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Labour Court “cannot adjudicate disputes” related to employer-employee matters: Supreme Court

Labour court is only an executing court having no authority to entertain employer-employee matters rather can only adjudicate on matters related to claim settlement or interpretation of award and likewise is upheld by the Supreme Court of India through a division bench led by HONOURABLE MR. JUSTICE MR SHAH and HONOURABLE MRS. JUSTICE BV NAGARATHNA in the case of M/s Bombay Chemical Industries v. Deputy Labour Commissioner and Anr. (CIVIL APPEAL NO. 813 OF 2022).

Brief facts of the case are that the Allahabad High Court dismissed the petition of the appellant M/s Bombay Chemical Industries, and Presiding Officer pursuant to Section 33(C)(2) of the Industrial Disputes Act 1947. Essentially, the present defendant chose to file an application with the Labor Court pursuant to Section 33(C)(2) of the Industrial Disputes Act 1947, claiming the difference in wages against the appellant. He denied that there was an employer-employee relationship and argued that the defendant had not engaged in it in any way. On 28 November 2017, the Labor Court ruled in favor of the defendant and awarded compensation to the appellant. The aggrieved appellant preferred to file a written petition with the Supreme Court. The Supreme Court rejected the defense and upheld the Labor Court’s decision. The appellant took it to the Supreme Court for appeal.

The appellants contended that When a serious problem with the employer-employee relationship arose and the defendant’s employment as a salesman at any time was seriously challenged, the Labor Court should not have considered the defendant’s application under Section. 33(C)(2) of IDA 1947. Instead of being decided by the Labor Court, this dispute should have been decided in reference to Section 10 of the IDA 1947.

The respondents argued that it is a false case with the object to be freed from the obligation to pay the difference in wages, as claimed by the defendant. He further stated that the existence of documentary evidence proved that the defendant was working as a dealer in the appellant’s establishment. However, after an assessment of the evidence and consideration of the material available in the records, the Employment Tribunal allowed the application.

The apex court held that pursuant to Section 33(C)(2), the jurisdiction of the Labor Court is that of an enforcement court and can only interpret the decision or settlement on which the claim is based.The order by the Labor Court therefore goes beyond the jurisdiction granted under Section 33(C)(2) of the Industrial Disputes Act.The Supreme Court did not appreciate the facts cited and affirmed the same without specifying the extent and scope of the Labor Court’s jurisdiction under Section 33(C)(2) of the Labor Disputes Act. The court set aside the order passed by the High Court and the Labor Court.

Click here to read the judgement

Judgement reviewed by- Bhaswati Goldar

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