INDUSTRIAL RELATIONS LAW-

MODULE-2
V.NAGARAJ
PROFESSOR of LAW
NATIONAL LAW SCHOOL OF INDIA UNIVERSITY
NAGARBHAVI
BANGALORE-560072
vnagaraj@nls.ac.in
INDUSTRY-Definition

• Section 2(j) of the industrial disputes Act

defines-
• “industry” means any business ,trade,
undertaking, or calling of employers and
includes any calling, service, employment,
handicraft, or industrial occupation or avocation
of workmen.
• In the ordinary sense industry or business
means an undertaking where capital and labour
co-operate with each other for the purpose of
producing wealth and for making profits.
• Nothing prevents the statute from giving a wider
meaning.
• The I.D Act is intended to bring about industrial
peace and harmony.
• Hence Industry is given a wider meaning.
• The judiciary has interpreted Industry in a
number of cases.
• They can be classified as fallows:
• 1st phase 1953 to 1962-wider meaning
• 2nd phase 1963 to 1978- narrow meaning
• 3rd phase BWSSB v A.Rajappa [AIR 1978 SC5
48] -reviewed the earlier cases and widest
meaning was given
• 1978 Parliament Reacts and amends Industry-
not brought in to effect so far
• 4th phase-Reservations about the correct ness of
BWSSB case-Requested the CJI to constitute a
larger bench than BWSSB case to explain what
is industry- State of U.P v Jai Bir Singh [(2005) 5
SCC1]
• 1st phase1953 to 1962
• D.N.Banerji v P.R. Mukherjee [AIR 1953 SC 58]
- The judiciary dealt with the question whether
Municipality is an industry?
• The SC held though municipal activity could not
be regarded as “business or trade” it would fall
with in the scope of the expression “undertaking”
and it is an industry.
• In Hospital Mazdoor Sabha v State of Bombay
The SC held that Hospital comes under then
term “undertaking” hence Industry
• Industry includes even activities which have no
commercial implications.
• Activities carried on by Govt. or charitable
organizations will also be industry.
• The SC in this case laid down a working
principle:
“ an activity systematically or habitually
undertaken for the production and or distribution
of goods or for rendering of material services to
the community with the help of employees is an
undertaking”
• In this case it was also held that an undertaking
to be an Industry must be analogous to trade or
business.
• Sovereign or Regal activities are out side the
scope of Industry.
• Corporation of the city of Nagpur v Its
employees AIR1960 SC 675
• This case was under the C.P and Bearer I.D and
Settlement Act, 1947
• Here unlike the definition of industry in the ID Act
the word undertaking in this definition is qualified
by the words manufacturing or mining.
• The Judiciary could not use the earlier cases
and call Corporation as an Undertaking.
• In this case the SC said that municipal functions
are analogous to “business or trade”
• Hence Corporation was held to be an industry.
• In Nagpur city corporation case there was
another issue raised as to sovereign functions.
• Departments performing sovereign functions are
excluded from the definition of Industry.
• If a department performs many functions, some
pertaining to industry and other non industrial
activities, the predominant functions of the
department shall be the criteria for the purpose
of deciding whether the department is industry or
not.
• The Sovereign functions shall be confined to
legislative power, administration of Law and
Judicial power.
• Trend Between 1963 to 1978
• In this period the trend was narrowing down the meaning
of the term industry.
• University of Delhi-v-Ramanath AIR1963 SC 1873 the
SC held that University is not an industry-because:
• Main scheme of an educational institution is imparting
education
• Teaching is not with in the purview of industry as there is
no commercial motive
• The subordinate staff play a minor or insignificant role in
the process of imparting education
• Permitting the insignificant role of the subordinate staff to
lend the colour of industry is unreasonable.
• Cricket Club of India-v-Bombay Labour union
AIR 1969 SC 276 The SC held that Cricket
Club is not an Industry.
• The Clubs activity is basically promotion of
the game of Cricket.
• It is a self serving institution
• It is not carrying any trade or business.
• In the course of promoting the game it has
incidentally earned some profits.
• It is not set up for earning profits.
• In the Management of Sardarjung Hospital-v-
Kuldipsingh Sethi AIR 1970 SC 1407, the SC
held that Hospital is not an industry.
• They overruled the earlier Hospital mazdoor
sabha case
• Hospitals run by the Government or Charitable
institutions are not run on commercial lines.
• If an hospital or Nursing home is run on
commercial basis then it may be an industry.
• The hospitals in question are not industry as
they are not run on terms analogous to trade or
business.
• Bangalore Water supply Sewerage Board-v-
A.Rajappa AIR 1978 SC 548 This was a seven
judge bench constituted to review all the
earlier cases and explain what is the
meaning of Industry.
• This case revived the pre 1962 cases and
over ruled the post 1962 cases.
• The law developed in this case is an
amalgamation of Hospital Mazdoorsabha
case and Nagpur city Corporation case, with
minor eloborations.
• The BWSSB case developed a working principle to
determine whether an activity is an industry or not:
1. Systematic activity
2. organized by Co-operation between
employer and employee
3. For the production and or distribution of
goods or services;
• Such an activity is an industry
• Absence of profit motive is irrelevant.
• If the organization is trade or business it does not
cease to be one because of philanthropy animating the
undertaking
• A restricted Category of professions, Clubs, co
operatives and little research labs may qualify
for exemption, if no employees are entertained
but in minimal matters, marginal employees are
hired without destroying the non employee
character of the unit.
• Regal functions the approach fallowed in Nagpur
city corporation was fallowed
• Sovereign functions strictly understood alone
qualify for exemption, not the welfare activities or
economic adventures undertaken by
government or statutory bodies.
• Parliamentary reaction-1982
• Amendment to section 2(j)- industry
• Amendment barrowed the definition as given in the
BWSSB case- Clarified the situation further by stating
that employer – employee relation includes employees
employed through contractor.
• The definition excludes certain categories of employment
from the definition.
• Coir board-v- Indiradevi (2000)1 SCC 224
• State of U.P-v-Jai Bir Singh (2005)5SCC1 a
constitutional bench decision.
• Now it has been referred to 9 judge bench
Definition of Workman-Section 2(s)

• Workman means any person (including an apprentice)

employed in any industry to do any manual, unskilled,
skilled, Technical, Operational, clerical or supervisory
work for hire or reward, whether the terms of
employment be express or implied
• It includes industrial disputes arising out of dismissal,
discharge or retrenchment
• It excludes persons subject to defence forces, police
force and prison service
• It excludes persons who are mainly employed in
managerial or Administrative capacity
• The definition does not differentiate between
permanent, temporary etc workers
• Conflicting judicial decisions as to the
interpretation of the definition
• Burmah shell storage Distribution Co; of India
ltd-v-Management staff
association(1970)2LLj590
• May and Baker(I) ltd-v-Workmen(1961)2LLJ94
• Sundarambal-v- Govt of Goa(1989)1LLJ61
• The above three decisions gave literal
interpretatio as per the words used in th
definition
• S.K.Verma-v-Mahesh
Chandra(1983)Lab.I.C1483 SC gave a beneficial
interpretation to the definition by holding that if
an employee employed in an Industry is not
expressly excluded from the definition of
workman then he is included in the definition.
• H.R.Adyanthaya-v-Sandoz(India)ltd
(1995)1LLJ303 SC- Constitutional bench
decision held that earlier trend of decisions are
correct and over ruled S.K.Verma case
• Distinction between workman and
independent contractor
• Workman does the work by himself where as
an independent contractor gets the work
done by others
• Workman is subject to supervision and
control of the employer where as
independent contractor is not
• Workman is hired by the employer and can
be terminated. In case of contractor there is a
contract.
• Hussainbai-v- Alath Factory union AIR1978 SC 1410
• The workers employed under a contractor
• The work was done for the principal employer
• The work was carried at the principal employers premises
• The raw materials were supplied by the principal
employer
• The workers raised a dispute that they are the workmen
of the principal employer
• The I.T adjudicated that the workmen are the employees
of the principal employer
• The S.C up holds the decision of the tribunal and held
that the contractor is a sham
Industrial Dispute and individual dispute

• Industrial dispute means any dispute or

difference between employers and employers, or
between employers and workmen or between
workmen and workmen, which is connected with
employment or non-employment or the terms of
employment or with the conditions of labour of
any person.
• The dispute has to be between plurality of
workman and employer
• Individual workman cannot raise an industrial
dispute
• A trade union or a number of workmen must rise
the dispute
• What number of workmen are required to rise an
industrial dispute
• The SC has said that substantial number of
workmen will have to rise the dispute
• The Sc has said that substantial number is not
majority
• It must however be such number as to lead an
inference that the dispute is one which affects
the workmen as a class.
Individual dispute deemed as industrial
dispute
• 1965 amendment to I.D ACT and insertion of 2A.
• Where any employer discharges, dismisses,
retrenches or otherwise terminates the services
of an individual workman, any dispute or
difference between that workman and his
employer…….shall be deemed to be an
industrial dispute notwithstanding that no other
workman nor any union of workmen is a party to
the dispute.
• This definition is not applicable to disputes short
of termination
• Any person used in the definition
• Workmen of Dimakuchi Tea estate-v- Dimakuchi
Tea estate (1958)1LLJ500S.C The Court held
that the word any person in the definition means
a person in whose employment or non
employment or terms of employment or
conditions of labour the workmen as a class
have a direct and substantial interest
• Whether such direct and substantial interest has
been established in a particular case will depend
on its facts and circumstances
• Standard Vacuum refining co; of India ltd-v-
the workmen (1960)2LLJ233SC
• this case labour was employed for cleaning and
maintenance through contractor
• The regular employees raised a dispute for
regularising the contract labour
• The regular workmen have direct and substantial
interest in the contract workers
 Compulsory Adjudication LC, IT, NT
Reference by the
Appropriate Government
Sec. 10(1)
Award Sec. 18(3) of ID Act

S. 2-A, 33-A

Publication of award

Conciliation (if successful Judicial review - Art. 226 or

Settlement) Art. 136
Sec. 18(3) of INDUSTRIAL
The I D act DISPUTES
Voluntary Arbitration – 10-A

Award – 18(2) & 18(3)

Judicial review - Art. 226 or

Art. 136

Collective Bargaining –
If successful – settlement
Sec. 18(1) of ID Act
Collective bargaining

• It is resolving Industrial disputes by negotiation between the

workmen and Employer.
• Though it has been quite common the law recognised only from
1956
• The amended definition 2(p) of the I.D.Act recognises settlements
other than Conciliation settlements
• Section 18(1) recognises bilateral settlements to be binding on the
parties to the settlements
• Tata Chemicals-v-Workmen(AIR1978SC828)
• Unfair labour practices recognises that it is illegal to refuse with a
recognised trade union.
• In the process of Bilateral negitiations the parties can use the
Weapons of strikes and Lock outs in order to make the opposite
party behave reasonably
• 2(q) Strike means cessation of work by a body of
persons employed in any industry acting in combination,
or a concerted refusal, or a refusal, under a common
understanding of any number of persons who are or
have been so employed to continue to work or to accept
employment.
• The definition does not speak about the purpose of strike
• So a strike can be pursuant to an I.D or even otherwise.
• The law regulating strikes also does not say that a strike
has to be pursuant to an I.D only
• Judiciary has classified strikes in to justified and un-
justified strikes
• A strike for purposes other than I.D is unjustified
• The facts and circumstances determine whether a strike
is justified or un justified.
• 2(L) defines Lock out as the temporary closing of
a place of employment or the suspension of
work or refusal by an employer to continue to
employ any number of persons employed by
him.
• It is an act of belligerency as opposed to Lay-off
• Lockout is also classified as justified and
unjustified based on the circumstances of the
case
• The labour Court decides the justifiability or
other wise of the strikes or lockouts.
• Wages for the period of strikes and lockouts –
Syndicate Bank-v- Umesh Nayak 1995 SC
• Go Slow
• Not a strike
• Considered as a serious form of misconduct
• Bharath Sugar Mills ltd-v- Jai singh –How the
Supreme Court considered it as a serious
misconduct
• Go slow is likely to be much more harmful than
a strike
Conciliation

• It is facilitated negotiation
• Conciliation and Board of conciliation
• Conciliation by the conciliation is quite popular
• It is compulsory in public utility services
• Among other services any section of an industrial
establishment on the working of which the safety of the
establishment or the workmen employed there in
depends is also a public utility service.
• In public utility services notice has to be given before
going on strike.
Binding nature of conciliation settlement
• Binding on parties to the dispute
• All other parties summoned to appear in the proceedings
as parties to the dispute
• Where a party referred to above is an employer, his heirs
successors or assigns in respect of the establishment to
which the dispute relates
• Where a party referred to above relates to workmen, all
persons who were employed in the establishment or part
of the establishment as the case may be to which the
dispute relates on the date of the dispute and all persons
who subsequently become employed in that
establishment
• In reality how Bi-lateral settlements are converted in to
conciliation settlements!
Appropriate Government

• Sec 2(a) of the I.D Act defines

• Industries carried on by or under the authority of the
Central Govt –central govt is the appropriate govt
• Industries listed in the definition central Govt is the
appropriate Govt
• For other industries State Govt is the appropriate Govt
• Meaning of carried on by the C.G
• Meaning of carried under the authority of the C.G
Appropriate Govt case law

• Heavy Engineering Mazdoor Union-v-State of

Bihar 1969(1)SCC 765
• HAL-V-Workmen AIR 1975 SC 1737
• Air India Statutory Corporation-v-United Labour
Union(1997)1LLJ 111 SC
• SAIL-V-National Union Water Front Workers
AIR 2001SC 3527
• Workmen of Sri Rangavilas Motors (P) ltd-v-
Rangavilas Motors (p) ltd(1967)2LLJ 12 SC
Government power of Reference

• It is discretionary
• Subject to judicial Review
• Exercised at any time
• Not when arbitration has started or notification is issued
• Nirmal singh-v- state of punjab case
• State amendments with reference to 2A disputes
• Recommendations of Rajasthan Road transport
corporation-v-Krishna kant
• Punishment short of termination requires reference
Compulsory Adjudication

• Western India Automobiles-v- Industrial

tribunal(1949)1LLj245 FC
• Industrial adjudication is not according to the strict law of
master and servant
• Industrial tribunals have powers to do justice by applying
principles of equity
• They create rights and duties in favor of the parties
• They can create contract for the parties which can be
enforced by coercion
• Mismatch between the expectations and the
qualifications
•
Section 11-A of the I.D Act

• Proviso- In case of any proceedings under this section,

the L.C;I.T shall rely only on the materials on record and
shall not take any fresh evidence in relation to the matter
• Workmen of Firestone Rubber Co. of India Ltd-v-
Management (1973)1LLJ278SC held-Materials on record
means-
• Evidence taken at the inquiry and the proceedings of the
enquiry
• The above and any additional evidence led before the
tribunal
• Evidence placed before the tribunal for the first time in
support of action taken by an employer as well as the
evidence adduced by the workman contra
Voluntary Arbitration Sec10A

• Agreement between the workmen and the Management

• Send copy to the Govt and conciliation officer
• Publication of the agreement
• KarnalLeather Karmachari Sanghatan –v-Liberty foot
wear (1989)$SCC448-Publication of the arbitration
agreement is a must before arbitration
• Notification by the Govt if majority workmen are parties
to the dispute
• Binding nature of the award-18(2) or 18(3)
• Rohtas Industries Ltd-v-Rothas industries staff union –
Arbitration subject to judicial review
Publication of awards

• Publication is must
• Time duration of 30 days is directory
• Award comes in to operation 30 days after
publication
• Remington Rand of India Ltd-v-
Workmen(1962)1LLJ287SC
• Grindlays bank-v-CGIT(1980)SuppSCC420-
Power of the Tribunal to recall the award