India - Laboured arguments

M J Antony / New Delhi October 15, 2008, 0:15 IST

If the Industrial Disputes Act was updated, much of the tedious litigation could be avoided.

There has been no serious attempt by parliamentarians to update the labour laws in nearly two decades of economic reforms, though one has to run fast these days to stay in the same place, as Alice found out in the Wonderland. This inertia of the lawmakers has cast a burden on the courts, which have to interpret outdated provisions of law in the new context. One glaring example is the decision of the Supreme Court to re-examine the definition of 'industry’ (State of UP vs Jai Bir Singh) in 2005, as the current interpretation given in the ‘Bangalore Water Supply’ case in 1978 was found anomalous. However, the Constitution bench has not found time to do this exercise.

Meanwhile, the court has been delivering scores of judgments involving workers who are variously described as casual, temporary, daily-rated, seasonal or ad hoc. Their demand for regularisation has led to a series of decisions which may not be beacons of clarity or unanimity. Two decisions of recent weeks showed how two lowly workers got varied results after devoting the best part of their lives in litigation from the labour court to the Supreme Court.

The Uttar Pradesh Electricity Board engaged a coolie, Laxmi Kant, in 1984 and terminated him two years later. He challenged the board’s action after ten years, demanding regularisation. The labour court ordered his reinstatement as his termination violated Section 6-N of the state Industrial Disputes Act. The Allahabad high court dismissed the board's appeal. It in fact asked the board to pay him his wages. It came to Rs 700,000. The board appealed to the Supreme Court where it succeeded. The court stated that the labourer has “already got more than sufficient compensation”, working merely two years.

The earlier view of the Supreme Court, the judgment clarified, was that if an order of termination was found to be illegal, normally the relief to be granted should be reinstatement with full back wages. However, with the passage of time, it came to be realised that an industry should not be compelled to pay to the worker for the period during which he apparently contributed little or nothing at all. The current view is that a person is not entitled to get something only because it would be lawful to do so. This shift in stand was in the context of “the changes in the policy decisions of the government in the wake of the prevailing market economy, globalisation, privatisation and outsourcing. Instead of ordering reinstatement with back wages, the current remedy is award of compensation to the aggrieved worker.”

A few days after this judgment, the court decided another case in which a part-time sweeper of New India Assurance Company fought his case for 19 years. Sankaralingam was employed in 1986. After three years, he asked for regularisation as according to the Industrial Disputes Act, a person is deemed to be employed in the establishment if he works continuously for 240 days in a year. The company terminated his services which led to the long legal battle. The industrial tribunal rejected the worker’s petition. But the Madras high court ordered his reinstatement with full back wages. The Supreme Court has upheld the high court’s view. This may look incompatible with the view expressed in the UP Electricity Board’s case discussed above.

The Punjab and Haryana high court, in Talwara Co-op Credit & Service Society vs Sushil Kumar took the view which was in tune with the new approach of the Supreme Court. In this case, a clerk was appointed in the co-op office in 1987. His services were terminated after three years. He challenged his termination and while his case was going on for decades, the co-op society became a sick unit. The Supreme Court closed the case ordering the co-op to pay him Rs 200,000 as compensation. The judgment emphasised: “The grant of a relief of reinstatement is not automatic. Grant of back wages is also not automatic. The industrial courts are required to strike a balance in a situation of this nature. For this purpose, certain relevant factors, as for example, the nature of the service, the mode and manner of recruitment should be taken into account.”

The unreasonable time consumed by courts in such labour disputes is underscored by an appeal decided two weeks ago, Steel Authority of India (Sail) vs State of West Bengal. The question again was regularisation of members of the National Union of Water Front Workers. The litigation started in 1987, wound its way to the Calcutta high court and the Supreme Court twice. Sail ultimately won the case, but if there was a clear statute in place, enormous amount of human resources could have been saved.