The terminations came first and the dispute afterwards. Calcutta High Court quashes conciliation orders that reversed the sequence
Justice Shampa Dutt (Paul) holds that Section 90 of the Industrial Relations Code bites only where a dispute is already pending, and sets aside the Conciliation Officer's orders.
When a service contract is wound up, the workers engaged through sub-contractors to perform it are retrenched. When they raise an industrial dispute afterwards, the employer is confronted with a provision of the Industrial Relations Code that freezes conditions of service while a dispute is pending — and a Conciliation Officer who reads it as requiring prior approval for terminations already effected. The Calcutta High Court has quashed two such orders, on the simple ground that the letters of termination came before the dispute existed.
The proceedings challenged
Two writ applications were taken up together, the issue being similar: one by a payment services company and the other by a bank. Both were aggrieved by conciliation proceedings, and in particular by two orders of June and September 2026 passed by the Conciliation Officer and Assistant Labour Commissioner (Central) at Kolkata under the Industrial Relations Code, 2020. The prayer was for quashing of the proceedings and an interim order restraining the respondents from giving effect to them.
The workers' side relied on Sections 60, 70 and 90 of the Code. The petitioners' position was that the workers had been retrenched because the services for which they had been engaged through sub-contractors had been withdrawn or closed down — not as a step taken in the course of a live dispute.
What Section 90 actually freezes
Section 90 of the Code is the successor to a familiar provision of the old industrial disputes law, and its purpose is to preserve the status quo while conciliation or adjudication runs. Its opening words are the ones that decide this case: where an industrial dispute pertaining to an establishment or undertaking is already pending before a conciliation officer, an arbitrator, a Tribunal or a National Industrial Tribunal, the employer is restrained from taking the specified steps without the prescribed approval.
The provision therefore operates on a condition precedent. There must be a pending dispute for the freeze to attach. An employer who acts before any dispute exists has not breached it, because there was nothing to breach.
The Conciliation Officer's orders proceeded the other way. The judgment records his reasoning: relying on a Supreme Court decision, he held that once an application is not made under the relevant clause of Section 90, or is not approved by the authority — in that dispute, himself — the employer's action falls, and the workman is deemed never to have been dismissed or discharged and remains in service. He considered himself bound by that settled law, adding that none of the employers had made any application before terminating the workers pending conciliation, and that they had served only thirty days' notice.
The High Court found that the officer had made a wrong observation in holding that no application had been made by any of the employers before discharge or dismissal, as mandated by the Code — the officer having stressed the word “shall”.
The dates
The answer the Court gave rests on the chronology rather than on any disagreement about what Section 90 requires when it applies.
The letter of termination by way of retrenchment was issued on 26 May 2026. That was prior to the initiation of the industrial dispute before the Conciliation Officer. There was therefore no prima facie violation of Section 90, because the section had not been engaged when the employer acted.
That is a narrow holding and a sound one. The deeming provision the Conciliation Officer invoked — that the workman is treated as never having been dismissed — is a powerful consequence, and it is attached to a failure to seek approval at a time when approval was required. Applying it to a termination that preceded the dispute converts a status quo provision into a retrospective bar on the employer's ordinary right to end a contract.
There is a practical point underneath this that affects a great deal of contracted-out work. Where a principal employer withdraws or closes a service, the sub-contractor's workers engaged for it lose the work by operation of the arrangement rather than by a disciplinary act. The question whether those workers have a remedy — against whom, and on what terms — is a real one, and this judgment does not answer it. What it holds is that the answer does not lie in Section 90 when the dispute was raised after the event.
Order
The impugned orders of the Conciliation Officer and Assistant Labour Commissioner (Central), Kolkata, were quashed and set aside. Both writ applications were allowed, connected applications were disposed of, any interim order stood vacated, and a certified copy was directed to be given on priority.
For employers the judgment is a reminder that the protection in Section 90 is a shield with a date on it, and that a Conciliation Officer cannot reach backwards with it. For workers, the limits of the decision matter as much: nothing here decides whether the retrenchment itself was lawful, whether the thirty days' notice was adequate, or whether the principal employer bears any responsibility for workers engaged through sub-contractors on its work. Those questions survive, and belong to an industrial dispute properly raised and adjudicated rather than to a freeze provision applied out of sequence.