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U.P State Sugar Corporation Ltd. v. Om Prakash Upadhyay .
Factual and Procedural Background
The respondent was first engaged on 29-1-1997 as an Apprentice General Clerk for one year on a monthly stipend of Rs 300 under the Apprentices Act. After completing the year of training, he requested—and was granted—another year of engagement in the same capacity. When this second period ended on 21-4-1989, the appellant discontinued his services.
The respondent raised an industrial dispute. The State Government referred the matter to the Labour Court under the U.P. Industrial Disputes Act. Rejecting the appellant’s contention that no master–servant relationship existed, the Labour Court held that after the first year the respondent was no longer an apprentice under the Apprentices Act; therefore, his termination constituted “retrenchment” under the U.P. Industrial Disputes Act. It ordered reinstatement with continuity of service.
The appellant challenged that award before the High Court. An interim order dated 10-5-1994 directed the respondent’s reinstatement on current salary. Ultimately, the High Court upheld the Labour Court’s award, holding that Section 2(oo)(bb) of the Industrial Disputes Act, 1947 (Central Act) did not apply to disputes under the U.P. Industrial Disputes Act. The present appeal was filed against that High Court judgment.
Legal Issues Presented
- Whether the respondent’s termination after the expiry of the second training period amounted to “retrenchment” under the U.P. Industrial Disputes Act.
- Whether Section 2(oo)(bb) of the Central Industrial Disputes Act, 1947—excluding certain contractual terminations from the definition of retrenchment—applies to disputes governed by the U.P. Industrial Disputes Act.
- How any apparent repugnancy between the Central Act and the State Act should be resolved in light of Article 254(2) of the Constitution and Section 31 of the Central Industrial Disputes Act.
Arguments of the Parties
Appellant's Arguments
- The respondent remained an apprentice throughout; hence no master–servant relationship existed and he was not a “workman.”
- Termination followed automatically on expiry of the contract; under Section 2(oo)(bb) of the Central Act such termination is not retrenchment.
- Because labour is in the Concurrent List, the amended Central Act prevails, rendering the Labour Court’s award unsustainable.
Respondent's Arguments
- After the first year, his engagement was not under the Apprentices Act; he was therefore a regular employee falling within the definition of “workman” in Section 2(z) of the U.P. Act.
- The U.P. Industrial Disputes Act contains no provision similar to Section 2(oo)(bb); his termination consequently amounts to retrenchment.
- Section 31 of the Central Act saves the operation of existing State laws, so the U.P. Act governs the dispute.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jai Kishun v. U.P. Coop. Bank Ltd., 1989 UPLBEC 144 | Section 2(oo)(bb) of the Central Act does not apply to disputes under the U.P. Industrial Disputes Act. | Followed; relied upon to uphold the High Court’s position that the State Act prevails. |
| Pushpa Agarwal v. Regional Inspectress of Girls Schools, Meerut, (1995) 70 FLR 20 (All) | Contrary view suggesting applicability of Section 2(oo)(bb) to State disputes. | Distinguished; the Court preferred Jai Kishun because it considered the relevant statutory provisions more thoroughly. |
Court's Reasoning and Analysis
1. The Court noted that the definition of “retrenchment” in the U.P. Industrial Disputes Act mirrors the Central definition as it stood before the 1984 amendment introducing Section 2(oo)(bb). Under the U.P. Act, therefore, the respondent’s termination would amount to retrenchment.
2. Section 2(oo)(bb) of the Central Act carves out contractual terminations from “retrenchment.” Its absence in the State Act creates an apparent repugnancy between the two enactments.
3. Although labour legislation falls in the Concurrent List and Parliament’s later law ordinarily prevails under Article 254(2), Section 31(1) of the Central Act expressly states that where a State Act relating to adjudication of industrial disputes was in force before the Central amendment, its operation “shall not be affected.”
4. Given this saving clause, the Court held that the U.P. Industrial Disputes Act continues to govern disputes within the State despite the subsequent Central amendment. Accordingly, Section 2(oo)(bb) cannot be invoked to deny the respondent the status of a retrenched workman.
5. The Court found no persuasive authority to the contrary and therefore affirmed the High Court’s reliance on Jai Kishun.
Holding and Implications
Appeal Dismissed; High Court judgment affirmed; Labour Court award to be implemented in full.
Immediate Effect: The respondent is entitled to reinstatement with continuity of service, as ordered by the Labour Court and upheld by the High Court.
Broader Implications: The decision reinforces that, within Uttar Pradesh, the U.P. Industrial Disputes Act prevails over Section 2(oo)(bb) of the Central Industrial Disputes Act because of the saving provision in Section 31 of the Central Act. Contractual terminations excluded from retrenchment under the Central Act will still amount to retrenchment under the U.P. Act, unless and until the State statute is amended.
Order
1. The respondent was appointed as an Apprentice for one year on a monthly stipend of Rs 300 for getting training of General Clerk. His engagement was under the provisions of the Apprentices Act for which a contract was also entered into between the parties on 29-1-1997. On completion of his training for a period of one year his engagement stood discontinued. It is claimed that the respondent could not gain full knowledge during his training and, therefore, he requested for one more year of training under the appellant. At his behest, he was engaged for one more year as an Apprentice. When that period came to an end on 21-4-1989, it is stated that his engagement as an Apprentice came to an end. The respondent, however, raised an industrial dispute which was referred to the Labour Court by the State Government under the U.P Industrial Disputes Act. The contention put forth on behalf of the appellant that the respondent is not an employee of the appellant and there was no relationship of master and servant between them was not accepted by the Labour Court. The Labour Court found that though the respondent was initially appointed as an Apprentice for one year, his services were thereafter engaged not as an Apprentice under the Apprentices Act and, therefore, it must be deemed that he was in some kind of employment and, therefore, termination of his services amounted to “retrenchment” under the U.P Industrial Disputes Act. The Labour Court also held that the claim of the appellant that the termination of employment or engagement of service of the respondent was in terms of Section 2(oo)(bb) of the provisions of the Central Industrial Disputes Act would not be attracted inasmuch as there was no provision akin to it in the U.P Industrial Disputes Act. The Labour Court thus held that the termination of the services of the respondent is illegal and that he is entitled to reinstatement with continuity of service. The award made by the Labour Court in the aforesaid manner was challenged in a writ petition before the High Court.
2. The High Court by an interim order made on 10-5-1994 directed that the respondent should be taken back to the post in which he was employed and he should be paid the current salary subject to the final orders in the writ petition. Thereafter, the High Court upheld the award made by the Labour Court and made it clear that the engagement of services of the respondent after 21-4-1989 not being as an Apprentice under the Apprentices Act, it must be held that he was employed on regular basis falling under the definition of “workman” under Section 2(z) of the U.P Industrial Disputes Act.
3. On the application of the State Act or the Central Act to the case on hand, the High Court followed a Division Bench ruling in Jai Kishun v. U.P Coop. Bank Ltd. 1989 UPLBEC 144 and made it plain that the provisions of Section 2(oo)(bb) of the Central Industrial Disputes Act would not apply in respect of proceedings arising under the U.P Industrial Disputes Act. The High Court also noticed the contrary view in this regard in the case of Pushpa Agarwal v. Regional Inspectress of Girls Schools, Meerut (1995) 70 FLR 20 (All) but held that in Jai Kishun case 1989 UPLBEC 144 the relevant provisions had been duly considered which are not taken note of in Pushpa Agarwal case (1995) 70 FLR 20 (All) and on that basis, it followed the decision in Jai Kishun case 1989 UPLBEC 144. It is this judgment that is brought in appeal before us in these proceedings.
4. The definition of “retrenchment” under the State Act is identical to the one available in the Central Act prior to the amendment by Act 49 of 1984. It is not in dispute that the law, as applicable then, would be applicable to the present case if the Central Act is not attracted.
5. The law is settled that under the Central Act every case of retrenchment would not include a case of contractual termination which came to be introduced under the Central Act by amending Act 49 of 1984 which purports to exclude from the ambit of the definition of “retrenchment” inter alia: (i) termination of service of a workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry, or (ii) termination of the contract of employment in terms of a stipulation contained in the contract of employment in that behalf. Such a case is not available under the U.P Industrial Disputes Act. If the U.P Industrial Disputes Act covers the present case then termination of the services of the respondent would certainly result in retrenchment while it is not so under the Central Industrial Disputes Act in view of exceptional clauses referred to above. While the former situation results in retrenchment, the latter situation does not amount to retrenchment if the same case would arise under the State Industrial Disputes Act. Thus operation of the two enactments would bring to the forefront the obvious repugnancy between them. In such a case as to how the question is to be resolved needs to be considered in the present case.
6. Inasmuch as the enactments, both by the State and the Centre, are under the Concurrent List, we are urged to look to Article 254(2) of the Constitution of India. If we view from that angle, the U.P Industrial Disputes Act also covers the same field as the Central Industrial Disputes Act. However, Section 2(oo)(bb) is obviously a special provision enacted in order to understand the meaning of “retrenchment” and that is the law made by Parliament subsequent to the State enactment and naturally falls within the proviso to Article 254(2). If that is so, the Central Act will hold the field because in the State enactment there is no provision akin to Section 2(oo)(bb) of the Central Industrial Disputes Act. Therefore, we would have taken that view but for the special provisions in the Central Act which we will advert to hereinafter.
7. Section 1(2) of the Central Act provides that the Act “extends to the whole of India” and this sub-section was substituted for the original sub-section (2) by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956 (36 of 1956) with effect from 29-8-1956. Under that Act, Section 31 (which came into force from 7-10-1956) has been introduced which reads as follows:
“31. Act not to override State laws.—(1) If, immediately before the commencement of this Act, there is in force in any State any Provincial Act or State Act relating to the settlement or adjudication of disputes, the operation of such an Act in that State in relation to matters covered by that Act shall not be affected by the Industrial Disputes Act, 1947 as amended by this Act.
(2) For the removal of doubts it is hereby declared that nothing in this section shall be deemed to preclude the Central Government or the National Tribunal from exercising any powers conferred on it by the Industrial Disputes Act, 1947 as amended by this Act.”
8. Sub-section (1) of the said section makes it clear that the operation of the State Act will not be affected by the Central Act. With this legislative history of the law, we think the High Court is justified in its view.
9. Several decisions referred to by the learned counsel are not on the point germane to this case and, therefore, we do not propose to refer to the same.
10. In the result, the order made by the High Court is affirmed and the order made by the Labour Court shall be given effect to in full. The appeal is dismissed accordingly. No costs.
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