Supreme Court directs contract workers to approach Industrial Tribunal for regularization: Sunil Kumar Biswas vs. Ordinance Factory Board (29 March 2019)

Introduction

Date of the Judgment: 29 March 2019

Citation: 2019 INSC 321

Judges: Abhay Manohar Sapre, J., Dinesh Maheshwari, J.

Can contract workers, who have been working for an extended period, directly seek regularization of their services through the Central Administrative Tribunal (CAT)? The Supreme Court of India addressed this critical question in a recent judgment, clarifying the appropriate legal avenue for such claims. The court held that disputes regarding regularization of contract workers must be adjudicated by the Industrial Tribunal, not the CAT, under the Industrial Disputes Act, 1947. This decision impacts numerous contract workers seeking permanent employment. The judgment was delivered by a two-judge bench comprising Justice Abhay Manohar Sapre and Justice Dinesh Maheshwari.

Case Background

The case involves the appellant, Sunil Kumar Biswas, and respondent Nos. 4-6, who were contract workers engaged by a contractor to provide services to the Ordinance Factory Board (respondent No. 1). They had been working for approximately 25 years and sought regularization of their services, claiming they were effectively employees of the Ordinance Factory Board. They initially approached the Central Administrative Tribunal (CAT), Calcutta, seeking a direction for regularization. The CAT dismissed their application, leading them to file a writ petition before the High Court at Calcutta. The High Court also dismissed the petition, stating that their remedy lay in approaching the Central Government for a reference to the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947. Aggrieved by the High Court’s decision, the contract workers appealed to the Supreme Court.

Timeline

Course of Proceedings

The Central Administrative Tribunal (CAT), Calcutta, dismissed the Original Application (OA) filed by the appellant and respondent Nos. 4-6, who were seeking regularization of their services. The CAT’s decision led to the filing of a writ petition before the High Court at Calcutta. The High Court also dismissed the writ petition, holding that the appropriate remedy for the contract workers was to approach the Central Government for a reference to the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947. The High Court reasoned that the dispute involved factual aspects that could not be adjudicated by the CAT or the High Court in a writ petition. The unsuccessful writ petitioners then filed an appeal by way of special leave in the Supreme Court.

Legal Framework

The primary legal provision relevant to this case is Section 10 of the Industrial Disputes Act, 1947 (ID Act). This section empowers the Central Government to refer industrial disputes to the Industrial Tribunal for adjudication. The High Court held that the dispute regarding regularization of contract workers was an industrial dispute that required factual determination and could not be addressed by the CAT or the High Court in a writ petition. The ID Act provides a mechanism for resolving disputes between employers and employees, including issues related to employment and regularization.

The relevant provision is:

“Section 10 of the Industrial Disputes Act, 1947: Reference of disputes to Boards, Courts or Tribunals. – (1) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing,-
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute, to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication.”

Arguments

The appellant and respondent Nos. 4-6 argued that they had been working for the Ordinance Factory Board for approximately 25 years through a contractor. They claimed that, given their long service, they were entitled to regularization of their services. They contended that the CAT should have considered their claim for regularization.

The High Court, however, held that the appropriate remedy for the appellant and respondent Nos. 4-6 was to approach the Central Government for a reference to the Industrial Tribunal under Section 10 of the ID Act. The High Court reasoned that the dispute involved factual aspects that needed to be adjudicated by the Industrial Tribunal and could not be resolved by the CAT or the High Court in a writ petition.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

✓ Whether the Tribunal and the High Court were justified in dismissing the OA and writ petition.

Treatment of the Issue by the Court

Authorities

Judgment

The Supreme Court agreed with the High Court’s view that the dispute between the contract workers and the Ordinance Factory Board was an industrial dispute that required factual adjudication. The Court emphasized that such disputes cannot be resolved by the Central Administrative Tribunal (CAT) or the High Court in a writ petition. The Court held that the appropriate remedy for the contract workers was to approach the Central Government for a reference to the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947.

The Court observed:

“Having regard to the nature of the controversy raised by the appellant and respondent Nos.4-6, we are also of the considered view that their remedy lies in getting their alleged dispute settled by the Industrial Tribunal in a reference under Section 10 of ID Act.”

“The reason is that such disputes once made are required to be adjudicated on facts and the evidence. The factual controversy cannot be adjudicated in OA by the Tribunal or by the High Court in a writ petition.”

“Needless to say, if the reference is eventually made to the Industrial Tribunal at the instance of the appellant and respondent Nos.4-6 by the Central Government on their request under Section 10 of the ID Act and issue in question is gone into on facts, the same shall then be decided strictly in accordance with law by the Industrial Tribunal uninfluenced by any observations made by the Tribunal, the High Court and this Court in these proceedings.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the nature of the dispute, which involved factual aspects that required adjudication through evidence. The Court emphasized the procedural aspect, stating that the Industrial Tribunal, under Section 10 of the ID Act, was the appropriate forum for resolving such disputes. The Court’s reasoning focused on the need for a fact-finding process that the CAT and the High Court could not provide in the given circumstances.

Key Takeaways

✓ Contract workers seeking regularization of their services cannot directly approach the Central Administrative Tribunal (CAT) or the High Court through a writ petition.

✓ The appropriate remedy for such workers is to seek a reference to the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947, through the Central Government.

✓ The Industrial Tribunal is the appropriate forum for adjudicating disputes involving factual aspects and evidence related to regularization claims.

✓ This judgment clarifies the procedural route for contract workers seeking regularization and ensures that such disputes are resolved through a proper fact-finding process.

Directions

No specific directions were provided by the Supreme Court in this judgment.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that disputes regarding the regularization of contract workers, which involve factual aspects, must be adjudicated by the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947, and not by the Central Administrative Tribunal or the High Court through a writ petition. This judgment reinforces the procedural aspect of labour law, ensuring that disputes are resolved through the appropriate legal channels.

Conclusion

In conclusion, the Supreme Court dismissed the appeal, affirming the High Court’s decision that contract workers seeking regularization must approach the Central Government for a reference to the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947. The Court emphasized that such disputes involve factual aspects that cannot be adjudicated by the Central Administrative Tribunal or the High Court in a writ petition. This judgment clarifies the appropriate legal avenue for contract workers seeking regularization and underscores the importance of procedural correctness in labour law disputes.