An Industrial Tribunal lacks jurisdiction over managerial employees employed outside its territorial jurisdiction.

The respondent employee was appointed by L&T Gulf Private Limited as a Manager in its piping department at Faridabad on 16 June 2008, and his service was confirmed on 16 December 2008.

The employer alleged that his performance remained unsatisfactory despite counselling and opportunities for improvement.

The employee proceeded on leave from 13 September 2013, allegedly without proper authorisation, and, following correspondence and a show-cause notice, the employer treated his conduct as voluntary abandonment of service with effect from that date.

The employee initially approached the labour authorities in Haryana and subsequently raised a dispute before the West Bengal labour authorities. A reference was thereafter made to the Seventh Industrial Tribunal, West Bengal under Section 2A(2) of the Industrial Disputes Act, 1947.

The Tribunal proceeded ex parte after treating a notice bearing the endorsement “refused” as valid service and declared the termination illegal, directing reinstatement with full back wages and consequential benefits.

Larsen and Toubro Limited challenged the award, contending that the original employer, L&T Gulf Private Limited, was a separate juristic entity, that the Tribunal lacked territorial jurisdiction, that the employee was not a “workman”, and that the award had been passed without effective notice.

During the writ proceedings, L&T Gulf Private Limited was deleted and Larsen and Toubro Limited was substituted following amalgamation.

1. Whether the respondent employee was a “workman” entitled to invoke the machinery of the Industrial Disputes Act, 1947, notwithstanding his appointment as a Manager and the managerial nature of his duties?

2. Whether the Seventh Industrial Tribunal, West Bengal had territorial jurisdiction to adjudicate the dispute when the employee was appointed, posted and employed at Faridabad?

3. Whether the ex parte award was sustainable when the employer asserted that notice had not been served at its correct address and that the original employer was a separate juristic entity?

The Court applied Section 2A(2) of the Industrial Disputes Act, 1947, which permits an individual workman to directly approach the Labour Court or Industrial Tribunal in disputes concerning discharge, dismissal, retrenchment or termination, subject to the employee satisfying the statutory definition of “workman” under Section 2(s).

The Court relied on the principle that an employee performing managerial or supervisory functions, as opposed to work of a nature covered by Section 2(s), is not a workman.

On territorial jurisdiction, the Court applied the situs-of-employment and nexus principles stated in Paritosh Kumar Pal v. State of Bihar, under which the place where the employee worked and where termination operated is ordinarily the material forum for an industrial dispute.

The Court also relied on Deb Kumar Roy v. The Learned Second Labour Court, Kolkata, concerning the territorial competence of labour adjudicatory authorities.

The principle that a subsidiary is a separate legal entity from its holding company was noted with reference to Parry’s (Cal.) Employees’ Union v. Judge, Second Industrial Tribunal.

Although the respondent relied on the restricted scope of certiorari under Syed Yakoob v. K.S. Radhakrishnan and Indian Overseas Bank v. I.O.B. Staff Canteen Workers’ Union, the Court retained jurisdiction to interfere where the proceedings were not maintainable for want of jurisdiction or statutory standing.

The Court examined the appointment letter, which designated the respondent as a Manager and provided substantial allowances and managerial-grade benefits, and found that these terms prima facie indicated that he was not a workman.

The Court also relied on the respondent’s own employment profile, which described him as a “Lead Engineer/Designer” performing design, engineering, guiding and reviewing functions, reinforcing the conclusion that his duties were not within Section 2(s).

Independently, the Court found that the respondent had admittedly worked at Faridabad and had never been transferred to Kolkata.

Since the dispute concerned termination of employment, the situs of employment had the direct and substantial nexus with the dispute; the fact that the employee approached labour authorities in Haryana further supported that conclusion.

The Tribunal had not considered territorial jurisdiction because the employer did not appear, and the ex parte proceedings therefore could not cure the fundamental absence of jurisdiction.

In view of these jurisdictional and maintainability defects, the Court considered it unnecessary to sustain the award’s findings on the legality of termination or reinstatement.

Consequently, the ex parte award dated 7 January 2016, published on 18 March 2016, declaring the termination illegal and directing reinstatement with full back wages and consequential benefits, was quashed and set aside.

The writ petition, WPA 9653 of 2016, was allowed, and all connected applications were disposed of.