Court asserts conciliation over mandates in the Corrohealth case involving 800 retrenched employees
In a significant ruling, the Kerala High Court has delineated the jurisdiction of the District Labour Officer in the case concerning Corrohealth Infotech Private Limited's decision to shut down its operations in Kerala, resulting in the retrenchment of nearly 800 employees. The court, presided by Justice Gopinath P., clarified that the Labour Officer's directive to maintain the status quo on retrenchment should not be construed as a mandatory order but rather as a part of the ongoing conciliation process under the Industrial Relations Code, 2020.
Corrohealth Infotech Private Limited had approached the Kerala High Court challenging the District Labour Officer, Ernakulam's communication, which instructed them to maintain the status quo with regard to their decision to close operations and discharge employees. The company argued that the shutdown was unavoidable due to circumstances beyond their control and asserted that they had already disbursed retrenchment compensation to the affected employees.
Representing Corrohealth, Senior Counsel Sri. S. Sreekumar contended that the Labour Officer's role is confined to facilitating conciliation between the company and its employees and does not extend to imposing continued employment obligations during conciliation proceedings. The petitioner expressed willingness to cooperate fully with the conciliation process.
The Advocate General, appearing for the respondents, emphasized the social responsibility of the state to engage in conciliation, particularly in light of the substantial number of employees, predominantly women, affected by the abrupt loss of employment. He informed the court of the Labour Department's scheduled meeting to attempt conciliation, convened by the Hon'ble Minister for Labour, Government of Kerala, and urged Corrohealth's participation.
Justice Gopinath P. upheld the Advocate General's stance, reinforcing the state's duty to facilitate conciliation in scenarios involving significant employment loss. The court directed that the Labour Officer's instruction should not be perceived as a binding mandate but as part of the conciliation framework. The court recorded Corrohealth's commitment to partake in the conciliation meeting scheduled for July 10, 2026, at the Ernakulam Collectorate's Conference Hall.
The ruling underscores the importance of conciliation in industrial disputes, ensuring that both parties attempt resolution in accordance with the Industrial Relations Code, 2020, thereby balancing corporate operational decisions with employee welfare considerations.
Bottom line:-
Industrial Relations Code, 2020 - Labour Officer's authority limited to conciliation proceedings - Direction to maintain status quo regarding retrenchment of employees not binding as a mandate but part of conciliation proceedings.
Statutory provision(s): Industrial Relations Code, 2020
Corrohealth Infotech Private Limited v. State of Kerala, (Kerala) : Law Finder Doc id # 2937585
