Central Provinces Transport Services Ltd v Raghunath Gopal Patwardhan (1956)

Two questions that recur throughout this Unit are settled, or at least mapped, in this short judgment.

The first is whether a dismissed employee is still an "employee" at all. If he is not, every dismissed workman is put out of court at the threshold, and the whole apparatus of reinstatement collapses. The Court holds that he remains an employee, and explains why an inclusive clause in a definition does not silently cut the definition down.

The second is the famous individual dispute problem. The Court collects the three views then competing in the High Courts and the Tribunals, says which way the weight of authority lies, and then — because the appeal arose under a State Act and not the central Act — expressly leaves the point open under s. 2(k) of the Industrial Disputes Act 1947. That reservation is what makes the case a landmark: it is the immediate ancestor of s. 2A, and no answer on individual disputes is complete without it.

The appellant Company, Central Provinces Transport Services Ltd., Nagpur, was at the material dates a public limited company; the respondent was employed by it as a mechanic. In June 1950 goods belonging to the Company were stolen and suspicion fell on the respondent. An enquiry into the matter resulted in his dismissal on 28 June 1950 on the ground of gross negligence and misconduct.

He was then prosecuted on a charge of theft, and that prosecution ended in his acquittal on 3 March 1952. He thereafter applied to the Company to be reinstated and, failing to get redress, filed on 1 October 1952 an application before the Labour Commissioner under s. 16(2) of the Central Provinces and Berar Industrial Disputes Settlement Act 1947 for reinstatement and compensation.

The Company resisted the claim on the ground, among others, that as the applicant had been dismissed on 28 June 1950 he was not an employee on the date of the application; that accordingly there was no "industrial dispute touching the dismissal of an employee" as required by s. 16(1) and (2); and that the proceedings were therefore incompetent. The Assistant Labour Commissioner accepted that contention and dismissed the application. On revision the Provincial Industrial Court, by its order of 5 February 1954, held that a dismissed employee was an employee as defined in s. 2(10), that a dispute by such an employee was an industrial dispute within s. 2(12), and that the application was maintainable; it set aside the order of dismissal and remanded the matter for enquiry on the merits. The Labour Appellate Tribunal, on 19 October 1954, affirmed that decision. The Company appealed under Article 136. Pending the appeal the Company went into liquidation and was taken over by the State of Madhya Pradesh.

Section 16, so far as material, provided:

(1) Where the State Government by notification so directs, the Labour Commissioner shall have power to decide an industrial dispute touching the dismissal, discharge, removal or suspension of an employee working in any industry in general or in any local area as may be specified in the notification. (2) Any employee, working in an industry to which the notification under sub-section (1) applied may within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages.

Section 2(10) defined "employee" to mean any person employed to do any skilled or unskilled manual or clerical work for contract or hire or reward in any industry, and to include an employee discharged on account of a dispute relating to a change in respect of which a notice is given under s. 31 or s. 32, whether before or after the discharge. Section 2(12) defined "industrial dispute" as any dispute or difference connected with an industrial matter arising between employer and employee or between employers or employees; s. 2(13) defined "industrial matter" widely, and its inclusive clause expressly covered questions pertaining to the relationship between employer and employee and to the dismissal or non-employment of any person.

It was not disputed that a question of reinstatement is an industrial matter under s. 2(13). The controversy was whether it was an industrial dispute under s. 2(12).

The Company argued that on dismissal the employment came to an end; that the legislature could not have meant to include those who had ceased to be in service, since otherwise the inclusive clause about discharged employees was unnecessary; and that on the maxim expressio unius est exclusio alterius the inclusive portion excluded all other ex-employees.

The Court held the question "practically concluded" by the Federal Court's decision in Western India Automobile Association v Industrial Tribunal, Bombay, where a definition as wide as s. 2(k) of the Industrial Disputes Act 1947, covering disputes connected with the employment or non-employment of a person, was held wide enough to include a claim for reinstatement by a dismissed workman. The attempt to distinguish that case as decided on a different statute failed: ss. 2(12) and 2(13) of the State Act were held to be "substantially in pari materia with s. 2(k) of Act XIV of 1947".

On the inclusive clause, the Court held that it had been inserted ex abundanti cautela to repel a possible contention that employees discharged under ss. 31 and 32 would not fall within s. 2(10), "and cannot be read as importing an intention generally to exclude dismissed employees from that definition". The decisive practical consideration was that s. 16 expressly provides relief to dismissed employees by way of reinstatement and compensation, so that on the Company's construction "that provision must become useless and inoperative".

Accordingly, the Court held, agreeing with the Federal Court, that the definition of "employee" in the Act "would include one who has been dismissed", and the respondent could not be denied relief merely because he was not in employment on the date of the application.

The Company next argued that an industrial dispute means a dispute between the employer on one side and the industry represented by its workmen as a class on the other; that a dispute between an employer and a single employee is an individual dispute outside s. 2(12); and that labour legislation exists to regulate the relation between capital and labour so that public peace is not disturbed and production does not suffer, not to give an individual workman an additional forum when the ordinary courts already provide one.

The Court recorded that the same question under s. 2(k) of Act XIV of 1947 had "evoked considerable conflict of opinion" and that three different views had been expressed.

View I — a dispute which concerns only the rights of individual workers "cannot be held to be an industrial dispute". This was the opinion in Kandan Textiles v Industrial Tribunal, where Rajamannar C.J. thought that though the language of s. 2(k) was wide enough to include such a dispute, s. 18 suggested that something more was meant, and Mack J. observed more emphatically that the Act was "never intended to provide a machinery for redress by a dismissed workman". The observations there, and in Manager, United Commercial Bank Ltd v Commissioner of Labour, were obiter; the point arose directly in J. Chowdhury v M.C. Banerjee, where Mitter J. held the reference bad.

View II — a dispute between an employer and a single employee can be an industrial dispute under s. 2(k). So held Bhargava J. in Newspapers Ltd, Allahabad v State Industrial Tribunal, U.P., and a Full Bench of the Labour Appellate Tribunal in Swadeshi Cotton Mills Company Ltd v Their Workmen.

View III — "A dispute between an employer and a single employee cannot per se be an industrial dispute, but it may become one if it is taken up by the Union or a number of workmen." This was the view of Bose J. in Bilash Chandra Mitra v Balmer Lawrie & Co., of Ramaswami and Sarjoo Prosad JJ. in New India Assurance Co. v Central Government Industrial Tribunal, and of Balakrishna Ayyar J. in Lakshmi Talkies, Madras v Munuswami, besides Tribunal decisions.

The Court's comment is the passage that is quoted ever afterwards: "The preponderance of judicial opinion is clearly in favour of the last of the three views stated above, and there is considerable reason behind it." Notwithstanding that the language of s. 2(k) is wide enough to cover a dispute between an employer and a single employee, the scheme of the Industrial Disputes Act "does appear to contemplate that the machinery provided therein should be set in motion, to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was not intended to be the subject of an adjudication under the Act".

Had that been the governing statute, the respondent would have failed, the workmen in the industry not having adopted his dispute as their own. But the appeal arose under the State Act, and in the view the Court took of the respondent's rights under that statute it declined to express a final opinion on whether a dispute simpliciter between an employer and a workman is an industrial dispute within s. 2(k) of Act XIV of 1947.

The Court's reasoning on this branch turns on the scope of the two statutes, and is a model of purposive construction.

The State Act is "not in pari materia with Act XIV of 1947". It covers the ground occupied by that Act — arbitration, adjudication, awards, strikes and lock-outs — "But it contains more." Chapter IV of the State Act contains provisions intended to regulate the contract of employment, a subject covered centrally by the Industrial Employment (Standing Orders) Act 1946. The preamble of that Act shows its object to be "to require employers in industrial establishments formally to define conditions of employment under them", whereas the object of the Industrial Disputes Act is "to make provision for the investigation and settlement of industrial disputes and for certain other purposes". Hence, "While Act XIV of 1947 may be said to be primarily concerned with disputes of labour as a class Act XX of 1946 is directed to getting the rights of an employee under a contract defined."

Because the State Act occupied the ground of both central Acts, the Court held that it would be proper to interpret the expression "industrial dispute" therein "in a sense wider than what it bears in Act XIV of 1947, so as to cover not only disputes of workmen as a class but also their individual disputes".

Three internal indications supported that reading. Section 41 allowed an application by an employer or employee concerned or by a representative of the employees, and s. 2(24) defined "representative of employees" as a union or, where there is no union, persons elected by the employees not exceeding five — a clear recognition of the right of an individual employee, as distinguished from a class, to move for redress. Section 53 required an employee to appear through the representative of employees save with permission, but added: "Provided that where only a single employee is concerned he may appear personally". And s. 16 itself "is intended, in our opinion, to enable an employee to enforce his individual rights when there is an order of dismissal, discharge, removal or suspension", so that in that context "industrial dispute" must include the claim of a dismissed employee for reinstatement and compensation.

The view of the Provincial Industrial Court and the Labour Appellate Tribunal on the meaning of "industrial dispute" in the State Act was correct. A dismissed employee remains an "employee" under s. 2(10); his claim for reinstatement and compensation is an industrial dispute under s. 2(12); and s. 16 enables him to enforce that individual right. The appeal was dismissed with costs, so the enquiry on the merits into the respondent's dismissal proceeded.

A definition clause that expressly "includes" a particular class of ex-employees is not, without more, an implied exclusion of every other ex-employee; such a clause is read ex abundanti cautela, especially where the contrary reading would render an express remedial section useless. A dismissed employee is therefore an "employee", and his claim for reinstatement is an industrial matter and an industrial dispute. Where a State enactment occupies the ground of both the Industrial Disputes Act and the Standing Orders Act, the expression "industrial dispute" in it bears a wider sense that takes in individual disputes. Under s. 2(k) of the Industrial Disputes Act 1947 the question was expressly left open, the Court recording only that the preponderance of authority favoured the view that an individual dispute becomes an industrial dispute if espoused by the union or a number of workmen.