Employers Can Choose Judicial Jurisdiction: Supreme Court
The Supreme Court of India has ruled that private employers have the right to include a clause in the appointment letter specifying the jurisdiction of a particular court for dispute resolution. This provision becomes especially relevant in employment-related disagreements.
A bench comprising Justice Dipankar Datta and Justice Manoj Misra observed that contractual clauses specifying a jurisdiction constitute a valid legal agreement, even if one party holds more power during employment negotiations.
Key Points from the Verdict:
- Private employers may add a specific clause in appointment letters selecting a jurisdiction for resolving disputes.
- The court clarified that such clauses do not strip an employee of their legal right to seek judicial remedy.
- Instead, these clauses merely define which court will hear the dispute to facilitate convenience.
The Supreme Court emphasized, “No party’s legal right to a decision can be taken away by agreement, but for convenience, jurisdiction can be assigned to a particular court.”
Background:
The ruling came during a hearing of appeals related to employees appointed in IDFC Bank in Patna and Krishna Bank in Delhi, who were challenging the jurisdiction clause in their appointment letters. The court clarified that the clause did not deprive the employees of their right to legal recourse but only limited such proceedings to Mumbai courts as stated in their contracts.
