Declaration of Essential Services by Government and suppression of material facts criticized by Gujarat High Court

According to the case details, on the day the workers’ strike commenced i.e. 16.12.2013, the Government of Gujarat came out with a notification overnight declaring the company’s services as essential services for 6 months and the strike as illegal. After 3 days i.e. 19.12.2013, the Government issued another notification referring the case to Industrial Tribunal in Surat for adjudication. The dispute involved the workers at Larsen and Toubro’s Hazira Unit demanding the wage scales paid by the Company to its workers in Powai.

These Notifications were challenged before the Hon’ble Gujarat High Court under Special Civil Application No. 18610 of 2013 by the Petitioners, Larsen and Toubro Kamdar Union, Hazira. The Notification dated 16.12.2013 was issued by the Government in exercise of its powers under Section 2(n) (vi) of the Industrial Disputes Act, 1947 and the subsequent Notification dated 19.12.2013 issued by the State Government was in exercise of its powers under Section 10(1) (d) of the Act. By this Notification itself, the Government, in exercise of its powers under Section 10 (3) of the Act, had prohibited the workers of the Respondent Company from continuing the strike which they had started on 16.12.2013.

The workers contended that the Government has taken the Management’s side by issuing the said Notifications, by the effect of which, the bargaining power of the workers as against the Management had gone down drastically and that the action of the Government, taken under the pretext of industrial peace, was not bona fide. The workers further contended that under the pretext of the strike being illegal, the Management had already began taking high-handed actions which was worsening the existing situation between the workers and the Management and therefore, the impugned Notifications had to be stayed.

The State Government and the Respondent Company contended that since both Notifications were issued by the Government, presumption was always in favour of them being bona fide. Further, it was contended that the Petitioners should not be granted interim relief as the same would ultimately result in allowing their Petition. Reliance was placed on a number of precedents to support their stand.

The Hon’ble High Court, after hearing both parties observed that granting interim relief to the workers was important in view of the circumstances of the case, as not granting the same would cause irreparable loss to the workers. Further, the Court recorded that the Notification dated 16.12.2013 was cancelled/withdrawn by the State Government ab initio by Notification dated 19.03.2014. The Hon’ble Court inter alia observed that there was concealment of material facts by the Government; the Respondent had already requested the Government once through representation dated 21.06.2013 to declare the services of the workmen as ‘essential services’, however, the Government had rejected the same, this fact was neither pointed out by the Respondent Company nor the Government. While deciding the question of legality of Notification dated 19.12.2013, the Court found that there was a huge gap between the object and reasons of the Government for having issued the same and also that the issuance of the Notifications suffered from a lack of bona fide. The Court found that the Government had indeed thrown its weight in favour of the Management in the name of Industrial peace to ‘appease’ it. The Court, after perusal of all documents presented, observed that, the chronology of events showed that the reference made by the Government for adjudication of the dispute was less for the promotion of industrial peace and more for fulfillment of condition precedent of exercise of powers under Section 10(3) of the Act and therefore allowing Notification dated 19.12.2013 would result in miscarriage of justice.

Therefore, finally the Court held that during pendency of the petition, the further implementation, operation and effect of the impugned Notification dated 19.12.2013 shall remain stayed.

This move by the Hon’ble Gujarat High Court is significant as it criticizes the suppression of material facts from the Court and the declaration of a Company’s services as essential services without bona fide reasons for doing so.

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