REFERENCE UNDER ID ACT

It is essential to state in brief that the object of the entire labour legislation is to promote industrial
peace and harmony which would further the greater industrial development of the nation at large.

Section 10(1) of the Industrial Disputes Act provides for the provisions related to the reference by
the Appropriate Government of its own Motion, also known as the Discretionary Reference or
Reference of disputes to Boards, Court of Inquiry, Labor Court or Tribunals. The section empowers
the government to refer the unresolved issue to any competent authority. The priority is to resolve
the issue by negotiation or conciliation etc., but if these efforts fail then the government is
empowered to refer the issue to the following authorities
(I) Board of Conciliation for promoting a settlement the matter
(II) Court of inquiry for inquiry into
(III) Labor Court for Adjudication
(IV) Industrial Tribunal for Adjudication
(V)NNational Tribunal for Adjudication

The discretion of the government to refer such a dispute is absolute and discretionary, but there are
certain other directions given under the law, which is in the form of the provisos. There are three
provisos to section 10(1),
1. Firstly, when the dispute is of any matter as specified in the third schedule and affects less
than 100 workmen, it shall be referred to the Labor Court.
2. Secondly, where the dispute is related to public utility service, and notice of strike or lockout
as required by section 22 has been given. In that case, the appropriate government shall make
a reference notwithstanding that any other proceedings under this Act in respect of the dispute
may have commenced.
3. Thirdly, the dispute in relation to the Central Government then; it shall be competent for that
government to refer the dispute to a Labor Court/Tribunal constituted by the State
Government.

This becomes essential in light of the facts that there have been conflicting judicial decisions
dealing with the government’s power of order of reference under section 10(1) and the related
aspects of the same.

RELATED JUDGMENTS
The confusion surrounding section 10(1) of the IDA was first noticed by the Hon’ble SC in the case
of United Commercial Bank Ltd. v UP Bank Employee Union [2] , there the matter concerned the
construction of unamended section 10(1), which opened with the word “if any industrial dispute
exists or is apprehended.” Justice C.Iyer, posed the question that ‘whose apprehension is referred to
in Act; the government or the parties or anyone else’s? The court here did not decide these questions
since did not fall here for decision. But the court stated that these are interesting questions which
needs to be resolved.

# In the case of State of Madras v. C.P. Sarathy and Another, AIR 1953 SC 52,
There was some dispute between the cinema hall owners and the employees association, the labour
commissioner who was appointed as the conciliation officer prescribed certain minimum terms for
the settlement of dispute were agreed to by the concerned respondents and five other cinema
owners. However, since majority of cinema owners had refused to agree to the demand the matter

was then referred to industrial tribunal. The tribunal pronounced the award and also held that the
award would be binding on all the parties. This award was confirmed by the government. However
the respondents had been arguing since the very beginning that there was no dispute in their
establishment.

OBSERVATIONS:
Dealing with the nature of order of reference, court put forth the following points:
Requirement for Reference
1. The Government will not be justified in making a reference under section 10(1) without
satisfying itself on the facts and circumstances brought to its notice that an industrial dispute
exists or is apprehended in relation to an establishment or a definite group of establishments
engaged in a particular industry and,
2. It is also desirable that the Government should, wherever possible, indicate the nature of the
dispute in the order of reference.

Reference is in Administrative Act

⁃ In making a reference under section 10(1) the Government is doing an administrative act and
the fact that is has to form an opinion as to the factual existence of an industrial dispute as a
preliminary step to the discharge of its function does not make it any the less administrative
in character.
⁃ The Court cannot, therefore, canvass the order of reference closely to see if there was any
material before the Government to support its conclusion, as if it was a judicial or quasi-
judicial determination.

Only consideration: Whether it is an Industrial Dispute

⁃ No doubt, it will be open to a party seeking to impugn the resulting award to show that what
was referred by the Government was not an industrial dispute within the meaning of the Act,
and that, therefore, the Tribunal had no jurisdiction to make the award.
⁃ But, if the dispute was an industrial dispute as defined in the Act, its factual existence and the
expediency of making a reference in the circumstances of a particular case are matters
entirely for the Government to decide upon, and it will not be competent for the Court to hold
the reference bad and quash the proceedings for want of jurisdiction merely because there
was, in its opinion, no material before the Government on which it could have come to an
affirmative conclusion on those matters.

HELD: The Court held that even though it is not legally necessary to indicate the nature of the
dispute, it is desirable to indicate so.

# State of Bombay v. K.P. Krishnan, AIR 1960 SC 1223,

(1)On the basis of what material can the government base its decision as to whether to send the
dispute for reference or not ?
2) Will the cases falling under section 12(5) can be referenced only under section 12(5)
independently from section 10(1) ?
3) Is the government bound to base its decision only on the report made by conciliation officer
under section 12(4) or has to verify all the relevant facts ?

LABOUROBSERVATIONS:
The court held that ‘reference cannot be under section 12(5) independently of section 10(1). On the

point on which the government is to base its decision, the court stated that the report given by the
conciliation officer would be very relevant for making the reference. But that does not suggest that
report would be only relevant material. It would be open for the government to consider other
relevant material on which government can base its conclusion. In dealing with the court’s power to
issue writs in cases where the order in contrary to the provisions of section 10(1)(a) to (d) in the
matter of selecting the appropriate authority. It is also common ground that in refusing reference
under section 12(5) if the government refuse to record the reasons the writ of mandamus can be
issued. However, when the court is hearing a writ petition for mandamus it is not sitting for appeal
over the decision of the government; nevertheless if the court is satisfied that the reason given by
the government for refusing to make reference are extraneous and not germane then the court can
issue, and would be justified in issuing a writ of mandamus even in respect of such an
administrative order.

However there are certain grounds on which the government can refuse to make the order of
reference are still in question.

TELCO Convoy Drivers Mazdoor Sangh v. State of Bihar, AIR 1989 the employees, it should
mak SC 1565, In this case, TELCO drivers Sangh were part of TELCO limited functions and does
not exceed and they demanded permanent employment as applicable to the other beyond the limit
for which i employees in TELCO. In order to implement the same, they approached the demands of
the worker on the ground that the driver will not come under the definition of employees and no
master-servant relationship exists. Aggrieved by this, the drivers Sangh filed a writ of mandamus
asking the State to refer the same to the Industrial Tribunal. Ranchi bench of Patna High Court
directed the petitioners to place the same before the appropriate government. Later, it was requested
by the Sangh before the government, and this time, the government also refused to refer the same
on the ground mentioned earlier by the Labour Commissioner. Petitioners filed the case before the
Supreme Court and the Court, in this case, directed the State Government to refer the same as per
section 10(1) of the Act and stated that when an issue comes before the State Government, it should
not act judicially or quasi-judicially, which falls away from its jurisdiction. Hence, the State should
form the opinion to refer only within its administrative limits.

And, in the case of Sharad Kumar v. Govt. of NCT of Delhi, AIR 2002 SC 1724, Sharad Kumar
filed an appeal against the order by Delhi High Court, which refused to interfere with the
governmental order, which in a way refused the referral of a dispute to the Industrial Tribunal on the
ground that the appellant, in this case, was not a workman under the definition under section 2 of ID
Act, 1947. Aggrieved by the order, the appellant filed this case. Court looked into the limits of the
Delhi Government to exercise its powers or administrative actions within the purview of section
10(1) of the Act. Accordingly, the Court directed the government to refer whether the appellant is a
workman or not to the Industrial adjudication under section 10(1) of the Act, 1947.

ADD DELHI COTTON MILLS CASE

CONCLUSION
From the above discussion, the question arises the government is justified in refusing to make a
reference to the Industrial Tribunal or not?
In order to look into the same, it is important to know the essence of what section 10(1) states. It
enables the government to refer a dispute if it finds or apprehends it to be resolved through the
Industrial Adjudication or Court or any means provided under section 10(1) of the Act, 1947.

We can say that the government is justified for the act of refusal only if it finds that
misappropriation or the grounds of demand that the employees make are not reasonable
enough to refer the same to the Industrial Tribunal.
But, while looking into the reasonability of the concerns raised by the employees, it should make
sure that it acts within its administrative functions and does not exceed its role as an administrator.
In case it goes beyond the limit for which it has no jurisdiction, the refusal made on such grounds
which are identified through such excessive jurisdictions would not be justifiable, and hence the
Court should reconsider the same and order the government to act as per section 10(1) of the Act.

Also, as seen in the above cases, it is clear that the order of refusal made by the Appropriate
Government is revocable or can be withdrawn through the order of the Judiciary. Hence it is not
absolute or rigid.