Bombay HC Sets Guidelines For Reviewing Proportionality Of Industrial Disciplinary Action; Bars Use Of New Evidence From Assessing Proportionality Of Punishment

Background

Aiyaz Mohammad was dismissed from Mahindra and Mahindra on May 16, 2019, after a protest he allegedly led halted production for 181 minutes, costing the company ₹2.6 crore. The protest followed a serious workplace accident on September 3, 2018. Along with three other employees, Mohammad was accused of instigating the stoppage. While his colleagues received a mere four-day suspension, Mohammad faced dismissal, which he contested as victimization.

The Labour Court ruled in Mohammad's favor, declaring his dismissal an act of unfair labour practice under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, and ordering his reinstatement with 75% back wages. Mahindra and Mahindra appealed this decision to the Industrial Court, which remanded the case for fresh trial on the proportionality of the punishment.

Arguments

Mohammad's counsel argued that his dismissal was disproportionately harsh, given that all four employees faced identical charges. He pointed out that Mohammad's unblemished service record, coupled with the fact that the company had been more lenient with the other employees involved, rendered the dismissal arbitrary and discriminatory. He relied on the precedent set in Punjab and Sindh Bank v. Raj Kumar, arguing that differential treatment violated Article 14 of the Constitution, which guarantees equality before the law.

Mahindra and Mahindra, represented by their counsel, argued that Mohammad, as the leader of the protest, played a more significant role in the disruption, justifying a harsher penalty. They cited Colour-Chem Ltd. v. A.L. Alaspurkar to argue that the doctrine of proportionality does not apply to major misconduct, asserting that Mohammad's actions constituted a serious infraction resulting in substantial financial losses for the company. The respondent further argued that under Schedule IV, Item 1(g) of the Maharashtra Act, only minor misconduct warrants scrutiny of proportionality in punishment.

Court's Reasoning

Firstly, Justice Pansare clarified that the doctrine of proportionality must be assessed based on the evidence already on record. Referring to Raghubir Singh v. General Manager, Haryana Roadways, Hissar, the court reiterated that under Section 11-A of the Industrial Disputes Act, 1947, the Labour Court has the power to review the severity of a punishment. However, the court cannot admit new evidence when assessing proportionality; it must rely exclusively on the material presented during the initial trial. The Industrial Court had erred in allowing a fresh evidentiary review, as this violates the legal framework intended to preserve the integrity of existing records.

The court emphasized that the doctrine of proportionality serves to ensure that the punishment is commensurate with the offense. While the charges against Mohammad and his co-workers were the same, the court acknowledged that Mohammad's role as the primary instigator, as claimed by the company, could justify harsher punishment. However, the disparity in the treatment of Mohammad and his colleagues raised legitimate concerns about the fairness of the company's actions. The Labour Court had originally concluded that dismissing only Mohammad while merely suspending the others constituted victimization, an opinion the High Court viewed as plausible based on the records. The court further pointed out that victimization claims require thorough examination, particularly in industrial disputes where power imbalances often exist between employer and employee.

Secondly, the court addressed the scope of the Industrial Court's remand order. Justice Pansare noted that while the Industrial Court was correct in seeking a reassessment of the proportionality of Mohammad's punishment, it had overstepped by permitting both parties to present new evidence. The Supreme Court, in Workmen v. Firestone Tyre & Rubber Co. of India (P) Ltd., had made it clear that additional evidence can only be considered when determining whether an inquiry was valid, not when assessing proportionality. Therefore, the High Court restricted the remand to a reconsideration of the punishment's proportionality, based solely on the existing evidence. Thus, the High Court remanded the case back to the Labour Court for a fresh assessment of proportionality, ensuring that no new evidence would be considered in the trial. The court stressed that Mohammad's punishment should reflect a fair balance between the severity of his misconduct and the leniency shown to his co-workers.

Decided on: October 21, 2024

Citation: 2024:BHC-NAG:11862, Aiyaz Mohammad v. Mahindra and Mahindra Ltd.

Counsel for Petitioner: Mr. S.W. Sambre

Counsel for Respondent: Mr. R.B. Puranik

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