Scope of ‘Appropriate Government’ under Indian Labor Laws

“Appropriate government” is defined under section 2(b) of IRC 2020 as;

In relation to any industrial establishment or undertaking carried on by or under the authority of the Central Government or concerning any such controlled industry as may be specified in this behalf by the Central Government…… including establishments of the contractors for the purposes of such establishment, corporation, other authority, public sector undertakings or any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, as the case may be, the Central Government………

The section implies that for the purposes specified, central government is the appropriate government or state government. 

Section 2(a) of ID Act 1947 define “appropriate government” similarly. Further in section 10 of the act, the powers attributed to ‘appropriate government’ are specified such as that it orders reference to any board and also serves as an umpire in proceedings of industrial disputes. The section alongside giving power of reference also allows under sub-clause (1), the power of reference for existing and apprehended disputes, thereby making the “appropriate government” was judge of ‘apprehended disputes’. 

In the case of Telco Convoy Drivers Mazdoor Sangh and Another v. State of Bihar and Others, 900 drivers of company demanded permanent status as they are ‘workmen’  to which TELCO alleges that they do not fall under the definition of ‘workmen’ therefore there does not exist any industrial dispute. Mazdoor Sang requests reference of the suit which is rejected by the Deputy Commissioner which is allegedly should have been referred u/s 10(1) of ID Act however they exceeded their jurisdiction while deciding that it is not an industrial dispute thereby evolving the issue whether appropriate government can decide if drivers are workmen. SC held that appropriate government does not have the power to adjudicate the matter as it is an administrative body, whereas adjudication falls under jurisdiction of a judicial or quasi/judicial body. Therefore appropriate government can make reference ‘any time’. 

In the case of State of Madras v. CP Sarathy, it was held that the government is required to decide reference based on the facts and circumstances with its ‘subjective opinion’ and that apprehension/expedience or factual existence of a dispute is entirely the government’s discretion. As the reference order is entirely administrative, consequently HC u/a 226 cannot examine the validity of the decision. Section 10(4) though tries to limit the scope of reference as it requires the reference to be made for “specified points of dispute and matters incidental thereto”.  

Section 10(1) also have certain limitations to the action concerning reference. Appropriate government also loses its authority to cancel the reference once made, it can merely be transferred.  The requirement to release a reference order is ‘factual formation of opinion based on relevant materials’ though government is not required to disclose in either notification or counter affidavit, facts leading to the currently formed opinion. However ‘refusal of reference’ is subjected to scrutiny as it requires communicating reasons for such refusal. Government can refuse reference but it can be challenged on the grounds of being irrelevant, irrational, adjudicating the merits of dispute, unreasonable or ignores the failure report of conciliation officer. Appropriate government also has the right to prohibit continuance of any strike or lockout. Thereby concluding that the powers of appropriate government under ID Act is fairly discretionary but not entirely immune. 

In the IRC 2020, as we saw above, the definition is shorter but the basic meaning is similar. It still serves as an umpire. The new IRC 2020 does anything but increases the scope of power as even if the holding of central PSU’s reduce less than 50%, central government can still act as appropriate government. Furthermore, central government is also the appropriate government for controlled industries; the industries under the control of union, declared under public interest by a central act. It also has the power of exempting any new industrial establishment in public interest i.e. creating more economic activity and employment. It also the discretion of appropriate government to decide whether an activity is core or not. Appropriate government can also prohibit women from entailing hazardous works. 

Where the discretion was more but not absolute, the new code, via giving such powers in hands of central government alone, made it highly discretionary in nature, destabilising power dynamics. 


  1. Telco Convoy Drivers Mazdoor Sangh and Another v. State of Bihar and Others, 2002 AIR (SC) 1724
  2. State of Madras v. CP Sarathy (1953) 1 LLJ 174 (SC), AIR 1953 SC 53

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.


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