The High Court of Kerala has definitively ruled that employees of co-operative societies are not required to exhaust departmental appellate remedies under the Kerala Co-operative Societies Rules, 1969, before approaching the Labour Court to challenge disciplinary actions. This judgment settles a recurring procedural dispute, affirming that workers governed by these societies maintain the autonomy to choose their legal forum when contesting termination or other punitive service measures.

The ruling came in response to a writ petition filed by Chokkad Service Co-operative Bank Ltd., located in Malappuram district, which sought to challenge an order issued by the Labour Court in Kozhikode. The dispute originated with the dismissal of a peon, Jishal A., who had been employed by the bank since 2008. Following his suspension over allegations of grave irregularity and insubordination, the society conducted an inquiry and subsequently issued an order of dismissal on December 7, 2023.

Instead of filing an appeal before the society’s executive committee as stipulated under Rule 198(4) of the Kerala Co-operative Societies Rules, the employee initiated an industrial dispute before the Labour Court, Kozhikode. The bank contested the maintainability of this claim, arguing that the employee was legally obligated to first exhaust the internal administrative remedy of an appeal. The bank contended that because the management of the society is vested in its committee, an order of punishment should be viewed as final only after the appellate authority has reviewed it. However, the Labour Court rejected this objection, holding that the claim was maintainable under the Industrial Disputes Act, 1947.

Clarifying the Scope of Concurrent Jurisdiction

In his judgment, Justice Viju Abraham emphasized that the Kerala Co-operative Societies Act and the Industrial Disputes Act both possess concurrent jurisdiction over service-related disputes involving co-operative society employees. The court underscored that once an individual meets the criteria defined under the Industrial Disputes Act—specifically regarding the definition of a "workman" and an "industrial dispute"—they possess the statutory right to seek redressal from the Labour Court directly.

The court explicitly rejected the argument that the order of the president of a society must be validated by an appellate board before it can be challenged by an aggrieved worker. The judgment clarified that Rule 198(4) of the state’s co-operative rules establishes an appellate mechanism, but it does not act as a jurisdictional barrier to constitutional or statutory remedies available elsewhere.

“It is the choice of the employee concerned to choose any one forum out of the two forums available to him/her under the two Acts and to get his/her service disputes decided subject to satisfying the test laid down under the I.D. Act,” the court noted, reinforcing the established position that the employee’s discretion in forum selection is paramount.

Streamlining the Adjudication Process

The court observed that interfering with a tribunal’s order on preliminary issues like maintainability often serves only to delay the resolution of the core grievance. By dismissing the petition, the High Court has effectively prioritized the speedy disposal of industrial disputes, preventing societies from using procedural technicalities regarding internal appeals as a means to defer or evade adjudication by specialized labour tribunals.

Addressing the precedent set by previous rulings, the court reiterated that requiring an employee to pursue an internal appeal before approaching the Labour Court would be an unnecessary legal burden. The judgment pointed to consistent judicial trends, including the decision in Veerankavu Welfare Co-operative Society Ltd. v. C. Sindhu Kumari , which similarly affirmed that exhaustion of departmental remedies is not a prerequisite for invoking Section 2A(2) of the Industrial Disputes Act.

“It is not necessary for the employee to invoke the remedy under Rule 198(4) of the Rules, to file an appeal before the Appellate Authority, ie. the Executive Committee/Board of Management, before approaching the Labour Court under Section 2A(2) of the I.D. Act,” the court stated, dismissing the bank’s reliance on the Division Bench decision in Managing Director, State Bank of India v. S. Murali , which the court clarified was limited to the calculation of limitation periods and not to the requirement of exhausting appellate remedies.

Immediate Practical Implications for Co-operative Societies

The court’s decision holds significant weight for the hundreds of co-operative societies operating across Kerala, as it restricts the ability of these organizations to mandate internal exhaustion of remedies when faced with industrial disputes. For employees, the ruling ensures that the legal path to challenging punitive actions remains direct and accessible.

The High Court observed that the Labour Court, Kozhikode, was correct in its assertion that the termination of the employee falls squarely within the scope of the Industrial Disputes Act. With the preliminary objection to the maintainability of the case now firmly resolved, the Labour Court has been directed to proceed with the dispute.

Given that the underlying industrial dispute has been pending since 2025, the judgment emphasizes the necessity of efficient resolution. The petitioner's challenge was deemed devoid of merit, and the matter now returns to the original forum for a trial on the merits of the dismissal. The final determination will hinge on whether the inquiry conducted by the society and the subsequent termination follow the established principles of industrial law and natural justice, independent of the internal appeals process the society had sought to enforce. The Labour Court is expected to prioritize the final hearing to bring closure to the long-standing employment dispute.