Industrial Tribunals: Adjudicating Industrial Disputes in India

Introduction

Industrial Tribunals play a pivotal role in the Indian industrial relations landscape, serving as specialized adjudicating bodies for disputes between employers and workmen. Unlike traditional courts, these tribunals are creations of specific statutes, designed to address the unique complexities of industrial conflicts with an approach that prioritizes industrial peace and justice over strict legal technicalities. This article explores the constitution, jurisdiction, powers, and duties of Industrial Tribunals, as well as the inherent limitations on their authority under the Industrial Disputes Act, 1947.

Constitution and Nature of Industrial Tribunals

A. Definition

Section 2(r) of the Act defines “Tribunal” as an Industrial Tribunal constituted under Section 7A, including those constituted before March 10, 1957. Industrial Tribunals were first established by the Industrial Disputes Act, 1947, as adjudicating authorities distinct from ordinary courts of law.

B. Nature of Industrial Tribunals

Tribunals are adjudicating authorities other than ordinary courts of law. In the case of Bharat Bank Ltd. v. Its Employees (AIR 1950 SC 188), the Apex Court observed that “though Tribunals are clad in many of the trappings of a court and though they exercise quasi-judicial functions, they are not full-fledged courts”. Thus, a Tribunal is an adjudicating body which decides controversies between the parties and exercises judicial powers as distinguished from purely administrative functions and possesses some of the trappings of courts but not all. Tribunals also apply the principles of natural justice.

Tribunals are the creatures of the statutes and therefore cannot travel beyond the ambit and scope of the Act. A court of law is bound by all the rules of evidence and procedure, but a Tribunal is not. Thus, Tribunals need not follow the strict technicalities of law in adjudication of industrial disputes. A Tribunal is entitled to proceed based on oral or documentary evidence, which may not be strictly admissible in evidence under the Indian Evidence Act. Further, courts have to decide only objectively, but the Tribunals may take a departure to decide even subjectively.

C. Composition and Qualifications

Section 7A provides for the constitution of Industrial Tribunals. The appropriate government may, by notification in the official gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule, and for performing such other functions as may be assigned to them under the Act.

A Tribunal shall consist of one person only to be appointed by the appropriate government. A person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless (a) he is, or has been, a Judge of a High Court, or (b) he has, for not less than 3 years, been a District Judge/ Additional District Judge.

It may be noted that the matters assigned to Tribunals are important matters and involve quite many complications. As such, it is safer to place the matters before the judges of senior rank (unlike the Labour Courts). Further, Sec. 7A(4) provides that the appropriate government may, if it so thinks fit, appoint two persons as Assessors to advise the Tribunal in the proceeding before it.

Jurisdiction of Industrial Tribunals

The jurisdiction, powers, and duties of Industrial Tribunals largely mirror those of Labour Courts, but with a broader scope. Industrial Tribunals are empowered to adjudicate matters specified in both the Second and Third Schedules of the Act.

Matters listed in the Third Schedule (generally within the purview of Tribunals) include:

Wages, including the period and mode of payment.
Compensatory and other allowances.
Hours of work and rest intervals.
Leave with wages and holidays.
Bonus, profit sharing, provident fund, and gratuity.
Shift working otherwise than by Standing Orders.
Classification by grades.
Rules of discipline.
Rationalization;
Retrenchment of workmen and closure of establishment; and
Any other matters that may be prescribed.

This extensive list indicates that almost any significant industrial matter can be submitted for adjudication to a Tribunal. Tribunals generally possess broad powers, provided they act within the scope of their authority as defined by the Act and the terms of reference.

Duties of Industrial Tribunals

The primary duties of an Industrial Tribunal are:

Upon reference of an industrial dispute to a tribunal for adjudication, it shall hold its proceedings expeditiously.
The tribunal must decide the matter before it on the merits after taking into consideration all material facts and circumstances.
It must confine its jurisdiction to the points referred to in the Government’s order and matters incidental thereto.
It must always consider the evidence produced before it objectively and must conclude judicially.
As it is a quasi-judicial body, it must serve notice upon the parties to the reference by name before making any award. Any award without giving such notice is fundamentally wrong.
It shall, within the specified period, submit its award to the appropriate Government.
The award shall be in writing and shall be signed by its presiding officer.
The award shall, within 30 days from the date of receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit.

Limitations on Jurisdiction of Industrial Tribunals

Despite the wider scope of adjudication, Industrial Tribunals do not possess absolute discretion or power. Their jurisdiction is subject to various limitations:

The jurisdiction of an Industrial Tribunal is governed by the provisions of the Act and the terms and conditions of reference. The workmen or employer cannot confer jurisdiction upon the tribunal on a question not covered by the reference. In other words, the jurisdiction cannot be conferred on the Tribunal by the consent of the parties.
The tribunal has the power to give adequate relief prayed for the parties under the reference made to it. However, it cannot grant relief not claimed by the parties. Similarly, it cannot go beyond the terms of the reference. Thus, in Pottery Mazdoor Panchayat v The Perfect Co. Ltd. (1983) I LLJ 253 (SC), the Supreme Court held that the reference being limited to the narrow question as to whether the closure was proper and justified, the tribunal by the very terms of the reference had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was closed down by the management.
The ‘order of reference’ gives the tribunal the jurisdiction to try a dispute. The industrial Tribunals are not a court of general and residuary jurisdiction but a tribunal with specific jurisdiction circumscribed by the terms of the order of reference. Tribunals are ad hoc tribunals with ad hoc jurisdiction to determine specified industrial disputes. The jurisdiction of a tribunal is confined to the actual points of disputes on the terms of reference and matters substantially involved in or connected with the referred dispute.
The industrial tribunal has no jurisdiction to adjudicate any issue relating to salaries of employees who were not workmen under the I.D. Act., as held in the case of Mukand Ltd. v Mukand Staff & Officers’ Asscn. (2004) II LLJ 327 (SC). It cannot make an award in respect of employees of independent contractors. However, it can examine (when a reference has been made to it) whether the employee was a ‘workman’, or whether there exists an ‘industrial dispute’.
The tribunal’s jurisdiction is limited to the territory to which the dispute relates and the area. In Lipton Ltd v Their Employees (AIR 1959 SC 676), the dispute originated in Industrial Tribunal, Delhi, and was referred to the Delhi Tribunal. When a similar dispute concerning the company arose at the branch at Madras and was confirmed by the SC, the Labour Appellate Tribunal.
It was observed: “When the dispute at the Delhi Tribunal was brought, the workmen working at Madras joined. The Madras High Court held that between the workmen of Madras and the dispute between the management and workmen at Madras. The Supreme Court held that the object and policy of the company, though employed at one unit only, received their salaries from the Delhi office, and the channel of advice was the Delhi office; thus, the Delhi Tribunal had jurisdiction to try the employees.”
If a question regarding the validity of a reference or the tribunal’s jurisdiction arises, the tribunal itself shall decide it. Findings of fact are generally not within the scope of jurisdictional review unless they involve interpretation of the statute, which becomes a point of law (Saurashtra AIR 1951 Court 64; Kay’s Construction Co. (P) Ltd. v Its Workmen AIR 1959 SC 38).

Scope of Powers of Industrial Tribunals

As far as the scope of powers of the tribunals is concerned, the higher judiciary has also commented upon it in several cases. Some of the important decisions in this regard are:

A. Flexibility from Formal Rules of Law

Industrial Tribunals are not strictly constrained by formal rules of law. Their primary objective is to adjudicate and settle industrial disputes effectively to maintain industrial peace and promote production. Therefore, they should avoid being hampered by strict legal technicalities that prevent them from achieving justice in a dispute (Workmen of M/s. Williamson Magor & Co. Ltd v M/s. Williamson Magor & Co. Ltd. (1982)).

Creating New Rights and Obligations: The tribunal’s function is not confined to administering justice strictly by existing law. It can confer new rights and privileges, even if they are not within the terms of any existing agreement. It can create new rights and obligations between parties deemed essential for industrial peace (Management of Machkund Hydro-Electric Project v. Workmen of Machkund (1970)).
Altering Terms of Employment: An award by a tribunal may even alter the terms of employment if it is just and fair to do so (Bharat Bank Ltd. v Its Employees (1950)).
Incidental Powers: Tribunals possess implied incidental powers necessary to discharge their functions effectively and do justice between parties, such as the power to set aside an ex parte award even without express statutory provision (Grindlays Bank Ltd. v Central Govt. Industrial Tribunal (1981)).
Scrutiny of Management Actions: While tribunals do not substitute their judgment for that of management, they can interfere if management’s action is mala fide, constitutes an unfair labour practice, or is not a bona fide exercise of contractual power. This includes examining whether a dismissal, even during a probationary period, is legitimate or merely a pretext (Brooke Bond India v Y.K. Gautama (AIR 1973 SC 2634)).
Interference with Disciplinary Action: An industrial tribunal will not interfere with management’s disciplinary action unless it is shown that management acted in bad faith, made a basic error, violated natural justice, or the finding is baseless or perverse. If an inquiry is fair and the charge proved, the tribunal should generally not interfere with the dismissal of a workman for misconduct (M/s. Khardah & Co. Ltd. v The Workmen AIR 1964 SC 719). Similarly, if management justifiably loses confidence in an employee, reinstatement may not be awarded (Binny Ltd v Their Workmen AIR 1972 SC 1975).

B. Non-Interference in Managerial Prerogatives (Subject to Conditions)

Tribunals should not substitute their judgment for that of management in sensitive areas like closure or lay-off, as management is generally considered the best judge of business decisions. Unless it is proven that a closure is a sham or a lay-off is mala fide, it would be inappropriate for a tribunal to interfere and investigate alternative management policies or question genuine financial hardships leading to such decisions.

C. Fixation of Wage Structure

Wage fixation is a critical aspect of social welfare. Tribunals must balance social justice (ensuring workmen a fair share of wealth produced) with economic realities (preventing capital diversion due to excessive wage increases). No universal rule applies, as situations vary across regions, industries, and establishments.

Minimum Wages: When fixing bare minimum wages or subsistence wages, tribunals must prioritize the workers’ needs, making the employer’s capacity to pay irrelevant. Fair wages, however, must consider the economic reality and the worker’s minimum needs to preserve efficiency (H.H Industries v F.H. Lal AIR 1974 SC 526). Capacity to pay is not relevant for fixing minimum wages, as distinguished from fair wages (Sangam Press v Workmen AIR 1975 SC 2035).
Revision of Wages: Demands for wage revision can arise from increased paying capacity of the employer, rising cost of living, anomalies or errors in existing wage structures, or a rise in wage structures in comparable industries or regions. Each case for revision must be examined on its merits (Workmen of Balmer Lawrie & Co. Ltd. v Balmer Lawrie & Co. Ltd. AIR 1964 SC 278).

D. Granting Adjournments

Speedy settlement of disputes is a main objective of the Act. Therefore, only short adjournments to accommodate parties are permissible; long adjournments are generally not allowed.

E. Documents and Evidence

While tribunals are not bound by all rules of the Evidence Act, they must adhere to principles related to proof of documents and claims for privilege (Sections 123 and 124 of the Evidence Act), as these are based on public policy and natural justice (Reserve Bank of India v Central Govt. Industrial Tribunal, Delhi (1959)). In other matters, tribunals can rely on data available outside formal evidence presented by parties.

F. Power to Correct Errors and Review

Rule 26 of the Industrial Disputes (Central) Rules, 1957, allows Labour Courts, Tribunals, National Tribunals, or Arbitrators to correct clerical mistakes or errors arising from accidental slips or omissions in any award. Such corrections can be made without notice to the parties (Lipton Ltd. v Their Employees AIR 1959 SC 676).

Furthermore, tribunals have an implied power to review their orders, particularly procedural ones (Shri Meenakshi Mills Ltd. v Workmen AIR 1954 SC 153).

G. Miscellaneous Powers

Pleading Modifications: Labour Courts and Tribunals can allow parties to modify their pleadings in the interest of justice, provided there is no oblique motive (Borpuhiuc Tea Estate v Industrial Tribunal, Assam AIR 1978 SC 992).
Continuing Jurisdiction: A tribunal does not become functus officio (cease to have authority) merely upon making an award; it may, in certain circumstances, consider matters arising out of the award.
Interim Relief: When a reference involving several matters (e.g., wage scales, classification) is pending for a long time, the tribunal has the power to grant interim relief to workmen without prejudice to the parties’ full arguments at the final award stage (Hindustan Clycle v Workmen AIR 1963 SC 101).

Conclusion

Industrial Tribunals serve as critical adjudicatory bodies within India’s industrial relations framework. Constituted under the Industrial Disputes Act, 1947, they are designed to provide specialized, expeditious, and equitable resolution of industrial disputes. While operating with quasi-judicial authority, their powers are firmly rooted in statute and circumscribed by the specific terms of reference.

The nuanced approach of Tribunals, allowing for flexibility from strict evidentiary rules while adhering to natural justice, enables them to address the complex socio-economic realities of industrial disputes. Their capacity to interpret and even modify contractual terms, alongside their role in wage fixation and oversight of managerial actions, underscores their commitment to industrial peace and social justice. Despite inherent limitations on their jurisdiction, the broad scope of their powers, coupled with the ability to grant various forms of relief, makes Industrial Tribunals indispensable for maintaining harmony and ensuring fairness in the Indian industrial sector.

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