Appropriate Government under Labor Law

India has Parliamentary form of Government which is federal in nature and having unitary features. The code define the appropriate Government..
India has Parliamentary form of Government which is federal in nature and having unitary features. The code define the appropriate Government..
Appropriate Government under Labor Law
Home » Labor Law » Industrial Dispute Act 1947 » Appropriate Government under Labor Law


Before given a light upon “Appropriate Government” we will have to note down the following:

  • India has Parliamentary form of Government which is federal in nature and having unitary features
  • The central Government and state Government Co-exist with division of powers as provided under the constitution of India.
  • The subject labour is in the concurrent list and both have power to bring legislations. However the central labour will prevail over state law if certain special provisions are not adhered
  • All the code define the appropriate Government. Under labour law these are :-
    • The Code on Social Security 2020
    • Occupational Safety, Health and Working Conditions Code 2020
    • Industrial Relation Code 2020
    • The wage code 2019
  • Certain common services and businesses which operate in more than one states are in the purview of central Government

Significance of Definition of Appropriate Government

  • The code contains abstract and skeleton provisions of law and needs a detailed procedure and machinery to implement the provisions of law
  • The role of appropriate government is to frame the rules and procedure necessary for the enforcing the law in their respective jurisdiction
  • The definition is important to decide which government and what matters has the jurisdiction and power to carry out objects of the codes
  • Who has to issue licence or Registrations, bring welfare or social security schemes ?
  • Who has to monitor the implementation of the provisions?
  • Who has to establish tribunals and courts or administrative machinery to hear grievances, claims , disputes and provide relief.

Definition of Appropriate Government as per the Industrial Dispute Act 1947

Appropriate Government has been defined in Section 2a of the act in which certain institutions and activities has been mentioned for which the appropriate government is Central Government in relation to any industrial dispute concerning anu industry carried on:

  1. By or under the authority of central Government
  2. Amendments in 2010 by in which two sub clause were added as :
  3. any company in which not less than fifty-one percent of the paid-up share capital is held by the Central Government appropriate authority will be central Government
  4. in relation to any other industrial dispute, including the State public sector undertaking, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government;
  5. Under Occupational Safety, Health and Working Conditions Code 2020- Appropriate authority will be central Government except :
    1. A factory ,motor transport undertaking , plantation , newspaper establishment relating to beedi and cigar

Case Law :

Cotton Corporation of India Ltd v GC Odusmath (1999) the Karnataka High Court held that merely because the government of India was holding a majority of the shares in the Cotton Corporation of India, and was exercising control over corporation, it could not be said that the Central Government was the appropriate government within the meaning of s 2(a)(i). On this view of the matter, the court held that the state government, within whose territorial jurisdiction the dispute arose, would be the appropriate government.

Bharat Glass Works Private Ltd v State of West Bengal (1958) In this casethe question, before Calcutta High Court was whether an undertaking, the management and control of which was taken over by the Central Government, could be said to be an industry ‘carried on by or under the authority of the Central Government.’ Subsequent to the said takeover, the State of West Bengal referred an industrial dispute between the company and its workmen, to an industrial tribunal, for adjudication. The order of reference was challenged before the Calcutta High Court on the ground that an industry which is ‘controlled’ in the manner laid down under that Act, must be held to be ‘carried on under the authority of the Central Government’. A single judge of the High Court negatived the contention, holding that a business which is carried on by or under the authority of the Central Government must be a Central Government business. In other words, an industry, to be ‘carried on by or under the authority of the Central Government’, must be an industry ‘belonging to the Central Government, that is to say, its own undertaking’.

  1. By a railway Company

Any Industry Carried on by a Railway Company With respect to a railway company, the ‘appropriate government’ is the Central Government.

 But a business carried on by a private limited company, though under the licence and control of the East India Railway Administration, is not an industry carried on by a railway company.

JR Jugele, Railway Contractor v Sitabaiatamaram 1990 – However, the Central Government and not the state government, will be the appropriate government for making the reference of a dispute, for adjudication, on the matter of a termination of the service of a coolie working under a railway contractor.

Any controlled industry as may be specified in this behalf by the Central Government In order that the Central Government may be the ‘appropriate government’ in relation to a controlled industry, two requirements must be satisfied, viz,

  1. The industry should be a ‘controlled industry’; and
  2. It should have been ‘specified in this behalf i.e, it should have been specified as such for the purpose of this provision.

These two requirements are to be satisfied cumulatively. As pointed out by the Supreme Court in Bijay Cotton Mills, that in order to attract the provisions of this clause, it is not enough that the industry in question is a ‘controlled industry’, but it should also have been specified by the Central Government as a ‘controlled industry’ for the purposes of s 2(a)(i).

In relation to the employees employed in a canteen, run by a contractor in the premises of the Hindustan Petroleum Corporation, a single judge of the Bombay High Court held that the Central Government would be the appropriate government, in view of the fact that the Central Government had notified that the appropriate government with respect to the corporation will be the Central Government.23

  1. Specified Corporations : With respect to disputes relating to the following corporations and bodies, the Central Government has specifically been made the ‘appropriate government’:
  2. A Dock Labour Board;
  3. The Industrial Corporation of India Limited, formed and registered under the Companies Act 1956;
  4. The Employees State Insurance Corporation;
  5. A Board of Trustees;
  6. The Central Board of Trustees and the State Board of Trustees;
  7. The Indian Airlines Corporation and the Air India Corporation;
  8. The Life Insurance Corporation of India;
  9. The Oil and Natural Gas Commission;
  10. The Deposit Insurance and Credit Guarantee Corporation;
  11. The Central Warehousing Corporation;
  12. The Unit Trust of India;
  13. The Food Corporation of India;
  14. The International Air Port Authority of India;
  15. A Regional Rural Bank;
  16. The Export Credit and Guarantee Corporation Ltd;
  17. The Industrial Reconstruction Corporation of India Ltd; and;
  18. The Banking Services Commission.
  • A Banking Company : A banking company has been defined in clause (bb) of Section 2. It means a banking company as defined in Section 5 of the bbanking Companies Act, 1949. It is only with respect to the banking companies falling within the definition of a banking company in the Act, that the Central Government is the appropriate government. With respect to the other banking companies, only the State Government in which the bank is situated, would be the appropriate government.
  • An Insurance Company : An insurance company has been defined in clause (kk) of Section 2. It is only in relation to the insurance companies falling within the definition as defined in Section 2 of Insurance Act 1938, that the Central Government is the appropriate government; with respect to the other companies, it is the state government.
  • A Mine: Section 2 (j) of the Act. It is quite clear that the employees who are employed in any mining operation, for the purpose of searching and obtaining minerals by extraction, including all borings, bore-holes and oil-wells and other modes of working, as enumerated in the definition of a ‘mine’, can be stated to be employed in a mine. Likewise, employees engaged in loading ore in a mine, are employed in a mine. For such Central Government will the appropriate Givernment.

But, unless a person is so employed, he cannot be said to be engaged in any kind of work incidental to or connected with mining operations. An illustration of this point is Serajuddin & Co, where the Supreme Court held that an ‘industrial dispute’ between the workmen employed in the head office of a company at Calcutta, engaged in a mining business, having its mines in the State of Orissa, was not an industrial dispute concerning a ‘mine’, as the head office was not connected with the mining operations.

The Patna High Court, in Khas Jeenagora Coal Co, took the view that the Central Government was not the ‘appropriate government’ in connection with a dispute connected with the non-employment of a person working as a watchman or as a peon, in the bungalow of a director of the company, situated at the mine site.

Likewise, regarding a dispute about the clerks working in the accounts section of certain collieries, who were not doing any job directly connected with the mining operations, appropriate government was the state government and not the Central Government.

In the case of Management of Indian Oil Corporation vs State of Assam 1990 The Gauhati High Court held that an oil refinery cannot be treated as a mine within the meaning of s 2(j)(viii) of the Mines Act.

  • An Oil-field :  The appropriate government in relation to an industrial dispute concerning an oil-field is the Central Government.
  • A Cantonment Board: The Punjab High Court held that the ‘appropriate government’, with respect to a cantonment board created and regulated by the provisions of the Cantonment Act 1924 while managing the affairs of the cantonment board under the provisions of Chapter III of the Act and acting under the supervision and control of the Central Government, was the Central Government. However, the legislature specifically included ‘Cantonment Board’ in s 2(a)(i) by the Amending Act No 36 of 1964, thereby putting an end to any confusion in this regard.
  • A Major Port: The expression ‘in relation to any industrial dispute concerning a major port’ was considered by the judicial commissioner, Kutch, with respect to a dispute in PK Pillai v Burma Shell OS & D Co of India Ltd AIR 1956.  The company had an office in the Kandla Port, which was carrying on its business in the port. It was observed that these words would have applied if there were a dispute ‘between the port authorities and their workmen or between people doing the port work and their workmen’. But the company was neither a port authority, nor doing port work; hence the ‘appropriate government’ was the state government, and not the Central Government.

But in the under-noted Tulsidas Khimji v Jeejeebhoy (1961) the Bombay High Court held that the activities of a firm, carrying on its business of clearing, shipping and managing a godown department in a port, were concerning a ‘major port’, hence the Central Government was the appropriate government.

  • Concerns having establishments in more than one State : In cases where the entire business of an establishment is confined to the territories of a state, obviously, the government of that state is the ‘appropriate government’. But difficulties arise in cases where an employer has establishments in more than one state. The Act does not contain any provisions in this connection. Nor does it contemplate a joint reference by more than one state.45 In certain cases, the courts have relied upon the principles governing the jurisdiction of civil courts to entertain actions or proceedings.

Lalbhai Tricumlal Mills and Indian Cable Co were mechanically followed by the court in Sri Ranga Vilas Motors, in which the head office of the company was situated in Krishnagiri, in the State of Madras, and it had a branch at Bangalore, in the State of Mysore, where the concerned workman was employed. The service of the workman was terminated at Bangalore, but the dispute was sponsored by the workmen at Krishnagiri, which gave it the character of an ‘industrial dispute’. The court observed that since there was a separate establishment at Bangalore, where the concerned workman was working and the impugned order had to operate on the workman at Bangalore, the Mysore government was the ‘appropriate government’.

Under Social Security Code Those Establishments having departments or branches in more than one state Central Government will be the appropriate Government.

  • Under other labour codes like Occupational Safety, Health and Working Conditions Code 2020, Industrial Relation Code 2020, The wage code 2019 the appropriate Government will be state government if it is not covered in exclusively under that code.

In Hindustan Machine Tools vs. Industrial Tribunal ,Jaipur 1993 : One of the units of the Hindustan Machine Ltd has been established at Ajmer. It is a registered company having legal entity. The court held that State of Rajasthan was the appropriate Government.


The definition of appropriate Government in section 2 a is exhaustive in relation to any industrial dispute concerning the industrial undertaking or establishment , the central Government is the appropriate Government. For the rest of the industries , in relation to any other dispute , the state Government is the appropriate government .



Leave a Comment

Your email address will not be published. Required fields are marked *