Situs Is Not Supreme: Bombay HC Expands Labour Court Jurisdiction Beyond State Borders Overruled GlaxoSmithKline

"Maharashtra Is Not Just Geography": Bombay High Court Opens Door for Out-of-State Workers in Landmark Ruling — In a momentous ruling that reshapes the landscape of industrial law in Maharashtra, the Bombay High Court has held that Labour and Industrial Courts in Maharashtra can entertain complaints from employees posted outside the State, so long as material decisions such as appointment, transfer, or termination were taken at the company’s head or administrative offices within Maharashtra.

The ruling, delivered by Justices M.S. Sonak and Advait M. Sethna, not only unseats a long-standing precedent from the same court but also unlocks access to justice for thousands of employees who had been shut out of forums in Maharashtra due to jurisdictional hurdles.

"GlaxoSmithKline is No Longer Good Law"

The core legal finding in the 143-page judgment is that the earlier Division Bench ruling in GlaxoSmithKline Pharmaceuticals Ltd. v. Abhay Raj Jain (2008), which held that the employee’s location at the time of termination or transfer was the only relevant factor for jurisdiction under the MRTU Act, now stands implicitly overruled.

“The decision of the Hon’ble Supreme Court in Nandram lays down a view diametrically opposite to GlaxoSmithKline. The two are irreconcilable,” wrote Justice Sonak. “Although GlaxoSmithKline was not expressly referred to, the logic and principle applied by the Supreme Court leaves no room for doubt. GlaxoSmithKline is no longer good law.”

This was in reference to Nandram v. Garware Polyester Ltd. (2016), where the Supreme Court held that even though an employee was terminated while posted in Pondicherry, part of the cause of action arose in Maharashtra, as the decision to terminate him had been taken in Aurangabad.

A 15-Year Legal Battle and a Doctrinal Correction

The case before the Bombay High Court was not just about one employee. It encompassed a batch of matters: Appeal No. 585 of 2009 (Chaitanya Ashok Jadhav v. Novartis India Ltd.), and five connected writ petitions involving major pharmaceutical players including Wockhardt, Lupin, Piramal (now Abbott), and Rallis.

The affected employees had waited more than 15 to 18 years for a ruling on whether their complaints could even be heard. During this time, employers had repeatedly objected to the jurisdiction of Labour and Industrial Courts in Maharashtra, arguing that since the employees were posted in other states, the MRTU Act could not apply.

“The employees are at least entitled to know whether they have been knocking on the wrong door for nearly two decades,” the Court observed, adding that many of these workers had been kept out of work, without adjudication on the merits of their complaints, “only because employers chose to exhaust them with legal hurdles.”

"Situs of Employment Is Not Gospel Truth"

In GlaxoSmithKline, the Court had held that only the place where the employee was working — their "situs" — mattered for jurisdiction. But this Division Bench took a fundamentally different view.

“Situs of employment may be a relevant factor. But it is not the only — nor the sole determinative — factor,” wrote the Court, calling GlaxoSmithKline’s approach “narrow, mechanical, and unsuited to the evolving realities of industrial adjudication.”

Instead, the Court ruled that decisions made at head offices — such as transfers and terminations — can give rise to jurisdiction in the state where such decisions originate, even if the employee is posted elsewhere.

The Court referenced the Supreme Court's observation in Nandram, where it was held that “the decision to terminate the appellant having been taken at Aurangabad, necessarily part of the cause of action has arisen at Aurangabad.”

Legal Fiction Meets Practical Reality

One of the most compelling observations came when the Court addressed the concern raised by employers about enforceability. It was argued that Labour Court orders in Maharashtra could not be enforced in another state, making such jurisdiction futile.

Justice Sonak responded sharply: “Enforceability of a Labour Court order is not a matter of geographical accident. It is a matter of law. The Act’s enforcement machinery can be made effective by the State where the cause of action arises.”

The Court also warned against letting "technicality defeat substantial justice," stating: “Employers have, through jurisdictional gymnastics, attempted to ensure that employees never get to see a day in court. That cannot be allowed in a welfare legislation such as the MRTU Act.”

A Clear Rebuke to Tactical Litigation

The judgment also made it clear that objections on territorial jurisdiction can be waived — and in many cases, had already been. Employers, the Court noted, often remained silent on jurisdiction in the early stages, only to revive the objection when cases turned unfavorable.

“This Court cannot be used as a strategic escape route for corporate employers seeking to avoid the scrutiny of lawful adjudication,” the Bench held.

In one of the sharper moments, the Court commented: “Such opportunistic flip-flops seem routine when the aim is to frustrate employees and crush their resistance.”

On "Overruling by Implication"

The Bench delved into the legal doctrine of implied overruling, stating that it is not necessary for a judgment to name a previous decision in order to overrule it.

Quoting from academic commentary, the Court noted, “When the Supreme Court overrules a legal principle by implication, even without express reference, the earlier precedent loses its authority.”

This means that any attempt to cling to GlaxoSmithKline despite its inconsistency with Nandram is “misconceived and legally unsustainable.”

Reliefs Granted — and a Warning to Employers

The Court allowed all appeals and petitions filed by the employees and trade unions. It restored their complaints for adjudication on merits, ordering that these should be disposed of within one year.

The employers were slapped with exemplary costs for “delaying the inevitable” — a rare judicial reprimand that signals a shift in tolerance for procedural exploitation.

The Bigger Picture: A Door Opens for Workers Across India

This ruling does more than resolve a long-standing legal conundrum. It opens the door for thousands of workers across India whose employers are headquartered in Maharashtra.

With companies increasingly managing national workforces from centralised locations in Mumbai and Pune, the decision recognises the modern employment structure — and ensures that justice isn’t trapped by outdated territorial notions.

In the words of Justice Sonak: “When the heart of the decision-making lies in Maharashtra, the law must follow the heartbeat.”

D.D. 03 November 2025