When there is a labour dispute in a central government undertaking, the state government where it is situated can refer the issues to a labour court there according to its law. It is not essential that the central government should refer it according to the Industrial Disputes Act, the central law, the Supreme Court stated when a dispute arose between the workers of Hindustan Aeronautics Ltd (HAL) in Nashik, Maharashtra, and the central undertaking.
The Supreme Court, thus, quashed the Bombay High Court order, which held a different view. This is a question, which has arisen in several cases when a central industry is situated in a state. Though there have been decisions in the cases of Air India, SAIL and Heavy Engineering Corporation, the issue has cropped up again. In this case, the workers' union filed a complaint under the Maharashtra Trade Unions and Prevention of Unfair Labour Practices Act.
The labour court found that HAL had indulged in unfair practices and ordered reinstatement of persons who were terminated with full back wages. The industrial court upheld it. HAL moved the Bombay High Court arguing that it was performing "sovereign functions" as it was manufacturing defence aircraft and it is directly under the central government.
Therefore, the state law would not apply to the central undertaking and it shall be governed by the Industrial Disputes Act. The high court accepted the argument. The workers appealed to the Supreme Court. It held that the high court was wrong and the state government was the appropriate authority to refer the dispute to the labour court. The judgment emphasised that the central government came in only if the industry is carried on "by or under the authority of the central government". This is question of fact to be decided in individual cases.
The Supreme Court, thus, quashed the Bombay High Court order, which held a different view. This is a question, which has arisen in several cases when a central industry is situated in a state. Though there have been decisions in the cases of Air India, SAIL and Heavy Engineering Corporation, the issue has cropped up again. In this case, the workers' union filed a complaint under the Maharashtra Trade Unions and Prevention of Unfair Labour Practices Act.
The labour court found that HAL had indulged in unfair practices and ordered reinstatement of persons who were terminated with full back wages. The industrial court upheld it. HAL moved the Bombay High Court arguing that it was performing "sovereign functions" as it was manufacturing defence aircraft and it is directly under the central government.
Therefore, the state law would not apply to the central undertaking and it shall be governed by the Industrial Disputes Act. The high court accepted the argument. The workers appealed to the Supreme Court. It held that the high court was wrong and the state government was the appropriate authority to refer the dispute to the labour court. The judgment emphasised that the central government came in only if the industry is carried on "by or under the authority of the central government". This is question of fact to be decided in individual cases.
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