Industrial Disputes Act | Gujarat HC Quashes Order Referring Alleged Dispute Between Company & Foreign Personal Assistant To Labour Court

Quashing an order referring to the labour court an alleged dispute between a company and a female foreign national employed as a personal assistant–who had also levelled rape allegations, the Gujarat High Court said that there was no application of mind regarding a "prima facie opinion" on if an industrial dispute existed. 

Observing that the assistant labour commissioner's order was defective, the court said that whether an employee is a workman or not is a mix question of law and facts which can be decided after adducing evidence, not permissible at the stage of making reference; however prima facie opinion is a must before a reference order is made. 

It also underscored that a reference order under the Industrial Disputes Act pre-supposes that an employer–workman relationship exists adding that it appeared that the labour commissioner acted as a "post office", and had not applied its mind.

Justice MK Thakker said, "this Court is of the view that reference in the present form is clearly defective. It does not suggest of application of mind with regard to the forming a prima facie opinion as to whether there is industrial dispute between employer- workman concerned exists or was apprehended. Therefore, impugned order of reference passed by the learned Assistant Labour Commissioner...is hereby set aside and the reference is remanded back to the appropriate government to pass fresh orders after arriving to the subjective satisfaction regarding the existence of the industrial dispute". 

Referring to the various provisions of the Act and said, "The appropriate government in the opinion of this court has to form the opinion that any industrial dispute exist or is apprehended. The power to make reference for adjudication would arise as soon as it forms such opinion and that opinion is naturally formed before order of reference is made. In the instant case, the order of reference was made without arriving to the subjective satisfaction regarding existence of the dispute. The second defect in the order of reference is that existence of jurial relationship is required to be examined which decided the jurisdiction of the learned court. In the scheme of the act, the employer-employee relationship between management and the worker concerned is sine qua non for holding that workman of the employer from whom they claimed relief. Making a reference presupposes an accepted position by the government that their exists relationship of employer and the workman which can alone can give rise to an industrial dispute. The act clearly implies that there must exist a relationship of employer and employee to the parties to the lis. There is no doubt that the employee is a workman or not involves a mix question of law and facts which can be concluded on scrutinizing evidence which is not permissible at the stage of making reference however, prima facie opinion is must before making order of reference. In absence of such, the government precluded from forming an opinion as to existence or apprehension of industrial dispute". 

Background

The respondent–a foreign national, was appointed by the petitioner company as a Personal Assistant under an agreement for one year from November 2022 to November 2023. The respondent was drawing a salary of $7500 i.e approx Rs.6,00,000 per month. In April 2023, she filed a complaint levelling several allegations against the Office of petitioner company.

Thereafter she tendered her resignation; the company issued a service certificate, no objection certificate and relieving letter on the same day. She was also paid Rs.77,25,000 as a full and final settlement and she had also issued a receipt on 16.04.2023, confirming this amount. She also stated on affidavit that she had received all dues and did not have any grievance against the petitioner or its Officers.

Subsequently she filed a private complaint before the magistrate's court alleging offences under various IPC sections including 376(rape), 354(Assault or criminal force to woman with intent to outrage her modesty), 323(Punishment for voluntarily causing hurt), 506 (Punishment for criminal intimidation).

This complaint was dismissed, however the high court had directed the Magistrate to pass an order of investigation to competent Officer under section 156(3) of the Cr.P.C.  Pursuant to this, investigation was carried out, and a summary report was filed in February 2024.

She thereafter raised an industrial dispute before the Assistant Labour Commissioner in March 2024 claiming that her services be reinstated with all consequential benefits. The company filed a reply disputing the allegations and contending that there is no dispute exists or apprehended between the petitioner and the respondent. Subsequently the Commissioner referred the matter to the labour court against which the company moved the high court. 

Before the high court the petitioner company's counsel argued that the commissioner, without even ascertaining the fact whether a dispute existed or not and without having prima facie satisfaction, mechanically referred the matter. It was also argued that the respondent is a foreign national, is a highly trained professional person, was paid over Rs.6 Lakh per month along with various other benefits and hence by no stretch of imagination, can be termed as workman under section 2(s) of the Industrial Disputes Act.

The counsel for the female foreign national argued that proceedings before the labour court had already started when the petitioner company sought time to file written statement for which the matter was adjourned. Instead of filing the written statement, the company filed a plea before the high court challenging the reference order, after which the high court had stayed the same.  

Whether she falls under definition of workman is a mixed question of law and fact and therefore the reference was rightly made, the counsel said. 

Findings

The court observed that a reference order cannot be made mechanically without forming an opinion and for that formation of such necessary opinion the appropriate government must be satisfied that a person whose dispute is being referred for adjudication is “workman”.

In the present case the court said that the material placed before the government by the respondent included the employment agreement, the salary slip of February-April, 2023, formal resignation, experience certificate and the copy of full and final settlement; relying on these documents, the alleged dispute was referred before the Industrial Court.

"It appears that appropriate government has acted as post office and without applying its mind the order of reference is passed," the court said. The court found that there was no subjective satisfaction by the assistant labour commissioner.

It thus allowed the plea.

Case title: CADILA PHARMACEUTICALS LIMITED v/s XYZ and Others

Click Here To Read/Download Order

Citation: 2025 LiveLaw (Guj) 35