The Referral Authority Is Required To Apply Its Mind And Pass A Reasoned Order Prior To Referral Of A Dispute To The Labour Courts

Summary:

[1]The Delhi High Court Allowed A Writ Petition Filed By Pfizer Ltd. Challenging A Reference Order Issued By The Referral Authority Under The Industrial Disputes Act, 1947. The Reference Order Had Forwarded A Termination Dispute Raised By The Respondent No.3 (Alleged Workman) To The Labour Court Without Proper Application Of Mind. The Court Held That The Referral Authority Must First Determine Whether A Referable Industrial Dispute Exists And Cannot Mechanically Act As A Conduit To The Labour Court.

Facts:

• Respondent No.3 Filed A Complaint On 20.12.2019 Alleging Wrongful Termination By Pfizer. Summons Were Issued, And Both Parties Submitted Detailed Pleadings And Documents. On 04.03.2021, The Referral Authority Passed A Reference Order Stating:

“Whether The Services Of Workman Sh. Sombir Singh Have Been Terminated Illegally And/Or Unjustifiably By The Management…”

• Pfizer Challenged The Reference, Arguing That Respondent No.3 Was Not A “Workman” As Defined Under Section 2(S) Of The Industrial Disputes Act, But An Executive Officer Performing Supervisory Duties. It Was Also Contended That The Referral Authority Failed To Apply Its Mind And Acted Mechanically Without Analyzing The Nature Of The Employment Relationship.

Issues:

• Whether The Referral Authority Erred In Mechanically Referring The Dispute Without Determining If The Respondent Was A “Workman” Under The Industrial Disputes Act?
• Whether Such A Referral Order Is Sustainable In The Absence Of Reasoned Analysis And Application Of Mind?

Held:

The Hon’ble High Court Set Aside The Referral Order And All Proceedings Emanating From It, Holding That:

• The Referral Authority Must Judiciously Apply Its MindTo Determine Whether An Industrial Dispute Exists And Whether The Person Concerned Qualifies As A “Workman.”
• The Referral Order Presupposed The Existence Of An Employer-Workman Relationship Without Determination Of Facts.
• Reliance Was Placed On Tata Iron And Steel Co. Ltd. V. State Of Jharkhand, And Ht Media Ltd. V. Gnctd, Both Emphasizing That Terms Of Reference Must Reflect The Real Nature Of The Dispute, Not Merely Parrot A Claimant’s Version.
• The Matter Was Remitted To The Referral Authority To Freshly Consider The Submissions And Take Action In Accordance With Law.

Analysis:

The Judgment Reaffirms That A Mechanical Referral Of Disputes By The Appropriate Government Without Examining Preliminary Jurisdictional Facts—Such As Whether The Claimant Is A “Workman”—Is Impermissible. Courts Have Clarified That While The Merits Are Not To Be Examined At This Stage, Application Of Mind And Formulation Of Appropriate Terms Of Reference Are Essential. The Decision Ensures Statutory Safeguards Are Upheld Before Invoking The Adjudicatory Mechanism Of Labour Courts.

[1] BEFORE THE HON’BLE HIGH COURT OF DELHI

PFIZER LIMITED VS. GNCTD & ORS. 

W.P.(C) 924 of 2022

Order Dated: July 10, 2025