In the case of the State of Bombay vs K.P. Krishnan and others, decided on 18th August 1960, the Supreme Court of India was called upon to interpret and apply the provisions of the Industrial Disputes Act of 1947. The case arose from an industrial dispute between the Firestone Tyre and Rubber Co. of India Ltd., and its workmen, who had made four demands to the company. These demands were in respect of gratuity, holidays, classification of certain employees, and for the payment of an unconditional bonus for the financial year ended October 31, 1953.
Facts of the Case
The workmen’s union had approached the Assistant Commissioner of Labour, Bombay, with their demands, stating that the company had not recognized their union and there was no hope of any direct negotiations between the union and the company. The Assistant Commissioner of Labour, who also served as the conciliation officer, was requested to commence conciliation proceedings. The company declared a bonus equivalent to 1/4 of the basic earnings for the year 1952-53, which the workmen accepted without prejudice to their demand for a higher bonus. The conciliation officer admitted two of the four demands into conciliation – the classification of certain employees and the bonus for the year 1952-53. However, the conciliation proceedings proved unsuccessful, leading to a failure report under section 12(4) of the Act.
Issues
The main issue in the case was the interpretation of section 12(5) of the Industrial Disputes Act, 1947. The question was whether the Government, after receiving a failure report from the conciliation officer, was obligated to refer the dispute to a tribunal for adjudication, or whether it had the discretion to decide whether or not to make such a reference.
Court’s Observations
The court observed that the conciliation officer had made certain suggestions to the company regarding the workmen’s claim for bonus, which the company did not accept. The conciliator also dealt with the workmen’s demand for classification and expressed his opinion that the work done by the workmen in question was mainly of a clerical nature and their demand to be taken on the monthly-paid roll was in line with the practice in other comparable concerns. However, the management did not agree to this demand.
The court also noted that during a part of the relevant year, the workmen had adopted go-slow tactics, which amounted to misconduct under the standing orders of the company. Disciplinary action was taken against 58 workmen employed by the company as a result. Despite this, the workmen argued that the total production for the said period compared favorably with the production for previous years and that the profit made by the company during the relevant year fully justified their claim for additional bonus.
The court held that the Government’s decision to refuse to refer the dispute for industrial adjudication was based on the fact that the workmen had resorted to go slow during the year 1952-53. The court had to consider whether this decision could be sustained under section 12(5) of the Act.
Conclusion
The court concluded that the Government had the discretion to decide whether or not to refer a dispute to a tribunal for adjudication after considering the report of the conciliation officer. However, this discretion had to be exercised bona fide and based on a consideration of relevant and material facts. The court also held that the Government could consider other relevant facts that may come to its knowledge or be brought to its notice in deciding whether a case for reference had been made out. The court further held that the Government was obligated to record and communicate its reasons for not making a reference to the parties concerned.