Air India Employees' Accommodation: Bombay HC Directs Centre To Take 'Fresh Decision' On Reference Of Dispute To Industrial Tribunal

The court held that the decision of the Central Government not to refer a dispute between Air India employees and Air India Ltd. regarding vacation of their allotted residences to the Tribunal was patently illegal and without application of mind.

"The very fact that the Central Government has reached only a prima facie satisfaction, on facts and circumstances, leaves room for doubt as to whether there are certain other material and relevant facts which the Central Government had left out of consideration for which it restrained itself from expressing a decision, final and conclusive", the court stated.

Chief Justice Dipankar Datta and Justice Madhav J. Jamdar allowed a batch of writ petitions filed by Air India employee unions challenging Centre's decision to decline reference of dispute over the issue of vacation of the residential quarters and deduction of Productivity Linked Incentive amounts to the Tribunal.

Petitioners are unions of Air India employees. Air India had ordered its employees to vacate their allotted residences in view of its privatisation. The Bombay High Court in a judgment dated 25 August 2022 allowed them to retain their premises till 24 September 2022 in view of Ganesh Chaturthi festival. It directed the Centre to decide whether reference under the Industrial Disputes Act, 1947 arises in this case.

The Central Government on 15 September, 2022 decided not to refer the dispute to the tribunal, terming the demands of the Joint Action Committee of Air India Unions to be extraneous. The petitioners challenged this before the High Court.

Senior advocate Sanjay Singhvi, senior advocate Mihir Desai and advocate Ashok Shetty for the petitioners submitted that the dispute is about employment terms which falls under section 2(k) of the Act. The decision to decline reference violates section 10(1) read with section 12(5) of the Act.

Additional Solicitor General Anil Singh for the Union of India, senior advocate Kevic Setalwad for Air India Assets Holding Limited, and advocate Vijay Purohit for Air India Ltd. submitted that the decision declining reference is justified considering the facts and circumstances.

The court said that there has been clear non-compliance with statutory provisions and the judicial order and non-application of mind to the facts.

Section 12(5) of the Act mandates that if a reference is declined the government has to record the reasons and communicate the same to the parties.

The court noted that the government held the demands of the joint committee to be 'extraneous' and declined to refer the dispute to the tribunal without giving the reasoning behind this conclusion.

Further, the court noted that the Ministry of Labour prima facie did not consider this dispute fit for reference to the tribunal.

The court said that a prima facie conclusion of the Ministry that industrial dispute exists is sufficient for reference as the tribunal examines the facts and circumstances in detail and can either affirm or reject the prima facie conclusion. However, a prima facie conclusion is not sufficient for declining a reference to the tribunal.

The court said that the government has to arrive at a final conclusion, and not a prima facie conclusion that no industrial dispute exists or is apprehended, or that there aren't sufficient reasons to refer the matter to the tribunal. This is because there is no opportunity for the tribunal to finally decide whether industrial dispute exists or not if no reference is made.

The court also observed that the central government failed to consider dispute raised by the Joint Committee regarding deduction of amount of Productivity Linked Incentive by the management.

Court said that the decision of the central government not to refer the dispute to the tribunal is patently illegal as there has been no application of mind to the facts and circumstances to arrive at this decision. The court remitted the matter back to the central government for refresh consideration by 12th October, 2022.

"Beyond 28th October 2022, action may be taken in accordance with law against those employees who fail to vacate the accommodation provided to them," it added.

Case no. – Writ Petition (L) No. 30047 of 2022 and connected cases.

Case title – All India Service Engineers Association v. Union of India & Ors.

Citation: 2022 LiveLaw (Bom) 362