Labour Court Jurisdiction in Employee Termination: Nandram vs. M/S Garware Polyster Ltd.

The case of NANDRAM vs. M/S GARWARE POLYSTER LTD. revolves around the jurisdiction of Labour Courts in employment termination disputes. The Supreme Court addressed whether the Labour Court at Aurangabad had territorial jurisdiction to entertain the complaint of the appellant, who was terminated after the closure of the respondent’s Pondicherry establishment.

Background of the Case

The appellant was initially employed by the respondent company as a Boiler Attendant in 1983 in Aurangabad. Over the years, he was promoted to Junior Supervisor in 1987 and later to Senior Supervisor in 1995, continuing his service in Aurangabad. However, he was subsequently transferred to Silvasa in Gujarat in 2000 and then to Pondicherry in 2001. Eventually, his employment was terminated on April 15, 2005, due to the closure of the Pondicherry establishment.

Legal Proceedings

Following his termination, the appellant challenged the decision before the Labour Court in Aurangabad by filing Complaint ULP No. 56 of 2005. The Labour Court ruled in favor of the appellant, asserting its jurisdiction over the case.

The respondent company, however, challenged this decision before the Industrial Court at Aurangabad in a revision petition. The Industrial Court overturned the Labour Court’s decision, ruling that the Labour Court in Aurangabad lacked territorial jurisdiction as the termination took place in Pondicherry.

Aggrieved, the appellant approached the Bombay High Court through Writ Petition No. 4968 of 2009. The High Court upheld the decision of the Industrial Court, concluding that the situs of employment being in Pondicherry meant that the Labour Court at Aurangabad had no jurisdiction.

Arguments of the Parties

Appellant’s Arguments:

• The appellant contended that although he was physically employed at Pondicherry at the time of termination, the decision to close the unit and terminate his employment was taken at Aurangabad, where the company’s registered office was located.
• He argued that since part of the cause of action arose in Aurangabad, the Labour Court there had jurisdiction to hear his complaint.

Respondent’s Arguments:

• The respondent company maintained that the termination took place in Pondicherry, and therefore, only the Labour Court in Pondicherry had jurisdiction over the dispute.
• The company also contended that the appellant’s complaint was not maintainable in Aurangabad as he was no longer working there at the time of termination.

Supreme Court’s Judgment

The Supreme Court ruled in favor of the appellant, holding that the Labour Court at Aurangabad indeed had jurisdiction over the dispute. The court reasoned:

“The decision to terminate the appellant having been taken at Aurangabad necessarily means that part of the cause of action has arisen at Aurangabad. In the facts of this case, both the Labour Courts have the jurisdiction to deal with the matter.”

The Supreme Court, therefore, set aside the orders of the High Court and the Industrial Court at Aurangabad, restoring the Labour Court’s order.

Directions to the Labour Court

The Supreme Court directed the Labour Court at Aurangabad to consider the complaint on its merits and pass final orders within six months. The parties were instructed to appear before the Labour Court on March 8, 2016.

Conclusion

This judgment clarified an important aspect of territorial jurisdiction in employment disputes. It established that a Labour Court could entertain a complaint even if the employee was terminated at a different location, provided that part of the cause of action arose within its jurisdiction. This ruling provides relief to employees who are transferred and terminated in different locations, ensuring they can seek legal recourse in courts that are accessible to them.

The appeal was allowed to this extent, with no order as to costs.

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Download Judgment: Nandram vs MS Garware Polyster Supreme Court of India Judgment Dated 16-02-2016-1741852691874.pdf