1. Court’s decision
The Bombay High Court has held that a small establishment facing industrial adjudication is entitled to seek legal representation under Section 36(4) of the Industrial Disputes Act when it demonstrates a genuine inability to conduct trial proceedings, particularly cross-examination, without assistance. The Court quashed the Labour Court’s refusal to grant such permission, holding that the denial was mechanical, unsupported by reasons, and contrary to natural justice. Reaffirming the jurisprudence that Section 36(4) requires both the opposing party’s consent and the Labour Court’s leave, the Court said that leave cannot be rendered illusory by arbitrary refusal of consent. Respondent workman’s non-appearance did not dilute the Court’s responsibility to ensure fairness. The Civil Revision Application was accordingly allowed.
2. Facts
The applicant is a small Mumbai laundry employing four to five workers. Respondent No.1 worked there briefly, left the job abruptly, and later filed proceedings before the Labour Commissioner seeking reinstatement and back wages. The applicant appeared through an advocate at that initial stage, but the matter was dismissed due to the worker’s non-prosecution. Subsequently, the worker initiated an industrial reference before the 7th Labour Court, Bandra, and filed an application under Section 36 of the Industrial Disputes Act, seeking to restrain the applicant from being represented by an advocate.
The employer filed its written statement drafted by counsel but submitted through a representative due to the Section 36 objection. When the worker led evidence and the stage of cross-examination arose, the applicant sought permission to be represented by an advocate on the ground that the proprietor lacked legal training and could not conduct cross-examination. On 1 December 2023, the Labour Court rejected this request without examining the underlying hardship. This rejection led to the present revision application. The High Court appointed an amicus from the Legal Aid Department to assist on the larger legal issue.
3. Issues
The core issue was whether, in a labour reference, a small employer may be represented by a legal practitioner under Section 36(4) of the Industrial Disputes Act, 1947. This raised sub-questions including:
• Whether consent of the opposite party can be withheld mechanically.
• Whether the Labour Court is required to record reasons for refusing leave.
• Whether denying representation causes prejudice and violates natural justice, especially where the employer is ill-equipped to conduct cross-examination.
• Whether existing Supreme Court and High Court precedents mandate a purposive and fairness-oriented interpretation of Section 36(4).
4. Petitioner’s arguments
The applicant argued that being a tiny laundry with no legal expertise, the proprietor could not conduct cross-examination or handle industrial reference proceedings. The worker’s union-backed prosecution placed the employer at an inherent disadvantage. The applicant emphasized that Section 36(4) provides for legal representation where leave is granted and consent is furnished, and that such consent should not be arbitrarily withheld. The Labour Court’s rejection, the applicant contended, was mechanical, unreasonable, and contrary to binding precedents that require a contextual evaluation of hardship. The petitioner argued that the denial of representation effectively deprived it of a meaningful chance to defend itself.
5. Respondent’s arguments
The worker did not appear in the High Court despite service, but his position before the Labour Court was reflected in his Section 36 application seeking to restrain the employer from engaging counsel. His stand was that the Industrial Disputes Act discourages adversarial representation by advocates to preserve equality between employer and workman. The objection relied on the statutory embargo under Section 36(3) and emphasised that representation by legal practitioners is an exception and not the norm. The worker did not, however, furnish any reasons showing how permitting counsel would prejudice him, nor did he contest the applicant’s plea of hardship.
6. Analysis of the law
Section 36 sets out a carefully structured regime for representation in industrial adjudication. While Section 36(3) bars legal practitioners in conciliation and court proceedings, Section 36(4) permits advocates before Labour Courts and Tribunals when two conditions are simultaneously satisfied: (1) consent of the opposite party; (2) leave of the adjudicating authority. The Supreme Court in Paradip Port Trust held that the word “and” in Section 36(4) cannot be read as “or”, making both conditions mandatory. Yet, courts must ensure that these conditions do not become instruments of procedural imbalance.
The Court analysed the underlying purpose of Section 36: ensuring parity between employer and workman, discouraging procedural juggernauts, and enabling quick and fair industrial justice. However, the judgment also acknowledges that modern industrial litigation often involves complexities requiring skilled assistance, and that denial of representation can itself undermine equality and fairness. The Court examined the evolution of Section 36 jurisprudence, the economic realities of small employers, and the constitutional obligation to ensure a fair hearing.
7. Precedent analysis
The Court relied on several precedents:
Paradip Port Trust v. Their Workmen (Supreme Court)
Held that both consent and leave are mandatory. However, it also recognised that hardship may be addressed legislatively. Crucially, the judgment emphasized the equalising purpose of Section 36 and the need for balanced interpretation.
Thyssen Krupp Industries (India) Pvt. Ltd. (Supreme Court, 2023)
Reaffirmed Paradip Port Trust, emphasising that Section 36 is a special law whose objective is to maintain fairness in labour adjudication.
Yeshwant Harichandra Gharat (Bombay High Court)
This decision (paras 25, 34, 40, 41) stressed that once one party has legally trained support, the other cannot be refused similar assistance. The judgment contains detailed reasoning on why fairness and natural justice require a contextual approach to representation.
T.K. Varghese v. Nichimen Corporation (Bombay High Court)
Held that consent cannot be withheld without justification and that the Labour Court’s leave may override mala fide refusal of consent. This case played a pivotal role in establishing that Section 36(4) must be interpreted to prevent abuse of the consent requirement.
By synthesizing these judgments, the Court concluded that Section 36(4) must be applied in a non-mechanical, context-sensitive, and justice-oriented manner.
8. Court’s reasoning
The Court held that the Labour Court’s refusal was an abdication of jurisdiction. The key findings were:
• The applicant is a very small establishment with no functional capability to conduct cross-examination.
• Denial of representation in such circumstances creates inequality, not parity.
• The Labour Court merely accepted the worker’s objection without examining whether consent was reasonably withheld.
• The Labour Court’s order lacked any assessment of prejudice or fairness.
• Natural justice considerations require allowing legal representation when a party is at risk of substantial procedural disadvantage.
• The object of the Industrial Disputes Act is not to handicap either party but to ensure equal footing.
The Court adopted the purposive interpretation advanced by the appointed amicus, holding that “leave of the Court” must be construed liberally to avoid miscarriage of justice. The refusal of consent by the opposite party is not decisive when it is arbitrary or unsupported by reasons. The Labour Court must balance statutory purpose with fairness; failure to do so vitiates the order.
9. Conclusion
The High Court quashed the Labour Court’s order dated 1 December 2023 in Reference IDA No.158-D of 2021. The applicant was granted permission to be represented by an advocate for all trial purposes, including cross-examination, evidence, and submissions. The Labour Court was directed to proceed with the reference on merits.
The Court also formally acknowledged and appreciated the assistance rendered by the amicus appointed through the Legal Aid Department. The Civil Revision Application was accordingly allowed and disposed of.
10. Implications
This judgment significantly shapes the applicability of Section 36(4) in Maharashtra. Key implications include:
• Labour Courts must record reasons before rejecting requests for legal representation.
• Consent under Section 36(4) cannot be withheld arbitrarily; mala fide refusal may be overridden.
• Small employers lacking legal capacity are entitled to seek advocate representation, to maintain fairness and comply with Articles 14 and 21.
• The decision aligns industrial adjudication with modern realities where legal complexities necessitate expert representation.
• Courts may increasingly adopt a liberal approach to Section 36(4), preventing procedural imbalance and ensuring a level playing field.
The judgment thus harmonises statutory text, precedent, and natural justice to advance equitable labour adjudication.
CASE LAW REFERENCES
1. Paradip Port Trust v. Their Workmen (1977)
Explained the mandatory dual requirement of consent and leave under Section 36(4). Applied here to emphasise that leave must be an active judicial safeguard.
2. Thyssen Krupp Industries India Pvt. Ltd. (2023)
Confirmed that Section 36 is a special law governing representation in industrial disputes, and fairness considerations must guide adjudication.
3. Yeshwant Harichandra Gharat (Bombay HC)
Clarified why fairness requires granting legal representation when denial creates procedural inequality. Extensively quoted in the present judgment.
4. T.K. Varghese v. Nichimen Corporation (Bombay HC)
Held that consent cannot be withheld without justification and that labour courts may override such refusal to prevent injustice.
FAQs
1. Can a small employer take assistance of a lawyer in Labour Court proceedings?
Yes. The Bombay High Court has held that small establishments may be permitted to engage lawyers under Section 36(4) when they demonstrate genuine hardship or inability to conduct proceedings without legal help.
2. Is consent of the opposite party always required under Section 36(4)?
Consent is required, but it cannot be withheld arbitrarily. If refusal is mala fide or unfair, the Labour Court may grant leave overriding the objection to uphold natural justice.
3. Why was the Labour Court’s refusal quashed in this case?
Because the refusal was mechanical, lacked reasoning, ignored the employer’s hardships, and violated principles of fairness. The High Court held that such denial impairs the right to defend effectively.