Calcutta High Court quashes WB decision to regulate private industry employments

The Calcutta High Court recently quashed West Bengal government’s decision to form Committees for regulation and supervision of the recruitment of contractual and permanent employees in industrial establishments..Justice Ravi Krishan Kapur found that the State was trying to arbitrarily regulate employment in violation of the legislative mandate under the Industrial Disputes Act (ID Act).The Court called the decision unnecessary, unreasonable, excessive and without any rational basis..In the garb of getting a foothold, the State may ultimately strangulate industry and this is an unreasonable restriction on the guarantee enshrined under Article 19(1(g) of the Constitution, the Court opined.“The long term effect of such measures may end up causing incalculable damage to industry and commerce. The real danger lies in the uncanalised, unguided and unfettered discretion which is sought to be vested with the State insofar as employee recruitment is concerned and the far reaching ramifications of the impugned notification which makes it unconstitutional and violative of Articles 14 and 19(1)(g),” it added..It was in 2022 that the State Labour Department had issued a notification for various industrial areas to mandate that recruitments in industrial/commercial establishments take place only with the knowledge of the committees headed by District Magistrates.Though aimed at streamlining the process of recruitment, the notification also stated the following:"It has been observed that, engagement of employees is being made in different industrial establishments without apprising the State Government and several anomalies have been reported in this regard. Moreover, Charter of Demands are being raised from time to time by different trade unions and sometimes settlements are arrived at, keeping the State Government in the dark".The notification was challenged by a contract workers’ union which argued that the decision was an indirect attempt to bypass an existing statutory mechanism..After examining the provisions of the ID Act, the Court noted that the law provides for appointment of conciliation officers to settle disputes at a bilateral level.“The Act expressly encourages bilateral settlement instead of escalating every situation into a tripartite level. The duty to conciliate and the powers of the Conciliation Officers under the Act cannot be encroached upon through any extraneous Committee at the instance of the State. The conciliatory machinery contemplated under the Act cannot be circumvented in such a circuitous manner,” it said..The Court further opined that the involvement of the State officials for settling every industrial dispute is unnecessary and also a waste of administrative machinery and resources. It concluded that the State was aiming at indirect control of employment in private trade and industry. .Significantly, it found that there was no representation of employees or workmen in the Committee under the notification“The principal object of the notification is that no recruitment can take place without the knowledge of the Committee and this per se is excessive and disproportionate. The Act enumerates the supervision and role of the State Government in employee welfare,” the Court said..The Court also ruled that the notification under challenge was in conflict with the existing legislative field under ID Act.There is simply no source of power which can be traced to any legislation authorizing the issuance of the notification, it further said..Further, the Court said the notification was also contrary to Employment Exchange Compulsory Notification of Vacancies Act..In conclusion, the Court observed that object of Article 19(1)(g) is to ensure that the freedom to carry on a profession should be enjoyed by the citizen to the fullest possible extent without “shackles” of avoidable cobwebs of Rules and Regulations. “The right of industry to grant employment or seek employment cannot be regulated in such a circuitous manner as contemplated by the impugned notification. The executive cannot arbitrarily interfere with the rights of industry,” it added.Thus, the Court quashed the notification. All the steps taken pursuant to and in furtherance of the notification are declared to be null and void, it ordered..Advocates Soumya Majumder and Sanjukta Dutta represented the petitioner.Advocates Sirsanya Bandyopadhyay and Tapati Samanta represented the State..[Read Judgment]