Labour Court Award Set Aside for Failure to Decide Jurisdictional Fact Under the Industrial Disputes Act

A State health authority challenged a Labour Court award concerning a daily-wage attendant whose engagement had been terminated. The Division Bench held that the Labour Court had not properly determined the jurisdictional fact necessary to assume jurisdiction and had reached conclusions unsupported by the relevant material. The Court also found that the Labour Court had not applied the statutory concepts of industry, workman and retrenchment under the Industrial Disputes Act in their proper perspective. The award was set aside and the dispute was remitted for fresh adjudication, including a fresh determination of jurisdiction after hearing both sides (Paras 6.8–9).

Key Proposition: A Labour Court must determine the jurisdictional fact necessary to assume jurisdiction over an industrial dispute; an award based on a perverse appreciation of material and an incorrect application of the statutory concepts of industry, workman and retrenchment can be set aside under Article 226.

• Industrial Disputes Act, 1947 – Sections 2(j), 2A, 2, 25B and 25F – jurisdictional fact – Labour Court jurisdiction – Held, jurisdiction must be determined on the facts and applicable statutory tests before adjudication proceeds (Paras 4.15, 7–8).
• Industrial Disputes Act, 1947 – Section 25F – retrenchment – daily-wage workman – relief of reinstatement – Held, reinstatement is not automatically required in every case of illegal termination (discussion in Paras 6.6–6.8).

Background / Synopsis :

• The opposite party was engaged as an Attendant on daily-wage terms for 44 days from June 2008 and continued at the Community Health Centre, Kundra.
• The State authorities alleged unauthorised absence from 16 September 2015 and terminated the engagement under a Finance Department Office Memorandum dated 23 June 2012.
• A Labour Court award dated 30 September 2024 in Industrial Dispute Case No. 02 of 2018 granted relief to the workman.
• The State authorities challenged that award under Articles 226 and 227, seeking certiorari and contending that the award was contrary to the Industrial Disputes Act.
• The High Court examined the Labour Court’s treatment of jurisdiction, absence, termination and retrenchment.

Issues For Consideration :

• Whether the Labour Court had properly determined the jurisdictional fact necessary to assume jurisdiction under the Industrial Disputes Act.
• Whether the Labour Court’s findings on the workman’s engagement, absence and termination were supported by the record.
• Whether the Labour Court correctly applied the statutory concepts of industry, workman and retrenchment, including Section 25F.
• Whether the award required interference under Article 226 and, if so, whether the matter should be remitted.

Submissions Of Parties :

Petitioner / Appellant:

• The State argued that the Labour Court had failed to appreciate material regarding the workman’s unauthorised absence and had reached conclusions on surmise.
• It relied on the Supreme Court’s discussion in State of U.P. v. Jai Bir Singh concerning hospitals and the need to examine the statutory definition of industry.
• It contended that the Labour Court had not properly applied Sections 2, 25B and 25F of the Industrial Disputes Act.

Respondent / State:

• The workman defended the Labour Court award and relied on the record concerning his engagement and alleged continued service.
• The record before the High Court included disputes about attendance, absence and the legal effect of termination.

Court's Observations & Analysis :

Re: Jurisdictional fact and Labour Court jurisdiction

• The Court treated determination of the jurisdictional fact as a prerequisite to the Labour Court assuming jurisdiction.
• Following the principles discussed in State of U.P. v. Jai Bir Singh, 2026 INSC 897 and Bangalore Water Supply and Sewerage Board v. A. Rajappa, the question whether the establishment and activity fall within the statutory concept of industry had to be assessed case-by-case
• The Labour Court had not adequately undertaken that jurisdictional inquiry.Held: The matter required fresh adjudication with a proper determination of jurisdictional fact.

Re: Appreciation of evidence and statutory concepts

• The High Court found the Labour Court’s conclusion to be perverse because relevant material had not been properly appreciated.
• The Labour Court had not applied the definitions of industry, workman and retrenchment under Section 2, read with Sections 25B and 25F, in the proper legal perspective.
• The High Court therefore interfered with the award under Article 226.
• Held: The Labour Court award could not stand on the existing reasoning.

Re: Relief of reinstatement for daily-wage workers

• The Court discussed the settled line of Supreme Court authorities that reinstatement with back wages is not mechanically automatic where termination of a daily-wage worker is illegal for procedural reasons.
• Authorities including BSNL v. Bhurumal, In-charge Officer v. Shankar Shetty and Jagbir Singh were discussed, while recognising exceptions such as unfair labour practice or discriminatory retention of juniors.
• Held: The Labour Court must reconsider the relief in accordance with the governing principles after deciding the dispute afresh.Labour Court Award Set Aside for Failure to Decide Jurisdictional Fact Under the Industrial Disputes Act

Decision & Directions :

• The Labour Court award dated 30 September 2024 was set aside.
• The matter was remitted to the Labour Court, Jayapur, Koraput, for fresh adjudication after reasonable opportunity of hearing to the parties.
• The Labour Court was directed to consider the evidence on record and determine jurisdiction in light of State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897 and Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 113.
• The Labour Court was directed not to be influenced by the High Court’s observations on the merits.
• The writ petition was disposed of; no order as to costs.

Legal Provisions Discussed & Precedents Cited :

• Constitution of India – Articles 226 and 227 – supervisory/writ jurisdiction over the Labour Court award.
• Industrial Disputes Act, 1947 – Section 2(j) – definition of industry and the jurisdictional inquiry.
• Industrial Disputes Act, 1947 – Section 2A – individual termination treated as an industrial dispute subject to statutory conditions.
• Industrial Disputes Act, 1947 – Section 25B – continuous service relevant to retrenchment protection.
• Industrial Disputes Act, 1947 – Section 25F – conditions precedent to retrenchment.
• Doctrine/principle – jurisdictional fact – foundational fact that must exist before an adjudicatory body can assume jurisdiction.
• State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897 – relied on for case-specific determination of the jurisdictional fact and the concept of industry.
• Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 113 – relied on for the statutory industry test.
• BSNL v. Bhurumal, (2014) 7 SCC 177 – relied on regarding compensation rather than automatic reinstatement for certain daily-wage terminations.
• Jagbir Singh v. Haryana State Agriculture Marketing Board, (2009) 15 SCC 327 – relied on regarding the non-automatic nature of reinstatement.
• In-charge Officer v. Shankar Shetty, (2010) 9 SCC 126 – relied on regarding compensation for daily-wage workers.
• State of Karnataka v. Uma Devi, (2006) 4 SCC 1 – referred to regarding absence of a right to regularisation.