Under the Industrial Disputes Act, 1947 (“ID Act”), which inter-alia deals with the industrial disputes between an employer and employee (‘workman’)1 it has been discussed in several judicial pronouncements that the relationship of an employer and employee is unequal due to inequality of bargaining power between them and therefore, employers are prone to a number of legal as well as reputational risks which could result from not following due process for termination of workman. One such provision is Section 332 of the ID Act which requires an employer to follow certain procedures when dealing with the change in service conditions of workmen or to terminate their services during the pendency of any proceeding involving an industrial dispute.

Applicability of Section 33 of ID Act has been a subject matter of examination in a judgment titled “Duncan Engineering Ltd.( “Company”) vs. Ajay C. Shelke and Ors.” decided on June 21, 2021 by Hon’ble Bombay High Court. The Hon’ble High Court held that non-compliance of mandatory provisions of Section 33 would render the dismissal order of a workman as void ab initio and the workmen would be entitled for reinstatement with all consequential benefits.

So far brief facts of the case are concerned, Ajay C. Shelke and others (“Workmen”) were employed, in one of the factories of the Company, and were served with charge sheets alleging willful insubordination, disobedience, illegal strike, riotous and disorderly behavior, etc. During a domestic enquiry, the enquiry officer recorded his findings that the Workmen were guilty of misconduct, leading to termination of services of Workmen in 2014. Such an action of the Company was challenged by the Workmen and the same was referred to the jurisdictional labour court. Workmen contended that dismissal was illegal as the same was a result of victimization for them having joined the Union viz. Maharashtra Rajya Rashtriya Kamgar Sangh (INTAK), which was espousing their cause. Further, the dismissal order was passed pending Reference i.e., Ref. (IT) No. 17 of 2014 pertaining to the Charter of Demands raised by the Union, which Workmen were members of, and therefore, without submission of an application to the authority before which the
matter was pending.

The Labour Court vide its Award, while holding the enquiry to be fair, proper and in accordance with the principles of natural justice, ordered, on the ground of non-compliance of Section 33(2)(b) of the ID Act, reinstatement of Workmen, with continuity of service, full back wages and all consequential benefits. The said order was challenged by the Company before the Hon’ble Bombay High Court.

The Hon’ble High Court observed that Section 33 of ID Act, as amended in the year 1956 makes a broad division between action proposed to be taken by an employer regarding any matter connected with the dispute on one hand and action proposed to be taken regarding a matter not connected with the pending dispute.

Section 33(2)(b) of ID Act enables an employer to dismiss or discharge a workman for any misconduct not connected with the dispute provided the concerned employer makes an application to
the concerned authority, before which a proceeding is pending, for approval of the action taken. Relying upon the Constitution bench judgment of “Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. vs. Ram Gopal Sharma and Ors.” passed by Hon’ble Supreme Court in the year 2002, the Hon’ble High Court held that proviso to Section 33(2)(b) contemplates three conditions mentioned therein viz. (i) dismissal or discharge; (ii) payment of wages for one month; and (iii) submission of an application for approval, to be done simultaneously. Therefore, if an approval is not granted under Section 33(2) (b) of the ID Act, the order of dismissal becomes ineffective from the date it was passed and therefore, an employee becomes entitled to wages from the date of dismissal to the date of disapproval of the application. The Court while dismissing the petition observed that since despite the pendency of the reference relating to Charter of Demands, the Workmen were dismissed without complying with the mandatory provision of Section 33(2)(b) of ID Act, the same renders dismissal order void and non-est.

Anhad Law’s Perspective

This judgment is a reminder of significant aspects required to be complied with by the employers in India under the ID Act while dealing with the termination of employees who will qualify as workmen. The Hon’ble High Court has reiterated the legal principle that if a statutory provision prescribes a particular step (s) required to be followed regarding an action of an employer (involving a workman), employer must follow the requirements provided, otherwise, action of an employer could become null and void ab-initio. This judgment reiterates that adherence to law and compliance therewith are obvious and necessary in a system governed by rule of law.

Manishi Pathak, Founding Partner and Ranjan Jha, Partner

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