Manager, United Commercial Bank Ltd v Commissioner of Labour, Madras (1950)

The case draws the line, early and clearly, between an individual dispute and an industrial dispute. A single dismissed employee who fights his own dismissal, with no other workmen or union behind him, is not — on this view — raising an industrial dispute at all. So a State statute giving him a personal appeal against dismissal is untouched by the Industrial Disputes Act, even after the Central Government refers a wide batch of disputes about "dismissal of workmen" to a Tribunal.

It is the classic statement of the "espousal" idea before s. 2A was added to the Act: a dismissal becomes an industrial dispute when the body of workmen, or a union, takes it up.

C. G. Sarma worked at the Madurai branch of the United Commercial Bank Ltd. The bank dispensed with his services on 30 June 1949, alleging he had misbehaved towards a respectable constituent and that his conduct inside and outside the office was unsatisfactory.

He appealed to the Commissioner of Labour, Madras, under s. 41(2) of the Madras Shops and Establishments Act 1947, which gives an employee of six months' standing a right of appeal against termination, and makes the appellate decision final and binding on both sides. The appeal was filed on 22 July 1949.

Meanwhile, under the Industrial Disputes (Banking and Insurance Companies) Act 1949, the Central Government referred disputes between listed banking companies and their employees to a Central Industrial Tribunal. A notification of 21 February 1950 added further disputes, including "Retrenchment, discharge or dismissal of workmen after the 13th June 1949 (specific cases to be cited by employees)". Neither Sarma nor any union on his behalf filed a statement of claim before the Tribunal about his dismissal.

When the appeal came up, the bank objected that the Commissioner had no jurisdiction because of the Central reference. The Commissioner overruled the objection. The bank applied to the High Court for a writ of certiorari to quash that order.

An argument of repugnancy under s. 107 of the Government of India Act 1935 was not pressed, because the Madras Act had received the Governor-General's assent on 10 February 1948.

1. Did the Industrial Disputes Act 1947, or the Banking and Insurance Companies Act 1949, take away by implication the right of appeal under s. 41(2) of the Madras Act?
2. Is a dispute raised by one individual employee against his own dismissal an "industrial dispute" within the Industrial Disputes Act?
3. Did an appeal validly filed in July 1949 become incompetent because of the Central reference of 21 February 1950?

The application was dismissed with costs. The Commissioner of Labour had jurisdiction to hear and decide the appeal.

Rajamannar CJ

The Chief Justice began from the position that s. 41 of the Madras Act was valid and applied to a bank, and that the Commissioner was the prescribed authority. There was no express provision taking away the right of appeal, as counsel for the bank conceded.

On timing, the appeal had been filed long before the notification relied on. The Court said that "In the absence of express statutory provisions, it is impossible to support such a result" — the result being that an appeal competent when filed later became unsustainable.

The real question was whether an individual's challenge to his own dismissal is an industrial dispute. If it were, s. 41(2) would be practically useless, since the definition of "industry" would cover almost every establishment under the Madras Act. The Court rejected that result: "The two Acts, namely, the Industrial Disputes Act & the Madras Act are not in pari materia."

An individual dispute under s. 41(2) "would not by itself be an industrial dispute falling within the scope of the Industrial Disputes Act." The dismissal of even one workman can become the subject of an industrial dispute, "but then it is no longer an individual dispute between the dismissed work. man & the employer only; it becomes a dispute between the workmen on the one hand & the employment on the other." Such a collective dispute cannot be the subject of a s. 41 appeal; it goes to a Tribunal under s. 10.

The Court relied on its own earlier Bench decision in Kandan Textile Ltd v Industrial Tribunal, Madras, where it was held that "something more than an individual dispute between a worker & the employer is required to make the dispute an industrial dispute", and that an individual dispute may later develop into a collective one. It explained Shamnugger Jute Factory v Modak (Privy Council) as a case where a collective dispute had in fact followed — the dismissal led to general unrest, a closure and a refusal to return to work.

Viswanatha Sastri J (concurring)

He agreed, adding reasons because "the matter is one of first impression". He accepted that the Federal Court in Western India Automobile Association v Industrial Tribunal, Bombay had held that reinstatement of dismissed workmen was a matter connected with non-employment and within the definition of industrial dispute, where the aggrieved workmen or their fellow workmen took up the cause.

Section 41 of the Madras Act deals with an individual dispute in which the other employees have no interest; the Industrial Disputes Act deals with "a collective dispute, a dispute between the employer on the one hand & the body of workmen or a section of that body on the other."

He described the two ends of the range: a dismissed employee challenging his dismissal while the others approve or are indifferent — an individual dispute only; and a dismissal the workmen or a union take up, threatening or going on strike for reinstatement — an industrial dispute. In between, it may be hard to say in advance which it is.

He also stressed the practical value of the Madras remedy: "Why should he be deprived of this cheap & expeditious remedy". A reference may never be made; the majority of workmen may not want one; and an award lasts only for a limited period, whereas a successful s. 41 appeal can secure unconditional reinstatement.

His conclusion: the right of appeal under s. 41(2) "is not taken away either expressly or by necessary implication by any of the provisions of Act XIV [14] of 1947." On the facts, "No body of workmen & no union of workmen complained of his discharge."

A dispute raised by an individual employee about his own dismissal, not taken up by the body of workmen or a union, is an individual dispute and not an "industrial dispute" under the Industrial Disputes Act 1947. The Act therefore does not, expressly or by implication, take away a State-law right of appeal against dismissal such as s. 41(2) of the Madras Shops and Establishments Act 1947; and an appeal validly filed does not become incompetent because the Central Government later refers disputes about dismissals in that industry to a Tribunal. A dismissal becomes an industrial dispute when it is espoused collectively.

• Direct question: Distinguish an individual dispute from an industrial dispute. When does the dismissal of a single workman become an industrial dispute? Use this case for the espousal test: the body of workmen or a union must take up the cause.
• Problem question: a dismissed shop or bank employee has appealed under a State Shops and Establishments Act, and the employer argues a later Central reference ousts the appeal. Apply this case: the two Acts are not in pari materia, nothing takes away the State right, and an appeal competent when filed stays competent.
• Link: pair with Western India Automobile Association v Industrial Tribunal (Federal Court) on reinstatement as part of "non-employment", and note how this case limits it to collective disputes.
• Caution in the answer: say plainly that this is a Madras High Court decision.