Overriding Effect, Inquiries and the Bar on Civil Courts

Section 120: overriding effect, and the better right saved

Section 120(1). The provisions of this Code shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, or in the terms of any award, agreement or contract of service, whether made before or after the commencement of this Code.

The proviso. Where under any such award, agreement, contract of service or otherwise an employee is entitled to benefits in respect of any matters which are more favourable to him than those to which he will be entitled under this Code, the employee shall continue to get the former, notwithstanding that he receives benefits in respect of other matters under this Code.

Section 120(2). Nothing in the Code shall be construed as precluding any employee from entering into an agreement with an employer for granting him rights or privileges in respect of any matter which are more favourable to him than those to which he would be entitled under the Code.

Four points, and the third is the one that earns marks.

The override is wide. Other laws, awards, agreements and contracts of service, made before or after the Code commenced.

The proviso reverses it where the employee is better off. He continues to get the more favourable benefit.

And the proviso is matter by matter, not package against package. The words are that he shall continue to get the former notwithstanding that he receives benefits in respect of other matters under this Code. So an employer cannot say that his contract is worse in one respect but better overall; each matter is compared separately, and the employee takes the better of each.

Sub-section (2) looks forward. The Code is no obstacle to a future agreement giving more.

Together the two sub-sections state the character of the whole Code: it is a statutory minimum. Everything in it may be improved upon by contract, award or settlement, and nothing in it may be reduced by them.

Section 121: inquiries and surveys

Section 121(1), the inquiry. The appropriate Government may, in the event of:

• the occurrence of an accident in an establishment which has caused, or had the potentiality to cause, serious danger to employees and other persons within and in the vicinity of the workplace, whether immediate or delayed; or
• any occupational disease specified in the Third Schedule which has been, or is suspected to have been, contracted in epidemic proportions,

appoint one or more persons possessing legal or special knowledge to act as assessors or competent persons in an inquiry, to inquire into the causes of the accident and disease, fix responsibilities, and suggest a plan of action for the future to prevent such accidents or diseases, and submit the report to the appropriate Government.

Section 121(2), the survey. The appropriate Government may direct a Chief Inspector-cum-Facilitator or any other officer under its control, or appoint a committee, to undertake a survey in the prescribed manner on the situation relating to safety or health at work at any workplace or class of workplaces, or into the effect of work activity on the health of the employees and other persons within and in the vicinity of the workplace.

Section 121(3), the powers. The officer or committee holding an inquiry under sub-section (1) or (2) shall have the powers of a civil court under the Code of Civil Procedure 1908 for enforcing the attendance of witnesses and compelling the production of documents and material objects, and may, so far as necessary for the purposes of the inquiry, exercise such powers of an Inspector-cum-Facilitator under this Code as may be necessary.

Section 121(4). The Central Government may make rules regulating the procedure of inquiry and survey and other related matters.

Five points.

The trigger is wider than an accident that caused harm. It includes an accident which had the potentiality to cause serious danger, and the danger may be immediate or delayed, and may be to persons in the vicinity as well as employees.

Occupational disease in epidemic proportions is a separate trigger, and it need only be suspected.

The inquiry's terms are stated in the section: causes, fixing responsibilities, and a plan of action for the future. Fixing responsibility is expressly part of it, which section 86 does not say.

The powers are real. Civil court powers to compel witnesses, documents and material objects, plus the necessary powers of an Inspector-cum-Facilitator.

Compare section 86 and state the differences. Section 86 is a direction by the Central Government to the National Board, in the event of an extraordinary situation involving a factory engaged in a hazardous process, and its recommendations are expressly advisory. Section 121 is by the appropriate Government, applies to any establishment, is conducted by assessors or competent persons, carries civil court powers, and says nothing about the report being advisory. In practice both end in a report, but the machinery is different and the confusion between them is a common mistake.

Sections 122 and 123: publication and directions

Section 122, publication of reports. The appropriate Government may, if it thinks fit, cause to be published any report submitted to it by the National Board or State Advisory Board, or any extracts from any report submitted to it under this Code.

It is permissive, and it is the only publication provision in the Code. Since section 86 ends in advisory recommendations and section 121 in a report to the Government, whether the public ever learns why an accident happened rests on this may.

Section 123, directions to a State. The Central Government may give directions to a State Government for the implementation of the provisions of this Code.

One line, and a strong one. It is not confined to any subject and requires no consultation, and it is the constitutional counterpart of section 116: labour is a Concurrent List subject, the Code is a Central enactment, and the Centre keeps a power of direction over its implementation.

Section 124: general restriction on disclosure

Section 124(1). No person shall, in respect of the establishment, disclose any information relating to any manufacturing or commercial business or any working process which may come to his knowledge in the course of his official duties.

Section 124(2), the exceptions. Sub-section (1) does not apply to a disclosure made:

• with the previous consent in writing of the owner of the business or process; or
• for the purposes of any legal proceeding, including adjudication or arbitration, pursuant to any of the relevant statutory provisions; or
• for the purposes of any criminal proceeding under this Code, whether pursuant to any of the relevant statutory provisions or otherwise; or
• for the purposes of any report of any such proceedings.

Three points.

The section binds "no person", but the words "in the course of his official duties" confine it to those who learn the information officially, principally inspectors, experts and members of committees.

The subject is the employer's secret, a manufacturing or commercial business or a working process, not personal information about workers.

It is the general counterpart of section 39. Section 39 imposes secrecy on the Chief Inspector-cum-Facilitator and Inspector-cum-Facilitator, and section 39(3) protects the person who gave the information. Section 100 makes disclosure contrary to either section 39 or section 124 punishable, and requires the previous sanction of the appropriate Government before a court may try it.

Sections 125 and 126: the bar on civil courts and good faith

Section 125, bar of jurisdiction. No civil court shall have jurisdiction in respect of any matter to which any provision of this Code applies, and no injunction shall be granted by any civil court in respect of anything which is done or intended to be done by or under this Code.

Two limbs, and both should be stated. The first excludes the civil court from any matter to which any provision of the Code applies. The second forbids an injunction against anything done or intended to be done by or under the Code, which is the practical half: it stops an establishment restraining an inspection, a prohibition order or a prosecution.

The limits of the bar are worth stating too. It does not touch the writ jurisdiction of the High Courts and the Supreme Court, which is constitutional and cannot be taken away by a statute. And it does not bar a claim that does not depend on the Code, such as a common law action in negligence, or the absolute liability of an enterprise carrying on a hazardous activity.

Section 126, protection of action taken in good faith.

Sub-section (1). No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of this Code or any rule, regulation, bye-laws or order made under it.

Sub-section (2). No prosecution or other legal proceeding shall lie against the Government, any Board or committee constituted under this Code, or any member of such Board, or any officer or employee of the Government or the Board, or any other person authorised by the Government or any Board or committee, for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of the Code or any rule, regulation, bye-laws or order made or issued under it.

Note the difference between the two sub-sections, which is easy to miss. Sub-section (1) protects any person against a suit, prosecution or other legal proceeding. Sub-section (2) protects the Government, Boards, committees, their members, officers and employees, and authorised persons against a prosecution or other legal proceeding for damage caused or likely to be caused; it does not use the word suit.

And both turn on good faith. An act done dishonestly, or for a purpose other than the Code's, is outside them.

A worked example

Karad Alloys has a settlement with its union under which workers get thirty days of annual leave with wages. The Code's section 32 would give fewer. Its contracts of service also provide a lower rate of overtime than section 27 requires.

Which prevails on leave? The settlement. Section 120(1) makes the Code override an inconsistent agreement, but the proviso provides that where under an award, agreement or contract of service the employee is entitled to benefits more favourable than under the Code, he shall continue to get the former.

And on overtime? The Code. Section 27 prevails over the inconsistent contract by section 120(1).

The company says the two must be taken together and its package is better overall. That is not what the proviso says. The employee continues to get the more favourable benefit notwithstanding that he receives benefits in respect of other matters under this Code, so each matter is compared separately.

The union wants to negotiate a still better creche entitlement. Section 120(2): nothing in the Code precludes an employee from entering into an agreement with an employer granting more favourable rights or privileges.

A furnace explodes at night. Nobody is hurt, but the blast reached the boundary wall. The appropriate Government may, under section 121(1), appoint assessors or competent persons possessing legal or special knowledge to inquire, because the accident had the potentiality to cause serious danger to employees and other persons within and in the vicinity of the workplace. The inquiry must find the causes, fix responsibilities and suggest a plan of action for the future, and report to the appropriate Government.

The company refuses to hand over the maintenance log. The inquiry has the powers of a civil court under the Code of Civil Procedure 1908 for enforcing the attendance of witnesses and compelling the production of documents and material objects, and may exercise such powers of an Inspector-cum-Facilitator as are necessary: section 121(3).

Later, nineteen workers in the same shop develop a Third Schedule disease. That is the second trigger in section 121(1): an occupational disease specified in the Third Schedule which has been or is suspected to have been contracted in epidemic proportions.

The union asks for the report to be made public. Under section 122 the appropriate Government may, if it thinks fit, cause to be published any report submitted to it by the National Board or a State Advisory Board, or extracts from any report submitted under the Code. It is discretionary.

An assessor tells a competitor about the company's alloy process. That contravenes section 124(1), disclosure of information relating to a manufacturing or commercial business or working process coming to his knowledge in the course of his official duties. It would have been permitted with the previous written consent of the owner, or for a legal proceeding including adjudication or arbitration, or for a criminal proceeding under the Code, or for a report of such proceedings: section 124(2). Disclosure contrary to section 124 is punishable under section 100, and no court may try it without the previous sanction of the appropriate Government.

The company sues in the civil court for a declaration that a prohibition order is bad, and asks for an injunction. Section 125 bars it: no civil court has jurisdiction in respect of any matter to which any provision of the Code applies, and no injunction shall be granted in respect of anything done or intended to be done by or under the Code. Its remedy is the appeal the Code provides, and in a proper case the writ jurisdiction of the High Court, which section 125 cannot take away.

It then sues the Inspector-cum-Facilitator personally. Section 126(1): no suit, prosecution or other legal proceeding lies against any person for anything in good faith done or intended to be done in pursuance of the Code or a rule, regulation, bye-law or order under it.

What this does NOT mean

Section 120 does not wipe out better contractual terms. The proviso preserves them, matter by matter.

It does not allow an overall comparison. The employee keeps the more favourable benefit notwithstanding that he receives benefits on other matters under the Code.

Section 121 is not confined to accidents that caused harm. An accident which had the potentiality to cause serious danger is enough, and so is an occupational disease suspected to have been contracted in epidemic proportions.

Section 121 is not the same as section 86. Different Government, different body, different establishments, and section 121's inquiry carries civil court powers.

Section 122 does not require publication. The appropriate Government may, if it thinks fit.

Section 124 does not protect information about workers. Its subject is a manufacturing or commercial business or working process.

Section 125 does not bar the writ jurisdiction. A statute cannot exclude articles 226 and 32.

Section 126 does not protect bad faith. Both sub-sections apply only to what is in good faith done or intended to be done.

Limits and criticism

Section 122 is the Code's only publication provision and it is discretionary. After a disaster, section 86 produces advisory recommendations and section 121 produces a report to the Government, and whether either is ever seen depends on the Government thinking fit. No time limit, no duty to give reasons for withholding, and no right in anyone to ask.

Section 121 requires responsibilities to be fixed but attaches no consequence to the finding. The report goes to the appropriate Government. Nothing requires a prosecution, a remedial order or even a reply.

Section 123's power of direction has no procedure. No consultation with the State, no requirement of writing on the face of the section, and no publication.

Section 124 protects the employer's secret with real force while the Code protects the worker's information nowhere. There is no general provision restricting disclosure of a worker's health record or personal data, though section 85(a) and section 93(6) at least give him access to his own.

Section 125's bar is very wide. Any matter to which any provision of this Code applies is a large field, and the Code's own remedies are appeals to officers, several of which exist only when rules are made. The practical effect is to funnel disputes into administrative channels and, failing those, into writ petitions.

Section 126 protects the administration but leaves the worker without a remedy against an honest failure to act. An inspector who in good faith decides there is no imminent danger under section 89(3), and is wrong, is protected by section 126(1), and nothing in the Code answers for the consequence.

Quick revision

• Section 120(1): the Code has effect notwithstanding anything inconsistent in any other law, award, agreement or contract of service, made before or after its commencement. Proviso: where the employee is entitled under any such instrument to benefits more favourable than under the Code, he continues to get them, notwithstanding that he receives benefits on other matters under the Code. (2) he may still agree with the employer for more favourable rights.
• Section 121(1): on an accident which caused or had the potentiality to cause serious danger to employees or persons in the vicinity, immediate or delayed, or a Third Schedule occupational disease contracted or suspected to have been contracted in epidemic proportions, the appropriate Government may appoint assessors or competent persons with legal or special knowledge to inquire into the causes, fix responsibilities and suggest a plan of action, and report. (2) it may direct a survey by a Chief Inspector-cum-Facilitator, another officer or a committee. (3) the inquiry has the powers of a civil court to compel witnesses, documents and material objects, and such Inspector-cum-Facilitator powers as are necessary. (4) the Central Government makes the procedural rules.
• Section 122: the appropriate Government may, if it thinks fit, publish any report of the National Board or a State Advisory Board, or extracts from any report submitted under the Code.
• Section 123: the Central Government may give directions to a State Government for implementing the Code.
• Section 124: no person shall disclose information about a manufacturing or commercial business or working process coming to his knowledge in the course of his official duties; exceptions for the owner's previous written consent, a legal proceeding including adjudication or arbitration, a criminal proceeding under the Code, and a report of such proceedings.
• Section 125: no civil court has jurisdiction over a matter to which any provision of the Code applies, and no injunction against anything done or intended to be done by or under it.
• Section 126: (1) no suit, prosecution or other legal proceeding against any person for anything in good faith done or intended to be done under the Code. (2) no prosecution or other legal proceeding against the Government, a Board or committee, its members, officers, employees or authorised persons for damage caused or likely to be caused by anything so done.

Test yourself

1. State section 120 and explain the effect of its proviso. The Code has effect notwithstanding anything inconsistent in any other law, or in the terms of any award, agreement or contract of service, made before or after its commencement. By the proviso, where under such an instrument or otherwise an employee is entitled to benefits more favourable to him than those under the Code, he shall continue to get the former, notwithstanding that he receives benefits in respect of other matters under the Code. So the comparison is matter by matter, and the Code operates as a floor.

2. May an employee agree to terms better than the Code provides? Yes. Section 120(2) provides that nothing in the Code shall be construed as precluding an employee from entering into an agreement with an employer granting him rights or privileges more favourable than those to which he would be entitled under the Code.

3. When may the appropriate Government appoint assessors under section 121, and what must they do? On an accident in an establishment which has caused, or had the potentiality to cause, serious danger to employees and other persons within and in the vicinity of the workplace, whether immediate or delayed; or on any occupational disease specified in the Third Schedule which has been, or is suspected to have been, contracted in epidemic proportions. The persons appointed must possess legal or special knowledge, and must inquire into the causes, fix responsibilities, suggest a plan of action for the future to prevent such accidents or diseases, and submit the report to the appropriate Government.

4. What powers does such an inquiry have? The powers of a civil court under the Code of Civil Procedure 1908 for enforcing the attendance of witnesses and compelling the production of documents and material objects, and, so far as necessary for the inquiry, such powers of an Inspector-cum-Facilitator as may be necessary: section 121(3).

5. Distinguish the inquiry under section 121 from the one under section 86. Section 86 is a direction by the Central Government to the National Board, in the event of an extraordinary situation involving a factory engaged in a hazardous process, and its recommendations are expressly advisory. Section 121 is by the appropriate Government, for any establishment, conducted by assessors or competent persons with legal or special knowledge, expressly includes fixing responsibilities, and carries the powers of a civil court.

6. What are the exceptions to the restriction on disclosure in section 124? Disclosure made with the previous consent in writing of the owner of the business or process; for the purposes of any legal proceeding, including adjudication or arbitration, pursuant to any of the relevant statutory provisions; for the purposes of any criminal proceeding under the Code; and for the purposes of any report of any such proceedings.

7. What is barred by section 125, and what is not? No civil court has jurisdiction in respect of any matter to which any provision of the Code applies, and no injunction may be granted by a civil court in respect of anything done or intended to be done by or under the Code. It does not bar the writ jurisdiction of the High Courts and the Supreme Court, which is constitutional, and it does not bar a claim that does not depend on the Code, such as an action in negligence or on the rule of absolute liability.