Labour Law

Avon Services Production Agencies Pvt. Ltd. v. Industrial Tribunal, Haryana & Ors.

(1979) 1 SCC 1; (1979) 1 LLJ 1

Citation: (1979) 1 SCC 1; (1979) 1 LLJ 1
Court: Supreme Court of India
Date: 1 November 1978
Bench: 3-Judge Bench - V.R. Krishna Iyer, D.A. Desai and O. Chinnappa Reddy, JJ.

Facts

Workmen raised disputes concerning termination of employment and the alleged closure of an undertaking.
The appropriate Government initially declined to refer certain demands for adjudication.
After further consideration, it later made a reference to the Industrial Tribunal.
The employer challenged the reference.
It argued that:
the earlier refusal exhausted the Government’s power;
the later reference amounted to an impermissible review;
the undertaking had closed, so there was no retrenchment dispute; and
the Tribunal could not examine the true nature of the termination.
The dispute reached the Supreme Court.

Whether the Government may reconsider an earlier refusal and subsequently refer a dispute.
Whether Section 10 requires express statutory review power.
Whether the Tribunal may determine if an alleged closure was genuine or was actually retrenchment.
What preliminary examination the Government may conduct.

The power under Section 10 is administrative and may be exercised whenever an industrial dispute exists or is apprehended.
An earlier refusal to refer does not create res judicata or permanently exhaust the power.
The Government may reconsider the matter upon:
fresh material;
changed circumstances;
correction of an earlier view; or
continuing industrial conflict.
It is not necessary to establish a formal judicial power of review.
The Tribunal has jurisdiction to determine the real nature of the dispute referred, including whether termination resulted from closure or retrenchment.
The Government should not finally adjudicate disputed merits at the reference stage.

The earlier refusal was an administrative decision and not a judgment between litigating parties.
No vested right arose in the employer that the dispute would never be referred.
Industrial disputes may continue, develop or acquire new urgency after an initial governmental decision.
The purpose of Section 10 would be defeated if the Government could never correct an earlier refusal.
The later reference therefore did not require a separately conferred review jurisdiction.
The employer’s assertion of closure involved disputed facts.
The workmen alleged that the business or substantial operations continued and that “closure” was used to disguise termination.
Such factual and legal questions belonged to the Industrial Tribunal.
The Government was entitled to recognise that an industrial dispute existed without deciding in advance which version was correct.
The Tribunal could examine records, business activity, continuity of operations and the circumstances of termination.
The reference therefore validly placed the substantive controversy before the adjudicatory forum.

The Supreme Court upheld the Government’s later reference.
An earlier refusal did not prevent reconsideration and subsequent exercise of Section 10.
The Tribunal could decide whether the case involved genuine closure or retrenchment.
Use this case for: the Government’s reference power is continuing and administrative; a prior refusal does not bar a later reference of the same industrial dispute.