Labour law

27.07.2022

Facts, issue, arguments of both the parties, backdrop, holding

324 –

Definition of workmen (industrial disputes act) –

Prove employer employee relationship exists in every case – this relationship is not very recent, the
scholarly work and t

Shivnandan sharma case – facts: 3 parties – bank, treasurers, cashiers – treasurers were appointed
to manage the cash, and the cashiers were to be appointed by the treasurers, the bank ¶5, who had
the power to remove ; who was to pay the salary? The bank would pay the treasurer, who then gave
the money to the cashiers; the bank had the power to decide the salary of the cashiers; the bank had
the power to scrutinise the working of the cashiers; the dispute arose because the una branch of the
pnb is no longer ?; issue-

SC: treasurer is an independent contractor, court is turning down the decision of the appellate
tribunal; exercise of power on the cashiers – govt. employee analogy (dual control) – the treasurers
and the banks were exercising control over the cashiers; the court applies a tort law test – control
and supervision (applicable in the ccase of a contract of employment) – this test assumes that the
master is an entrepreneur and an expert in the field he is working on, the test originates from 14 th
century, this old test is applicable in the present case ; a person who is an employee, employs
another person, will automatically become an apply of the master

Dharangdhara case – applying the supervision and control test blindly, agarias will not fall under the
definition of – it is not a universal test; but the court applies the same and acecepts that irrespective
of the fact that the test is moving away, the

Definition of workmen goes back to the test of employment –

Close shop agreement –

Court said that the degree of control needs to be determined

Issue of whether a person is an employee or not it is a purely question of fact; the court notes that
if they will be considered as employees, then it will lead to problems, because under the statute,
the

Read case no.3 and 4

29/07/2022

Code of wages – (mentioning of the term worker-17, employee-146)

Code of Social security (mentioning of the term worker-195, employee-26) [different types of
workers mentioned wage worker, building worker, gig worker, home based worker, inter state
migrant worker, platform worker, self-employed worker, unorganised worker]

Code of Industrial code (w-326, e-16) [protected workers, badly workers]

Occupational safety (w- 235, e-98) [unorganised workers, audio visual workers, inter state migrant
worker, building worker, motor transport workers

Definition of employee under the wages code 2019 (§2(k), very broad definition – term
‘establishment’ in the provision

Definition of worker under the wages code (§2(z), term ‘industry’ used in the provision (in this
provision, the terms semi-skilled is not used (when compared to the definition of employee),
manager, administrative capacities, supervisory category with a pay with 15 thousand’

Birdhichand sharma case – dispute

ILO – social justice principle

Silver jubilee case – tailors, 2nd last paragraph

Evolution of the definition of worker is broadening with the cases

16/08/2022

Managerial/administrative (

supervisory distinction –

doctors can’t be considered as workmen – ESIC case – distinction between profession and
occupation

sign retainer agreements with law firms

24.08.2022

DN Banerjee v. PR Mukherjee (1952) – DN Mukherjee – Budge Budge Municipality

25.08.2022

Bangalore water supply case – industrial dispute – BWS said that they are performing a sovereign
function – hence they wont fall under the ambit of industries (passing reference to Safdarjung
Hospital Case) – what all parameters will be considered to determine whether an entity will fall
under the definition of industry

para 49 – highlights the conflict that arises at the stage – judgements were in conflict of each other
(DN Banerjee and Mazdoor Sabha case (Broad definition of industry) vs Gymkhana, Safdarjung, Delhi
Univ. case (Constraint definition)) – does profit need to be considered to determine whether the
entity is an industry is not?
Socialist industries were existing in Russia – capitalist industries in USA – in 1978 – India had a mixed
economy (the principal behind this was socialism); 4.0 Industrial revolution (currently) – rise of AI

Court realises that there are different kinds of industries across countries, hence there cannot be a
uniform of definition of industry.

Statute – Industrial Disputes Act – court: statute should be read as a whole, given emphasis on the
beneficial factors (purpose) – other aspects to be referred to understand the principal – the
constitution and DPSPs (Articles 38 (welfare), 39 (livelihood), 42(participation of worker), 43)

relationship between the employee and the employer (cycle of cooperation and conflict) -

Court dissects the definition of industry by referring to (trade, business, undertaking, calling) – ¶38
“undertaking must be read down to conform to the restrictive characteristics shared by the society
of words before and after” a.k.a. birds of same feather

Tests laid down in the case – 1. primary and predominant trade 2. Integrated activity 3. Systematic
activity (employer employee relationship, production)

Reference to charitable institutions – is profit a

Schools – will fall under the ambit of industry

Professionals – a single lawyer/doctor will not fall under the definition of industry –

Final test for determining whether an entity is an industry or not - Dominant nature of the industry,
is there any systematic activity, production of goods for the satisfaction of human wants

29.08.2022

BWS three pronged test – 1. systematic activity; 2. Employer employee cooperation 3. Production of
goods and services for satisfying human wants, excluding spiritual

37. Subdivisional inspector of post vs. theyyam Joseph

The traditional sovereign function of the govt. – maintenance of law and order

Currently, govt. performs welfare functions – ration shops, fair price shops, welfare, hospitals,
anganwadi

The postal department was not regarded as an industry, because the functions that they performed
were of sovereign nature. additionally, the respondent was regarded as a civil servant. Refer to para
11 (the method of recruitment, the conditions of service, the scale of pay and the conduct Rules
regulating the service conditions of ED Agents are governed by the statutory regulation)

38. Physical Research Laboratory vs. K.G. Sharma

PRL – is a research institute – can be an industry if it fulfils the conditions given in the

PRL’s activity was not commercial –

40. All India Radio vs Santosh Kumar

Overruled subdivisional

You cannot simply bifurcate welfare functions from sovereign functions

01/09/2022

Coir board v Indira Bedi

Cotton and cloth related industry – coconut fibre – used for robes, mats, and in ships, exports
imports ships

Very big coir industry in kerala – the industry was not in good condition, due to which the coir board
came into the picture

The coir board regulated the coir industry – promoted export of coir products – conducted market
outreach programs – research for sale of coir products – opened showrooms for coir industry –

The dispute arose because some typists and clerks were dismissed from their position – the issue
was that the dismissal should be according to the industries dispute act

While writing any answer – First lay down the fact scenario – then explain the sections that are
applicable – then deal with the first case in which the confusion came for the first time

07.09.2022

Definition of industry – verbatim BWS case, sovereign functions, domestic functions, charitable
functions, and any other industry that has been notified, will be excluded from the definition of
industry

The test of severability has to be applied to in cases of sovereign functions; you can carve out the
non-essential activities

Concern w.r.to the definition – ‘any other activity’ – no parameter to determine what will fall under
the phrase – states will compete with one another to have a lower threshold, which would in turn
lower the threshold of the labour code as a whole, no industry would be covered under the
industrial disputes act – this comes in light of what was happening post covid – (reading number 52)

What is an industrial dispute?

Dispute b/w employers and employees/workers, workers and workers, employees vs employees
w.r.to the terms of the contract/wages/leaves

A demand in itself doesn’t qualify as a dispute – only when the demand gets rejected by the
employer, then it becomes a dispute – the demand needs to be raised by the trade union -

An individual dispute becoming an industrial dispute – there should be direct/substantial interest –

you will have to prove that it is of community interest, and the larger benefit of the labour
community is taken into consideration

If the establishment does not have a trade union of its own – an industry wise trade union can
espouse the cause if it is of respresentative character – ‘representative character’ is not defined –
the trade UNIONS ACT SAYS THAT THEre must be at least 100 persons (to form a trade union) or 7
persons (to form a part of the trade of representative character) or 10%

Def – industrial establishment – industry is an activity where people work; establishment is the place
where the activity is carried out1

Understanding means an industry also (take it as an activity) – and here understanding also includes
establish

§36 – industrial disputes Act – who can represent a workman in a dispute, and who can represent an
employee in a dispute – reference is to trade union – it says that irrespective of the fact that trade
unions is not mentioned in the industrial disputes act, it shows that trade unions play a significant
role in collective bargaining, it helps to wing away the disparity of power between the employee and
employer

Common law and legislations have not been kind to collectivisation – if you collectivised for
increasing wages, you would end up in jail, there will also be civil consequences – this position went
till the 19th century – after that, amendments were made: 1. Collectivisation in itself no more to be
penalised 2. Judiciary responded that the activities you undertake under collectivisation would be in
restraint of trade, and will also attract tort of conspiracy and induce breach of contract

Protections with regards to breach of contract, restraint of trade, and conspiracy (120b IPC) – these
protections given out; since the trade unions comprised of many people, they were allowed to have
large funds of money, which can be used for other purposes; in some jurisdiction, strike was made a
statutory right

In India, there is no right to strike, we have the right to assemble peacefully, this means that India
does not have adequate collective bargaining power, India has still not ratified ILO’s (argument: this
would also bring govt. employees under the purview); if we read Industrial Disputes Act- 22, 23, 24,
it can be found out that the prerequisites that need to be met to categorised as a strike cannot be
fulfilled by govt. employees

Discussion on article – reading number 52 –

Prepare a one page summary including your thoughts – response paper – agree/disagree with the
opinions expressed in the paper – article number 52

1
§2(3), Industrial Relation Code 2020