After 18 Years of Litigation, Karnataka HC Redirects Beedi Labour Dispute to Hubbali Industrial Tribunal

On February 15, 2023, the Karnataka High Court reversed a 2010 order by the Additional Labour Court of Hubli (now Hubballi), which ruled that a beedi manufacturer, Khaja Trading Pvt. Ltd., had to reinstate sacked beedi workers at their factory.

The high court ruled that the case pertained to the illegal closure of a factory and that the case should have been filed with the industrial tribunal rather than the labour court. The case has now been redirected to the industrial tribunal in Hubballi. The workers are anguished at the judgement after 18 years of futile litigation.

The case pertains to a Beedi manufacturer in Nippani, an important town near the Maharashtra and Karnataka border. Nippani and neighbouring Chikkodi taluks in Belagavi are famous for their tobacco cultivation. In this case, the workers are beedi rollers who were rolling at least 1,000 beedis daily for two years for a company called Khaja Trading Pvt. Ltd. They were hired in 2002 and continued working until the company allegedly downed shutters without any notice in September 2004. They protested at the site for six months to no avail.

After this, the workers decided to form the Belgaum District Beedi and Tobacco workers union. It was registered on February 7, 2005, and is affiliated with the Centre of Indian Trade Unions (CITU). The union filed two disputes with the labour department in Hubli - one pertaining to the illegal closure of the establishment (ref. no. 9/2005) and the other pertaining to loss of wages due to non-compliance with minimum wage laws (ref. no. 12/2006).

CA Kharade, 85, president of the Belgaum District Beedi and Tobacco workers union, represented the workers. He is also a retired assistant labour commissioner hailing from Nippani.

The story of how the women workers met Kharade is also interesting. After the factory was shuttered, the women protested at the site for six months. During this time, they were paid a visit by the Nippani MLA, Kakasaheb Patil, of the Indian National Congress (INC). He told them about Kharade and suggested they seek his help in filing an industrial dispute.

Both cases were heard in the Additional Labour Court, Hubli. In both instances, the court ruled in favour of the workers. In the first case, the court ruled that closing the factory without notice was illegal and ordered the reinstatement of all 148 contractual workers. The judgement was made in 2010 (ref. no. 9/2005).

In the latter case (ref. no. 12/2006), the union alleged that the workers were underpaid by the management and that the rules regarding minimum wage, bonus, leave payment and other entitlements were not followed. In 2002-03, the minimum wage for rolling 1000 beedis was Rs. 62.05. However, the contractor paid them Rs. 42 for 1,000 beedis rolled.

The workers, primarily Muslim women, received raw materials from the factory and rolled beedis at home. They dropped off the final product at the factory the following day. In both cases, Khaja Trading argued that it had no relationship with the workers and that the contractor was the principal employer. They contended that they only supplied raw materials to the contractor, and there was no direct relationship between the company and the workers.

The labour court did not buy into this argument. In the verdict in 2013, the court ruled that the applicants were entitled to Rs. 2,64,286 as back wages and a difference in salary payments. The court also ruled, “It is clear that there exists a relationship of employer-employee between respondent no. 2 (Khaja Trading) and the applicant, and respondent no. 2 is taking false defence stating that there exists no relationship between the respondent no. 2 and applicants.”

The workers thought that justice had been served. In both cases, the labour court ruled in their favour and refused to buy into the argument that Khaja Trading Pvt. Ltd. was not the principal employer.

High Court Reversal

Khaja Trading challenged the 2010 ruling (ref. 9/2005) in the Karnataka High Court through WP 63264/2011 and the 2013 ruling (ref. No. 12/2006) through WP 84371/2013. The cases were heard in the Dharwad bench of the Karnataka High Court.

The workers were aggrieved when the high court reversed both judgements of the labour court. Coincidentally, both reversals arrived in 2023, first in January, then in February. In one case (WP 63264/2011), the high court agreed with the petitioner (Khaja Trading) that the case pertains to the factory's closure, which comes under the third schedule to the Industrial disputes act. Therefore, it ruled that the labour court had no jurisdiction to hear the matter. The case was transferred to the Industrial Tribunal, Hubballi.

According to the Industrial Disputes Act 1947, matters pertaining to the Second Schedule to the Act can be heard by labour courts. Industrial tribunals can hear some matters pertaining to the Second or Third Schedule to the Act. The court ruled that the present matter falls under item 10 of the Third Cchedule, and thus only the tribunal has the jurisdiction to hear the matter.

In the second case (WP 84371/2013), the high court passed an even more curious judgement. It ruled that “if the applicants-employees have not established relationship between the parties, application filed under Section 33C(2) of the Industrial Disputes Act is not maintainable.” In other words, the court has ruled that the workers have not established their relationship with Khaja Trading in the high court.

Speaking with NewsClick in their union office in Nippani, the exasperated workers and Kharade, said, “The case had been heard at length in the labour court, and it has ruled that there was a relationship between the workers and the company. If the labour court does not have jurisdiction to hear the matter, then the High Court should mention this at the time of admission of the petition. How can they say this after so many years have passed? Moreover, we could not get regular hearings. It was a case of tareekh pe tareekh.”

When asked why the high court concluded that the employer-employee relationship was not established in the court, Kharade said, “They should have asked us for documents pertaining to this. We would have submitted them to the court.”

The women workers are utterly disillusioned with the system. A union leader, Parveen Nayakwade, told NewsClick, “The company representatives failed to attend court for many hearings. No action was taken against them. The contractor MS Siddique (also a party to the dispute), did not come to court even once in the last 18 years. It seems like we are the accused, and they are the innocent ones. The workers are getting punished by the delays.”

The workers said they joined the company because it had a factory in Miraj (Maharashtra). They believed that it was a good company because it had other branches. Per court documents, Khaja Trading is registered in Miraj, and its executive director is Sony Akkara. Although workers had never interacted with the owner, they said he is based in Kerala.

Workers also recalled a disturbing incident with the police. Nayakwade said, “Four of us were picked up for questioning by the police. We were taken to Hindalga central jail and locked up. They did not tell us what our crime was. They thought we would get scared. However, all the women in our union took out a morcha to the police station and demanded to know the reason behind our arrest. We were released after three days. Later, the tehsildar and the police sub-inspector came and apologised. We still do not know what cases they filed against us, but those were withdrawn.” 

The workers do not recall the year in which the arrests took place. NewsClick could not verify the incident.

Kharade said he plans to file writ appeals in the high court against both decisions. The women workers are uncertain how long they will have to wait for justice. They said that they had not taken full-time employment since the closure of the factory. They expected the cases to be wrapped up much sooner.