New Law, Same Old Mistake? Failed Opportunity to Amend Section 33A of the ID Act
[Gursimar Setia is a student at West Bengal National University of Juridical Sciences.]
During the pendency of an industrial dispute between workmen and the employer, it becomes necessary to ensure that workers are protected against victimisation and mala fide actions of an employer. Industrial disputes tend to last for long durations, and the employer may try to discourage workers from pursuing collective action by unfairly terminating or altering their status to their detriment. Section 33 (along with Section 33A) of the Industrial Disputes Act 1947 (ID Act) provides certain safeguards to workmen during the pendency of any proceeding in respect of an industrial dispute. Sections 90 and 91 of the Industrial Relations Code 2020 (IR Code) are the corresponding provisions in the new law and are exactly identical to the old provisions.
As per Section 33(2)(b) of the ID Act, where an industrial dispute is ongoing in an Industrial Tribunal or any other authority, an employer may alter the conditions of employment or order dismissal of workers in matters “not connected” to the ongoing dispute. However, keeping in mind the scope of misuse, the employer is required to pay one month’s wages to the dismissed workman and make an application to the authority for “approval” of the action taken by it. On failure of the employer to seek approval or otherwise fulfil the requirements of Section 33, an aggrieved workman may make a complaint against the employer before the authority where the dispute is pending under Section 33A. The employer may also be liable to face punishment under Section 31(1) of the ID Act.
While the consequences of approval not being granted have primarily been clear, the status of workers during the pendency of approval application (under Section 33(2(b)) and in case of omission by the employer from seeking approval have not always been well understood as courts have taken opposing views. In Rajasthan State Road Transport Corporation v. Satya Prakash (Rajasthan SRTC), the Supreme Court affirmed the view that compliance with Section 33 is mandatory and a dismissal made without fulfilling the requirements of Section 33 would be bad in law. However, in the same case, the court still refused to reinstate the aggrieved worker because his misconduct was proven before the Industrial Tribunal.
As explained below, the aforementioned case opened up a possibility of abuse by employers as the court widened the scope of enquiry under Section 33A and the same provisions have been carried forward in the new IR Code.
The long-standing position of the Supreme Court has been that an order of dismissal or discharge is “incomplete and inchoate” until approval of the relevant authority is obtained. If approval is granted, the workman stands discharged dating back to the order of dismissal. Conversely, if approval is denied, the action taken by the employer would fall away, and the workman would be deemed never to have been dismissed or discharged and would continue to be in the service of the employer.
Holding that an order of dismissal or discharge remains “inchoate” would suggest that the court treated the provisions of Section 33(2)(b) to be mandatory. The language contained in the proviso of Section 33(2)(b) imposes a mandatory duty on the employer, which would strengthen that inference.
However, a three-judge bench in Punjab Beverages v. Suresh Chand (Punjab Beverages) held that an order dismissing a workman which is in contravention of Section 33(2)(b) will not be void and inoperative. The court viewed “approval” under Section 33 as one that merely removes a ban, enabling an employer to dismiss a worker without attracting a penalty under Section 31(1). It went on to state that an aggrieved workman can always seek recourse under Section 33A or seek a reference under Section 10 of the ID Act.
Thus, the judgment suggests that an order made without seeking approval remains operative until set aside by a labour court under Section 33A. On the one hand, the court viewed approval as merely “removing a ban”, while on the other, it also held that if approval is not granted, then the order of dismissal would be “void ab initio”. There is an apparent inconsistency in this interpretation as an employer could choose not to seek approval and still be in a better position than someone who – in full compliance of the law – applied for approval.
These concerns were addressed by a Constitution Bench of the court in Jaipur Zila Sanhakjari Bhoomi v. Ram Gopal Sharma (Jaipur Zila) which overruled Punjab Beverages and held that the provisions of Section 33 have a mandatory character. It stated that an omission to seek approval is an apparent contravention of Section 33(2)(b), and it cannot be the case that such an order remains operative until it is set aside under Section 33A. It was observed that the proviso in Section 33(2)(b) protects a workman, acting as a shield against unfair labour practice and victimisation by the employer during the pendency of an industrial dispute. Thus, the court made seeking of approval mandatory. Since the Jaipur Zila case involved the non-payment of one month’s wages – a requirement of the proviso in Section 33(2)(b), the court found the employer in contravention and dismissed his appeal.
In Rajasthan SRTC, the court appeared to affirm Jaipur Zila, but the situation was distinct as the case involved the dismissal of a workman without applying for approval. Consequently, a complaint was lodged by the worker under Section 33A. The Industrial Tribunal found him guilty of misconduct but reinstated him because of the initial breach of Section 33(2)(b) by the employer. The High Court did not disturb the order of the Industrial Tribunal, but the Supreme Court held that it was incorrect in reinstating the workman.
Widened Scope of Enquiry under Section 33A
The court opined that since the complaint under Section 33A was adjudicated like a reference under the statute, it would not be sufficient for a workman to prove a contravention of Section 33 to get an order of reinstatement. If the employer can prove that the worker was guilty of some misconduct, the Industrial Tribunal cannot reinstate the worker. Since the misconduct of the worker in Rajasthan RSTC was proved before it, the court held that the worker should be dismissed.
The question that arises for consideration is that what are the exact contours of jurisdiction under Section 33A. The scope of enquiry under Section 33A has been described as two-fold by the court in Rajasthan SRTC. Not only does the labour court have to determine whether the employer is in compliance with Section 33, but it also has to answer the further question that whether the dismissal imposed on the workman is justified in law. This would mean that the court has to go into the merits of the dispute, within the contours of reference jurisdiction of an industrial court.
The differences between the jurisdiction of a labour court under Section 33(2)(b) and Section 33A are best characterised by an analogy of two concentric circles. Section 33A forms the outer circle under which compliance with Section 33 is ensured. In addition, it also ensures that the dismissal has not been made in bad faith and that it is in compliance with principles of natural justice and with the law. Under Section 33(2)(b), which forms the inner circle, the court has to only ensure that provisions of Section 33 have been complied with and whether the dismissal is bona fide and free of unfair labour practices or victimisation.
What follows from this broad scope of Section 33A is that, while an order of dismissal under Section 33(2)(b) is considered incomplete until approval of the relevant authority is obtained, the worker may still be prohibited by the employer from working and earning his daily wages. The workman is only left with the option to approach the labour court under Section 33A. Later, when an enquiry is held under Section 33A, the employer may get to benefit because the relevant authority goes into the merits as it is expected to carry out a two-fold enquiry. The workman may still get dismissed despite the employer choosing to ignore its duty under Section 33(2)(b). The current position of law closely resembles the practical implications that followed from the Punjab Beverages even though it has been overruled.
While arguably, the employer may still face a penalty under Section 31(1), the workman still has to suffer the brunt of approaching the courts, and the employer gets to benefit from its non-compliance with the law. The threat of penal sanction is also minimised as the court may show leniency in sentencing.
The wide scope of enquiry under Section 33A ultimately benefits the employer as a worker may be dismissed during the pendency of a dispute without getting the benefit of legislative safeguards. The Supreme Court also observes this fallacy in Karur Vysya Bank v. S Balakrishnan, where it acknowledges that the workman may have to remain out of the job awaiting the outcome of his complaint under Section 33A because of a lapse on the part of the employer. It is important to remember that industrial references tend to remain pending for a long duration which exacerbates the problem.
To cure this fallacy, a complaint under Section 33A should be restricted in scope to only ensure compliance of Section 33, instead of treating it like a reference under the Act. Even the Supreme Court has called upon the legislature and the government to prevent this fallacy from being transported to the new IR Code, but there has been no parliamentary action to this effect.