Gujarat Steel Tubes Ltd v Gujarat Steel Tubes Mazdoor Sabha (1979)

This is the great case on mass discharge following an illegal strike, and it is examined for four separate propositions, any one of which can be a question on its own.

First, and most importantly for this Unit: participation in a strike, even one that is both illegal and unjustified, does not by itself justify dismissal or punitive discharge. The employer must identify what this workman did. Passive participation is not enough; there must be "active individual excess".

Second, on form versus substance: an order worded as a "discharge simpliciter", with notice pay and terminal benefits, is nevertheless a dismissal if its foundation is misconduct. The Court will "lift the veil".

Third, on procedure: a punitive discharge without individual charge-sheets, hearing and individualised punishment is void — but the employer may still make out the delinquency before the adjudicator, who then tries guilt and punishment afresh.

Fourth, on s. 11A: an arbitrator under s. 10A is within the reach of s. 11A, or at any rate must decide in its spirit, and so may interfere with the punishment.

The judgment is also the classic statement of the constitutional and social premises of Indian labour law, and of the "golden rule" of negotiation first, adjudication next. And it carries a rare, fully reasoned dissent by Koshal J, which is itself examinable.

The appellant company manufactured steel tubes on the outskirts of Ahmedabad. Started in 1960, it went into production in January 1964 and prospered: turnover reached Rs. 560 lakhs in 1971-72, Rs. 680 lakhs the next year, Rs. 1,136 lakhs the year after, and Rs. 20 crores in 1974-75. It entered the export trade and became a premier manufacturer in its line, hampered only by the scarcity of steel.

The workmen's position was very different. As late as 1970 a worker's total monthly wage was in the region of Rs. 100, though those with longer service were paid somewhat more. The Court described the establishment as having "an innings of escalating profits" alongside workmen with "a running complaint of a raw deal", and noted that the wages "hovered round a harrowing hundred rupees or more in this thriving Ahmedabad industry".

A workers' union appeared around 1966, and by 1968 the respondent, the Gujarat Steel Tubes Mazdoor Sabha, came into being with the backing of all or most of the mill-hands. In March 1969 the Sabha presented a charter of demands; resistance and a strike followed; a settlement was reached by July 1969.

The wage board and the settlement of 4 August 1972

An agreement of April 1970 contained a clause by which the Management agreed "to implement recommendations of the Central Wage Board for Engineering Industries as and when finally declared", increments granted under the agreement to be adjusted against those recommendations provided the adjustment did not adversely affect wages. The Central Wage Board had been appointed in 1964 and took six years to recommend a revision of wages to be implemented with effect from 1 January 1969. Its implementation, or non-implementation, became the money-loaded grievance in the case.

In September 1971 an allegedly violent episode broke the truce, producing criminal cases, charges of go-slow, lock-outs, and the suspension, discharge and dismissal of workmen. Conciliation and two settlements followed. Sixty-four workmen had been discharged or dismissed; half were agreed to be reinstated and the fate of the other 32 was left for arbitration by the Industrial Tribunal.

The settlement of 4 August 1972 contained the clause on which everything afterwards turned:

"That the parties agree that for a period of 5 years from the date of this settlement all disputes will be solved by mutual negotiations or, failing that, by joint arbitration under Section 10A of the I.D. Act, 1947. Neither party shall take any direct action including go-slow, strike and lock-out for a period of 5 years from the date of this settlement."

In October 1972 the Sabha resolved to raise fresh demands, principally the non-implementation of the Wage Board recommendations, bonus for 1971, and wages for the lock-out period. The Sabha pressed for negotiation, saying the entitlement under the Wage Board recommendations was too plain to admit of difference; the Management's response was that it differed and that the matter should go to arbitration. A stalemate followed.

The strike and the countdown

On 25 January 1973 the Sabha wrote charging the Management with breach of clause 6 of the settlement. The same day the Management put its version on the notice board, stating that at a meeting on 20 January 1973 it had expressed willingness to implement the Wage Board recommendations according to its own interpretation with effect from 1 January 1969, without prejudice and leaving the points of dispute open to arbitration; that the Sabha had turned this down; and that with effect from 1 January 1972 every workman would get the benefit of the recommendations irrespective of whether he had put in 240 days' attendance.

The Sabha's answer was a strike two days later, on 27 January 1973.

The Management countered at once, asserting that the strike was illegal, being in breach of the settlement of 4 August 1972, and unjustified, the offer of arbitration having been spurned. Its notice threatened that if duty were not resumed immediately it would not be obliged to continue in service the 32 workmen taken back under the settlement, nor to implement the Wage Board recommendations from 1 January 1969, and it withdrew all its proposals unless the strike were withdrawn within two days.

The strike continued. A further notice withdrew the offer to implement the recommendations from 1 January 1969, announced a decision to take disciplinary proceedings against the defaulting workmen, and added a second ground of illegality — the pendency of the reference relating to the reinstatement of the 32 workmen before the Industrial Court.

Then came the final notice, whose critical paragraph the Court set out:

"By this final notice the workmen are informed that they should withdraw the strike and resume work before Thursday, February 15, 1973. If the workmen resume duty accordingly, the management would be still willing to pay salary according to the recommendations of the Wage Board on and with effect from January 1, 1969. Furthermore, the management is ready and willing to refer to the arbitration of the Industrial Tribunal the question as to whether the management has implemented the settlement dated August 4, 1972 and all other labour problems. In spite of this, if the workmen do not resume duty before Thursday, February 15, 1973, then the Company will terminate the services of all workmen who are on strike and thereafter it will run the factory by employing new workmen."

A further public notice called on the workmen to resume duty on or before Monday, 19 February 1973. It is common ground that this notice was not sent to individual workmen.

The orders of 21 February 1973

On 21 February 1973 the Management "blotted out the entire lot of 853 workmen from the roster, by separate orders of discharge from service, couched in identical terms". The essential words were:

"Your services are hereby terminated by giving you one month's salary in lieu of one month's notice and accordingly you are discharged from service. You should collect immediately from the cashier of the factory your one month's notice-pay and due pay, leave entitlements and gratuity, if you are entitled to the same... If and when you desire to be employed, you may apply in writing to the Company in that behalf and on receipt of the application, a reply will be sent to you in the matter."

Casual workmen received separate but similar orders.

But the Management had recorded its reasons separately, on 20 February 1973, forwarding them to the Sabha and to individual workmen on request. Those reasons described the strike as illegal and unjustified and narrated a history of assault on officers, go-slow tactics and sabotage. Their concluding part read:

"In the interest of the Company it is decided to terminate the services of all the workmen who are on illegal and unjustified strike since 27th January, 1973... it is decided that the services of all the workmen who are on illegal and unjustified strike should be terminated by way of discharge simpliciter. These workmen, however, may be given opportunity to apply for employment in the Company..."

The Court identified at once the question this produced: "Whether each of these orders using, in the contemporaneous reasons, the vocabulary of misconduct but, in the formal part, the expression 'discharge simpliciter', should be read softly as innocent termination or sternly as penal action, is one of the principal disputes demanding decision."

The breaking of the strike

The factory remained closed until 28 April 1973, when production recommenced with new workers recruited from the open market. Re-employment of the discharged workmen then began and snowballed: by 31 July 1973 a substantial number — 419 — had returned, the Management restoring continuity of service and other benefits to those re-employed, and relying on that as proof of its bona fides.

A "final offer" was made on 31 May 1973, open until 10 June, later extended to 16 June 1973, promising that workers who reported would be taken back with continuity of service, that the discharge orders of 21 February 1973 would be treated as cancelled, and that they would be paid the difference in wages from 1969 under the Wage Board recommendations. On 13 June 1973 the Sabha's secretary wrote that if the Management confirmed it would take back all the workmen discharged on 21 February, with intimation and reasonable time to join, he would see that the offer was accepted. The Management then back-tracked: new hands had come on the scene, and full re-employment was said to be beyond it.

Arbitration and the High Court

Because the settlement barred direct action and required arbitration, the dispute went to an arbitrator under s. 10A. The question referred was whether the termination orders issued against the workmen named in the annexure were "legal, proper and justified"; and if not, whether the workmen were "entitled to any reliefs including the relief of reinstatement with continuity of service and full back wages".

The arbitrator upheld the Management's action. On a challenge under Arts. 226 and 227, the Gujarat High Court reversed the award and substantially directed reinstatement — of 370 workmen, with full or partial back wages. Both sides appealed.

1. Were the orders of 21 February 1973, worded as discharge simpliciter, in truth orders of dismissal for misconduct?
2. If so, were they valid, no individual charge-sheets having been issued and no enquiry held?
3. Could an arbitrator under s. 10A exercise the power conferred on a "Tribunal" by s. 11A and interfere with the punishment?
4. Was the High Court entitled, under Arts. 226 and 227, to set aside the award and grant final relief without a remand?
5. Does participation in a strike that is illegal and unjustified justify discharge of every participant?

Both appeals were dismissed, with substantial modification of the relief.

The Court set out its conclusions in a numbered sum-up, and it is the passage to learn.

The premise. "The basic assumption we make is that the strike was not only illegal but also unjustified." On justification a contrary view could not be ruled out, but the Court did not reinvestigate the issue since the High Court had proceeded on what both sides took for granted.

The orders were punitive. "The Management, in our view, did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings, even though, with legal finesse, the formal order was phrased in harmless verbalism. But fine words butter no parsnips, and law, in its intelligent honesty, must be blunt and when it sees a spade, must call it a spade."

The procedure was void. "The action taken under the general law or the standing orders, was illegal in the absence of individualised chargesheets, proper hearing and personalised punishment, if found guilty. None of these steps having been taken, the discharge orders were still born."

But the employer gets a hearing on the merits. "The Management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment."

Section 11A reaches an arbitrator. "We hold that sec. 11A does take in an arbitrator too, and, in this case, the arbitral reference, apart from sec. 11A, is plenary in scope."

Article 226 may give final relief. Article 226, "however restrictive in practice, is a power wide enough, in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and, more importantly, this extraordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand. What the tribunal may, in its discretion, do, the High Court too, under Art. 226, can, if facts compel, do."

The central holding on strike and dismissal

"The Award suffers from a fundamental flaw that it equates an illegal and unjustified strike with brazen misconduct by every workman without so much as identification of the charge against each, the part of each, the punishment for each, after adverting to the gravamen of his misconduct meriting dismissal. Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge. There must be active individual excess such as master-minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role. Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong."

The Court found an indicator of the absence of grievous guilt in the employer's own conduct: having stated in strong terms all the sins of the workmen, the Management took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service — "suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen".

And it added a consideration of social fact: though all sanctions short of punitive discharge may be employed by a management, "in our current conditions of massive unemployment, low wages and high cost of living, dismissal of several hundreds, with disastrous impact on numerous families, is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the Industry, the welfare of the workmen and the broader justice that transcends transient disputes. The human dimensions have decisional relevance."

"We hold the discharge orders, though approved by the Arbitrator, invalid."

Discharge or dismissal — the test

The Court laid down the test in terms that are quoted constantly:

"The anatomy of a dismissal order is not a mystery, once it is agreed that substance, not semblance, governs the decision... sometimes words are designed to conceal deeds by linguistic engineering. The form of the order or the language in which it is couched is not conclusive. The Court will lift the veil to see the nature of the order."

Two factors are looked for — motive and foundation. If the severance of service is effected, the first condition is fulfilled; and if the foundation or causa causans of the severance is the servant's misconduct, the second is fulfilled. If the basis of the termination is "clearly not turpitudinous or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa". These canons "run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements. The law cannot be stultified by verbal haberdashery because the Court will lift the mask and discover the true face."

Applied: "Masters and servants cannot be permitted to play hide and seek with the law of dismissals." The Court will find out from other proceedings or documents connected with the formal order what the true ground is. If, so scrutinised, the order has a punitive flavour in cause or consequence, it is a dismissal. A termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the delinquent's service "is a dismissal even if he had the right in law to terminate with an innocent order under the standing order or otherwise". It makes no difference that the grounds are recorded in a different proceeding from the formal order, nor that the master, after satisfying himself of the guilt, abandoned the enquiry and proceeded to terminate. "Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination are given and non-injurious terminology is used."

The converse was equally carefully stated. Even where there is suspicion of misconduct, the master may say that he does not wish to bother about it, will not go into guilt, and simply does not want to keep a man he is unhappy with, being unwilling to investigate or to take the risk of continuing a dubious servant. "There it is not a dismissal, but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found. For, in fact, misconduct is not then the moving factor in the discharge. What is decisive is the plain reason for the discharge, not the strategy of a non-enquiry or clever avoidance of stigmatising epithets. If the basis is not misconduct, the order is saved."

"Tribunal" in s. 11A includes an arbitrator

"'Tribunal' simpliciter has a sweeping signification and does not exclude Arbitrator. A tribunal literally means a seat of justice, may be, a commission, a Court or other adjudicatory organ created by the State. All these are tribunals and naturally the import of the word, in Section 2(r) of the Industrial Disputes Act, embraces an arbitration tribunal."

And independently of the definition: an arbitrator has all the powers that the terms of reference, to which both sides are party, confer, and here he had authority to investigate the propriety of the discharge and the veracity of the misconduct. "Even if section 11A... is not applicable, an Arbitrator under Section 10A is bound to act in the spirit of the legislation under which he is to function." A commercial arbitrator deriving jurisdiction from the terms of reference is by necessary implication bound to decide according to law; "according to law" means the existing law, and the law laid down by the Supreme Court being the law of the land, "an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A".

The limits of writ review

The Court restated the orthodox limits and then their qualification. The jurisdiction under Art. 226 is limited to holding judicial or quasi-judicial powers "within the leading strings of legality", to seeing that they do not exceed their statutory jurisdiction and that they correctly administer the law. So long as statutory authorities function within their ambit, the manner in which they do so is no ground for interference; and the supervisory power under Art. 227 is no greater. "Every wrong order cannot be righted merely because it was wrong. It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like."

But: "Article 226 is a sparing surgery but the lancet operates where injustice suppurates... judicial daring is not daunted where glaring injustice demands even affirmative action." The Court must be cautious "both in not overstepping as if Article 226 were as large as an appeal and not failing to intervene where a grave error has crept in. And an appellate power interferes not when the order appealed is not right but only when it is clearly wrong. The difference is real, though fine." The amended Art. 226 would enable a High Court to interfere with an award "if that is based on a complete misconception of law or it is based on no evidence, or that no reasonable man would come to the conclusion to which the Arbitrator has arrived".

The value-vision

The Court grounded all of this expressly in the Constitution. "In a society, capital shall be the brother and keeper of labour and cannot disown this obligation of a partner in management, especially because social justice and Articles 43 and 43A are constitutional mandates." The policy directions in Arts. 39, 41, 42, 43 and 43A speak of the right to an adequate means of livelihood, the right to work, humane conditions of work, a living wage ensuring a decent standard of life and enjoyment of leisure, and participation of workers in the management of industries. "De hors these mandates, law will fail functionally. Such is the value-vision of Indian Industrial Jurisprudence."

And the method: "Jural resolution of labour disputes must be sought in the law-life complex, beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory texts, in the economic basics of industrial justice."

The golden rule. "The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace-making zone, disentangle the differences, narrow the mistrust gap and convert them, through consensual steps, into negotiated justice. Law is not the last word in justice, especially social justice. Moreover, in an hierarchical system, the little man lives in the short run but most litigation lives in the long run. So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, the Management and Union." The Court disclosed that it had itself attempted a settlement, with the participation of counsel on both sides, at an early stage of the hearing, and that though no settlement was clinched the approach "brought the parties closer... and gave us a better understanding of the problem".

Relief was "fashioned with an eye on mutual equities", the Court declining to ignore "a few raw realities since law is not dogmatics but pragmatics, without temporising on principle": the Management's difficulty in absorbing all the discharged employees at once when steel was scarce; its inability to pay huge sums as back wages without crippling the industry; the presence of over two hundred interregnal workmen who might have to be sacked if the old workmen came back — "a problem of humanist justice"; and the likelihood that some of the discharged men had found work elsewhere during the long years of litigation. The Court invoked the Gandhian guideline of recalling "the face of the poorest and the weakest man whom you may have seen" before taking any step.

The starting point of principle was stated in five words: "If the discharge is bad, reinstatement is the rule." The directions, as capsulated by the Court, were:

1. Of the 370 workmen the High Court had directed to be reinstated, 239 were permanent. 100 were assumed to have found alternative employment and were to be excluded from reinstatement, the Sabha supplying their list within two weeks. Their discharge orders were set aside; they were deemed to be in service until 3 August 1979, when they would be retrenched and paid retrenchment compensation under s. 25-F plus one month's pay in lieu of notice, computed on the wages admissible under the Engineering Wage Board recommendations as applicable to the Company. This was in lieu of reinstatement, and they were also to be paid 75 per cent of back wages.
2. The remaining 139 permanent employees were to be reinstated and paid 50 per cent of back wages as directed by the High Court.
3. Seventy of those 139 were to be given actual employment on or before 31 December 1979 and the rest on or before 31 March 1980. Until actual reinstatement each was to be paid two-thirds of monthly wages from 9 August 1979, when the hearing concluded. Half of the sums payable were to be paid by 31 March 1980 and the balance by 30 September 1980, carrying interest at 10 per cent until paid.
4. Of the casual workmen, those with less than nine months' service at the date of dismissal — 57 in number — were not to be reinstated; the High Court's direction in their favour was confirmed with the addition of Rs. 1,000 each in lieu of reinstatement. The remaining 74 casual workmen, with more than nine months' service, were to be reinstated by 31 March 1980, to be treated as confirmed within six months of rejoining, and the High Court's direction on their back wages was confirmed.

The Management was ordered to pay the Sabha's costs, counsel's fee fixed at Rs. 5,000.

The afterword

The Court closed with a warning about delay that is frequently quoted. The litigation, it said, "points to the chronic pathology of our Justice System — the intractable and escalating backlog in the Forensic Assembly Line that slowly spins Injustice out of Justice and effectually wears down or keeps out the weaker sector of Indian life". "Law may be guilty of double injustice when it is too late and too costly, for it holds out remedial hopes which peter out into sour dupes and bleeds the anaemic litigant of his little cash only to tantalise him into a system equal in form but unequal in fact."

Koshal J differed on three findings and would have allowed the Management's appeal. The dissent should be known, because it is the strongest statement of the opposing view on each of the main issues.

1. The orders were discharge simpliciter, not dismissal. Under the Model Standing Orders, the management may terminate services by recourse either to M.S.O. 23 or to M.S.O. 25. Action under M.S.O. 23 involves "no element of punishment", which is why no opportunity to show cause is provided; dismissal under M.S.O. 25 is by its very nature a punishment, and is therefore made subject to an enquiry. The two powers are separate and distinct. Clauses (3) and (4) of M.S.O. 25, requiring an enquiry, are attracted only to an order falling under sub-clause (g) of clause (1); and sub-clause (f) of clause (1) specifically provides that a workman guilty of misconduct may be discharged under M.S.O. 23. It therefore lies entirely in the employer's discretion whether, on being satisfied of misconduct, to discharge under M.S.O. 23 without an enquiry or to dismiss under M.S.O. 25 after one.

He accepted that "the employer cannot pass a real order of dismissal in the garb of one of discharge", but confined that to cases where the order is "in reality intended to punish an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome". If no such intention is made out, "the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee".

He added a point of construction. Under clause (4-A) of M.S.O. 23 the reasons for terminating a permanent workman must be recorded in writing and communicated if desired. Such reasons must consist of an opinion derogatory to the workman — negligence, work-shirking, or serious overt acts such as theft or embezzlement — and in every case would amount to misconduct punishable under M.S.O. 25. There being no case in which the reasons would not amount to misconduct, "M.S.O. 23 would be rendered otiose if termination of service thereunder for misconduct could be regarded as a dismissal", which "strikes at the very root of accepted canons of interpretation".

Hence the real criterion is "the real nature of the order, that is, the intention with which it was passed". For an order to be "founded" on misconduct it must be intended by way of punishment — "intended to chastise, or cause pain in body or mind or harm or loss in reputation or money". The question of mala fides, which is the same thing as colourable exercise of power, "becomes all important"; and "if no mala fides can be attributed to the management, the order of discharge must be regarded as one having been passed under M.S.O. 23 even though the reason for its passage is serious misconduct". Such would be the case where the employer orders discharge in the interests of the factory or of the general body of workers.

2. An arbitrator is not a "Tribunal" for s. 11A. Throughout the Act, "arbitrator" would include an umpire, but "Tribunal" would not include an arbitrator and would mean only an Industrial Tribunal constituted under the Act unless the context required otherwise. In s. 11(1) the word "Tribunal" is used in the sense of the s. 2(r) definition because an arbitrator is separately mentioned in that sub-section; and in sub-ss. (2) and (3) of s. 11, which invest a Board, a Labour Court, a Tribunal and a National Tribunal with certain powers, "Tribunal" would not include an arbitrator.

He also differed on method. "It is a well settled canon of interpretation of statutes that the language used by the Legislature must be regarded as the only source of its intention unless such language is ambiguous", in which case the Preamble, the Statement of Objects and Reasons and the underlying purpose may be considered. That the purpose of the legislation is to fulfil a socio-economic need "does not come into the picture till an ambiguity is detected in the language, and the Court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted". It was therefore not permissible to use the Statement of Objects and Reasons in interpreting s. 11A.

3. The High Court exceeded its jurisdiction. Under Art. 227 the High Court "does not sit as a Court of Appeal over the Award of the Arbitrator but exercises limited jurisdiction which extends only to seeing that the arbitrator has functioned within the scope of his legal authority". It was therefore not open to it to revise the punishment left intact by the arbitrator, whose authority had not been shown to have been exceeded.

Participation in a strike, even one both illegal and unjustified, does not by itself justify dismissal or punitive discharge; there must be active individual excess — master-minding the unjustified aspects of the strike, violence, sabotage or some other reprehensible role — charged against the individual workman, and punishment must be individualised. An order of "discharge simpliciter" whose foundation and causa causans is misconduct is in substance a dismissal, and the Court will lift the veil to see it, whatever the wording and whatever terminal benefits are paid; such a dismissal passed without individual charge-sheets, hearing and individualised punishment is void, though the employer may still prove the delinquency before the adjudicator, who then adjudges guilt and punishment de novo. An arbitrator under s. 10A falls within "Tribunal" for the purposes of s. 11A, and in any event must decide in the spirit of that section. Where the discharge is bad, reinstatement is the rule, though relief may be moulded on the equities.

The majority's argument moves in three steps, and they should be kept apart.

The first step is characterisation. Everything the Management did was designed to produce a termination that looked innocent: identical orders, notice pay, terminal benefits, an invitation to apply afresh for employment, and the word "simpliciter". But the reasons were recorded the previous day, they recited assault, go-slow and sabotage, and they were sent to the Sabha and, on request, to the men. Once the formal order and the recorded reasons are read as "separate but integrated proceedings", the foundation is misconduct and the order is a dismissal. The dividing line the Court drew is precise and is what makes the test usable: the question is whether the master went into the guilt and acted upon it, or whether he simply declined to keep a man he was unhappy with without investigating. Misconduct as the moving factor converts discharge into dismissal; mere unhappiness does not.

The second step is proportionality and individuation. This is the part that belongs to this Unit. A strike is by nature collective; discipline is by nature individual. The employer's error was to treat the collective character of the wrong as dispensing with the individual character of the punishment — to reason that because the strike was illegal, every striker was a delinquent deserving the extreme penalty. The Court's answer is that illegality of the strike goes to the workmen's entitlement to wages and to the availability of disciplinary action, but the grade of misconduct, and therefore the punishment, still has to be established man by man. And the Court found its proof in the employer's own conduct: a management that genuinely believed 853 men guilty of assault and sabotage does not take 419 of them back with continuity of service.

The third step is remedial. Having found the discharge bad, the Court applied the rule that reinstatement follows, and then softened it by facts — steel scarcity, the company's finances, the interregnal workers who would be displaced, the years that had passed, the difference between permanent and casual men. The resulting order is a worked example of moulding relief: some reinstated at once, some later, some deemed in service and then retrenched with s. 25-F compensation, some paid a lump sum in lieu, back wages at graduated percentages, interim payments and interest to answer delay. It is worth noticing that the Court did not use the equities to deny the principle; it used them to time and to price its application.

Underlying all three is the interpretive stance that Koshal J contested. The majority read the statute in the light of Arts. 39 and 41 to 43A and of the economic facts; the dissent insisted that purpose enters only where language is ambiguous, and that a court may not mould the written word to its own conception of what should have been enacted. That disagreement is a live one, and an answer that notices it is a better answer than one that does not.