Analysis of Section 10 of the Industrial Disputes Act, 1947

The Power of Reference under Section 10 of the Industrial Disputes Act, 1947: A Comprehensive Analysis

Introduction

Section 10 of the Industrial Disputes Act, 1947 (hereinafter "the Act") stands as a cornerstone in the mechanism for resolution of industrial disputes in India. It vests the 'appropriate Government' with the power to refer industrial disputes to various adjudicatory bodies, namely Boards of Conciliation, Courts of Inquiry, Labour Courts, or Industrial Tribunals. The exercise of this power is crucial for maintaining industrial peace and harmony, ensuring that grievances are addressed through a structured legal process. This article aims to provide a comprehensive analysis of Section 10, delving into its statutory framework, the nature and scope of the government's power, the complexities surrounding the timeliness of such references, and the extent of judicial review. The analysis will draw heavily upon the provided reference materials, integrating statutory provisions and significant judicial pronouncements from Indian courts.

The Statutory Framework of Section 10

Core Provisions and Objectives

Section 10(1) of the Act empowers the appropriate Government, if it is of the opinion that any industrial dispute "exists or is apprehended," to refer the dispute "at any time, by order in writing" to a Board for promoting a settlement, a Court for inquiry, a Labour Court for adjudication (if the dispute relates to matters in the Second Schedule), or an Industrial Tribunal for adjudication (if the dispute relates to matters in the Second or Third Schedule) (Steel Authority Of India, Ltd. v. Hindustan Steel Employees' Union And Others, Calcutta High Court, 1997). The primary objective is to provide a mechanism for compulsory adjudication when parties are unable to resolve disputes amicably, thereby preventing industrial unrest. The scheme of the Act, as noted in The Premier Automobiles Limited v. Kamlakar Shantaram Wadke (Bombay High Court, 1973), indicates that Section 10 primarily contemplates disputes collective in form and essence.

Special Provisions: Section 10(2) and 10(3)

Section 10(2) provides for a reference to be made by the appropriate Government if the parties to an industrial dispute apply, either jointly or separately, for such a reference and the Government is satisfied that the persons applying represent the majority of each party (N.I Assurance Co. v. C.G.I Tribunal, Patna High Court, 1953). This sub-section facilitates consensual adjudication.

Furthermore, Section 10(3) empowers the appropriate Government, where an industrial dispute has been referred to a Board, Labour Court, Tribunal, or National Tribunal, to issue an order prohibiting the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference (N.I Assurance Co. v. C.G.I Tribunal, Patna High Court, 1953). This provision is aimed at restoring normalcy during the pendency of adjudication.

Section 2A and its Interplay with Section 10

While Section 10 traditionally deals with collective disputes, Section 2A of the Act introduces a legal fiction whereby the discharge, dismissal, retrenchment, or other termination of services of an individual workman is "deemed to be an industrial dispute," notwithstanding that no other workman nor any union of workmen is a party to the dispute (Steel Authority Of India, Ltd. v. Hindustan Steel Employees' Union And Others, Calcutta High Court, 1997). This allows individual workmen to raise disputes concerning termination, which can then be referred for adjudication under Section 10 (The Premier Automobiles Limited v. Kamlakar Shantaram Wadke, Bombay High Court, 1973). The Supreme Court in Western India Match Co., Ltd. v. Western India Match Co. Workers Union And Others (1970 SCC 1 225) also discussed the conversion of individual disputes into industrial ones through union espousal, reinforcing the mechanisms by which individual grievances can access the adjudicatory machinery.

Nature of Government's Power under Section 10

Administrative, Not Quasi-Judicial

The Supreme Court has consistently held that the function of the appropriate Government in making a reference under Section 10(1) is an administrative act and not a judicial or quasi-judicial one (State Of Madras v. C.P Sarathy And Another, 1953 AIR SC 0 53; Ram Avtar Sharma And Others v. State Of Haryana And Another, 1985 SCC 3 189; Telco Convoy Drivers Mazdoor Sangh And Another v. State Of Bihar And Others, 1989 SCC 3 271). This principle is reiterated in numerous High Court judgments as well (I.T.C Limited v. State Of Karnataka, Karnataka High Court, 1985; Mypower Mazdoor Welfare Union v. The Secretary And Commissioner And Another, Karnataka High Court, 1997; Secretary (Policy) Regional Director (Food) Employees Association v. Food Corporation Of India And Others, Calcutta High Court, 2000).

Consequently, the Government cannot delve into the merits of the dispute and take upon itself the determination of the lis. Its role is primarily to assess whether an industrial dispute exists or is apprehended. If the Government attempts to adjudicate the dispute itself, for instance, by deciding on the fairness of a domestic enquiry or whether certain individuals are "workmen," it exceeds its jurisdiction (Ram Avtar Sharma And Others v. State Of Haryana And Another, 1985; Telco Convoy Drivers Mazdoor Sangh And Another v. State Of Bihar And Others, 1989).

Formation of Opinion: "Exists or is Apprehended"

The power to refer a dispute arises when the appropriate Government forms an opinion that an industrial dispute "exists or is apprehended." While this is a subjective satisfaction, it must be based on some material before the Government (State Of Madras v. C.P Sarathy And Another, 1953). The adequacy or sufficiency of the material on which the opinion is formed is generally beyond the pale of judicial scrutiny (I.T.C Limited . v. State Of Karnataka ., Karnataka High Court, 1987). However, the factual existence of the dispute and the expediency of making a reference are matters for the Government to decide (State Of Madras v. C.P Sarathy And Another, 1953). The Government need not specify every individual dispute within an industry when referring a collective dispute, provided the overarching existence or apprehension of an industrial dispute is evident (State Of Madras v. C.P Sarathy And Another, 1953).

Scope of Discretion and Grounds for Refusal

Discretionary Power: "May" Refer

The use of the word "may" in Section 10(1) indicates that the Government has discretion in deciding whether or not to refer a dispute for adjudication (Bombay Union Of Journalists And Others v. State Of Bombay And Another, 1964 SCC 0 1617). This discretion, however, is not unfettered. It must be exercised bona fide, based on relevant and germane considerations, and not arbitrarily or capriciously (State Of Bombay v. K.P Krishnan And Others, 1960 AIR SC 1 1223; Dinesh Prasad And Others v. State Of Bihar And Others, Patna High Court, 1984).

Permissible Grounds for Refusal

The Government may refuse to make a reference on valid grounds. These include:

Impermissible Grounds for Refusal

Conversely, a refusal to refer a dispute will be deemed improper if based on:

The "At Any Time" Conundrum: Timeliness of Reference

Literal Interpretation and Flexibility

Section 10(1) states that the Government may refer a dispute "at any time." This phrase has been interpreted to mean that there is no strict period of limitation for making a reference (Avon Services Production Agencies (P) Ltd. v. Industrial Tribunal, Haryana And Others, 1979 SCC 1 1; H.P. Shimla And Another. v. Kailash Chand Son Of Shri Rijhu Ram Non-, Himachal Pradesh High Court, 2016, citing Ajaib Singh v. Sirhind Cooperative Marketing-cum-Processing Service Society Limited). Consequently, the Government retains the authority to make a reference even if it had previously declined to do so, provided the dispute persists or re-emerges (Western India Match Co., Ltd. v. Western India Match Co. Workers Union And Others, 1970; Avon Services Production Agencies (P) Ltd. v. Industrial Tribunal, Haryana And Others, 1978; I.T.C Limited v. State Of Karnataka, Karnataka High Court, 1985).

Judicial Scrutiny of Delay

Despite the "at any time" clause, courts have examined the issue of delay in seeking reference. The Supreme Court in Prabhakar v. Joint Director, Sericulture Department And Another (2015) observed that while there is no limitation, an appropriate government can consider inordinate delay and form an opinion that the dispute has ceased to exist or has become stale. It was noted that if a reference is challenged on the ground of delay, the Tribunal/Court has to take into account the delay and its effect. In Nedungadi Bank Ltd. v. K.P Madhavankutty And Others (2000 SCC 2 455), a reference made after about seven years was a subject of litigation, highlighting that such delays can be contentious.

Some High Courts have opined that a reference should be made within a "reasonable period," though no universal formula can be laid down, and it depends on the facts and circumstances of each case (Food Corporation Of India, Through Its District Manager Faizabad v. Presiding Officer, Central Government Industrial Tribunal-Cum-Labour Court, Kanpur And Others, Allahabad High Court, 2007). The burden may be on the workman to explain the delay in such cases (Ibid.). This creates a tension between the literal interpretation of "at any time" and the judicial concern for preventing stale claims from being agitated after long periods.

Practical Implications of Delayed References

Delays in the government exercising its power under Section 10 can lead to frustration among workmen, potentially undermining the objective of maintaining industrial peace (Indu (Smt.) v. Municipal Council, Jodhpur, Rajasthan High Court, 1991). While Section 10 was intended to prevent frivolous references, protracted delays in making genuine references can deny timely justice (Ibid.).

Procedural Aspects and Judicial Review

Duty to Record Reasons for Refusal

When the Government decides not to refer a dispute, especially after receiving a failure of conciliation report under Section 12(4) of the Act, Section 12(5) requires it to record and communicate its reasons to the parties concerned. These reasons must be clear, precise, relevant, and germane to the decision (State Of Bombay v. K.P Krishnan And Others, 1960; Bombay Union Of Journalists And Others v. State Of Bombay And Another, 1963; Prabhakaran (Petitioner) v. Secretary To Ministry Of Labour And Rehabilitation (), Kerala High Court, 1983). The Patna High Court in Dinesh Prasad And Others v. State Of Bihar And Others (1984) emphasized that while declining reference, the Government must apply its mind and act reasonably.

The Calcutta High Court in Secretary (Policy) Regional Director (Food) Employees Association v. Food Corporation Of India And Others (2000) noted that since the government exercises its jurisdiction under Section 10 based on materials forwarded by the Conciliation Officer, the question of complying with principles of natural justice (like hearing the parties before making a reference) does not typically arise at the reference stage.

Judicial Review of Government's Decision

The administrative decision of the Government under Section 10 is subject to judicial review under Article 226 of the Constitution of India. A writ of mandamus can be issued directing the Government to make a reference if its refusal is found to be based on impermissible grounds, such as adjudicating the merits of the dispute, relying on extraneous or irrelevant considerations, or acting mala fide (State Of Bombay v. K.P Krishnan And Others, 1960; Ram Avtar Sharma And Others v. State Of Haryana And Another, 1985).

However, the scope of judicial review is limited. Courts do not act as appellate authorities over the Government's opinion. The review is generally confined to the decision-making process and whether the Government has acted within the confines of the statute, not the correctness of the opinion itself, unless it is shown to be based on no material, or on considerations irrelevant to the statutory purpose. The factual existence of an industrial dispute and the expediency of making a reference are matters primarily for the Government to decide (State Of Madras v. C.P Sarathy And Another, 1953). The interaction of Section 10 references with prior proceedings, such as those under Section 33(2)(b) of the Act, can also raise issues like res judicata, as seen in Surinder Pal v. Management Of Delhi Transport Corpn. . (Delhi High Court, 2008). Cases like Management Of Dandakaranya Project, Koreput v. Workmen Through Rehabilitation Employees' Union And Another (1997 SCC 2 296) and Haryana Agricultural University v. Presiding Officer (Punjab & Haryana High Court, 2011) illustrate typical references and the kinds of demands (e.g., regularization, reinstatement) that are adjudicated by Tribunals following such references.

Conclusion

Section 10 of the Industrial Disputes Act, 1947, embodies a critical state power integral to the industrial adjudication system in India. It grants the appropriate Government significant discretion to refer disputes, a power that is administrative in nature and must be exercised bona fide, based on relevant considerations, and without encroaching upon the adjudicatory functions of Labour Courts and Tribunals. The judiciary has played a vital role in delineating the contours of this power, particularly by clarifying that the Government cannot decide the merits of the dispute at the reference stage.

The interpretation of the "at any time" clause continues to evolve, with courts attempting to balance the statutory flexibility with the need to prevent undue delays and the agitation of stale claims. The requirement to record reasons for refusal ensures transparency and facilitates judicial review, thereby providing a check against arbitrary executive action. Ultimately, the judicious and timely exercise of the power of reference under Section 10 is paramount for fostering industrial peace, ensuring fair treatment of labour, and upholding the rule of law in industrial relations.