Labour Court Possesses Jurisdiction to Adjudicate Maintainability of a Reference as a Preliminary Issue of Fact

The petitioner company dismissed respondent no. 3 (the workman) on 08.09.2021 following a domestic enquiry for alleged misconduct.

The workman did not challenge the dismissal directly but initiated conciliation proceedings, which failed.

Consequently, the State Government referred the dispute to the First Labour Court (Case No. 18 of 2023).

Before the Labour Court, the petitioner filed an application on 27.08.2024 challenging the maintainability of the Order of Reference, arguing that no prior demand was made to the management before seeking conciliation.

On 17.02.2025, the Labour Court rejected the application, holding it had "no jurisdiction" to adjudicate the maintainability of a reference made by the appropriate government.

The petitioner challenged this order via a writ petition.

1. Whether the Labour Court has the jurisdiction to adjudicate the maintainability or validity of an Order of Reference made by the appropriate government.

2. Whether a prior written demand by the workman to the management is a mandatory prerequisite for the existence of a valid "industrial dispute".

Section 10(4) of the Industrial Disputes Act, 1947, which empowers adjudicating authorities to decide incidental issues.

The principle from Sambhu Nath Goyel v. Bank of Baroda, establishing that a written demand is not a sine qua non for an industrial dispute to exist, except in public utility services.

Mecon Ltd. v. State of West Bengal, which clarifies that while making a reference is an administrative act, the Tribunal has the authority to decide preliminary facts regarding its own jurisdiction, such as the existence of an employer-employee relationship.

D.P. Maheswari v. Delhi Admin, which discourages deciding matters on preliminary issues to avoid industrial delay.

The High Court found the Labour Court's observation—that it lacked jurisdiction to decide maintainability—to be legally erroneous.

Following Mecon Ltd., the Court reasoned that a Tribunal/Court, being a creature of statute, must be able to determine if a referred matter constitutes an "industrial dispute" within the meaning of the Act to exercise its jurisdiction.

Turnining to the merits of the petitioner’s maintainability plea, the Court found the "lack of prior demand" argument unsustainable based on Sambhu Nath Goyel, noting that since the workman was already dismissed after an inquiry, a prior demand to the company would serve no purpose.

The Court observed that the petitioner admitted the employer-employee relationship, thus confirming the existence of a valid dispute.

The Court concluded the maintainability challenge was a dilatory tactic intended to prejudice the workman under beneficial legislation.

The Court itself resolved the issue of maintainability against the petitioner, finding the reference valid despite the lack of a prior written demand.

The writ petition was disposed of with a direction to the Labour Court to dispose of the case on its merits expeditiously, preferably within three months.