MODULE 2

INDUSTRIAL
DISPUTES
VIRANGNA DHILLON
THE INDUSTRIAL DISPUTES ACT, 1947
AIM:
To maintain industrial peace by providing mechanisms for the
resolution of conflicts between employers and employees.

KEY FEATURES:
- Legal framework for settling disagreements.
- Definition and scope of industrial disputes.
- Processes established for conciliation and arbitration.

FUNCTIONS:
- Works Committees formation guidance.
- Labor Courts and Industrial Tribunals constitution.
OUTCOME: ENHANCES COLLECTIVE BARGAINING AND INDUSTRIAL DEMOCRACY.
DEFINITIONS
INTERPRETING KEY TERMS
The words ‘employer’, ‘industry’, ‘industrial dispute’ and ‘workman’
in section 2(g), (j), (k) and (s) of the ID Act are statutory terms, wider
in import than their ordinary meaning.

Merely because the employer is a government department or a local

body, etc., an enterprise does not cease to be an ‘industry’.

Ideologically, it ensures overall welfare of the society with least

exploitation of the workmen and also makes the production of
goods and material services cheaper by eliminating profit motive.
DECODING “INDUSTRY”
The definition of the term ‘industry’ in section 2(j) is both exhaustive
and inclusive.

The first part lays down that industry “means any business, trade,
undertaking, manufacture or calling of employers” and the
second part specifies that it “includes any calling, service,
employment, handicraft or industrial occupation or avocation of
workmen.”

Thus, while the first part defines it from standpoint of the employer,
the second part visualises it from that of the employees.
Bangalore Water
Supply and Sewerage
Board vs. A. Rajappa
and Others (1978)
BANGALORE WATER SUPPLY AND SEWERAGE
BOARD VS. A. RAJAPPA AND OTHERS (1978)
This case broadened the interpretation of "industry" to include
almost all types of establishments that engage in systematic activity
involving the cooperation of employers and employees, intending to
produce and distribute goods and services calculated to satisfy
human wants and wishes, excluding some sovereign functions.

This comprehensive definition includes not only traditional

commercial establishments but may also encapsulate charitable
organizations, educational institutions, cooperatives, and other
similar enterprises provided they engage in an economic activity
involving employer-employee interaction.
THE TRIPLE TEST
SYSTEMATIC ACTIVITY:
The case established that "industry" includes any systematic activity
facilitated by cooperation between the employer and employees
(workmen).

COOPERATION BETWEEN EMPLOYER AND EMPLOYEE:

The employer-employee interaction is key to this definition,
irrespective of the nature of the activity or its profit motive.

ACTIVITY PERTAINING TO GOODS AND SERVICES

PRODUCTION TO FULFILL HUMAN NEEDS:
This criterion indicates that any activity that results in goods or
services that fulfill human needs may be classified as an "industry."
THE TRIPLE TEST ALSO EMPHASIZES SEVERAL
IMPORTANT POINTS:

The systematic activity can be motivated by profit or financial

gain, but a profit motive is not necessary to qualify an activity as
an "industry."
Philanthropic and charitable activities do not disqualify an
organization from being recognized as an industry.
The true nature of the activity—the functional aspect focusing on
the employer-employee relationship—is the critical factor in
defining an "industry."

Notably, sovereign functions were exempted from the definition of

"industry." This can include typically governmental activities under
the purview of the state's sovereign authority, although the exact
definition of sovereign functions was not conclusively established.
THE DOMINANT NATURE TEST
This test addresses situations where an organization carries out
multiple activities, some of which might fall under the scope of
'industry' as per Section 2(j) of the Industrial Disputes Act, 1947,
while others may not.
If the primary function of any department falls within the category
of 'industry', that department is deemed to be an industry.

Sovereign functions of the government are exempted from the

definition of ‘industry’. However, if certain departments of the
government perform activities that align with the definition of
industry, then that section might be classified as an industry.

It was noted that while the government maintains overall authority,

the everyday management and operational activities are often
handled by private entities.
ANALYSIS
The case's broad interpretation of 'industry' has had significant
implications, bringing a wide variety of organizations under its
purview, including educational institutes and charitable
organizations, which traditionally were not considered industries.

Following Departments of the municipality were held to be

“industry:

(i) Tax (ii) Public Conveyance (iii) Fire Brigade (iv) Lighting (v) Water
Works (vi) City Engineers (vii) Enforcement (Encroachment) (viii)
Sewerage (ix) Health (x) Market (xi) Public Gardens (xii) Education
(xiii) Printing Press (xiv) Building and (xv) General administration.
BASED ON THE TRIPLE TEST,
DO

HOSPITALS
FALL WITHIN THE PURVIEW
OF “INDUSTRY” UNDER THE
INDUSTRIAL DISPUTES ACT?
HOSPITAL MAZDOOR SABHA
PRIVATE V. GOVERNMENT
There was no doubt that if a hospital was run by private citizens for
profit or no profit it would nevertheless be an ‘undertaking’ within
the meaning of section 2(j) and merely because such activity was
undertaken by government it could not take the activity out of the
definition of ‘industry’.

The fact that the state did not conduct this activity for profit made
no material difference.
BASED ON THE TRIPLE TEST,
DO

EDUCATIONAL
INSTITUTIONS
FALL WITHIN THE PURVIEW
OF “INDUSTRY” UNDER THE
INDUSTRIAL DISPUTES ACT?
UNIVERSITY OF DELHI V. RAM NATH
Educational institutions would not fall within the meaning of
‘industry’ because their aim was education and the teachers’
profession was not to be equated with industrial workers. The work
in the university was primarily carried on with the help of teachers
who were not covered by the definition of ‘‘workman’’ and,
therefore, educational institutions like the University of Delhi were
not ‘industry’.

BANGALORE WATER SUPPLY AND SEWERAGE

BOARD VS. A. RAJAPPA AND OTHERS (1978)
Educational institutions were included within the ambit of
"industry" because they met the criteria set forth by the triple test.
The Court identified that these institutions perform a systematic
activity with the cooperation between the staff (employees) and the
educational administration (employers) to offer educational services
which cater to an essential human want, i.e., education.
An industry is continuity, is an
organized activity, is a purposeful
pursuit – not any isolated adventure,
desultory excursion or casual, fleeting
engagement motivelessly undertaken.
Such is the common feature of a trade,
business, calling, manufacture –
mechanical or handicraft-based –
service, employment, industrial
occupation or avocation…
KEY TAKE AWAYS
DECISIVE PRINCIPLES FOR IDENTIFYING
‘INDUSTRY’ UNDER THE ID ACT
(a)Where (i) systematic activity, (ii) organised by co-operation
between employer and employees, (iii) for the production
and/or distribution of goods and services calculated to satisfy
human wants and wishes prima facie, there is an ‘industry’ in that
enterprise.

(b)Absence of profit motive or gainful objective is irrelevant, be

the venture in the public, joint, private or other sector.

(c)The true focus is functional and the decisive test is the nature of
the activity with special emphasis on the employer-employee
relations.
(d) If the organisation is a trade or business, it does not cease to be
one because of philanthropy animating the undertaking.

(e) ‘Undertaking’ must suffer a contextual and associational

shrinkage; so also, service, calling and the like. Thus all organised
activity possessing the triple elements, although not trade or
business, may still be ‘industry’ provided the nature of the
activity, viz. the employer-employee basis, bears resemblance
to trade or business.

(f) However, where a complex of activities, some of which qualify for

exemption, others not, involves employees on the total undertaking,
some of whom are not “workmen” as in Delhi University or some
departments are not productive of goods and services if isolated,
even then, the predominant nature of the services and the
integrated nature of the departments as explained in Corporation of
Nagpur will be the true test. The whole undertaking will be
‘industry’ although those who are not ‘workmen’ may not
benefit by the statute.
(g) A restricted category of professions, clubs, co-operatives and
even gurukulas and little research labs may qualify for exemption if
in simple ventures, substantially, and going by the dominant nature
criterion, substantively, no employees are employed but in
minimal matters marginal employees are hired without
destroying the non-employee character of the unit.

(h) If, in a pious or altruistic mission many employ themselves,

free or for small honoraria or like return, mainly drawn by sharing in
the purpose or cause, such as lawyers volunteering to run a free
legal services clinic or doctors serving in their spare hours in a free
medical centre or ashramites working at the bidding of the holiness,
divinity or like central personality, and the services are supplied free
or at nominal cost and those who serve are not engaged for
remuneration or on the basis of master and servant
relationship, then the institution is not an industry even if stray
servants, manualor technical, are hired.
(i) Notwithstanding the previous clauses, sovereign functions,
strictly understood (alone) qualify for exemption, not the welfare
activities or economic adventures undertaken by government or
statutory bodies.

(j) Even in departments discharging sovereign functions, if there

are units which are industries and they are substantially severable,
then they can be considered to come within section 2(j).

All the judges, however, pleaded for legislative reform and

made it clear that the judgment only sought “to serve the
future hour till changes in the law or in industrial culture
occur”.
AMENDMENTS TO THE DEFINITION
INDUSTRIAL DISPUTES (AMENDMENT) ACT, 1982
The 1982 amendment sought to address the uncertainties and
ambiguities that had arisen due to the wide and somewhat
expansive interpretations of what constitutes an industry,
particularly in the wake of the Bangalore Water Supply case which
had included a broad range of services under the definition of
industry, including educational institutions.
The amendment aimed to exclude certain types of establishments
and services from the definition of 'industry' such as:

Sovereign functions strictly confined to governmental

administrative operations,

Arms and ammunition production, atomic energy, and space

research establishments,

Hospitals and dispensaries,

Educational, scientific, research and training institutions,

Institutions owned or managed by organizations wholly or

substantially engaged in any charitable, social or philanthropic
service,

Khadi or village industries,

Any activity of the Government relatable to the sovereign
functions of the Government including all the activities carried
on by the departments of the Central Government dealing with
defense research, atomic energy, and space,

Any domestic service,

Any activity, being a profession practised by an individual or

body of individuals if the number of persons employed by the
individual or body of individuals in relation to such profession is
less than ten,

Any activity, being an activity carried on by a co-operative society

or a club or any other like body of individuals, if the number of
persons employed by the co-operative society, club or other like
body of individuals in relation to such activity is less than ten.
Physical Research
Laboratory v K.G.
Sharma (1997) 4 SCC
257
FACTS
The respondent, K.G. Sharma, was appointed by the Physical
Research Laboratory (PRL) as a Scientific Glass Blower on 25th
October 1948.

Sharma was transferred to a non-technical administrative post

on 11th May 1976.

He was retired from his service upon attaining the age of 58,
effective from 1st January 1979. Sharma challenged his
retirement, having expected to retire at 60.

Following a writ petition and a failed resolution, a complaint was

filed with the Labour Commissioner, leading to a reference made
to the Labour Court in Ahmedabad.
ISSUE
WHETHER THE ACTIVITIES
PERFORMED BY PHYSICAL
RESEARCH LABORATORY CAN
BE CLASSIFIED AS AN
'INDUSTRY' UNDER SECTION 2(J)
OF THE INDUSTRIAL DISPUTES
ACT.
ANALYSIS
The Court carefully scrutinized the nature of PRL's work and found that,
despite being systematic and involving employer-employee
cooperation, it did not align with activities typically seen in trade or
business.

It was noted that PRL's research was not aimed at commercialization

or at directly satisfying human wants and needs.

Rather, PRL was engaged in pure research for educational and

knowledge-acquisition purposes.

Hence, while research institutions could generally be considered

industries, PRL, given its specific objectives and the nature of its
operations, did not fit the bill.
ANALYSIS
The essence of the Court's analysis is in distinguishing between
commercial undertakings which produce and deliver services to
satisfy consumer needs, and institutions like PRL that engage
in non-commercial activities despite having aspects of
structured and cooperative work. The Court's reasoning is careful
to consider the possibility that some research institutions might
qualify as 'industries', but that PRL, due to its lack of profit motive,
intended purpose of research, and the non-commercial aspect of its
endeavors, does not.

In summary, the Court acknowledged the Bangalore Water Supply

case broadly defined 'industry' but clarified it by explaining the
underlying principle of these definitions could not stretch to
encompass institutions like PRL which operated on
fundamentally distinctive grounds.
General Manager
Telecom v A Srinivasa
Rao (1997) 8 SCC 767
ISSUE
WHETHER THE TELECOM
DEPARTMENT OF THE UNION OF
INDIA IS AN ‘INDUSTRY’ WITHIN
THE MEANING OF SECTION 2(J)
OF THE INDUSTRIAL DISPUTES
ACT, 1947.
ANALYSIS AND HELD
It was noted that the dominant nature test allowed commercial
activities not engaged in sovereign functions to be classified as
'industry’, and that several prior judgments had misapplied the test
resulting in a conflicting understanding of what constitutes an
‘industry’.

The Supreme Court firmly stated that the correct application of

the Bangalore Water Supply case left no doubt that the
Telecom Department, given its commercial nature and absence
of sovereign function discharge, fit the definition of an industry
under Section 2(j) of the Industrial Disputes Act.

Held: The Supreme Court concluded that the Telecom Department

of the Union of India is to be considered an 'industry' within the
meaning of Section 2(j) of the Industrial Disputes Act, 1947.
Coir Board, Ernakulam
and Cochin v Indira
Devi (1998) 3 SCC 259
FACTS
Coir Board, a statutory body under the Coir Industry Act, 1953,
was set up for the development of the Coir Industry and for
promoting exports.
It was involved in collecting statistics, conducting scientific,
technological, and economic research, setting up quality
standards and inspection mechanisms, licensing and
regulation, and advising on industry development.
To improve marketing and exports, the Coir Board
maintained showrooms and sales depots, selling products
through them on a commission basis.
Certain temporary clerks and typists employed by the Coir
Board were discharged. They claimed their terminations
should adhere to the Industrial Disputes Act, 1947
ISSUE
THE LEGAL QUESTION WAS WHETHER
THE COIR BOARD FALLS UNDER THE
AMBIT OF 'INDUSTRY' AS PER THE
DEFINITION IN SECTION 2(J) OF THE
INDUSTRIAL DISPUTES ACT, 1947.
ANALYSIS
Reference was made to key cases such as Bangalore Water Supply &
Sewerage Board v. A. Rajappa, which had provided an expansive
interpretation of "industry" to include nearly all organized activities
where employers and employees are engaged in producing goods
or rendering services.

The Court contemplated the dominant nature test, where the

dominant activity of an entity determines its status as an industry.

The Coir Board's primary function to promote the coir industry and
make its products more marketable does not necessarily equate to
running an industry itself. If the tests from the "Bangalore Water
Supply and Sewerage Board's case" were applied, practically
any organization doing useful work and employing people
might be labeled as an industry.
HELD
The Supreme Court's conclusion was that based on the
predominant objective of the Coir Board - not to run an industry
itself but to aid the coir industry - it should not be considered
an 'industry'.

Noting the necessity of judicial re-examination due to the sweeping

application of the 'industry' definition as provided in previous cases,
the Court suggested that the matter be placed before the Chief
Justice of India to consider whether a larger bench should be
constituted to reconsider the decision of the Court in the Bangalore
Water Supply case.

The Supreme Court’s meticulous examination underscored the

complexity of applying a single legislative definition to a vast
array of diverse entities.
All India Radio v
Santosh Kumar (1998)
3 SCC 237
FACTS
The respondent employees included clerks, linemen, watchmen,
and other casual workers who were working at All India Radio
or Doordarshan Kendras at the relevant time.

These employees had challenged their termination orders or

the non-regularization of their services before authorities
established under the Act. The termination orders were set aside,
and regularization was granted, along with consequential
benefits. All India Radio and Doordarshan Kendra's writ petitions
before the High Court were dismissed, leading to this appeal.
ISSUE
WHETHER ALL INDIA RADIO AND
DOORDARSHAN, ENGAGED IN BROADCASTING
ACTIVITIES, CAN BE DEFINED AS 'INDUSTRIES'
WITHIN THE ACT'S DEFINITION, ESPECIALLY
CONSIDERING THEY PERFORM COMMERCIAL
ACTIVITIES FOR PROFIT, SUCH AS
BROADCASTING ADVERTISEMENTS AND
SERIALS FOR FEES.
ANALYSIS
The court considered and overruled certain judicial precedents,
asserting that earlier decisions which held that entities
performing sovereign functions could not be considered as
'industries' under the Act were not applicable anymore.

The point of contention was the degree to which sovereign

functions were being performed by All India Radio and
Doordarshan Kendras as against their commercial activities.

All India Radio and Doordarshan Kendras engaged in

commercial pursuits, evidenced by their advertising and fee-
based telecasts, which are not sovereign activities but are
directed towards profit-making.
HELD
The Supreme Court held that All India Radio and Doordarshan
are indeed 'Industries' under the definition provided by Section
2(j) of the Act.

The termination orders were in violation of Section 25-F of the

Act and not challenged on merits. Hence, the dismissed
employees were ordered to be reinstated in their previous
positions with all due benefits under the impugned orders.

The appellants were directed to implement these orders and

reinstate the respondents within six weeks from the date of this
judgment.
Agricultural Produce
Market Committee v
Ashok Harikuni (2000)
8 SCC 61
FACTS
APMCs were set up under the Karnataka Agricultural Produce
Marketing (Regulation) Act, 1966, with a primary objective to
regulate the marketing of agricultural produce in the state.

The APMC was not established with an intent to make a profit

but rather as a statutory regulatory body. It was formed to
oversee and facilitate the proper conduct of the marketing of
agricultural products, benefiting both the agriculturists and the
general public.

The Committee formed under the Act is a body corporate with

perpetual succession, a common seal, and the capability to acquire
and hold property, sue and be sued. It is an entity recognized by law
to work effectively and independently.
ISSUE
WHETHER THE AGRICULTURAL
PRODUCE MARKET COMMITTEE
(APMC) IS AN "INDUSTRY" AS
CONTEMPLATED UNDER THE
INDUSTRIAL DISPUTES ACT,
1947.
ANALYSIS
SOVEREIGN FUNCTIONS
The judgment distinguishes between sovereign or ‘regal’ functions
of the state, which are inherently governmental and inalienable
(like legislation, administration of law, judicial power, defense,
foreign affairs), and other activities that could be considered
'industrial', even if they are carried out by the state.

What is relevant is whether the function performed by the

entity could also be conducted by a private individual or
company. If so, it is likely to be considered as "industry" under
the Act.

Sovereign powers are specified as defense, acquiring territory,

maintaining law and order, etc., and are immune from civil court
jurisdiction.
The activities of the APMC, such as regulating marketing of
agricultural produce, can be, and are often, performed by non-
governmental or private organizations.

The operations of the APMC were not ad hoc or informal; instead,

they were conducted systematically and organized, akin to how
a business enterprise operates, thereby fitting the definition of an
"industry."

The fact that certain employees of the appellant are civil

servants is irrelevant, as the critical criterion to determine the
applicability of the term 'industry' depends on the primary purpose
for which the organization’s personnel are employed.
HELD
Supreme Court held that the APMC functions in a manner similar to
that of a business undertaking in the systematic arrangement and
regulation of the marketing of agricultural produce.

This purpose is distinct from the sovereign functions

traditionally recognized by the law.

As such, the operations of the APMC were seen to have enough

characteristics of an "industry" to bring it within the ambit of the
Industrial Disputes Act, granting its workers the status and
protections as "workmen" under the Act.
State of UP v Jai
Bir Singh (2005)
5 SCC 1
ISSUE
WHETHER CERTAIN GOVERNMENT-
OPERATED OR WELFARE ACTIVITIES,
PARTICULARLY 'SOCIAL FORESTRY',
FELL WITHIN THE DEFINITION OF
“INDUSTRY” UNDER THE INDUSTRIAL
DISPUTES ACT, 1947.
ANALYSIS
The seven-judge bench decision in the BWS case provided an
extensive interpretation of 'industry' that encapsulated a vast array
of systematic activities encompassing employer-employee relations,
irrespective of the profit motive.

The legislative response to the Bangalore Water Supply case

with the Industrial Disputes (Amendment) Act 1982 led to a
modified definition of 'industry'. However, the execution of this
amendment has been stalled for over 23 years due to non-
enforcement.

The broad interpretation led to practical difficulties in the context

of industries like hospitals and education where the right to
strike or closure would impede essential services.
SOVEREIGNTY
"It is submitted that in a constitutional democracy where
sovereignty vests in the people, all welfare activities undertaken
by the State in discharge of its obligation under the Directive
Principles of State Policy contained in Part IV of the
Constitution are 'sovereign functions'."

To restrict the definition of 'sovereign functions' merely to

inalienable functions, like traditional law and order paradigms,
could lead to excluding significant welfare and developmental
activities from being recognized as intrinsic to modern
sovereign responsibility.

The practical outcome of this expanded interpretation means that

certain State initiatives, while systematic and organized (which may
typically qualify them as 'industry'), if fundamentally rooted in the
exercise of sovereignty concerning public welfare, should be
exempt from being classified under the umbrella of 'industry'.
PUBLIC WELFARE ACTIVITIES
"Wherever the government undertakes public welfare activities
in discharge of its constitutional obligations, such activities
should be treated as activities in discharge of sovereign
functions falling outside the purview of 'industry'."

Public welfare activities could include but are not limited to

healthcare services, education, housing, social security,
environmental protection, and the provision of amenities, which are
often subsidized or provided free to ensure universal access.

The explicit delineation made by the Court seeks to establish clear

boundaries so that welfare-driven public sector undertakings
do not get conflated with the 'industry' definition under the ID
Act, which applies to labor-management relations, disputes, and
regulations in trade and business enterprises.
HELD
"IT IS, THEREFORE, HIGH TIME FOR THE COURT TO
REEXAMINE THE JUDICIAL INTERPRETATION GIVEN BY IT
TO THE DEFINITION OF 'INDUSTRY.'"
Through this profound reconsideration, the judgment desires to
pave the way for a legal structure that is concordant with today's
industrial landscape and the attendant relations. The explicit call for
re-examination is indicative of a progressive judicial outlook—one
looking to foster a judicial-legal symbiosis that effectively responds
to changing societal structures while maintaining the sanctity and
foresight of law.
Steel Authority of
India Ltd. v National
Union of Water Front
Workers (2001) 7 SCC 1
FACTS
SAIL, along with other public sector undertakings, had been
engaging contract labor through contractors for various
operations crucial to their industries. These tasks ranged from
ancillary activities to some core operations, involving a
significant number of contract workers.

There were widespread contentions and disputes regarding the

rights of the contract laborers, particularly concerning their
conditions of work, wages, and ultimate job security.

The heart of the issue lay in the precarious nature of contract

labor employment, with laborers seeking greater protection
and permanency in their jobs.
FACTS
The Government of West Bengal issued a notification on the 15th of
July, 1989, under the Contract Labour (Regulation & Abolition)
Act, prohibiting the employment of contract labourers in four
specific stockyards of the company.

The union of the workers demanded that the contract labourers

should be absorbed into the company as regular employees.

The company filed a writ petition in the Calcutta High Court and
challenged the prohibition notification.
ISSUE
WHETHER THE ACT MANDATES, UPON THE
ABOLITION OF CONTRACT LABOR IN ANY
PROCESS OR OPERATION OF AN
ESTABLISHMENT, THE DIRECT ABSORPTION OF
THESE LABORERS AS REGULAR EMPLOYEES OF
THE PRINCIPAL EMPLOYER.
ANALYSIS
The Supreme Court undertook a comprehensive evaluation of the
CLA, which was enacted to regulate the employment of contract
labour and provide for its abolition in certain cases and
conditions. The Act's dual objectives include safeguarding the
welfare of contract labour while offering a mechanism for
progressively abolishing contract labour in certain circumstances.

The Court noted that the CLA does not explicitly mention the
absorption of contract labour as a direct consequence of
prohibition. This observation was fundamental to the Court's
reasoning, underscoring that the legislative intent was not to
mandate automatic absorption but rather to empower
authorities to prohibit contract labour under specified
conditions, considering the circumstances of each case.
If the contract is found to be not genuine but a mere camouflage,
the so-called contract labour will have to be treated as
employees of the principal employer who shall be directed to
regularize the services of the contract labour in the establishment
concerned.

If the contract is found to be genuine and prohibition notification

u/s 10(1) in respect of the establishment concerned has been
issued by the appropriate Government prohibiting employment of
contract labour in any establishment and where in such
establishment, the principal employer intends to employ regular
workmen, he shall give preference to the erstwhile contract
labour, if otherwise found suitable and, if necessary by relaxing the
condition as to age, academic qualifications.

Where the contract is genuine and there is no notification for

abolition of contract labour, the principal employer cannot be
directed to absorb contract labour.
INDUSTRIAL RELATIONS CODE, 2020
SECTION 2(P)
"industry" means any systematic activity carried on by co-operation
between an employer and worker (whether such worker is
employed by such employer directly or by or through any agency,
including a contractor) for the production, supply or distribution of
goods or services with a view to satisfy human wants or wishes (not
being wants or wishes which are merely spiritual or religious in
nature), whether or not,—

(a) any capital has been invested for the purpose of carrying on such
activity; or
(b) such activity is carried on with a motive to make any gain or
profit, but does not include —

(i) institutions owned or managed by organisations wholly or

substantially engaged in any charitable, social or philanthropic
service; or

(ii) any activity of the appropriate Government relatable to the

sovereign functions of the appropriate Government including all
the activities carried on by the departments of the Central
Government dealing with defence research, atomic energy and
space; or

(iii) any domestic service; or

(iv) any other activity as may be notified by the Central Government;

MODULE 2

INDUSTRIAL
DISPUTES
WEEK 3
WORKMAN
THE INDUSTRIAL DISPUTES ACT UNDER SECTION
2(S) DEFINES A “WORKMAN” AS–
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 expressed or implied, and for the purpose of any
proceeding under this Act in relation to an industrial dispute,
includes any such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence of that dispute,
or whose dismissal, discharge or retrenchment has led to that
dispute, but does not include any such person-
Who is subject to the Air Force Act, 1950 (45 of 1950), or the
Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

Who is employed in the police service or as an officer or other

employee of a prison; or

Who is employed mainly in a managerial or administrative

capacity; or

Who, being employed in a supervisory capacity, draws wages

exceeding ten thousand rupees per mensem or exercises,
either by nature of duties attached to the office or by reason of
the powers vested in him, functions mainly of a managerial
nature.
ANALYSIS OF THE DEFINITION
THE DEFINITION OF ‘WORKMAN’ IN SECTION
2(S) FALLS IN THREE PARTS.
The first part gives a statutory meaning of ‘workman’.
This part determines a ‘workman’ by reference to a person
(including an apprentice) employed in an ‘industry’ to do any
manual, unskilled, skilled, technical, operational, clerical or
supervisory work, for hire or reward.

The legal basis of the definition of ‘workman’ here remains the

contract of employment between the employer and the
employee. Unless there is a contract of employment between the
two or, in other words, there is a relationship of employer and
employee between them, the definition of ‘workman’ will not come
into play.
The second part is designed to include something more in what the
term primarily denotes.

This part gives an extended connotation to the expression

‘workman’.

The third part specifically excludes the categories of persons

specified in clauses (i) to (iv) of this subsection.

Even if a person satisfies the requirements of any of the first two

parts, he shall be excluded from the definition of ‘workman’ if he
falls in any of the four categories in the third part.
Dharangadhara
Chemical Works v.
Management AIR
1957 SC 264
FACTS
Dharangadhara Chemical Works Ltd. was involved in the salt
manufacturing industry, operating as a lessee under a
government-granted license.

Central to their operations was the engagement of a community

of traditional laborers known as agarias, who specialized in this
field of work.

These agarias were typically engaged on a seasonal basis, from

October through June, when the climatic conditions were
conducive to salt production.
The agarias performed their laborious tasks in a family-based
setup, with family members contributing to the salt-making
processes.

It was also within the practice of the agarias to recruit additional

labor if they deemed it necessary for increasing production,
with the cost of such extra labor borne by the agarias
themselves.

Notably, the operational relationship between the company and

the agarias did not adhere to standardized labor practices
commonly observed in industrial settings; specifically, the agarias
were not subject to regimented working hours – no muster rolls
were maintained to record their attendance, and the company
did not enforce a strict time schedule for the work to be carried
out.
ISSUE
WHETHER THE AGARIAS COULD
BE CLASSIFIED AS 'WORKMEN'
UNDER SECTION 2(S) OF THE
INDUSTRIAL DISPUTES ACT,
1947, OR IF THEY WERE
INDEPENDENT CONTRACTORS.
ANALYSIS
CONTROL AND SUPERVISION TEST
The Supreme Court applied the established principle that the test
for determining an employment relationship is the existence of the
right in the employer to supervise and control the work
performed by the employee, not just in terms of what work is to
be done but also the manner it is carried out.

The nature and extent of control necessary to establish an

employer-employee relationship varies from business to business
and cannot be precisely defined.
ANALYSIS
While the agarias enjoyed a certain level of flexibility and autonomy
in their working hours and employment of additional help, this
needed to be weighed against the practices and control
implicitly exerted by the employer in the overall salt production
process.

Typically, the absence of fixed working hours, maintenance of

muster rolls, and direct time control could suggest an
independent contractor status.

However, subtly instituted control mechanisms could suggest

otherwise.
SOME OF THE SUBTLE MECHANISMS INDICATING
EMPLOYER CONTROL INCLUDED:

Supervision of Quality and Process: The Salt Superintendent

would inspect the work at different stages to ensure that the salt
was being manufactured to a specific quality.

Payment Structures: The agarias were paid based on the quantity

of salt produced, which was accepted as salient for determining
employment relationships in some contexts but was not deemed
conclusive in this case. Payment for piece work did not by default
indicate independent contract work.

Clause 6 of the Agreement: The agreement stipulated that the

company could instruct the workers on the correct process of
salt production and could terminate the agreement for defaults
or poor behavior, demonstrating a degree of control typical of an
employer-employee relationship.
The court also cited the four indices of contract of service
recapitulated by Lord Thankarton in Short v. J & W. Henderson Ltd.
which are

(a) master’s power of selection of his servant;

(b) the payment of wages and other remuneration;
(c) the master’s right to control the method of doing the work;
(d) the master’s right of suspension and dismissal.

The court suggested that the correct method of approach would be

to consider whether having regard to the nature of work there was
due control and supervision by the employer and “the greater the
amount of direct control exercised over the person rendering
the services by the person contracting for them the stronger
the ground for holding it to be a contract of service, and
similarly the greater the degree of independence of such
control the greater the probability that the services rendered
are of the nature of professional services and that the contract
is not one of service”.
HELD
The Supreme Court agreed with the decision of the Industrial
Tribunal and the High Court that the agarias were workmen.

A person doing the work is a workman and does not cease to be

so merely because he gets other persons to work along with
him and those persons are controlled and paid by him.

The Court emphasized that while difficulties may arise from such a
classification, given the seasonal and self-regulated nature of the
agarias' work, these complications do not deter the conclusion that
they fulfill the requirements of being considered workmen as
defined by the Industrial Disputes Act, 1947.
Diwan Mohideen
Sahib v. Industrial
Tribunal, Madras AIR
1966 SC 370
FACTS
The appellants are proprietors of two bidi concerns, and a dispute
arose regarding whether individuals rolling bidis for them were
their own workers or workers of the independent contractors.

The appellants argued that the workers were not their workmen
and that the workers were employed by independent contractors,
thus no industrial dispute could exist between the appellants and
the bidi rollers.

Upon examination, the Tribunal found that contractors were

supplied with raw materials by the appellants, and after bidis
were rolled, the contractors delivered them back to the
appellants. The contractors had no attendance register for
workers, no fixed working hours, and the workers were not
bound to work every day.
ISSUE
WHETHER THE RELATIONSHIP
BETWEEN THE BIDI ROLLERS AND THE
APPELLANTS WAS ONE OF
EMPLOYER-EMPLOYEE, OR IF THE BIDI
ROLLERS WERE THE EMPLOYEES OF
INDEPENDENT CONTRACTORS.
ANALYSIS
PRINCIPAL-AGENT RELATIONSHIP VS.
INDEPENDENT CONTRACTORS:
Agency Indicators: The Tribunal found that the contractors
functioned more as agents than as independent entrepreneurs,
given the lack of financial discretion and the role of
distributing raw materials and collecting finished products as set
by the appellants.
Lack of Autonomy: The contractors had negligible business
autonomy. The arrangement did not reflect typical independent
contractor operations, which usually involve a greater financial
stake and risk.
CONTROL OVER WORK:
Direct Control: Though the appellants contended they did not
exercise direct control over the workers, the entire work
arrangement, including the supply of materials and
specifications for the finished product, was under their control.
Characteristics of Employment: The workers' dependence on
the appellants for their work, the lack of investment in the
means of production, all signified an employment relationship.

FINANCIAL TRANSACTIONS:
Economic Realities: The economic exchange between the
appellants and the contractors mimicked payment for labor
rather than a buy-sell relationship for goods. There was no actual
sale or purchase; rather, it was a distribution of profits, with the
bidi workers receiving a portion as wages.
AVOIDANCE OF LEGAL OBLIGATIONS:
Circumvention Strategy: The structure adopted by the appellants
was seemingly crafted to avoid compliance with the Factories Act,
suggesting a deliberate strategy to disguise the employment
relationship and shirk employer responsibilities.

PHYSICAL WORKING CONDITIONS:

Work Premises: Bidi rolling was performed on the premises
controlled or owned by the appellants, indicating the appellants'
indirect dominion over the work environment.

DISPUTE AND INTERMEDIARY INVOLVEMENT:

Role of Contractors in Disputes: When there were disputes over
wages or working conditions, the workers would engage directly
with the appellants, which wouldn't be the case if the contractors
were truly independent.
HELD
The Tribunal concluded, and the Supreme Court affirmed, that the
contractors were in reality performing the role of
intermediaries or agents for the appellants, with the bidi
workers essentially functioning as employees of the appellants.

This conclusion was based on the control the appellants had over
the work, the nature of financial transactions, the actual working
conditions, and the workers' actions during disputes, all pointing
towards an employer-employee relationship.

The superficial labels of "contractor" and "independent" were

unable to obscure the underlying employment dynamics
dictated by the appellants, leading to the rejection of the
appellants' attempt to categorize the workers as anything but their
employees.
Hussain Bhai, Calicut
v. The Alath Factory
Thozhilali Union,
Calicut & Ors." (1978 4
SCC 257)
FACTS
Hussain Bhai owned Alath Factory, where leather processing work
was carried out. The work involved in the factory was executed not
directly by employees of Hussain Bhai but by laborers who were
hired through contractors.

Despite the essential nature of the work these laborers

performed for the factory's operations, they were not being
given wages and benefits equivalent to what the law mandated
for workers employed directly by the factory owners in similar
industries.

The Alath Factory Thozhilali Union, representing these contract

laborers, raised objections against this treatment, advocating for
equality in wages and working conditions with the direct
employees of the factory.
ISSUE
WHETHER CONTRACT LABORERS WORKING IN
THE ALATH FACTORY SHOULD BE ENTITLED TO
THE SAME WAGES AND WORKING CONDITIONS
AS THE DIRECT EMPLOYEES OF THE PRINCIPAL
EMPLOYER, DESPITE BEING HIRED THROUGH
CONTRACTORS.
RULE
CONTRACT LABOUR (REGULATION AND
ABOLITION) ACT, 1970
The legal framework surrounding this issue involves principles
relating to contract labor under Indian Labor Law, specifically the
Contract Labour (Regulation and Abolition) Act, 1970.

This Act aims to regulate the employment of contract labor in

certain circumstances and provide for its abolition in certain
other circumstances.

The Court's deliberation extended beyond the mere text of the

Contract Labour (Regulation and Abolition) Act, 1970, to encompass
constitutional principles covering the right to equality under Article
14 and the right against exploitation under Articles 23 and 24.
ANALYSIS
Where a worker or group of workers labours to produce goods
or services and these goods or services are for the business of
another, that other is, in fact, the employer.

He has economic control over the workers' subsistence, skill, and

continued employment. If he, for any reason, chokes off, the worker
is, virtually, laid off.

The presence of intermediate contractors with whom alone the

workers have immediate or direct relationship is of no
consequence when, on lifting the veil or looking at the
conspectus of factors governing employment, we discern the naked
truth, though draped in different perfect paper arrangement, that
the real employer is the Management, not the immediate
contractor.
HELD
If the livelihood of the workmen substantially depends on
labour rendered to produce goods and services for the benefits and
satisfaction of an enterprise, the absence of direct relationship or
the presence of dubious intermediaries or the make-believe
trappings of detachment from the Management cannot snap
the real-life bond. The story may vary but the inference defies
ingenuity. The liability cannot be shaken off.

The source and strength of the industrial branch of Third World

Jurisprudence is social justice proclaimed in the Preamble to
the Constitution. The Court must be astute to avoid the mischief
and achieve the purpose of the law and not be misled by the
maya of legal appearance when myriad devices are resorted to
when labour legislation casts welfare obligations on the real
employer.
SK Verma v. Mahesh
Chandra (1983) II LLJ
429 1983 (4) SCC 214
FACTS
The central issue of the case arises from the dismissal from service
of S.K. Verma, a Development Officer in the Life Insurance
Corporation (LIC), with the preliminary objection by the LIC that
Verma was not a 'workman' under the definition provided in the
Industrial Disputes Act, 1947, Section 2(s).

The Industrial Tribunal accepted this preliminary objection and

deemed the reference to it as incompetent. The appellant's petition
under Article 226 was dismissed by the Delhi High Court, prompting
an appeal to the Supreme Court under Article 136.
ISSUE
WHETHER DEVELOPMENT OFFICERS IN THE LIFE
INSURANCE CORPORATION OF INDIA ARE
CONSIDERED 'WORKMEN' UNDER THE
INDUSTRIAL DISPUTES ACT, 1947, SPECIFICALLY
WITHIN THE DEFINITION OUTLINED IN SECTION
2(S).
ANALYSIS
The Supreme Court undertook a detailed analysis of the duties and
responsibilities associated with the role of a Development Officer.

EMPLOYMENT NATURE:
S.K. Verma was employed as a Development Officer by the LIC, a
role that traditionally involves the recruitment and training of
agents, organization, and development of the corporation's
business within a delineated area.

The designation falls under a unique category separate from the

traditional supervisory, clerical, or manual positions typically
considered in labor disputes.
ANALYSIS
It was noted that Verma, as a Development Officer, was a whole-
time employee subject to transfers, had defined operational
areas, and largely worked towards organizing and developing
the corporation's business, all without supervisory control over
the recruited agents.

The Court critically interpreted the 'workman' definition under the

Industrial Disputes Act, focusing on the intention behind the Act
to cover a broad spectrum of employed individuals, excluding
those in managerial or administrative capacities.
HELD
DEVELOPMENT OFFICERS IN THE LIFE
INSURANCE CORPORATION ARE WORKMEN'
WITHIN THE MEANING OF S. 2(S) OF THE
INDUSTRIAL DISPUTES ACT, 1947

The analysis underscored that a liberal and broad interpretation was

crucial to fulfilling the Act's objectives, emphasizing social welfare
legislation aimed at smoothing industrial relations by covering a
wide range of employment situations.

The court held that if the person does not fall under the
exceptions mentioned under Section 2s of the Industrial
Dispute Act, 1947 will be a workman even if he did not qualify
under the manual, clerical, supervisory and technical category
of work.
Miss A.
Sundarambal v.
Govt. of Goa 1989
ISSUES
(1) WHETHER THE SCHOOL, IN WHICH THE
APPELLANT WAS WORKING, WAS AN INDUSTRY.

(2) WHETHER THE APPELLANT WAS A

'WORKMAN' EMPLOYED IN THAT INDUSTRY.
JUDICIAL HISTORY
In University of Delhi & Anr. v. Ram Nath, [1964] 2 S.C.R. 703 a
bench consisting of three learned judges of this Court held that the
University of Delhi, which was an educational institution and
Miranda House, a college affiliated to the said University, also being
an educational institution would not come within the definition of
the expression 'industry' as defined in section 2(j) of the Act.

The decision in University of Delhi & Anr. v. Ram Nath, (supra)

was overruled by Bangalore Water Supply.

The learned Judge, however, observed that while an educational

institution was an industry it was possible that some of the
employees in that industry might not be workmen.
ANALYSIS
In order to be a workman, a person should be one who satisfies
the following conditions:
(i) he should be a person employed in an industry for hire or reward;
(ii) he should be engaged in skilled or unskilled manual, supervisory,
technical or clerical work; and
(iii) he should not be a person falling under any of the four clauses

The question for consideration before us is whether a teacher in a

school falls under any of the four categories, namely, a person
doing any skilled or unskilled manual work, supervisory work,
technical work or clerical work.

If he does not satisfy any one of the above descriptions he would

not be workman even though he is an employee of an industry
ANALYSIS
We are of the view that the teachers employed by educational
institutions whether the said institutions are imparting primary,
secondary, graduate or post graduate education cannot be called as
'workmen' within the meaning of section 2(s) of the Act.

Imparting of education which is the main function of teachers

cannot be considered as skilled or unskilled manual work or
supervisory work or technical work or clerical work. Imparting of
education is in the nature of a mission or a noble vocation. A
teacher educates children, he moulds their character, builds up
their personality and makes them fit to become responsible
citizens. Children grow under the care of teachers. The clerical
work, if any they may do, is only incidental to their principal
work of teaching.
HELD
We, therefore, hold that the High Court was right in holding that the
appellant was not a 'workman' though the school was an
industry in view of the definition of 'workman' as it now stands.

We may at this stage observe that teachers as a class cannot be

denied the benefits of social justice. We are aware of the several
methods adopted by unscrupulous managements to exploit them
by imposing on them unjust conditions of service.

In order to do justice to them it is necessary to provide for an

appropriate machinery so that teachers may secure what is rightly
due to them.
H.R. Adyanthaya vs
Sandoz (India) Ltd on
11 August, 1994
FACTS
The petitioner was a medical representative in the company of the
respondent, where the petitioner filed a complaint in the labor
court as his services were terminated.

Role of Medical Representatives:

Their primary role involves promoting their employer’s

pharmaceutical products to doctors, pharmacists, and other
healthcare professionals to boost sales.

This entails a combination of technical knowledge of the

products and skilled sales techniques.
AMENDMENTS TO THE ID ACT
THE SERIES OF RELEVANT AMENDMENTS:
From 1947 to 1956: The persons employed included Manual
Skilled & Unskilled, or Clerical work.

Amendment of 1956: Any unskilled or skilled work, whether

manual or not.

Amendment of 1982: any activity relating to the promotion of

sales or business or both, carried on by any establishment is for
the first time was sought to be brought within the definition of
wages and industry.
However, the amended definition of 'industry' has not till date
come into force.
THE SPE ACT
The Sales Promotion Employees (Conditions of Service) Act initially
defined a sales promotion employee as someone involved in
sales or business promotion, limited to those earning up to Rs
750 monthly (excluding commission) or up to Rs 9000 annually
with commission, regardless of supervisory roles.

Exclusions were made for work mainly in managerial or

administrative roles.

The Act was updated in 1986 (effective from May 6, 1987) to include
all sales promotion employees regardless of wage limits,
excluding those in supervisory roles with wages above Rs 1600
monthly and those mainly in managerial or administrative roles.
ANALYSIS
Classification of Work: The court examined whether the activities
of medical representatives could be considered 'skilled',
'technical', or 'operational' under the broader definitions provided
by recent amendments to the ID Act, and how these fit within the
scope of the SPE Act.

After analysing previous judgments, the Court reiterated that the

position in law as it obtains today is that a person to be a workman
under the ID Act must be employed to do the work of any of the
categories, viz., manual, unskilled, skilled, technical, operational,
clerical or supervisory. It is not enough that he is not covered by
either of the four exceptions to the definition.
HELD
Shri Sharma, representing the workmen, argued that MRs qualify as
workmen due to the skilled and technical nature of their duties.
However, the court dismissed these arguments, referencing prior
judgments that clearly delineated the scope of the term 'workman'
and found that the roles of MRs did not align with the definitions
of 'skilled' or 'technical' categories within this context.

They challenged the SPE Act’s original wage-based differentiation of

sales promotion employees, deeming it unconstitutional under
Article 14 for discriminating against those earning above certain
thresholds. Yet, the court found this classification to have a
rational basis, aimed at safeguarding the economically vulnerable
sections among sales promotion employees, and hence, upheld the
legislative discretion in setting these parameters.
SK Maini v. M/S
Carona Sahu
Company Ltd. (1994)
FACTS
The appellant Shri S.K. Maini was working as the Shop
Manager/Incharge of the respondent-Company M/s Carona Sahu
Company Limited.

On an allegation of misconduct against the appellant, a domestic

enquiry was caused by the respondent- Company and by order
dated March 12, 1981 the service of the appellant was terminated.

On September 28, 1981, Government of Punjab referred the

following dispute for adjudication to the Labour Court,
FACTS
Before the Labour Court a preliminary objection was raised by the
respondent-Company by contending that Shri S.K. Maini was not a
workman because being a Shop Manager/In-charge of the shop,
he had been discharging mainly managerial and administrative
functions and had been supervising the works of other employees
subordinate to him for running the said shop and even if he was a
Supervisor at the relevant time, Shri S.K. Maini was drawing a
salary of more than Rs 500 per month.

The Labour Court ruled in favor of Maini, ordering his reinstatement

with full back wages, but this decision was overturned by the High
Court on the grounds that Maini's primary duties were managerial
and administrative, thus excluding him from the definition of a
'workman' under the Industrial Disputes Act, 1947.
ISSUE
WHETHER SHRI S.K. MAINI'S TERMINATION WAS
JUSTIFIED AND IF HE QUALIFIES AS A
'WORKMAN' UNDER THE INDUSTRIAL DISPUTES
ACT, 1947
ANALYSIS
The key argument by the appellant's counsel, revolved around the
true nature of SK Maini's duties, despite his title as Shop
Manager/In-charge.

Maini, described as a humble and low-paid worker, primarily

performed clerical tasks, occasionally supervising a small
number of employees.

He had no independent power to appoint and to dismiss the

employees and to initiate disciplinary proceedings against them. He
had no authority under the terms and conditions of his service
to take independent decisions for the Company and although he
was designated as a Shop Manager/In-charge, he was essentially a
salesman of the Company.
ANALYSIS
The respondent contended that managerial roles do not
necessarily include the power to dismiss or suspend employees,
such authority may belong to higher-ranking administrative figures.

He detailed Maini's significant responsibilities as the manager and

in-charge of the shop, which included overseeing daily
operations, from opening to closing, and managing the
business activities with help from subordinates who could not
act independently without Maini's approval.

Despite Maini performing some clerical work, such as accounting

and form-filling, these tasks were secondary to his main managerial
and administrative duties.
ANALYSIS
Whether or not an employee is a workman under Section 2(s) of the
Industrial Disputes Act is required to be determined with reference
to his principal nature of duties and functions.

It should be determined with reference to the facts and

circumstances of the case and materials on record and it is not
possible to lay down any straitjacket formula.
SOME OTHER DECIDING FACTORS
Under the terms and conditions of service, he was asked to take
charge of the shop to which his service was transferred.

Mr Maini, under the terms and conditions of service, was required to

be held responsible and liable for any loss suffered by the
Company due to deterioration of the quality of the stock or any
part thereof and loss of any of the other articles lying in the shop
caused by reason of any act of negligence and/or omission to
take any precaution by the employees.
HELD
On a close scrutiny of the nature of duties and functions of the
Shop Manager with reference to the admitted terms and
conditions of service of Shri Maini, it appears to us that the
High Court was justified in holding that the appellant was not a
workman under Section 2(s) of the Industrial Disputes Act.
Heavy Engineering
Corporation v.
Presiding Officer,
Labour Court (1996)
FACTS
The appellant had appointed respondent no. 2 as a doctor in
general duty medical officer grade-II on ad hoc basis on 17.5.1978
for a period of six months which was further extended for a
period of three months. Second extension was granted for a
period of two months.

The ad hoc appointment of respondent no.2 along with three other

doctors who were appointed with him thus continued for a period
of eleven months.

They were informed by one month's written notice that they

would be relieved of their duties on completion of the above
tenure on 17.4.1979. The posts were advertised for appointment on
regular basis.
ISSUE
He raised an industrial dispute regarding alleged illegal
termination of his services by an order dated 17.4. 1979 contending
that he had worked for a period of more than 240 days and his
services could not be terminated without assigning any reason.

The main plea before the Supreme Court by the corporation was
that respondent no.2 could not be regarded as ‘workman’ within the
meaning of section 2(s) of the Act as at the material time his total
monthly emoluments were Rs. 1200/- and he was working in a
supervisory capacity.
WAS RESPONDENT NO. 2 A WORKMAN UNDER
SECTION 2(S) OF THE INDUSTRIAL DISPUTES
ACT?
ANALYSIS
While it is no doubt true that Respondent 2. along with the other
doctors, used to work in shifts he was the sole person in charge
of the first-aid post.

He had, under him male nurse, nursing attendant, sweeper and

ambulance driver who would naturally be taking directions and
orders from the in-charge of the first-aid post.

These persons obviously could not act on their own and had to
function in the manner as directed by Respondent 2, whenever
he was on duty.

They were, in other words, under the control and supervision of the
respondent.
HELD
When a doctor, like the respondent, discharges his duties of
attending to the patients and, in addition thereto supervises the
work of the persons subordinate to him, the only possible
conclusion which can be arrived at is that the respondent cannot
be held to be regarded as a workman under Section 2(s) of the
Act.
Workmen of the
Canteen of Coates of
India Ltd v. Coates of
India Ltd. (2004)
FACTS
The appellants are workmen employed in a canteen which is run
in the premises of the respondent company.

The canteen started functioning since the year 1970 in pursuance of

the agreement of the year 1969.

The furniture kept in the canteen hall and the utensils used for
the canteen have been provided by the Company.

There is a Managing Committee called the Canteen Managing

committee for the purpose of supervision and control over the
affairs of the canteen.

The caterer is responsible for the supply of meals, snacks and tea
to the factory employees.
FACTS
After the contractor submits his bills, the Managing Committee
forwards the same to the Company with its recommendation and
the Company pays the bills to the Committee for payment to
the contractor.

The canteen employees were not directly appointed by the

Company nor had they ever moved the company for leave or
other benefits enjoyed by the regular and direct employees of
the Company.

The canteen employees got their wages from the respective

contractors after signing the registers and they sign the
attendance-cum-pay register maintained by the caterers.
ISSUE
WHETHER THE WORKMEN EMPLOYED IN A
CANTEEN , WHICH WAS RUN IN THE PREMISES
OF COATES OF INDIA LTD., COULD BE
REGARDED AS THE 'WORKMEN' OF THE
RESPONDENT-COMPANY?
ANALYSIS
Learned counsel for the appellant strenuously urged that the
respondent Company has the statutory obligation to provide a
canteen in the premises and therefore, the employees of the
canteen must be presumed to be the workmen employed by the
respondent Company and no one else.

It is sufficient for us to state that some requirement under the

Factories Act of providing a canteen in the industrial
establishment, is by itself not decisive of the question or
sufficient to determine the status of the persons employed in
the canteen.
HELD
The court held that:

It is clear from the finding of fact which obviously is based primarily

on undisputed facts that all the relevant factors indicate that the
workmen were employed only by the contractor who is running
the canteen, and they were not employees of the respondent
Company.
Workmen of Nilgiri
Cooperative Marketing
Society v. State of Tamil
Nadu (2004) 3 SCC 514
FACTS
The case involves the 'Nilgiris Cooperative Marketing Society
Limited' (the Society), based in Nilgiris, Tamil Nadu. Formed in 1935
to protect small vegetable growers from exploitation, it had
grown to approximately 22,000 members.

The Society has two main categories of members: A-class (growers

with voting rights) and B-class (merchants without voting rights).

Issues about agricultural produce are resolved through arbitration

as per the Tamil Nadu Cooperative Societies Act, 1961.
An industrial dispute was raised by 407 persons – some porters,
some graders – concerning their employment status.

The Society contends that they utilize the service of contractors

(third parties) to get work done in the yards. Payments to
workers are typically made by engaging members to the said
contractors.

All members are entitled to participate in auction mela to sell their

goods. During this time, third parties are hired to pack, load,
unload vegetables in the auction organized by the society.
These workers are made available for use by the members and
payments are made by the members usually and the society
maintains no wage registers, attendance records etc.

These workers have asked to be regularized as employees of

the society and be given the same benefits.
ISSUE
WHETHER THE WORKERS ENGAGED IN THE
MARKETING YARDS FOR LOADING, UNLOADING,
GRADING, AND PACKAGING TASKS ARE
EMPLOYEES OF THE NILGIRIS COOPERATIVE
MARKETING SOCIETY OR INDEPENDENT
CONTRACTORS/THIRD-PARTY EMPLOYEES.
ANALYSIS
SOCIETY'S FUNCTION AND STRUCTURE:
The society functions as an intermediary, facilitating transactions
between its members (growers and merchants) rather than directly
engaging in commercial activities. Its role in providing infrastructure
and arbitration services aligns with its cooperative nature.

ENGAGEMENT AND PAYMENT OF WORKERS:

Evidence indicated that workers were engaged variably, depending
on the seasonal flux in auction activities, with no consistent
employment pattern. Workers were either hired directly by
members for their needs or engaged through third parties, with
payments made by members or reimbursed by the society in
specific instances.
ANALYSIS
CONTROL AND SUPERVISION:
The society did not exhibit the level of control or supervision over
the workers typical of an employer-employee relationship. Actions
taken (e.g., quality control measures) were in the capacity of
facilitating member transactions rather than directing labor.

EMPLOYMENT RECORDS AND FORMALITIES:

The absence of employment records, fixed working hours, and
formal employment contracts further supported the conclusion that
the workers were not directly employed by the society.
HELD
The Supreme Court concluded that the workers in question
were not employees of the Nilgiris Cooperative Marketing
Society.

This determination was based on the nature of the society’s

operations, the indirect engagement of workers for specific tasks
without consistent patterns or direct control, and the cooperative's
primary role as an intermediary focused on facilitating member
activities rather than acting as a commercial employer.

This decision underscores the importance of considering the

specific operational context and objectives of cooperative societies
in labor law applications, recognizing the distinct nature of
cooperative societies from traditional commercial employers.
 SECTION 2(S)

DEFINITION Any person employed in any industry to do any:

manual, unskilled, skilled, technical,

operational, clerical or supervisory work

does not include any such person-

Who is employed mainly in a managerial

or administrative capacity; or
EXCLUSIONS
Who, being employed in a supervisory
capacity, draws wages
 CONTRACT OF SERVICE
DHARANGADHARA CHEMICAL V.
CONTRACT FOR SERVICE
WORKS V. MANAGEMENT
AIR 1957 SC 264 QUES: Whether having regard to the nature of
(AGARIAS CASE) work there was due control and supervision by
the employer.

CONTRACT OF SERVICE
V.
CONTRACT FOR SERVICE
DIWAN MOHIDEEN SAHIB
V. INDUSTRIAL TRIBUNAL,
QUES: Whether the contractors were MADRAS AIR 1966 SC 370
performing the role of intermediaries for
the appellants, with the workers essentially
(BIDI ROLLERS CASE)
functioning as employees of the appellants.
HUSSAIN BHAI, CALICUT V. CONTRACT OF SERVICE
V.
THE ALATH FACTORY CONTRACT FOR SERVICE
THOZHILALI UNION,
Absence of direct relationship or the presence
CALICUT & ORS." of dubious intermediaries or the make-believe
(1978 4 SCC 257) trappings of detachment from the
Management cannot snap the real-life bond.

CONTRACT OF SERVICE
V. WORKMEN OF THE CANTEEN
CONTRACT FOR SERVICE
OF COATES OF INDIA LTD
A requirement under the Factories Act V. COATES OF INDIA LTD.
of providing a canteen, is by itself not (2004)
decisive of the question or sufficient to
determine the status of the persons
employed in the canteen.
 CONTRACT OF SERVICE
V.
CONTRACT FOR SERVICE
WORKMEN OF NILGIRI
COOPERATIVE MARKETING Factors such as the nature of the society’s
operations, the indirect engagement of
SOCIETY V. STATE OF TAMIL workers for specific tasks without consistent
NADU (2004) 3 SCC 514 patterns or direct control, and the cooperative's
primary role as an intermediary focused on
facilitating member activities rather than
acting as a commercial employer.

BROAD INTERPRETATION:
SK VERMA V.
If the person does not fall under the
exceptions mentioned under Section 2s, he
MAHESH CHANDRA
will be a workman even if he did not qualify (1983) (4) SCC 214
under the manual, clerical, supervisory and
technical category of work.
 NARROW INTERPRETATION:
Whether a teacher falls under any of the
MISS A. SUNDARAMBAL four categories, namely, a person doing any
V. skilled or unskilled manual work,

GOVT. OF GOA 1989 supervisory work, technical, or clerical work.

If he does not satisfy any one of the above

descriptions he would not be workman
even though he is an employee of an
industry.

NARROW INTERPRETATION:
A person to be a workman under the ID Act H.R. ADYANTHAYA
must be employed to do the work of any of VS
the categories, viz., manual, unskilled,
skilled, technical, operational, clerical or
SANDOZ (INDIA) LTD
supervisory. It is not enough that he is not ON 11 AUGUST, 1994
covered by either of the four exceptions
to the definition.
 MANAGERIAL RESPONSIBILITIES:
SK MAINI V. Whether or not an employee is a
M/S CARONA SAHU workman is required to be determined
with reference to his principal nature
COMPANY LTD. (1994) of duties and functions.

It should be determined with reference

to the facts and circumstances of the
case and it is not possible to lay down
any straitjacket formula.

MANAGERIAL RESPONSIBILITIES:
A team of a male nurse, nursing attendant,
sweeper and ambulance driver were under the
HEAVY ENGINEERING
control and supervision of the respondent. CORPORATION V. PRESIDING
Thus, the only possible conclusion which can
OFFICER, LABOUR COURT
be arrived at is that the respondent cannot be (1996)
held to be regarded as a workman under
Section 2(s) of the Act.
“WORKMAN” UNDER
THE INDUSTRIAL
RELATIONS CODE
SECTION 2 (ZR)
"worker" means any person (except 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, and
includes working journalists as defined in clause (f) of section 2 of
the Working Journalists and other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955 and
sales promotion employees as defined in clause (d) of section 2 of
the Sales Promotion Employees (Conditions of Service) Act, 1976,
and for the purposes of any proceeding under this Code in relation
to an industrial dispute, includes any such person who has been
dismissed, discharged or retrenched or otherwise terminated in
connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute,
SECTION 2 (ZR)
but does not include any such person—

(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or
the Navy Act, 1957; or

(ii) who is employed in the police service or as an officer or other

employee of a prison; or

(iii) who is employed mainly in a managerial or administrative

capacity; or

(iv) who is employed in a supervisory capacity drawing wages

exceeding eighteen thousand rupees per month or an amount as
may be notified by the Central Government from time to time:
MODULE 2

INDUSTRIAL
DISPUTES
INTRODUCTION
WHAT ARE INDUSTRIAL DISPUTES?
Section 2(k) of the Industrial Disputes Act, 1947:

Industrial disputes refer to “any dispute or difference between

employers and employers, or between employers and
workmen, or between workmen and workmen, which is
connected with the employment or non-employment or the
terms of employment or with the conditions of labour, of any
person.”
IMPORTNT POINTS
There should be a factum of dispute not merely a difference of
opinion.
The term “industrial dispute” conveys the meaning that the
dispute must be such that would affect large groups of
workmen as a class who are working in an industrial
establishment.
The disputes can be raised by workmen themselves or their
union or federation on their behalf. (Section 36)
The dispute may be in relation to any workman or workmen or
any other person in whom they are interested as a body.
This is based on the fact that workmen have right of
collective bargaining. Thus, there should be community of
interest in the dispute.
INDIVIDUAL DISPUTES
An individual dispute originates from a single employee’s
grievance. To be classified as an industrial dispute, it must be
raised by a registered trade union.
Individual disputes can transform into collective industrial
disputes when they incorporate the interests of the broader
community or when they receive support from workers
themselves or their union or federation acting on their behalf.

Alternatively, for an individual dispute to be considered an

industrial dispute, it must meet the conditions in Section 2A.
According to Section 2A, if an employer terminates the services
of an employee due to a dispute or differences between the
worker and their employer, even if no other worker or union
of workers is involved, the resulting dispute is classified as an
industrial dispute.
Workmen v Dharampal
Premchand
(Saughandi) AIR 1966
SC 182
FACTS
The respondent is a firm which carries on business as perfumers
and tobacconists in Chandni Chowk, Delhi. On the 28th July, 1961,
the respondent passed the impugned order dismissing the
services of its 18 employees.

On that date, the respondent had in its employment 45 employees.

The 18 employees who were dismissed by the respondent had
become members of the Mercantile Employees' Association
which is a registered Trade Union in Delhi.

On the 29th July, 1961, the said Association took up the cause of
the dismissed employees and carried the dispute before the
Conciliation Officer, Delhi.
ISSUE
WHETHER THE DISPUTE REFERRED TO THE
TRIBUNAL FOR ITS ADJUDICATION IS AN
INDUSTRIAL DISPUTE WITHIN THE MEANING OF
S. 2(K) OF THE ACT OR NOT.
RULE: A union of workmen may validly raise a dispute as to
dismissal even though it may be a union of the minority of the
workmen employed in any establishment. The majority union, of
course, can raise a dispute. Similarly, if there is no union of workmen
in any establishment, a group of employees can raise the dispute
and the dispute then becomes an industrial dispute, though it may
relate to the dismissal of an individual employee.

There is no dispute that the Mercantile Employees' Association has

taken up the dispute on behalf of the 18 dismissed employees.

It was, however, urged before the Tribunal that besides the 18

dismissed employees, no other employee of the respondent is a
member of the said Association, and so, it was contended that the
said Association was not authorised to raise the dispute, and in
the absence of proof of the fact that the dispute had been
sponsored or espoused by the Union of the employees of the
respondent, the reference should be held to be invalid.
ANALYSIS
The Act was passed for the investigation and settlement of
industrial disputes, and its material provisions have been enacted,
because it was thought expedient to make provision for such
investigation and settlement of disputes, keeping in mind the
importance of the development of Trade Union Movement on
proper lines in this country.

It would be necessary to require that a dispute raised by a

dismissed employee cannot become an industrial dispute,
unless it is supported either by his Union or, in the absence of a
Union, by a number of workmen.

Unless such a limitation was introduced, claims for reference may

be made frivolously and unreasonably by dismissed employees,
and that would be undesirable.
Section 36 of the Act which deals with the representation of
parties, incidentally suggests that the union which can raise an
individual dispute as to a dismissal validly, should be a union of
the same industry.

Generally, it is the union of workmen working in the same

establishment which has passed the impugned order of dismissal.

But in a given case, it is conceivable that the workmen of an

establishment have no union of their own, and some 'or all of
them join the union of another establishment belonging to the
same industry.

In such a case, if the said union takes up the cause of the

workmen working in an establishment which has no union of
its own, it would be unreasonable to hold that the dispute does
not become an industrial dispute because the union which has
sponsored it is not the union exclusively of the workmen working in
the establishment concerned.
HELD
The object of trade union movement is to encourage the
formation of larger and bigger unions on healthy and proper
trade union lines, and this object would be frustrated if industrial
adjudication were to adopt the rigid rule that before any dispute
about wrongful dismissal can be validly referred under s. 10(1) of
the Act, it should receive the support of the union consisting
exclusively of the workmen working in the establishment
concerned.
Workmen of
Dimakuchi Tea
Estate v DTE AIR
1958 SC 353
FACTS
Dr. K. P. Banerjee was appointed as an assistant medical officer at
the Dimakuchi Tea Estate on a provisional basis, subject to a
satisfactory medical report and a three-month probation period,
with conditions regarding his evaluation for permanent
employment.

After receiving an increment, Dr. Banerjee was abruptly dismissed

by the management, receiving a letter stating his services were
terminated effective immediately, with a month's salary in lieu of
notice. The termination letter cited reasons related to medical
incompetence and specific allegations regarding his
professional conduct.
FACTS
The manager wrote back to say that Dr.- K. P. Banerjee was
discharged on the ground of incompetence in his medical duties
and the chief medical officer (Dr. Cox) had found that Dr. Banerjee
was incompetent and did not have sufficient " knowledge of simple
everyday microscopical and laboratory work which befalls the lot of
every assistant medical officer in tea garden practice."

It was further stated that Dr. Banerjee gave a faulty, inexpert and
clumsy quinine injection to one Mr. Peacock, an assistant in the
Dimakuchi tea estate, which produced an extremely acute and
severe illness very nearly causing a paralysis of the patient's leg.
ISSUE
WHETHER THE TERM "ANY PERSON" IN THE
DEFINITION OF AN INDUSTRIAL DISPUTE
INCLUDED EMPLOYEES LIKE DR. BANERJEE,
WHO WAS IN A MANAGERIAL OR SUPERVISORY
ROLE AND NOT PART OF THE WORKMEN
CATEGORY AS DEFINED IN THE ACT, OR PART
OF THE UNION WHICH INSTITUTED THE
PROCEEDING.
ANALYSIS
The Act is primarily meant for regulating the relations of employers
and workmen-past, present and future.

It draws a distinction between 'workmen' as such and the

managerial or supervisory staff, and confers benefit on the
former only. It is in the context of all these provisions of the Act
that the definition clause in s. 2(k) has to be interpreted.

It seems fairly obvious to us that if the expression "any person" if

given its ordinary meaning, then the definition clause will be so
wide as to become inconsistent not merely with the objects and
other provisions of the Act, but also with the other parts of that very
clause.
ANALYSIS
The workmen may then raise a dispute about a person with
whom they have no possible community of interest; they may -
raise a dispute about the employment of a person in another
industry or a different establishments dispute in which their own
employer is not in a position to give any relief, in the matter of
employment or non-employment or the terms of employment or
conditions of labour of such a person.

According to learned counsel for the appellants, the person about

whom the dispute has arisen need not be a workman within the
meaning of the Act, but he must answer to the description of
an employee, discharged or in service, or a candidate for
employment.
ANALYSIS
The use of "any person" instead of "any workman" in the
definition of an "industrial dispute" under the Industrial Disputes
Act, 1947, indicates a deliberate legislative choice to encompass
disputes related to individuals not necessarily employed at the
time the dispute arises.

Specifically, before the 1956 amendments, the definition aimed to

include within the ambit of an industrial dispute those cases
where a workman dismissed prior to the dispute still results in
an industrial dispute, highlighting a broader interpretation.
For a dispute to qualify as an industrial dispute, it must involve
issues where workmen as a class possess a direct or substantial
interest. This criterion emphasizes a collective concern among
workmen regarding employment issues.

Ordinarily, it is only the aggrieved party who can raise a dispute; but
an industrial dispute' is put on a collective basis, because it is now
settled that an individual dispute, not espoused by others of
the class to which the aggrieved party may belong, is not an
industrial dispute within the meaning of a. 2 (k).

“The very nature of, an ‘industrial dispute' as distinguished from an

individual dispute, is to obtain new industrial conditions, not
merely for the specific individuals then working from the specific
individuals then employing them, and not for the moment only, but
for the class of employees from the class of employers.

It is a battle by the claimants, not for themselves alone."

HELD
Two crucial limitations are (1) the dispute must be a real dispute
between the parties to the dispute so as to be capable of
settlement or adjudication by one party to the dispute giving
necessary relief to the other, and (2) the person regarding whom
the dispute is raised must be one in whose employment, non-
employment, terms of employment, or conditions of labour the
parties to the dispute have a direct or substantial interest.

In the case before us, Dr. K.P. Banerjee was not a workman'. He
belonged to the medical or technical staff-a different category
altogether from workmen. The appellants had no direct, nor
substantial interest in his employment or non-employment, and
even assuming that he was a member of the same Trade Union, it
cannot be said that the dispute regarding his termination of service
was an industrial dispute within the meaning of s. 2(k) of the Act.
DISSENT
The dissent analyses the legal and linguistic aspects of the term "any
person" within the definition of an industrial dispute. Sarkar J.
argues against a narrow interpretation that limits "any person" to
individuals falling strictly within the definition of "workman" in the
Act. He posits that such a restrictive interpretation does not align
with the legislative intent and the broader objectives of the Act to
maintain industrial peace and protect the collective interests of
workmen.

In his conclusion, Justice Sarkar opines that the definition of an

industrial dispute should be interpreted to include disputes
related to the employment or non-employment of individuals
like Dr. Banerjee.
Municipal Corporation of Delhi
v. Female Workers (Muster
Roll) AIR 2000 SC 1274: (2000)
3 SCC 224
FACTS
Female workers (muster roll), engaged by the Municipal
Corporation of Delhi, raised a demand for grant of maternity leave
which was made available only to regular female workers but was
denied to them on the ground that there services were not
regularised and, therefore, they were not entitled to any maternity
leave.

Their case was espoused by the Delhi Municipal Workers Union.

FACTS
The Union stated that Municipal Corporation of Delhi employs a
large number of persons including female workers on muster roll
and they are made to work in that capacity for years together
though they are recruited against the work of perennial nature.

The nature of duties and responsibilities performed and undertaken

by the muster roll employees are the same as those of the regular
employees.

The women employed on muster roll have to work very hard in

construction projects and maintenance of roads including the work
of digging trenches etc. but the Corporation does not grant any
maternity benefit to female workers who are required to work
even during the period of mature pregnancy or soon after the
delivery of child.
ISSUE
WHETHER THE FEMALE WORKERS WORKING ON
MUSTER ROLL SHOULD BE GIVEN ANY
MATERNITY BENEFIT?
CONTENTION
The Corporation in their written statement, filed before the
Industrial Tribunal, pleaded that the provisions under the Maternity
Benefit Act, 1961 or Central Civil Services (Leave) Rules were not
applicable to the female workers, engaged on muster roll, as
they were all engaged only on daily wages.
CONSTITUTIONAL PROVISIONS
Article 14 of the constitution states that no person will be denied
equality before the law or equal protection of the law. So, the labor
belonging to any sector is equal before the law.

Under Article 39 of the constitution, certain policies are to be

followed by the state to secure that men and women have equal
rights to livelihood and that there is equal pay for work by both men
and women.

Article 42 and Article 43: article 42 talks about just and humane
conditions of work and maternity relief and that the validity of
executive action on denying it will be examined on the basis of
article 42 of the constitution. Article 43 speaks about living wage etc
for workers to ensure a decent standard of living.
HELD
A woman employee, at the time of advanced pregnancy cannot be
compelled to undertake hard labour as it would be detrimental to
her health and also to the health of the foetus.

It is for this reason that it is provided in the Act that she would be
entitled to maternity leave for certain periods prior to and after
delivery.

We have scanned the different provisions of the Act, but we do not

find anything contained in the Act which entitles only regular
women employees to the benefit of maternity leave and not to
those who are engaged on casual basis or on muster roll on
daily wage basis.