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Chairman and Managing Director, The Fertilizers and Chemicals Travancore Ltd. v. General Secretary, FACT Employees Association

Civil Appeal · 2019 INSC 514Decided 11 Apr 2019
Civil Appeal No. 3803 of 2019
Justice Abhay Manohar Sapre · Justice Indu Malhotra

Background

A public sector fertilizer company, facing financial difficulties, reduced the retirement age of its pre-1978 employees from 60 to 58 years on the Central Government's direction. Trade unions challenged this in writ petitions that were dismissed by the Kerala High Court and, ultimately, by the dismissal of a Special Leave Petition in the Supreme Court in 2004, settling the issue. Years later, the State Government referred essentially the same retirement-age question to the Labour Court at the unions' instance; the Labour Court held the reference barred by res judicata, but on a further writ petition, the Kerala High Court held res judicata did not apply and awarded the employees 30% back wages.

Decision Breakdown

The Supreme Court held that the principle of res judicata (including constructive res judicata under Section 11 of the Civil Procedure Code) applies to labour and industrial adjudications, as settled by its own earlier decisions. Since the retirement-age issue between the same parties had already been conclusively decided right up to the Supreme Court in the first round of litigation, the State Government had no jurisdiction to refer the identical question to the Labour Court again, and the Labour Court itself had no jurisdiction to re-decide it. The Court allowed the appeals, set aside the High Court's judgment, and restored the Labour Court's awards (which had ruled against the unions).

Lesson Learnt

Once a dispute between the same parties on the same issue has been fully and finally decided by the courts, up to the Supreme Court, it cannot be revived by raising a fresh "industrial dispute" on the identical question; the principle of res judicata applies to labour adjudication just as it does to ordinary civil litigation.

Official source (sci.gov.in)View Judgment (PDF)

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