Production) Ägencies Pvt. Ltd. v.Industrial Tribunal 1979 (I) L.L.J. 1.

372 COCHIN UNIVERSITY LAW REVIEW MIin this area reveals that the emphatic plea for observance ofthe..principle has been raised at two situations.

The first situation9a where the plea of notice and hearinghas been raised was when the Government suo moto recon-sidered its earlier order of refusal to refer. This plea was repelledby the judiciary, labelling the role of the Government as a purelyadministrative function. 10 But the Supreme Court s ' has formu-lated a frame work within which this more or less unfetteredpower could be used; Government can reconsider its decisioneither because new facts have come to light or because it hadmisunderstood the existing facts or for any other relevant rea-sons. It can make the reference only if it is an .industrial dis-pute and either existed or is apprehended and the reference itmakes must be .with regard to that and no other industrialdispute.

Much water has flown under the bridge since the SupremeCourt gave these guidelines. In recent times the net of admini-strative law has been spread wide enough to catch within itsfold what was once considered non-justiciable.' 2 There has beena •significant change in the attitude of Courts towards the appli-cability of principles of natural justice while an administrativefunctionary exercises its jurisdicton conferred by a statute. Butthis .sweeping . change had no impact on the judicial thoughtwhile it considered a situation like the one which we have nowat hand. The disappointing aspect is that recently in Avon Ser-vices (Production) Agencies v. Industrial Tribunal" the SupremeCourt has gone a step further and observed" that it was not

9a. As illustrated by the facts of the following cases:Workmen of Dalmia Cement (Bharat) Ltd. v. State of Madras 1969(1) L.L.J. 499 ('Madras) and Cooper Engineering Ltd. v. D. N.Avey 1971(1) L.L.J. 613 (Bombay).

See.

ee infra, n. 11, 19.

Western India Match Co. Ltd. v. Western India Match Co. WorkersUnion 1970(2) L.L.J. 256.

Abdul Salani and Co. v. State of Tamil Nadu (1973) 43 F.J.R.180, 185.1979(1) L.L.J. 1.Id., at p. 5.

C. ROBIN 878

absolutely necessary that there ought to be fresh materials be.fore the Government for reconsideration of its earlier decisions.This will lead to an anomalous position where the Subsequentorder of 'the Government referring the dispute for adjudicationwill not be open to judicial scrutiny and the Government willalways; be able to disarm the court by taking •refuge in silence.Therefore, this aspect requires reconsideration.

Juristic 15 and judicial 16 opinions converge to the point thatthe exercise of the power by the Government under such circum-stances warrant a notice and hearing. If at all this procedure isto be dispensed with in the interest of administrative efficiency,it is advisable that the Government, having once declined tomake a reference, while subsequently makes an order, must statethe reasons for reconsideration of its earlier order, as reasoneddecisions, a concomitant of the principles of natural justice isnot alien to administrative decision making in India. At leastthat fairness must be extended in such situations. Moreover thescope for judicial scrutiny of the reasoned order is more. Theruling of the Supreme Court in Hachtief Gammon v. State ofOrissa" fortifies this proposition. The Court observed:

"The Courts have power to see that the executive act law-fully. It is no answer to the exercise of that power to saythat the Executive acted bonafide nor that they have be-stowed painstaking consideration. They cannot avoidscrutiny by Courts by failing to give reasons. If they givereasons and they are not good reasons, the Courts candirect them to reconsider •the matter in the light of relevantmatters, 'though the propriety, adequacy, or satisfactorycharacter of those reasons may •not be open to judicialscrutiny." 18 ,

"The Law of Industrial Disputes" - O.P. Malhotra (third Edition)Vol. 1, pp. 596-597; S. S. Visweswamiah "Government's Power toReftr Disputes for Adjudication under the Industrial Disputes Act,1947 . A Review." 1979 Ac. L. R. 65, 77.Indian Telephone Industries Ltd. v. State of Karnataka 1978(L) LLJ544; Muthukrishnan v. New Horizon Sugar Mills (P) Ltd. 1980(I)L.L.J. 215.11975(2) L.L.J. 418.Id., at p. 428.

374 COCHIN UNIVERSITY LAW REVIEW

Thus reasoned orders in these circumstances might con-ceivably induce fairness while the Government exercise thepower under Section 10(1) of the Act. If the Government goesout of bounds, the blow will fall and the order will be quashed.

The second situation where the plea for Observance of theaudi alteram partem rule has been raised was when the Govern-ment decide, at the instigation of the workmen or a Union, torefer the dispute which it has on an earlier occasion declined torefer. Recently a considerable amount of decisional grist hascropped up among various High Courts on this question. Theconflicting decisions of the High Courts have an unsettling effecton an area whose ambit and periphery are well determined. TheSupreme Court is yet to pronounce on this point.

As early as in 1956, the Madras High Court considered thequestion in Radhakrishna Mills (Pollachi) Ltd. v. State ofMadras 19 In this case, the management terminated the servicesof an employee and the Union espoused the cause. The Govern-ment declined to refer the dispute for adjudication. After amonth the Communist Legislative Party at Madras made a re-presentation, on behalf of the Union, to the Government for re-consideration of the decision. Subsequently the Governmentreferred the matter for adjudication. The impugned order waschallenged on the ground that the exercise of the - jurisdictionwas vitiated 'by failure to give notice to the employer before thesecond order was passed. Rejecting this contention the courtheld that the issue of the second order itself was an admini-strative act and did not amount to a judicial or quasi-judicialdetermination of the rights of any of the parties. Therefore thefailure to give notice to the management did not vitiate theexercise of the statutory power vested in the Government bySection 10(1) (c) of the Act.- A Division Bench of the Raja-sthan High Court in Good Year (India) Ltd v. Industrial Tri-bunala took the same view on a more or less similar factsituation. 21

A.I.R. 1956 Mad. 1113.1968(2) L.L.J. 682.

21. The frets of the case show that the petitioner company terminatedf. n. contd.

C. ROBIN 3'75

The Delhi High Court in Khadi Gramodyog Bhavan v.Delhi Adminisiration, 22 in the light of slightly different facts,23held that where the Government refuses to refer the dispute, itis open to it to revise and such a revision can be made withoutnotice to the parties. The intendment of the Court, apparentfrom the decision is that the power to decide whether to refer adispute under Section 10(1) of the Act is purely an admini-straive act and therefore the principles of natural justice is notto be followed in such circumstances. Perhaps, it is felt, this viewwas discernible as the decisions were rendered before the deci-sion in A. K. Kraipak v. Union of India. 24 For Kraipak marksthe water shed, if we may say so, in the application of naturaljustice to administrative proceedings. 25

The proposition laid down by the above cases failed toimpress the Madras Hgih Court. In Abdul Salam and Co. v.State of Tamil Nadu, 26 the Court took a different view. Rama-prasada Rao, J., observed:

"Though the jurisdiction exercised by the appropriate Govt.,while making a reference under Section 10(1) (c) of theI.D. Act, 1947, is administrative in nature, yet, while itmakes a reference, it cannot be said that the order, actor thing done by the Government is a pure and simpleadministrative act without having any impact upon therights of the parties. .... If the Govt., having refused to

the services of an Area Supervisor. He raised an indu'stria'l dispute.Govt declined to refer the dispute. The Workman filed a representa-tion stating that the Govt. failed to take into consideration certainrelevant materials While refusing to refer the dispute. Subsequentlythe Govt. reconsidered its decision and referred the matter foradjudication.

2/2. 1968(1) L.D.J. 79.

tHere the Govt. once refused to refer the dispute. But later, on therecommendation of the Labour Commissioner, revised its previousorder and-referred the dispute for adjudication.

A.I.R. 1970 S.C. 150.

Mohmidev Singh Gill v. Chief Election Commissioner AA.R. 1978S.C. 851, 870.

(1973) 43 F.J.R. 180.


refer an alleged industrial dispute for adjudication sub-sequently re-exercises its power and refers the dispute foradjudication solely on the further representation made bythe workmen, without giving the employer an opportunityto rebut the content and scope of such representation, thesubsequent order, being violative of the well known ruleof fair hearing, would be unjust." 27

While arriving at this view the Court mainly relied upon thedecision in A. K. Kraipak v. Union of India 28 Where the SupremeCourt has held that 'The dividing line between an administrativepower and a quasi-judicial power is quite thin and is being gra-dually obliterated.. ... In a welfare state like India which isregulated and controlled by the rule of law it is inevitale thatthe jurisdiction of the administrative bodies is increasing at arapid rate. The concept of rule of law would lose its vitality ifthe instrumentalities of the state are not charged with the dutyof discharging their functions in a fair and just manner, whatwas considered as an administrative power some years back isnow being considered as a quasi-judicial power. 29 The Courtfurther clarified the position that though the ultimate decisionsprings trom administrative action and is based on subjectivesatisfaction of the authority, yet if such an indoor investigation,forms part and parcel of process, which may terminate in anyorders adverse to the interest of the persons claiming to beheard before the authorities, then the concerned authority wouldbe under an obligation to comply with the rules of natural justicewhich includes the rule of fair hearing."This decision of theCourt was in direct conflict with the decision of the same HighCourt in. Radhakrishna Mills case.

A Division Bench of the Court took the task of resolvingthe riddle in Trichy Steel Rolling Mills Ltd. v. Gnanaswnba-ndam. 31 While leaving open the wider question whether the

Id., at p. 184.AIR. 4970 S.C. 150.Id., at p. 154.('1973) 43. F.J.R. 180, 185.(1974) 46 F.J.R. 158.

C. ROBIN 377

principles of natural justice would apply to every administrativeorder, Veeraswami C.J. held, on the facts, : 2 that the Govern-ment's second order of reference made without giving notice tothe employer' was invalid. Recently these two decisions wereaffirmed by a Full Bench of the High Court in Muthukrishnanv. Árew Horizon Sugar Mills.3 3 Earlier a Division Bench of theKarnataka High Court in Indian Telephone Industries v. State ofKainataka 34 and a Single Judge of the Calcutta High Court inAnierican Express International Banking Corporation v. Unionof India 35followed the view taken by the Madras High Court inAbdul Salam and Co. case and Trichy Steel Rolling Mills Case.

But a Single Judge of the Karnataka High Court in Kirlos-kar Electric Co. v. Workmen 36 and a Division Bench of theAndhra High Court in Srikrishna Jute Mills v. Govt. of A 37took the earlier view taken by the High Courts of Delhi 38 andRajasthan. 39Recently a Division Bench of the Kerala High Court

Abdu Rahiman Haji v. Abdu Rahiman 4oapproved this view.

Thus two arguments are deducible from the decisions ofthe High Courts. One line of argument 41 is that the issue of the

In this case the management terminated the services of a workman.He raised an industrial dispute. Government declined to refer thematter for adjudication. Three months later the workman filed arepresentation to the Government. Government reconsidered thematter and referred the dispute for adjudication. The order of refer-ence was assailed on the ground that it violated the princile of audialteram partem.1980 (1) L.L.J. 215.

1978(1) L.L.J. 544.

1979(2) L.L.J. 22

1974(2) L.L.J. 537.

1977(2) L.L.J. 215

Khadi Gramodyog Bhavan v. Delhi Administration 196&(1) L.L.J. 79Goodyear (India) Ltd. v. Industrial Tribunal 11968(2) L.L.J. 682.1980 Lab. I. C. 910.

Indian Telephone Industries v. State of Karnataka, 1978(1) L.L.J.544; American Express International Banking Corporation v. Unionof India, 1979(2) L.L.J. 22; Muthukrishnan v, New flori4on SugarMills, 1980(1) L.L.J. 215,


second order referring the dispute for adjudication itself wasan administrative act and therefore the failure to give notice tothe management did not vitiate the exercise of the power underSection 10(1) of the Act. Whereas the other argument a2 is thatthe power exercised in these circumstances cannot be said tobe a pure and simple administrative act because it affects therights of the parties and therefore if it violates the audi alterampartem rule it would be unjust. It is submitted that the formerview is inconsistent with the current thinking on the subject asit has been held by the Supreme Court 43 that natural Justiceis now a brooding omni-presence although varying in its play.It has many colours and shades, many forms and shapes andsave where valid law excludes, it applies where people areaffected by acts of authority.

In the past, the principle of audi alteram partem have beeninvoked only before a judicial or a quasi-judicial functionary.There has been a lurking dislike to invoke the same before anadministrative authority. To-day, in India as well as in England,the advances made by Natural Justice, by march of times exceedall frontiers. For the dichotomy between administrative andjudicial function viz-a-vis the doctrine of natural justice is pre-sumably absent after Kraipak in India and Schmidt inEngland. 43a In the circumstances, the later view, i.e., the Govern-ment before deciding to make a reference on the basis of therepresenation filed by one of the parties was bound to providean opportunity of hearing to the other party, holds good.

A pertinent point on which emphasis was made while re-jecting the plea for observance of the audi alteram partem rulewas that since Section 10(1) or 12(5) of the Act did not provideeither expressly or by necessary implication that the principles

Khadi Gramodyog Bhavan v. Delhi Administration, 1968(1) L.L.J.79; Good Year ((India) Ltd, v. Industrial Tribunal, 1968(2) L.L.J.682; Kirlosker Electric Co. v. Workmen, 1974(2) L.L.J. 537; SriKrishna Jute Mills v. Government of A.P., 1977(2) L.L.J. 363.

Mohinder Singh Gill v. The Chief Election Commissioner A.I.R. 1978S.C. 851, 870 and 871.

43a. Id., at p. 870.

C. ROBIN 379

of natural justice should be followed by the Government, it isnot necessary to follow it. 4' this reasoning looses its vitalityin the context of the facets of pragmatic realism set out by theratios from rulings of the Supreme Court. In A. K. Ktuipak v.Union of Indiao Hegde, J., with telling terseness set out theprinciple thus:

"The aim of the rules of natural justice is to secure justiceor to put it negatively to prevent miscarriage of justice.These rules can operate only in areas not - covered by anylaw validly made. In otherwords they do not supplant thelaw of the land but supplement it." 46

Justice K. K. Mathew, in Indira Nehru Gandhi v. RaiNaraino vivified the proposition thus:

"The observance of the principle of natural justice wascalled for whenever it was necessary to arrive at a justdecision on the facts and circumstances of the case. Evenif a power given to a body without specifying that the rulesof natural justice should be observed in exercising it, thenature of the power would call for its observance."

The moral as pondered by the above decisions illuminatesthe point that even though it is not expressly provided by theprovisions of the Act, the nature of the power vis-a-vis the parti-cular circumstances of the case compel the authority to followthe principle of audi alteram pattern in such cases. So much sothis proposition, appears to be equally invocable even in caseswith facts as illustrated earlier where an administrative decisionis taken by a functionary like the Government under Section10(1) of the Act. Failure to adhere to such principles wouldmake the decision a nullity, as it has been said that the philo-

'ado skhar Electric Co. v. Workmen, 1974(2) L.L.J. 537. 540 andSrikrishna lute Mills v. Govt. of A.P. 1977(2) L.L.J. 363, 367,

A.I.R. 1970 S.C. 150.

Id., at p. 156.

A.I.R. 1975 S.C. 2192.

48. Id., at p. 2378.


sophy behind natural justice is, in one sense, participatory justicein the process of democratic rule of law.49

Another aspect on which the High Courts of AndhraPradesh 50 and Kerala 5' laid an accent is that if the governmentchose to reconsider its earlier decision, it was not necessary.to give notice to the employer of the proposed action becauseno civil rights of any parties are being adjudicated upon. Whiledoing so, the courts did not attempt to analyse the amplitudeof the term "Civil rights" as they were carried away by thewrong premises set out by the decision of the Karnataka HighCourt in Kirloskar Electric Co. v. Workmen. 52 This reasoningof the Courts, it is felt is not correct in view of the recent deci-sions”of the Supreme Court.

In England as early as in 1915, it was laid down54 as aproposition that if the order of an administrative authority isone which affects the rights and property of an individual, heis entitled to have the matter determined in a judicial spirit inaceordance with the principles of substantial justice. This pro-Position was adopted with approval in Rex v. Electricity Com-missioner. 55 Later in India also it came to be a generally acceptedproposition that where an authority has to affect the rights ofindividuals it has a duty to proceed judicially.56 The SupremeCourt has added gloss to this general proposition in State ofOrissa v. Dr. Birtapani Dei. 57 Shah, J. observed:

Mohinder Singh Gill v. Chief Election Commissioner, A.I.K. 1978S.C. 851, 881.Sri Krishna lute Mills v. Govt. of A.P. 1977(2) L.L.J. 363.

Abdu Rahiman Haji v. Abdu Rahiman 1980 Lab. 1. C. 910.

1974 (2) L.L.J. 537.

Mohinder Singh Gill v. Chief Election Commissioner ALR. 1978S.C. 851 and Maneka Gandhi v. Union of India A.I.R. 1978 S.C. 597.

Local Govt. Board v. Alridge [1915] A.C. 120, 140.

[1924] 1 K.B. 171, 198 Banks, L.J. Stated "On principle End autho-rity it is in my opinion open to this court to hold; that powers sofar - reaching, affecting as they do individuals as well as property,are powers to be exercised judicially and not ministerially."

A. T. Markose, Judicial Control of Adtninistraive Action, (1956) 296,

A.1.R. 1967 S.C. 1269,

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"The law that a party to whose prejudice an order is in-tended to be passed is entitled to a hearing applies alike tojudicial tribunal and bodies of persons invested with autho-rity to adjudicate upon matters involving "Civil Con-sequences."58

• I : ' .The law is now taken to be well settled that even in an

administrative proceedings which involves civil consequences, thedoctrine of natural justice is applicable."

Now the problem is to assess the semantic sweep of the:terms "civil rights" and • "Civil consequences," and to find outwhether it is susceptible of covering a situation which we havenow at hand. "Civil rights," generally speaking may be viewedas attempts to give meaning to the ideal of equality." They are-rights appertaining to a person by virtue of his, citizenship in a •

state or community and capable of being enforced or redressedin a civil action. 6 ' This includes the rights of property, marriage,protection by the laws, freedom of contract, trial by jury ?etc."The term "Civil consequences" not only cover infraction ofproperty or personal rights but also of civil liberties, materialdeprivations and non-pecuniary damages. 83 In sum, everythingthat affects a citizen in his civil life inflicts a "Civil con-sequence.64 That being so, it is hardly open to doubt that the'expression "Civil consequences" thus takes within its sweep suchcases, as the one which we have now at hand.

Here is a situations where the Government first refused torefer •the matter for adjudication. Later, on the• basis of therepresentation made either by the workman or the Union to

Id., at p. 1271.See Maneka Gandhi v. Union of India A.I.R. 1978 S.C. 597 andMohinder Singh Gill v. Chief Election Commissioner AiIJR. 1978S.C. 851.

Encyclopedia Britanica Vol. 5, 842.Black's Legal Dictionary, 1487.Ibid.Mohinder Singh Gill v. Chief Election ComMissioner, IA. 1978S.C. 851, 876.

64.. Ibid.


the Government, the Government reconsiders its earlier orderand decides to refer the matter without giving the employer anopportunity of hearing. Therefore if the Government exercisetheir power under these circumstances and decides to make areference, then it has a definite impact upon the rights of themanagement.

Firstly, the Government's refusal to refer the dispute in thefirst instance might give rise to a 'legitimate' expectation on thepart of the employer that the same dispute would not be thesubject matter of adjudication again. 65 Therefore the employer'slegitimate expectation to act and hold to the earlier order of theGovernment has been affected by the second order; secondly,by reason of the reference, the petitionr is exposed to defend theproceedings before the Labour Court and other courts whichnecessarily involves time and money.

Moreover once a reference is made Section 33 would comeinto operation and the relative situation creates various inroadesinto the normal powers vested in the management. S. 33 66 places

S. S. Visweswaraiha, Government's power to Refer Disputes for Ad-judication under the Industrial Disputes Act, 1947 - A Review: 65, 76.

S. 33 reads as follows:33. Conditions of service, etc. to remain unchanged under certaincircumstances during pendency of proceedings:-

During the pendency of any conciliation proceeding before aConciliation Officer of a Board or of any proceeding before(an arbitrator or) a Labour Court or Tribunal or NationalTribunal in respect of an industrial dispute, no employer shall—

(a) in regard to any matter connected with the ,dispute alterto the prejudice of the workmen concerned in such dispute, theconditions of service applicable to them immediately before thecommencement of such proceeding; or(h) for any misconduct connected with the dispute, dischargeor punishment, whether by dismissal or otherwise any workmanconcerned in such dispute, save with the express permission inwriting of the authority •before which •the proceeding is pending.

During the pendency of any such proceeding in respect of anindustrial dispute, the employer may, in accordance with thestanding orders applicable to workman concerned in such dis-pute (or, where there are no such standing orders, in accordance

f. n. contd.

C. NNW gee

restrictions on the employer from changing the conditions ofservice etc., of the workman under certain circumstances. Anycontravention of the provisions of the section can be the subjectmatter of a complaint in writing before an industrial adjudicatorunder S. 33A67 of the Act.

If the dispute relates to the dismissal or discharge 68of some

with the terms of the contract, whether express or implied,between him and the workman), —<a) alter, in regard to any matter not connected with the dis-pute, the conditionS of service applicable to that workman im-mediately before the commencement of such Proceeding; or(b) for any misconduct not connected with the dispute, dis-charge or punishment, whether by dismissal or otherwise, thatworkman;Provided that no such workman shah be discharged or dis-missed,' unless he has been paid wages for one month and anapplication has been made by the employer to the authoritybefore which the proceeding is pending for approval of theaction taken by the employer.

(3) Notwithstanding anything contained in sub-section (2), no em-ployer shall, during the pendency of any such proceeding inrespect of an industrial dispute, take any action against anyprotected workman concerned in such dispute—

by E kering, to the prejudice of Such protected workman. thisconditions of service applicable to him immediataly before thecommencement of such proceedings; or

by discharging or punishing, whether by disMissal or Other-wise, such protected workman,Sant with the express permission in writing of the authority be-fore which the proceeding is pending.

S. 33A. Special provisions for adjudication as to whether conditionsof service, etc. changed cheirig pendency of proceedings:- Where anemployer contravenes the provisions of Section 313 during the pend-ency of proceedings before a (Labour Court, Tribunal or NationalTribunal), any employee aggrieved by such contravention, May makea complaint in writing, in the prescribed manner to such (LabourCourt, Tribunal or National Tribunal) and on receipt of each com-plaint tint (Labour Court, Tribunal or National Tribunal) shalladjudicate upon the complaint as if it Were a dispute referred to orpending before it, in accordance with the provisions of this Act andshall submit its award to the appropriate Government and the pro-visions of this Act shall apply accordingly.In almost all cases the dispute related to discharge or dismissal ofworkmen.


workmen and the employer acting on the basis of the Govern-ment's refusal to refer the dispute may make fresh appointmentsin the vacancies caused due to the dismissal or discharge. If theGovernment takes a somersault after a lapse of many yearsand refers the dispute for adjudication and in case the adjudica-tion results in the re-instatement of the dismissed or dischargedworkmen, the employer may be forced either to keep the surpluslabour or to retrench them according to elaborate - procedurecontained in the provisions 69 relating to retrenchment. This islikely to have an unsettling effect on the employer's financialarrangement and cause dislocation of industry. In these circum-stances, it is hardly open to doubt that an order of referencemade by the Government on the basis of the representation ofthe Union after having once rejected to make a reference willhave "Civil Consequences" on the employer. Therefore, it isproper and fair that the Government before doing so, must givenotice to the management so that it must have its say to thecontrary on the matter.

Another important aspect left unnoticed by the High Courtsis the `diamorphism of powers' of the Government under S.12(5) of the Act viz., the power to make reference and thepower to refuse to make a reference. Under S. 12(5) 70 the Go-vernment has to consider whether a prima facie case has beenMade out for reference and if so, whether it is expedient to referthe matter for adjudication. If it is so the Government may makethe reference by exercising its power under S. 10(1) of the Act.If it is not so the Government may refuse to make the reference.When the government refuses to refer the matter sub-section5 of Section 12 requires the Government to record and com-municate to the parties concerned, its reasons for the refusal tomake the reference. It is now well established 7I that the Govern-ment while giving reasons for refusal to refer, there must bematerial to show that they have considered all the relevant

Ss. 25(F) and 25(N) of the Act

Supra, n. 5.

State of Bombay v. K. P. Krishnan 1960 (2) L.L.J. 592 BombayUnion of Journalists v. State of Bombay 1964 (1) L.L.J. 351 andHochtief Gammon v. State of Orissa 19715(2) L.L.J. 4141.

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facts; otherwise the order will not be sustainable in law andtherefore, liable to be quashed in a Writ proceedings. A vitalaspect embedded in this position of law is that the Govern-ment once refused to refer a matter and gave its reasons fornon reference based on relevant facts, subsequently chooses torefer on the basis of a memorandum submitted by the workmenor a Union, necessarily the second order must be based on cer-tain new facts made out in the memorandum. Therefore in theinterest of justice and fair play the other party must certainly beprovided with an opportunity to repudiate the new contentionraised in the memorandum. If this fairness was not extended,then the manner of exercise of power by the Governmentappears to be one impregnated with the principle of audi alterampartem:

Perhaps, it may be argued that this fear is unwarranted asthe parties will be provided an opportunity to question thevalidity of the reference on this ground before the Labour Courtor the Industrial Tribunal. But this is inconsistent with the objectand purpose of the Act as it might pave the way for indefinite-ness in the adjudicatory process and induce litigative mentalityon the parties. Therefore it is preferable • to efface the fog at thestarting point itself, and leave the matter to the adjudicatoryauthority so that it can proceed on definite lines to resolve thedispute.

In fact, a case with similar factsn came up for considera-tion before the Supreme Court in Western India Match Co. Ltd.v. Western India Match Co. Workers Union." The Court in thiscase held that the government's power to refer the matter cannotbe said to have been exhausted when it has declined to make areference at an earlier stage. But •it did not consider the questionwhether government acting on the 'basis of the representation

In this case the appropriate government declined to refer the dispute.A Writ Petition filed against the order of the government was dis-missed. However on • further representation by the Union, thegovernment, •referred the same dispute for adjudication after a lapseof six years. This order of the government wz.is assailed (among othergrounds) as violative of the principles of audi alteram pattern.

1970 (2) L.L.J. 256.


made by one party must give an opportunity to the other partyto rebut die content and scope of such representation. So muchso the question remains unanswered.

CONCLUSION

The trend of decisions exempted in the cases referred 74 toearlier, reveals the fact that when the problem is posed to someHigh Courts, they took a dogmatic approach by holding thatthe principles of natural justice is not applicable to 'purelyadministrative functions' ignoring the facts of the case at hand.But this rigid view no longer holds the field." Natural justice,it has been said is pragmatically flexible and is amenable tocapsulation under compulsive circumstances. 76 Therefore, it issubmitted, the courts must shed the doctrinaire approach andbe tempered to adopt a realistic view as new problems call fornew solution.

Here, even though the subject matter initially springs fromadministrative action, yet the means adopted or the manner ofexercise of the power is likely to affect rights of parties andinvolve civil consequences as well. Therefore it would be idealto suggest that when the government decides to refer a disputeon the basis of the representation filed by workmen or union,which once it has refused to refer, it must give the employer anopportunity of hearing. If the management did not have theopportunity to refute the content and scope of such representa-tion then the manner of exercise of •the power by the govern-ment appears to be unjust.

There may be various possiblities of the government beingpressurised into making the reference subsequent to the previousrefusal, for instance the change of the officer responsible formaking the reference, connection of trade union with the rulingparty at the relevant time, change of government from one ruling

Supra,

Maneka Gandhi v. Union of India, A.LR. 1978 S.C. 597, 690 perKailasarn, J.Mohinder Singh Gill v. The Chief Election Commissioner, A.I.R.1978 S.C. 851, at 875 per Krishna dyer, J.

C. ROBIN 387

party to another, malafides and so on.77 In a country wherepolitical affiliation of trade unions and splinter unionism areprevalent, it might be possible that the government may allowitself be stampeded in reviewing its earlier decision. 78 The Na-tional Commission on Labour in India also has expressed itsconcern on this stultifying aspect.79

The subsequent decisions of the government to make areference after prior refusal may cause inconvenience to theemployer as discussed earlier. Our Supreme Court has alreadyexpressed its concern about this aspect." It would be detrimentalto the objects of the Act if disputes raised by certain employeesare allowed to linger on continuously and indefinitely in a fluidand indecisive state. There were instances where the govern-

0. P. Malhothra, The Law of Industrial Disputes, (3rd Edn.) Vol. I,pp. 594-595.This could be clearly illustrated from the facts of the following cases:In Srikrishna Jute Mills v. Govt. of A.P., (1977)2 L.L.J. 363, afterhaving declined to make the reference, the government subsequentlyreferred the same for adjudication, due to the political pressureexerted on the government by an M.L.A. In Indian Telephone Indu-stries Ltd. v. State of Karnataka, 1(1978) 2 L.L.J. 544, the govern-ment reviewed its earlier order of refusal to refer and chose to referthe dispute for adjudication at the behest of the Chief Minister of theState. In Abdul Rehiman Haji v. Abdu Rehiman, 1980 Lab. I.C. 910,the government having once declined to refer, chose to refer thedispute at the intervention of the Labour Minister of the State.

The Commission observed:"Though we are not convinced that collective bargaing is antitheticalto consumer interests even in a democratic system, pressure on thegovernment to intervene or not to intervene in a dispute may hepowerful. It may hardly be able to resist such pressures...." Reportof the National Commission on Labour in India, (1969), p. 327.For an elabOrate discussion of the subject see pp. 325-1327.in Western India Match Co. v. Western India Match Co. WorkersUnion, (1970) 2 L.L.J. 256, Shelat, J. opined:"It is true that where a government reconsider its previous decisionand decides to make the reference, such a dcision might causeinconvenience to the employer because the employer in the mean-time might have acted on the belief that there would be no pro-ceedings by way of adjudication of the dispute between him and theworkmen.' it, at p. 264.

388 COCHIN UNIVERSITY LAW REVIEW 1191

ment has referred the disputes after a very long time." Thiswill have an unsettling effect on the organisational set up of aparticular industry. Moreover, if old and stale disputes arereferred then it will cause a litigative mentality on the partiesand give only a pious hope in the adjudicatory process.Ultimately the purpose and policy of the legislation will bedefeated.

It is, therefore desirable that the government must desistfrom referring stale disputes after the lapse of several years. Itis best to say that fixing a limitation on the exercise of thepower when the government reviews its earlier order is essentialso as to end the unlimited vagaries of the government. It is alsodesirable that when the government re-exercises its power anddecides to refer the dispute for adjudication, it must state rea-sons in the order of reference, showing that new facts had cometo light or there was misunderstanding as to the existing facts orthere was any other relevant consideration. The National Com-mission on Labour in India suggested that the best way to meetthis delicate problem is to evolve a regulatory procedure in whichthe State can be seen in the public eye to absolve itself ofpossible charges of political intervention.82

It is the duty of the legislature •to give effect to this signalcalling for authoritative resolution of his confused position. Butif the course of legislative action is traced one could hardlyfind any remnants of legislative attempt on this matter. TheIndustrial Relations Bill 1978 also failed to clarify this aspect.83It is manifest that the legislative chambers have no time to care

In Western India Match Co. Ltd. v. Western India Match Co, Work-ers Union, (1970), 2 L.L.J. 265, the facts show that the govern-ment chose to refer the dispute after a laiPse of six years from itsorder of refusal to refer. In Shanti Theaters (P) Ltd. v. State ofTamil Nadu, •1979) 55 F.J.R. 389 where having thrice refused torefer the dispute for adjudication the government made the refer-ence 10 years after its first order to refusal.

Report of the National Commission on Labour (1969) p. 327.

Section 104 of the Industrial Relatioth Bill 1978 deals with thepower of the government to refer a dispute for adjudication. It con-tains the same provisions as that of section 10(1) and section 12'(5)of the Industrial Disputes Act, 1947.

C. .ROBIN 389

for these minions as they are too pre-occupied with other press-ing business. Therefore it becomes the responsibility of the judi-ciary to give guidance by deriving a working criteria so as toavoid litigation in this area.

But past experience has proved the contrary. Instead ofcontriving a way out, the High Courts have contributed muchfor the confusion by rendering contradictory rulings. In addi-tion the decision in Avon Services (Production) Agencies v.Industrial Tribunal" has let loose the minimum restrictionsplaced on the government by the decision in Western IndiaMatch Co. Ltd. v. Western India Match Co. Worker's Union.85The former decision of the Supreme Court was misquoted andmisapplied by the High Court without paying heeds to the factsof the case at hand. 86 Therefore, it is suggested that the SupremeCourt in a future case must illumine the twlight area of law andprovide a speedy finality to the confusion so that the industrialcommunity may be helped to carry on smoothly.

(1979) 1 L.L.J. 1.(1970) 2 L.L.J. 256.

816. For instance see the decision of the Kerala High Court in AbduRehiman Haji v. Abdu Rahttnan, 1980 Lab. I.C. 910.

reference of industrial dispute and natural justice

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