High Court Holds that the “Status of the Employee” is not the Sole Determinant of Jurisdiction under the MRTU Act

In this batch of matters, the appellant and other petitioners had approached the Industrial and Labour Courts alleging unfair labour practices under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. Their complaints were rejected for want of territorial jurisdiction on the basis of the Division Bench ruling in GlaxoSmithKline Pharmaceuticals Ltd., which held that the situs of the employee at the time of the alleged unfair labour practice alone determined jurisdiction. The employees had been working in various States while the decisions impugned, including orders of transfer, termination, and correspondence, emanated from the employer’s registered and administrative offices within Maharashtra.

In some cases, the complaints were summarily dismissed; in others, the Labour Courts declined jurisdiction or made conflicting determinations. The petitioners contended that such dismissals caused denial of substantive justice since the alleged acts, decisions, and communications all originated from offices within the State. They urged that the GlaxoSmithKline ratio could not survive after the Supreme Court’s later decision in Nandram v. Garware Polyester Ltd., which recognised that jurisdiction may arise where part of the cause of action accrues, even if the employee was posted elsewhere.

Core Issue: Whether Labour and Industrial Courts under the MRTU Act are deprived of jurisdiction solely because the employee was posted outside Maharashtra at the relevant time, and whether GlaxoSmithKline remains good law after the Supreme Court’s ruling in Nandram v. Garware Polyester Ltd..

HC Held: The Division Bench held that the earlier GlaxoSmithKline decision, which treated the employee’s situs as the exclusive determinant of territorial jurisdiction, cannot be regarded as good law in view of Nandram. It observed that the Supreme Court had laid down a broader principle of part accrual of cause of action, consistent with Section 20 of the CPC and general civil law principles. Consequently, the situs of employment is not conclusive where the acts complained of originate from the employer’s registered or administrative offices within the State.

Therefore, the Court allowed the appeal and connected writ petitions, setting aside the orders that had dismissed the complaints for want of jurisdiction. The matters were restored to the respective Labour or Industrial Courts for fresh adjudication on merits. The Court further directed that such proceedings be completed expeditiously and imposed costs of Rs. 50,000 in several matters, payable within four weeks of upload of the judgment. It clarified that merits of the disputes were left open for determination in accordance with law.

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