Individual Dispute vs. Industrial Dispute in Indian Labour Law

The Dichotomy of Disputes: Navigating Individual and Industrial Disputes under Indian Labour Jurisprudence

Introduction

The landscape of Indian labour law is significantly shaped by the distinction between an 'individual dispute' and an 'industrial dispute'. This differentiation is not merely academic; it carries profound implications for the rights of workmen, the obligations of employers, and the jurisdiction of adjudicatory bodies established under the Industrial Disputes Act, 1947 (hereinafter "IDA, 1947"). An 'industrial dispute', as traditionally understood, implies a collective disagreement, reflecting the legislative intent to foster collective bargaining and maintain industrial peace. Conversely, an individual grievance, unless it garners collective support or falls under specific statutory exceptions, historically lay outside the purview of industrial adjudication. This article undertakes a comprehensive analysis of these two categories of disputes, tracing their judicial evolution and legislative modulation in India, drawing heavily upon landmark precedents and statutory provisions.

The IDA, 1947, primarily enacted to provide for the investigation and settlement of industrial disputes, defines "industry" broadly, as affirmed in cases like Bangalore Water Supply And Sewerage Board v. A. Rajappa And Others (1978 SCC 2 213), setting the stage for what constitutes the arena for such disputes. Within this arena, the nature of the dispute itself – whether individual or collective – determines the applicability of the Act's machinery.

Defining "Industrial Dispute" under Section 2(k) of the Industrial Disputes Act, 1947

Section 2(k) of the IDA, 1947 defines an "industrial dispute" as:

"any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person."

This definition, on its face, appears capacious. However, judicial interpretation has played a crucial role in delineating its contours, particularly concerning the phrase "any person" and the inherent collectivity implied by the term "industrial dispute." Early judicial thought, influenced by jurisprudence from other common law jurisdictions like Australia, emphasized the collective nature of an industrial dispute. As observed in N.I Assurance Co. v. C.G.I Tribunal (Patna High Court, 1953), citing Griffith, C.J. in Jumbunna Coal Mine, No Liability v. Victorian Coal Miners' Association, "an industrial dispute exists where a considerable number of employees engaged in some branch of industry make common cause." Similarly, Isaacs, J. in George Hudson Ltd. v. Australian Timber Works Union, highlighted that "the very nature of an ‘industrial dispute,’ as distinguished from an individual dispute, is to obtain new industrial conditions... not for the moment only, but for the class of employees from the class of employers" (cited in Newspapers Ltd. v. State Industrial Tribunal, U.P And Others, Supreme Court Of India, 1957 and New Commercial Mills Company Limited v. I.G.Thakore President,Industrial Court, Gujarat High Court, 1966). This perspective suggests that an industrial dispute is essentially a "group contest" (Newspapers Ltd. v. State Industrial Tribunal, U.P And Others, 1957 AIR SC 532).

The "Any Person" Qualification and the Community of Interest Doctrine

A significant interpretative challenge arose from the words "of any person" in Section 2(k). The Supreme Court, in Workmen Of Dimakuchi Tea Estate v. Management Of Dimakuchi Tea Estate (1958 AIR SC 1 353), addressed this issue comprehensively. The Court held that the expression "any person" cannot be interpreted in an absolute, unrestricted sense to include any individual in whose employment the workmen may be interested. Instead, it must be a person in whose employment, non-employment, terms of employment, or conditions of labour the workmen as a class have a direct or substantial interest, or with whom they have a "community of interest." The Court reasoned that if "any person" were to be read literally, it could lead to absurdities where workmen raise disputes about individuals with whom they have no nexus. This principle ensures that the dispute retains its "industrial" character, affecting the collective well-being or interests of the workforce. The Delhi High Court in LORD KRISHNA TEXTILE MILLS/ NATIONAL TEXTILE CORPORATION LTD. v. KAMRUJAMA (2015) and its companion cases reiterated this, stating, "The expression „any person" must have a direct relation with the workmen about whose employment or non-employment or terms of employment or conditions of labour, the workmen have direct and substantial interest."

The Transformation of Individual Disputes into Industrial Disputes: The Espousal Doctrine

The general rule, crystallized through a series of judicial pronouncements, is that a dispute concerning an individual workman does not, by itself, constitute an industrial dispute. However, such an individual dispute can transform into an industrial dispute if it is "espoused" or taken up by a trade union of workmen of the employer or by a substantial number of workmen employed in the establishment. This is known as the espousal doctrine.

Judicial Evolution of the Espousal Principle

The Supreme Court in Newspapers Ltd. v. State Industrial Tribunal, U.P And Others (1957 AIR SC 532) firmly established that a dispute between an employer and a single workman does not fall within the definition of "industrial dispute" unless the workmen as a body or a considerable section of them make common cause with the individual workman. The Court disapproved of earlier views that suggested an individual dispute could inherently be an industrial dispute. This position was reiterated in numerous subsequent cases, including Bombay Union Of Journalists And Others v. Hindu' Bombay And Another (1963 AIR SC 0 318), where the Court emphasized that the dispute must be taken up by the union of employees of the particular employer or by an appreciable number of employees of that employer. The Court noted, "An individual dispute at the inception could not be converted into an industrial dispute by subsequent support" (Bombay Union Of Journalists, as cited in Alstom Projects India Limited v. Sidram S/O Ramchandra & Ors, Karnataka High Court, 2015).

The rationale behind the espousal doctrine was articulated in Workmen Of M/S Dharam Pal Prem Chand (Saugandhi) v. Dharam Pal Prem Chand (Saugandhi) (1966 AIR SC 182). The Supreme Court observed that the policy of the IDA, 1947 is to promote collective bargaining and that disputes should be settled on a collective basis to safeguard the interests of the working class and foster healthy trade unionism. Therefore, a complaint against wrongful dismissal, for instance, becomes an industrial dispute if the workmen acting collectively take up the cause.

Even before the definitive pronouncements by the Supreme Court, High Courts had grappled with this distinction. For example, The Manager, United Commercial Bank Ltd., Mathurai v. The Commissioner Of Labour, Madras And Another (Madras High Court, 1950) distinguished, "A dismissed employee might question the propriety of his dismissal even though the other employees either approve of such dismissal or are indifferent to it. In such a case it must be held that the dispute is only an individual dispute... If, however... a union of workmen takes up the cause... there is an industrial dispute." The Punjab & Haryana High Court in Punjab Anand Lamp Employees Union v. Punjab Anand Lamp Industry Ltd. And Another (1996) noted the historical divergence of opinions before the Supreme Court settled the law in cases like Central Provinces Transport Services Ltd. v. Raghunath Gopal Patwardhan (1956 INSC 62), which accepted that an individual dispute could become an industrial dispute if espoused. In Central Provinces Transport Services Ltd., the Supreme Court held that even a dispute concerning a dismissed employee could qualify as an industrial dispute, and that the definition of "employee" under the relevant provincial act included dismissed employees for the purpose of seeking relief.

The case of Management Of Indian Cable Co., Ltd., Calcutta v. Workmen (1962 FLR 4 444) also touched upon the nature of an industrial dispute, reinforcing that it required collective representation to qualify under Section 2(k) of the Act, as the dispute in question was not supported by a union or a significant section of the workforce prior to the reference.

Nature and Requirements of Valid Espousal

For espousal to be valid and transform an individual dispute into an industrial dispute, certain conditions must be met:

  • Espousal by Competent Body: The cause must be taken up by a registered trade union of which the workman is a member and which represents workmen of the employer, or by a substantial number of fellow workmen in the same establishment (Bombay Union Of Journalists; Radhey Shyam And Another v. State Of Haryana And Another, Punjab & Haryana High Court, 1997). The union espousing the cause should not be an "outsider" union with no connection to the employees of the establishment in question (Employers Of Express Newspapers (Private) Ltd. Madras, v. Labour Court, Andhra Pradesh Hyderabad And Others, Andhra Pradesh High Court, 1962).
  • Substantial Number: What constitutes a "substantial number" is a question of fact to be determined in the circumstances of each case. It does not necessarily mean a majority, but the number must be such that the dispute is no longer an individual grievance but has acquired a collective character.
  • Timing of Espousal: Generally, the espousal should precede the date of reference of the dispute for adjudication. The Supreme Court in Bombay Union Of Journalists indicated that subsequent espousal might not convert an individual dispute existing at the time of reference. However, the critical date is the date of reference; if the dispute was espoused by that date, it could be an industrial dispute.
  • Genuineness of Espousal: The espousal must be genuine and not a mere sham or a paper transaction. The court in Bombay Union Of Journalists scrutinized the authenticity of the union's resolution.

The Karnataka High Court in P.M Murugappa Mudaliar v. P. Raju Mudaliar And Others (1964 SCC ONLINE KAR 112) reiterated that "the dispute between individual workman and management can become industrial dispute when that dispute is sponsored by the union. When validity of reference relating to single workman is challenged on ground that what is referred is only individual dispute and not industrial dispute, it is for the workman to show that his cause has been sponsored by his union or by number of workmen of his class." This was also cited in Alstom Projects India Limited v. Sidram S/O Ramchandra & Ors (Karnataka High Court, 2015).

Membership in Espousing Union

An interesting question arose as to whether the concerned workman must have been a member of the espousing union at the time the cause of the dispute arose. In Western India Match Co., Ltd. v. Western India Match Co. Workers Union And Others (1970 SCC 1 225), the Supreme Court clarified this. It held that it is not necessary for the workman to be a member of the union at the time of the accrual of the cause of action (e.g., dismissal). It is sufficient if the workman is a member on the date the union takes up their cause or on the date of reference. The Court reasoned that the object of the IDA, 1947 is to enable workmen to fight for their rights collectively, and a rigid rule about prior membership would defeat this object.

Legislative Intervention: Section 2A of the Industrial Disputes Act, 1947

The stringent requirement of espousal often left individual workmen, particularly those whose services were terminated, without an effective remedy if they could not secure the support of a union or a substantial number of their colleagues. Recognizing this hardship, Parliament introduced Section 2A into the IDA, 1947, by an amendment in 1965.

Rationale and Scope of Section 2A

Section 2A (as originally enacted and subsequently amended) provides that where any employer discharges, dismisses, retrenches, or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment, or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.

As noted by the Delhi High Court in LORD KRISHNA TEXTILE MILLS/ NATIONAL TEXTILE CORPORATION LTD. v. KAMRUJAMA (2015) (and its companion cases v. GHANSHYAM and v. YASHPAL), "Prior to 1965, a workman who claimed relief for himself, or a few workmen, who individually claimed relief for themselves had no remedy under the ID Act unless their cause was espoused by a Trade Union or by a considerable number of fellow workmen." Section 2A was enacted to remedy this situation for specific types of individual disputes. The Allahabad High Court in Ram Ayodhaya Prasad v. Presiding Officer Labour Court Ghaziabad And Another (2019) also highlighted the deeming fiction created by Section 2A.

Impact of Section 2A on the Traditional Espousal Doctrine

Section 2A creates a legal fiction, deeming certain individual disputes to be industrial disputes. For matters falling within its scope (discharge, dismissal, retrenchment, or termination of services of an individual workman), the requirement of espousal by a union or other workmen is obviated. The individual workman can directly raise such a dispute, and the government can refer it for adjudication. However, for individual disputes not covered by Section 2A (e.g., disputes relating to promotion, transfer, wages, not involving termination), the traditional espousal doctrine continues to apply. The case of J.H Jadhav v. Forbes Gokak Ltd. (2005 SCC 3 202), where a dispute over denial of promotion was referred, illustrates a type of dispute that, if individual, would typically require espousal if not for specific facts indicating union support.

Section 2A and Collective Actions

The introduction of Section 2A also raised questions about its interplay with other provisions of the IDA, 1947, particularly concerning collective actions like strikes. In Chemicals & Fibres Of India Ltd. v. D.G Bhoir And Others (1975 SCC 4 332), the Supreme Court addressed whether a strike by other workers becomes illegal merely because an individual dispute under Section 2A (concerning another employee's dismissal) is pending before a Labour Court. The Court held that the deeming provision in Section 2A, which treats an individual dispute as an industrial dispute, is for the specific purpose of enabling the individual workman to access the dispute resolution machinery. It does not mean that such an individual dispute pending adjudication would automatically attract the prohibitions on strikes (e.g., under Section 23 of the IDA, 1947) in the same way as a general industrial dispute involving the collective body of workmen. The Court emphasized that Section 2A was intended to provide relief to individual workmen and should not be interpreted to curtail the legitimate rights of other workmen to engage in collective action concerning their own demands, provided such action is otherwise legal and justified. The legality and justifiability of strikes themselves are complex issues, as discussed in Syndicate Bank And Another v. K. Umesh Nayak (1994 SCC 5 572), which focused on entitlement to wages during strikes.

Distinguishing Features and Implications

The distinction between an individual dispute and an industrial dispute has several practical implications:

  • Jurisdiction of Adjudicatory Bodies: The appropriate government can refer only an "industrial dispute" (or a deemed industrial dispute under Section 2A) to Labour Courts, Industrial Tribunals, or National Tribunals under Section 10 of the IDA, 1947. An individual dispute that does not meet these criteria cannot be so referred.
  • Nature of Remedies: Awards in industrial disputes can have wider applicability, sometimes affecting workmen other than those immediately involved, and can shape future terms and conditions of employment.
  • Collective Bargaining and Industrial Actions: The concept of an industrial dispute is intrinsically linked to collective bargaining, strikes, and lock-outs, which are tools available to workmen and employers in the context of collective disagreements.
  • Binding Nature of Settlements/Awards: Settlements reached in the course of conciliation proceedings or awards of adjudicatory bodies in an industrial dispute are binding on the parties as specified in Section 18 of the IDA, 1947.

As observed in Thomas…* v. State Of Kerala & Others… (Kerala High Court, 1959), "a dispute between an employer and a single employee though not an industrial dispute per se, may become one if it is taken up by the union or a number of workmen." This encapsulates the fluid boundary, contingent on collective support, that existed prior to Section 2A for all individual disputes and continues to exist for those not covered by it.

Conclusion

The distinction between individual and industrial disputes remains a cornerstone of Indian labour law. While Section 2(k) of the Industrial Disputes Act, 1947, and the judicially crafted espousal doctrine emphasize the collective nature of industrial disputes, Section 2A represents a significant legislative acknowledgment of the need to protect individual workmen in specific critical situations like termination of employment. The jurisprudence, evolving from cases like Newspapers Ltd. and Workmen of Dimakuchi Tea Estate to the nuanced interpretations in Chemicals & Fibres, reflects a continuous effort to balance the principles of collective bargaining with the imperative of ensuring justice for individual grievances. Understanding this dichotomy is crucial for workmen, employers, trade unions, and legal practitioners navigating the complex terrain of industrial relations in India, ensuring that disputes are appropriately characterized and channelled through the correct adjudicatory pathways for effective resolution. The law continues to strive for a framework that upholds both industrial peace through collective mechanisms and individual worker rights through accessible remedies.