Tamil Nadu Government Order Declaring Auto Component Industry 'Public Utility Service' Stayed By Madras High Court

The Madras High Court has passed an interim stay order against a government order issued by the Tamil Nadu government’s labor and employment department, declaring the automobile component industry as a ‘public utility service’ under the Industrial Disputes Act.

Earlier, the Tamil Nadu government had claimed that the objective behind the declaration was to “boost investor confidence” in the state’s manufacturing sector as well as ensure that company managements don’t declare lockouts due to agitating unions.

Incidentally, the stay order came after a Coimbatore-based labor union called Kovai Mavatta Pricol Thozhilalar Otrumai Sangam moved the Madras High Court challenging the declaration of the Tamil Nadu government’s labor and employment department.

The labor union argued that by no stretch of imagination could auto components manufacturing industry be brought within the ambit of 'public utility service'.

Hence the declaration under the government order was arbitrary, irrational and could not be countenanced in law, the union had argued.

After hearing the submission, the Madras High Court’s Justice V Parthiban stated that said the government order does not satisfy the requirement provided under the Industrial Disputes Act.

The court stated that there is no public emergency or public interest involved in the auto components manufacturing industry and hence the government order is the result of arbitrariness and non-application of mind.

The hearing of the case has been adjourned to August 29.