Workmen v/s Firestone Tyre And Rubber Co.
(1973) 1 Supreme Court Cases 813
Civil Appeal No. 1461 of 1972 - Decided on March 06, 1973

This Old Judgement passed by the Hon'ble Supreme Court of India[1] contains various serious questions for the beneficiary of the employees that the proper interpretation of Section 11-A of the Industrial Dispute Act, 1947 (herein IDA) and Whether the Section 11-A of the Industrial Dispute Act, 1947 applies to industrial disputes which have already been referred to for adjudication and were pending as on December 15, 1971. There are 4 cases which are dealt together by the Hon'ble Supreme Court of India as four industrial disputes were referred by the State Government to the adjudication of Industrial Tribunal and Labour Court and they were pending on December 15, 1971, when Section 11-A of the Industrial Disputes Act, 1947 came into operation.

The question arose whether Section 11-A was applicable to proceedings pending before Tribunal on December 15, 1971, and if so, what powers were to be exercised by Industrial Tribunal in respect of industrial disputes covered by Section 11-A of the Industrial Disputes Act In Civil Appeal No. 1461 of 1972 the Industrial Tribunal held that Section 11-A has no retrospective effect in respect of pending proceedings. The workmen have appealed against that decision.

A contrary view was taken in Civil Appeal No. 1995 of 1972[2] by Fifth Labour Court of Bombay. The said Labour Court also held that if in the proceedings covered by Section 11-A, the employer has not held a proper enquiry then the court has no discretion but to reinstate the employee. Similar views were expressed in Civil Appeals No. 1996[3] and 2386 of 1972[4]. In all the three cases the employers have come in appeal. All appeals heard together. The decision would not only be of interest to the Labour community but to almost all employer and employees.

The case is filed through the Appeal before the Hon'ble Supreme Court of India by Mr. Deshmukh, Miss Indra Jai Singh, Mr. Madan Mohan and Mr. Bhandari (Counsels appearing on behalf of the all workmen's). Praying for the proper interpretation of the Section 11-A of the Industrial Dispute Act, 1947 and retrospective effect of the Section 11-A of IDA, 1947 for the beneficiary of the employees.

The Central Government by Notification No. F. S. 110-13/1/71-LRI, dated December 14, 1971, appointed the 15th day of December 1971, as the date on which the said Act would come into force. Accordingly, the Amendment Act came into force with effect from December 15, 1971. The court having heard both the sides passed its verdict on March 06, 1973 with the findings that:

• In Civil Appeal No. 1461 of 1972, the Industrial Tribunal had considered only the question regarding the applicability of the section to disputes which had been referred before the section came into force. The Tribunal has held that the section does not apply to such disputes. This view is in accordance with our decision and as such is correct. This appeal is hence dismissed.
   
• In the three other orders, which are the subject of consideration in Civil Appeals Nos. 1995 of 1972, 1996 of 1972 and 2386 of 1972, the Labour Court, Bombay has held that Section 11-A applies even to disputes which had been referred prior to December 15, 1971. This view, according to our judgment, is erroneous. The Labour Court has also expressed some views on the construction to be placed on Section 11-A.
  
  Part of the views expressed therein is correct; but the rest are wrong. To the extent that the decision of the Labour Court in the three orders are contrary to our decision on both the points, they are set aside and the appeals allowed to that extent. The Tribunal and the Labour Courts concerned in all these appeals, will proceed with the adjudication of the disputes in accordance with the views expressed in this judgment. There will be order as to costs in these appeals.

And the Judges in this Appeal talked about the previous position of law before Section 11-A.

We have held that the previous law, according to the decisions of this Court, in cases where a proper domestic enquiry had been held, was that the Tribunal had no jurisdiction to interfere with the finding of misconduct except under certain circumstances. The position further was that the Tribunal had no jurisdiction to interfere with the punishment imposed by an employer both in cases where the misconduct is established in a proper domestic enquiry as also in cases where the Tribunal finds such misconduct proved on the basis of evidence adduced before it.

These limitations on the powers of the Tribunals were recognised by this Court mainly on the basis that the power to take disciplinary action and impose punishment was part of the managerial functions. That means that the law, as laid down by this Court over a period of years, had recognised certain managerial rights in an employer.

The Special Leave Petition gives the clear interpretation of Section 11-A[5] as stated below:
The section has the effect of altering the law by abridging the rights of the employer inasmuch as it gives power to the Tribunal for the first time to differ both on a finding of misconduct arrived at by an employer: as well as the punishment imposed by him. Hence in order to make the section applicable even to disputes which had been referred prior to the coming into force of the section, there should be such a clear, express and manifest indication in the section.

There is no such express indication, An inference that the section applies to proceedings, which are already pending, can also be gathered by necessary intendment. In the case on hand, no such inference can be drawn as the indications are to the contrary. We have already referred to the Proviso to Section 11-A, which states in any proceeding under this section'.

A proceeding under the section can only be after the section has come into force. Further the section itself was brought into force sometime after the Amendment Act was passed. These circumstances, as well as the scheme of the section and particularly the wording of the proviso indicate that Section 11-A does not apply to disputes which had been referred prior to December 15, 1971. The section applies only to disputes which are referred for adjudication on or after December 15, 1971. To conclude, in our opinion, Section 11-A has no application to disputes referred prior to December 15, 1971.

The Appeal also gives the clarity regarding opportunity to the employer to produce fresh evidence for the first time to justify his actions as stated below:
In construing the provisions of a welfare legislation, courts should adopt beneficent rule of construction, i.e. if two constructions are reasonably possible then the construction which furthers the policy and object of the Act and is more beneficial to the employees has to be preferred to achieve the legislative purpose provided it is possible to do so without doing violence to the language used by the Legislature and also keeping in view as to what was the previous position of law and to what extent the section exhibits intention to change the same.[6]

If there has been no enquiry held by the employer or if the enquiry is held to be defective, it is open to the employer even now to adduce evidence for the first time before the Tribunal justifying the order of discharge or dismissal. We are not inclined to accept the contention on behalf of the workmen that the right of the employer to adduce evidence before the Tribunal for the first time recognised by this Court in its various decisions, has been taken away.

There is no indication in the section that the said right has been abrogated. If the intention of the legislature was to do away with such a right, which has been recognised over a long period of years, as will be noticed by the decisions referred to earlier, the section would have been differently worded.

Admittedly, there are no express words to that effect, and there is no indication that the section has impliedly changed the law in that respect. Therefore, the position is that even now the employer is entitled to adduce evidence for the first time before the Tribunal even if he had held no enquiry or the enquiry held by him is found to be defective.[7]

These are few of the observations of the authors commenting on the aforesaid verdict:
The Industrial. Disputes Act is a legislation intended to bring peace and harmony between the management and labour in an industry so that production in any way does not suffer and at the same time labour is not exploited. It is now however well settled that the question as to whether a particular concern is an industry the approach must be broad and liberal and not rigid and doctrinaire.

The Industrial Disputes Act is a social welfare legislation and the Courts while interpreting should take recourse to such an interpretation as would advance the object and purpose of the legislation and give full meaning and effect to it in the achievement of its social objective.[8] The Court should adopt a pragmatic and not pedantic approach.[9]

The term "social welfare legislation" to describe enactments that, either as a whole or in some part, contain provisions that have the following three features: First, the statute defines or implies a minimum standard of living or some minimum aspect of a standard of living. Second, it asserts or implies that there is a group that falls below the minimum; it may tell how the group is to be identified. Third, it sets up or implies some program to help all or part of that group to reach or approach the minimum standard.[10]

The concept of "Social Security" is multi-dimensional in its contents and complexion. It is mainly 20th century concept. The state gives security to its citizens as a condition of human existence. Security to a man against ravages of social conflicts and inadequacies is an important aspect of social security.

Social justice leads to social security. In a way both are the two sides of the same coin, because where there is social justice there is social security. Unemployment benefits, maternity benefit, family allowance, old age grants, death grants, industrial injury benefits, nationalised health services, adventitious aid to weaker sections of the society measures which every welfare state should endeavour to provide for its citizen.[11]



The International Labour Organization was established in 1919 for the purpose of promoting social justice and improving the living and working conditions "of workers throughout the world. It made a beginning in this field by emphasizing the importance of comprehensive social security measures in the preamble to its constitution, in which it promised protection of the worker against sickness, disease and injury arising out of his employment, the protection of children, young persons and women, provision for old age and other injury".[12]

This poses a significant question before the law that whether the verdict passed by the Industrial Tribunal and Bombay Labour Court is familiar with the above principles.

As the Author's find out there are 2 major cases happened before this case Indian Iron & Steel Co. Ltd. v. Workmen[13] in this case Hon'ble Supreme Court held If no enquiry is held or if the enquiry held is defective then even under Section 11-A, the employer can adduce evidence for the first time before the Industrial Tribunal but in that case the Tribunal has to be satisfied about the guilt of the workman.

In the case of Workmen v. Motipur Sugar Factory Ltd.[14] Hon'ble Supreme Court held that:

1. The proviso to Section 11-A requiring the Tribunal to take into account the material on record cannot be confined to matters which were available at the domestic enquiry.
2. Section 11-A should not be construed to mean that there is no obligation whatsoever on the part of the employer to hold an enquiry before passing an order of discharge and dismissal. If proper enquiry is made then the Tribunal will have to give very cogent reasons for not accepting the view of the employer and the employer will also escape the charge of having acted arbitrarily or mala fide and it would conduce to harmonious and healthy relationship between employer and the workmen.
3. Section 11-A of the Industrial Disputes Act came into force on December 15, 1971, and is not applicable to references pending on that date. It will apply to all the references referred subsequently. It is not necessary that order of Discharge and Dismissal should have been passed on or after December 15, 1971 to make Section 11-A applicable.

The Hon'ble Supreme Court in this case referred these 2 above cases in decide its verdict.

Now, the author's has find out that there was one other major issue which was dealt by the Hon'ble Supreme Court of India which is not in the prayer in any of the appeal. The court talked about beneficent rule of construction. The issue is Section 11-A was inserted in IDA, 1947 through Amendment on December 15, 1947 which clearly stated that the employer cannot adduce fresh evidence for the first time to justify his actions but the Hon'ble Supreme Court of India in its judgement stated that we are aware that Act is a beneficial piece of legislation enacted in the interest of the employees.

It is well settled n construing the provisions of a welfare legislation, courts should adopt beneficent rule of construction, i.e. if two constructions are reasonably possible then the construction which furthers the policy and object of the Act and is more beneficial to the employees has to be preferred to achieve the legislative purpose provided it is possible to do so without doing violence to the language used by the Legislature but we cannot exploit the right of employer because of the language used by the Legislature so, the employer has the right to adduce the fresh evidence to justify his actions.

Authors believes that the step which had taken by the Judiciary without violating the language of the Legislation is totally correct and fair. We know that the purpose IDA, 1947 and the Amendment is for the well-being of the employees but the Judiciary has kept in mind that in the ambit of well-being of employees they cannot exploit the rights of the employer.

There is one major fact on which Authors disagree with the decision of the apex court of this country that in Appeal No. 1995, 1996 and 2386 of 1972, the Supreme Court set aside the order of the Bombay Labour Court which stated that Section 11-A can be applicable on the disputes which had been referred before Dec. 15,1971 and in Appeal No. 1461 of 1972 the apex court said that in its accordance the decision of the Industrial Tribunal is correct which stated that the Section 11-A will not apply retrospectively on the disputes pending before Dec. 15, 1971.

In one issue apex court took the decision in the view of beneficent for the employees without exploiting the right of the employer and in another does not allow the retrospective effect of Section 11-A of IDA, 1947. The author must say if the Hon'ble Judiciary allow the retrospective effect of the Section 11-A so, it will be more beneficial for the employees as well as employer because this section gives power to tribunal to check the validity of misconduct and the punishment imposed by the employer.

The Authors prove his points by the latest judgement of Sree Shankaracharya University of Sanskrit v. Manu[15], decide on 16-05-2023. In this case the Hon'ble High Court Single Bench gives the verdict that there is retrospective effect of Govt. Order dated � 29-03-2001, and case was referred to Double Bench of the High Court but the Double Bench upheld the decision of the Single Bench.

Then, the appeal was filed before the apex court of this country and the apex court held that there can be no retrospective effect of the Govt. Order date � 29-03-2001, as this order is amendment not a clarification of the order dated � 21-12-1999, which talked about the Two advanced increment to the employees who hold P.H.D at the time of the recruitment and Four advanced increment on the selection of higher-grade post. The apex court give its verdict in the favour of the employees as the employees was recruited on 14-07-1999, after the Govt. Order which gives benefit to the employees.

The Authors highly suggest by the virtue of this case comment that the apex court is like mother of a child whose duty is to take care of their children by giving its decision. The apex court of this country is the highest court or we can say last opportunity to get relief and apex court should keep in his mind while giving its verdict that it should be neutralized not rigid (except in criminal cases) while deciding the matters relating to the benefit of the employer and employee. In this verdict the apex court think about the rules and applicability of law instead of falling in the ambit of beneficent rule for both the parties.

End-Notes:

1. Workmen v. Firestone Tyre and Rubber Co. (1973) 1 SC 813.
2. The Dy. General manager, Larsen and Toubro Ltd. v. Sheikh Ismail Mohamed.
3. The Dy. General manager, Larsen and Toubro Ltd. v. K. P. Ganghare.
4. M/s. Godfrey Phillips India Ltd. v. Manik Vasudeo & Ors.
5. Supra note 1, para 65.
6. Supra note 1, para 35.
7. Supra note 1, para 37.
8. Union of India v. Central Govt. Tribunal & Ors 1985 SCC OnLine Cal 312.
9. S.K. Verma v. Mahesh Chandra (1983) 4 SCC 214.
10. Lawrence M. Friedman, "Social Welfare Legislation: An Introduction", 21 STANFORD LAW REVIEW 217, 220 (1969).
11. Social Security in the Light of Constitution: A National and International Perspective, 26 ALJ (2018-19) 182.
12. Social Security in the Light of Constitution: A National and International Perspective, 26 ALJ (2018-19) 184.
13. Indian Iron & Steel Co. Ltd. v. Workmen 1958 SCR 667.
14. Workmen v. Motipur Sugar Factory Ltd 1965 3 SCR 588.
15. Sree Shankaracharya University of Sanskrit v. Manu 2023 SCC OnLine SC 640.

Written By:

• Chetan Sachdeva, BA.LLB (Hons). 3rd year, 2021-2026
• Dhruv Parihar, BA.LLB (Hons). 3rd year, 2021-2026