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Labour Court has no jurisdiction over execution of claim settlement: Supreme Court

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Setting aside an order of Allahabad High Court, the Supreme Court has observed that the Labour Court has no jurisdiction and cannot adjudicate dispute of entitlement or the basis of the claim of workmen.

A Division Bench comprising Justice M.R. Shah and Justice B.V. Nagarathna noted that under Section 33(C)(2) of the Industrial Act, the Labour Court’s jurisdiction is like that of an executing court and it can only interpret the award or settlement on which the claim is based.

It said under Section 33(C)(2) of the Industrial Disputes Act (ID Act), 1947, it is not open for the Labour Court to entertain disputed questions and adjudicate upon the employer-­employee relationship.

“In an application under Section 33(C)(2) of the Industrial Disputes Act, the Labour Court has no jurisdiction and cannot adjudicate dispute of entitlement or the basis of the claim of workmen. It can only interpret the award or settlement on which the claim is based,” the judgment said.

The top Court was hearing an appeal against a 2018 order of the Allahabad High Court which had dismissed the petition of the appellant M/s Bombay Chemical Industries and upheld the order passed by the Presiding Officer, Labour Court IV, Uttar Pradesh, Kanpur Nagar, under Section 33(C)(2) of IDA 1947.

Originally, the present respondent had preferred an application before the Labour Court under Section 33(C)(2) of IDA 1947, demanding the difference of wages against the appellant.

Before, the Labour Court, the appellant company had denied any employer-employee relationship with the respondent and submitted that the respondent was never engaged by it. The respondent had relied upon certain documents to state that he was working as a salesman in the establishment of the appellant.

On November 28, 2017, the Labour Court decided in favour of the respondent and directed the appellant to pay the difference of wages.

Aggrieved, the appellant preferred a writ petition before the High Court. The High Court dismissed the plea and upheld the order of Labour Court.

The appellant the moved the Supreme Court in appeal.

Advocate Vishal Yadav, appearing for the appellant, argued that when there was a serious issue raised with respect to the employer-­employee relationship and that it was seriously disputed that respondent was at any point of time in employment as a salesman, the Labour Court ought not to have entertained the application of the respondent under Section 33(C)(2) of the IDA 1947.

He submitted that instead of adjudication by the Labour Court, this dispute should have been decided in the reference under Section 10 of the IDA 1947.

Advocate Vinod Kumar Tewari, appearing for the respondents, contended that the appellant came out with a false case only to get out of the obligation to pay the difference in salary as claimed by the respondent. He further stated that the presence of documentary evidence in itself proved that the respondent was working as a salesman in the establishment of the appellant.

It was only after appreciation of evidence and considering the material available on record, that the Labour Court had allowed the application, Tewari argued.

The Supreme Court rejected the contentions raised by the respondent. It observed that once there was a serious dispute that respondent had work as an employee in the establishment of the appellant, it was not open for the Labour Court to entertain disputed questions and adjudicate upon the employer-­employee relationship between the appellant and respondent.

Consequently. the top Court set aside the order passed by the High Court and the Labour Court.

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