Labour Law Notes

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PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. 2

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These notes are prepared by Radhika Seth, Law Centre 2. This is meant only for personal use of students. It is not meant for public or wholesale distribution.

VOTE FOR MY PANEL ON 13TH SEPTEMBER- ELECTION DAY.

RADHIKA SETH 2 FOR PRESIDENT

ANUBHAV SINGH 1 FOR SECRETARY

AMIT RANJAN 1 FOR CC

HARSH TOMAR 3 FOR CC

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Industry

During the twentieth century and that too mainly in the post independence period a new branch of jurisprudence known as Industrial Jurisprudence has developed in India. This branch of law, i.e., the labour and industrial law, has modified the traditional law relating to master and servant and had cut down the old theory of laissez-faire based upon the 'freedom of contract' to protect workmen against victimization and unfair labour practices by the employer and to put an end to industrial disputes by peaceful methods. The old age right of

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an employer to hire and fire his workmen at his will has been subjected to many restraints. Industrial Tribunals can extend an existing agreement or make a new one, or in general create new rights and obligations or modify the old ones even against the wishes of the employer or workmen or both. Moreover the right of workers to participate in management has been given legislative recognition. The departure from the old theories of law of contract and law of master and servant has not only been in India but all over the world. The industrial society everywhere has been moving during the present century from contract to status and this status is politico-economic juristic status.

Thus Industrial Disputes Act which is one of the important industrial legislation was passed in 1947. The object of the Act as laid down in the preamble of the Act is "to make provision for investigation and settlement of industrial disputes and for certain other purposes." The main objects of the Act as analyzed by the Supreme Court in Workman of Dimarkuchi Tea Estate verses Management of Dimarkuchi Tea Estate, are as follows:

(1) The promotion of measures for securing amity and good relations between the employer and workmen.

(2) The investigation and settlement of industrial disputes between employers and employers, employers and workmen or workmen and workmen, with a right of representation by a registered trade union or a federation of trade unions or association of employees or a federation or association of employers.

(3) The prevention of illegal strikes and lockouts.

(4) Relief to workmen in the matter of lay-off, retrenchment and closure of an undertaking (5) Collective bargaining. Definition of Industry Section 2(j) of Industrial Disputes Act, 1947 before the 1982 amendment defined industry as under: "Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. This definition of 'industry' in the Industrial Disputes Act, 1947 had received conflicting interpretation by the Supreme Court at different times. The scope of the term 'industry' in S. 2(j) of the Act seemed to have had all the features of the games of snakes and ladders; the term being given a very wide interpretation in Hospital Mazdoor Sabha case (AIR 1960 SC 610), a narrow interpretation in Safdarjung Hospital case and again the widest interpretation in Bangalore Water Supply and Sewerage board case. The aforesaid definition of industry' in S. 2(j) of the Act is in two parts. The first part says that it means any business, trade; undertaking, manufacture or calling of employers and the second part provides that it includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. 'Industry' as it was understood can be illustrated by some important decisions on the point. "The words used in the definition are very wide in their import and even so its latter part purports to provide an inclusive definition. The word "undertaking" according to Webster means "anything undertaken, any business work or project which one engages in or attempts, an enterprise". Similarly trade according to Halsbury, in its primary meaning' is "exchange of goods for goods or goods for money" and in its secondary meaning it is "any business carried on with a view to profit whether manual or mercantile, as distinguished from liberal arts or learned professions and from agriculture" whereas "business" is a wider term not synonymous with trade and means practically "anything which is an occupation as distinguished from a pleasure." The word "calling again is very wide; it means one's usual occupation, vocation, business, or trade"; so is the word "service" very wide in its import" (State of Bombay verses Hospital Mazdoor Sabha. There has not been any difficulty in ascertaining the meaning of the words business, trade, manufacture or calling of employers in order to determine whether a particular activity systematically carried on with the co-operation of employer and employers is an industry or not but the difficulties have arisen in interpreting the word "undertaking" in S 2(j) of the Act. For the first time the question arose in D.N. Banerji verses . RR. Mukherjee, which involved a dispute between a municipality and its employees. The municipality was held to be an industry and the dispute was held to be an industrial dispute. The Supreme Court observed that the non-technical ordinary meaning of 'industry' is "an

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undertaking where capital and labour co-operate with each other for the purpose of producing wealth in the shape of goods, machines, tool etc.", and for making profits, and an industry in this sense includes agriculture, horticulture etc. But the court said that this is too wide and that every aspect of employer-employee connection does not result in industry. Holding however, that municipal activity cannot be truly regarded as business or trade. The Supreme Court considered whether it can mean "undertaking". The suggestion that the word "undertaking", takes its colour from other four words in the first part of the definition was not accepted. It was said that this interpretation renders the word "undertaking" superfluous and the latter part of the definition unnecessary. Therefore, the court included non-profit undertakings in the concept of industry even if there is no private enterprise. Referring to the inclusion of public utility service in the scheme of the Act it was held that a dispute in a public utility services is an industrial dispute, and the fact that the enterprise is financed by taxation and not by capital was considered irrelevant. In the second case Baroda Municipality verses . Workman, the question again arose whether a municipality comes within the scope of S. 2(j). The Supreme Court said: "It is now finally settled by the decision of this Court in 1953 SCR 302, that a municipal undertaking of the nature we have under consideration is an "industry" within the meaning of the word in Section 2(j) of the Industrial Disputes Act and includes disputes between the municipality and their employees in branches of work "that can be regarded as analogous to the carrying on of a trade, or business." These first two cases laid down that for an activity to be an industry it is not necessary that it must be carried on by private enterprise or must be commercial or result in profit. It is sufficient if the activity is analogous to the carrying on of a trade or business and involves co-operation between employers and employees. This result was achieved by extending the meaning of 'undertaking' to cover adventures not strictly trade or business but objects very similar. The activity of the municipality was not attempted to be brought within expressions business and trade. The term "undertaking" was held to cover it. In the case Corporation of City of Nagpur verses Employees, the question whether and to what extent the Corporation of Nagpur was an industry under the C.P. and Barar Industrial Disputes Settlement, Act, 1947. That Act defined industry in a different manner. Under that Act the term "industry" meant:

(a) Any business, trade, manufacturing or minning undertaking or calling of employers, (b) Any calling, service, employment, handicraft or industrial occupation or avocation of employers, and (c) Any branch of industry or a group of industries.

In this definition the qualifying words "manufacturing or mining" limited the word undertaking and it could not be given the wide meaning given earlier. The Supreme Court did not attempt to bring municipal activity within the word "undertaking" but brought it within the expression "trade, business". It found the definition to be very clear and not susceptible of any ambiguity and observed that all the words wide and that even if the meaning could be cut down, the aims and objects of the C.P. and Berar Act as disclosed in the preamble, the main object, namely social justice demanded a wide meaning. The Court distinguished between (a) regal and (b) municipal functions of the Corporation and found that the latter analogous to business or trade because they were not regal and the activity was organised and services rendered. In the case State of Bombay verses Hospital Mazdoor Sabha, it was held that a hospital run by Government is included in the definition of "industry". It was however recognised in that case that a line must be drawn to exclude some callings, services and undertakings. It was held that domestic, personal or casual services are not included and examples were given of such services. The meaning of industry as an economic activity involving investment of capital and systematically carried on for profit for the production or sale of goods by employment of labour was again discarded because profit motive and investment of capital were considered not necessary. Another test reaffirmed was to enquire whether my such activity be carried on by private individual or group of individuals. Answering that a hospital can be run by a private party for profit, it was held that a hospital is an industry even if it is run by Government without profit. It was, however, again emphasized that an undertaking to be an industry must be analogous to trade or business. The Court laid down the following working principle:

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"As a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods for rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the co-operation of the employer and the employees; and its object is the satisfaction of material human needs. It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual, nor must it be for one's self nor for pleasure. Thus the manner in which the activity in question is organised or arranged; the condition of the cooperation between the employer and the employee necessary for its success and its object to render material services to the community can be regarded as some of the features which are distinctive of activities to which Section 2(j) applies." In the case Ahmadabad Textile Industry Research Association verses . State of Bombay, it was held that an Association for the research maintained by the Textile Industry and employing technical and other staff was industry. The case repeated the tests stated in the Hospital Mazdoor Sabha and applied them. It was observed that the Association was providing material service to a part of the community, was carried on with the help of employees, was organised in a manner in which trade or business is organised and there was co-operation between employer and employees.

However in the next case of National Union of Commercial Employees verses . M.R. Meher, (overruled by Bang/ore Water Supply, case, where the employers of a firm of solicitors demanded bonus and the case satisfied the test so far enumerated, a new test was added that the association of capital and labour must be direct and essential. The service of a solicitor was regarded as individual depending upon his personal qualifications and ability to which the employees did not contribute directly or essentially. Their contribution, it was held, no direct or essential nexus with the advice or services. In this way learned professions were excluded from the scope of industry. This case is also known as Solicitor's case. In the next case of Harinagar Cane Farm verses . State of Bihar, (1964), a cane farm was purchased by a sugar factory and worked as a department for supply of sugarcane. The agricultural operations were held to be industry. It was held that the agricultural operations were organised and carried on in the same manner as trade or business is carried on by a trader or businessman. In the case University of Delhi verses Ramnath, overruled by Bangalore Water Supply, case, the question was whether bus drivers employed by the University were workmen, the concept of service was narrowed and it was held that the educational institutions were not an industry. Their aim was education and the teachers' profession was not to be assimilated to industrial workers. The Court, however, stated that it must not be understood as laying general proposition. In the next case Madras Gymkhana Club Employees Union verses Management of Madras Gymkhana Club, (overruled by Bangalore Water Supply, case, it was held that the Madras Gymkhana Club being a members' club was not an industry. The Court said that industry involves the cooperation of employer and employees, organised like a trade and calculated to supply pleasurable utilities to members and others. The Court agreed that the material needs or wants of a section of the community was catered for but that was not enough. That must have been done as part of trade or Business or as an undertaking analogous to trade or business. That element the Court held, was completely missing' in a members club. The Court said: "The Club belongs to members for the time being on its list of members and that is what matters. Those members can deal with the club as they like. Therefore, the Club is identified with its members at a given point of time. Thus it cannot be said that the Club has an existence apart from its members." With regard to the two parts of the definition of the term "industry" the Court observed as follows:

"The definition of industry" is in two parts. In its first part it means any business, trade, undertaking, manufacture or calling of employers. This part of the definition determines an industry by reference to the occupation of employers in respect of certain activities. These activities are specified by five words and they determine what an industry is and what the cognate expression "industrial" is intended to convey, this is the denotation of the term or what the words "business, trade, undertaking manufacture or calling" comprehend. The second part views the

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matter from the angle of employees and is designed to include something more in what the term primarily denotes. By the second part of the definition any calling, service, employment, handicraft or industrial occupation or avocation of workman is included in the concept of industry. This part gives the extended connotation. If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kind of activity of the employees mentioned in the second part. But the second part standing alone cannot define "industry". Similarly in the case of 'Cricket Club of India (1961) (overruled by Bangalore Water of Suppy case the Cricket Club of India was held not to be an industry. In the next case Safdarjung Hospital, New Delhi verses Kuldip Singh, (1970) (overruled by Bangalore Water Supply, case, a sharp bend in the course of law came. The Supreme Court considered the facts of the appeals, clubbed together and held that all the three institutions, namely, (1) Safdarjung Hospital, New Delhi, (2) Tuberculosis Hospital, New Delhi and (3) Kurji Holy Family Hospital, Patna, in the bunch of appeals were not industries. In the first case the Supreme Court took the view that a place of treatment of patients, run as a department of government, was not an industry, because it was a part of the functions of the government. Likewise, dealing with the Tuberculosis Hospital case, the Court held that hospitals was wholly charitable and also was a research institute. Primarily, it was an institution for research and training. Therefore, the Court concluded, the institution could not be described as industry. In the third case the same factors plus the prohibition of profit were relied on by the Court. The Court also took view that professions must be excluded from the ambit of industry. It said: "A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill. Thus a teacher uses purely intellectual skill, while a painter uses both. In any event, they are not engaged in an occupation in which employers and employees co-operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services... Material services involve an activity carried on through co-operation between employer and employees to provide the community with the use of something such as electric power, water transportation, mail delivery, telephones and the like." Thus the Supreme Court in Safdarjung Hospital case overruled the Hospital Mazdoor Sabha (Supra). However, the Supreme Court in Bangalore Water Supply case, overruled the Safdarjung Hospital case and rehabilitated Hospital Mazdoor Sabha case.

In the case of Management of the FICCI verses . Workmen the Federation of India Chambers of Commerce and Industry was held to be an industry within the meaning of S. 2(j). The Court said: "The Federation carried on systematic activities to assist its members and other businessmen and industrialists and even non-members as, for instance, in giving them the right to subscribe to their bulletin, in taking up their cases and solving their difficulties and in obtaining concession and facilities for them from the Government. These activities are business activities and material services." Dhanrajgirji Hospital, case, which was decided on the lines of Safdarjung Hospital case was also overruled by the Supreme Court in Bangalore Water Supply case. In the case of The Workmen of Indian Standards Institution verses The Management of Indian Standards Institution, the Supreme court held that the activities of the Indian Standards Institution fall within the category analogous to trade or business and must be regarded as "industry" as defined in S. 2(j) of the Industrial Disputes Act, 1947. The court observed. "The Court should, therefore, as far as possible, avoid formulating or adopting generalizations and hesitate to cast the concept of industry in narrow rigid mould which would not permit of expansion as and when necessity arises. Only some working principles may be evolved which would furnish guidance in determining what are the attibutes or characteristics which would ordinarily indicate that an undertaking is analogous to trade or business.

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In Bangalore Water Supply and Sewerage Board verses A. Rajappa, (1978) a seven judge bench of the Supreme Court exhaustively considered the scope of industry. The Supreme Court in this case by a majority of five with two dissenting overruled Safdarjung Solicitors' case, Gymkhana, Delhi University, Dhanrajgiri Hospital and Cricket Club of India. It rehabilitated Hospital Mazdoor Shabha and affirmed Indian Standards Institution. The Court followed Banerji and Corporation of City of Nagpur cases. There are four judgements: one by Krishna lyer, J for himself, Bhagwati and Desai, JJ; the second by the former Chief Justice Beg; the third by Chief Justice Chandrachud and the fourth by Jaswant Singh. J., for himself and Tulzapurkar, J. The following is the summary of the majority view in the words of Krishna lyer, J., who gave the leading judgement: 1. Industry as defined in S. 2(j) and explained in Banerji has a wide import.

(a) Where (1) systematic activity, (2) Organised by co-operation between employer and employee (the direct and substantial element is chimerical) (3) for production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geard to celestial bliss, i.e., making on a large scale Prasad or food), prima facie, there is "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 organization is the trade or business it does not cease to be one because of philanthropy animating the undertaking.

2. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.

(a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgement; so also service, calling and the like. This yields the inference that all organised activity possessing the triple elements in I (supra) although not trade or business, may still be 'industry' provided the nature of the activity viz., the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold 'industry' undertakings, callings and services, adventures "analogous to the carrying on the trade or business." All features other than the methodology of carrying on the activity viz. in organizing the cooperation between employer and employee may be dissimilar, if on the employment terms there is analogy.

3. Applications of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.

(a) The consequences are: (1) Professions, (2) Clubs, (3) Educational institutions, (4) Co-operatives, (5) Research institutes, (6) Charitable projects and

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(7) Other kindred adventures, if they fulfil the triple tests listed in (supra) cannot be exempted from the scope of Section 2(j),

(b) A restricted category of professions, clubs, co-operatives and even gurukulas and little research clubs may qualify for the exemption if the simple ventures, substantively, and going by the dominant nature criterion, substantially, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit.

(c) 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 service 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, manual or technical, are hired. Such elementary or like undertakings alone are exempt not other generosity, compassion, developmental passion or project.

4. The dominant nature test: (a) 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 the University of Delhi or some departments are not productive of goods and services is isolated, even then the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur will be the true test. The whole undertaking will be 'industry' although those who are not 'workmen' by definition may not benefit by the status.

(b) 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.

(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, they can be considered to come within S. 2(j).

(d) Constitutional and competently enacted legislative provisions may remove from the scope of the Act categories which otherwise may be covered thereby.

5. We overrule Safdarjung, Solicitors' case , Gymkhana Delhi University (MR 1963 SC 1873), Dhanrajgiri Hospital and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha is hereby rehabilitated." Thus in Bangalore Water Supply and Sewer age Board Y Rajappa, the Supreme Court laid down the following test which is practically reiteration of the test laid down in Hospital Mazdoor Sabha case: Triple test. Where there is a (1) Systematic activity; (2) Organised by cooperation, between employer and employee and (3) For the production and/or distribution of goods and services calculated to satisfy human wants and wishes, prima facie there is an industry in the enterprise. This is known as triple test, The following points were also emphasized in this case: 1. Industry does not include spiritual or religious services geared to celestial bliss, e.g., making on large scale prasad or food, 2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector. 3. The true test is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. 4. If the organization is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.

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5. Although S. 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to over-reach each other. The word "undertaking" must suffer a contextual and associational shrinkage, so also "service", "calling" and the like. The inference is that all organised activity possessing the triple elements although not trade or business may still be industry provided the employer-employee basis, bears resemblance to what we find in trade or business. The consequences are: (1) Professions, (2) Clubs, (3) Educational institutions, (4) Co-operatives, (5) Research institutions, (6 charitable projects, and (7) Other kindered adventures, If they fulfil the triple test, cannot be exempted from scope of definition of industry under section 2(j) of the Act. Dominant nature test. Where a complex of activities some of which qualify for exemption, others not, involve employees on the total undertaking some of whom are not "workmen" 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 will be the true test, the whole undertaking will be "industry" although those who are not workmen by definition may not benefit by the status. Exceptions. 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 entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit. If in pious or altruistic mission, many employ themselves, free or for small honorarium 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, manual or technical are hired. Such elementary or like undertakings alone are exempt, not other generosity, compassion, developmental passion or project. Sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Governmental or statutory bodies. 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).

In Coir Board, Ernakulam verses Indira Devai PS (I) (1998), the two-Judge Bench of the Supreme Court said:

"The definition of industry under the Industrial Disputes Act was held to cover all professions, clubs, educational institutions, cooperatives, research institutions, charitable projects and anything else which could be looked upon as organised activity where there was a relationship of employer and employee and goods were produced or service was rendered. Even in the case of local bodies and administrative organizations the Court evolved a 'predominant activity' test so that whenever the predominant activity could be covered by the wide scope of the definition as propounded by the Court, the local body or the organization would be considered as an industry. Even in those cases where the predominant activity could not be so classified, the Court included in the definition all those activities of the organization which could be so included as industry, departing from its own earlier test that one had to go by the predominant nature of the activity. In fact, Chandrachud, J. (as he then was) observed that even a

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defence establishment or a mint or a security press could, in a given case, be considered as an industry. Very restricted exemptions were given from the all embracing scope of the definition so propounded. For example, pious or religious missions were considered exempt even if a few servants were hired to help the devotees. Where normally no employees were hired but the employment was marginal the organization would not qualify as an industry. Sovereign functions of the State as traditionally understood would also not be classified as industry though Government departments which could be served and labelled as industry would not escape the Industrial Disputes Act.

The majority laid down the 'dominant nature test for deciding of whether the establishment is an industry or not."

Suggestion. Constitutional and competently enacted legislative provisions may well remove from the scope of Industrial Disputes Act categories which otherwise may be covered thereby. The Parliament must step in and legislate in a manner which will leave no doubt as to its intention.

However, doubting the correctness of the tests laid down in Bangalore Water Supply & Sewerage Board verses Rajappa and pointing out the damaging effects of the extended meaning given to " industry" is this case, a two-judge bench of the Supreme Court in Coir Board verses Indira Devai RS., (1998), observed that a larger bench should be constituted to reconsider Bangalore Water Supply & Sewerage Board M. Rajappa decision. It was further observed that since the notification bring into effect the 1982 amendment to S. 2(j) of the Industrial Disputes Act has not been issued by the executive so far the matter should be judicially re-examined. Hence matter referred to larger Bench to reconsider the decision in that case. In Coir Board verses Indira Devai RS., (2000) 1 SCC 224, the larger Bench of the Supreme Court held that the Bangalore Water Supply and Sewerage Board verses Rajappa decision "does not require reconsideration".

Difficulty in defining "industry". The Supreme Court observed, "Industry, therefore, cannot be strictly defined but only be described. Such a rule, however, leaves too wide a door open for speculation and subjective notions as to what is describable as an industry. It is best to look for a rough rule of guidance by considering what the concept of industry must exclude." New definition of "industry" but not yet given effect till date The definition of "industry" was amended in 1982 and is reproduced below. It shall stand substituted w.e.f. the date to be notified. (j) "Industry" means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are 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 (1) Any capital has been invested for the purpose of carrying on such activity;

Or (2) Such activity is carried on with a motive to make any gain or profit. and includes (a) Any activity of the Dock Labour Board established under section 5-A of the Dock Workers (Regulation of Employment) Act, 1948; (b) Any activity relating to the promotion of sales or business or both carried on by an establishment. But does not include (1) any agricultural operation except where such agricultural operations' carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause and such other activity is the predominant one). Explanation. For the purpose of this sub-clause "agricultural operation " does not include any activity carried on in a plant at ion as defined in clause (f) of Sect ion 2 the Plantation Labour Act, 1951, or (2) Hospital or dispensaries, or (3) Educational, scientific, research or training institutions; or

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(4) Institutions owned or managed by organization wholly or substantially engaged in any charitable, social or philanthropic service; or (5) Khadi or village industries; or (6) any activity of the Government relatble to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence, research, atomic energy and space; or (7) Any domestic service; or (8) any activity, being a profession practiced 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; or (a) 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 individual in relating to such activity is less than ten. It may be noted that the amendment has not yet been brought into force. The earlier definition of 'industry' still continues to be valid and effective. This definition has incorporated the triple test laid down in Bangalore Water Supply case, but has excluded many activities like hospitals, educational institutions, etc. In Des Raj verses State of Punjab, the irrigation Department of the State of Punjab was held to bean "industry" within the meaning of S. 2(j) of the Industrial Disputes Act as it stands at present. The Supreme Court applied the tests laid in various decisions of the Supreme Court and particularly the dominant nature test evolved by Krishna lyer, J. in Bangalore Water Supply and Sewerage Board case. The Supreme Court further stated in the above case that though by S. 2(c) of the Amending Act 46 of 1982, the definition of industry had been amended but the amendment has not yet been brought into force even after a lapse of six years. "It is appropriate that the same should be brought in force as such or with such further alterations as may be considered necessary, and the legislative view of the matter is made known and the confusion in the field is cleared up. In the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation." In Karmani Properties Ltd. verses State of West Bengal, the appellant company owned several mansion houses. There were about 300 flats in those mansions which had been let out to tenants. The appellant provided various facilities to its tenants in these flats, e.g., free supply of electricity, washing and cleaning of floors and lavatories, lift service, electric repairs and replacing, etc. and for that purpose the company employed 50 liftman, durwans, pumpmen, electric and other mistries, bill collectors and bearers etc. in connection with those properties. A dispute arose between the employees of the company and the company with regard to wages, scales of pay. Held that the activities carried on by the company fell within the ambit of the expression "industry" defined in S. 2(j) of the Industrial Disputes Act as constructed by the Supreme Court in Bangalore Water Supply and Sewerage Board case. In Gurmail Singh verses State of Punjab, it was held that running of tubewells by Government or Government owned corporation constitutes "industry". In All India Radio verses Santosh Kumar, AIR 1998 SC 941, it was held that "All India Radio" and "Doordarshan" are covered by the definition of "industry" within the meaning of S. 2(j) of the Act. The functions which are carried on by All India Radio and Doordarshan cannot be said to be confined to sovereign functions as they carry on commercial activity for profit by getting commercial advertisements telecast or broadcast through their various Kendras and stations by charging fees.

In General Manager, Telecom verses A Srinivasa Rao, Telecom Department of Union of India was held to be an 'industry'. Similar was the decision in Asha Rani verses Divisional Engineer, Telecom Department, (2001) . In Sub-Divisional Inspector of Post, Vaikan, verses Theyyam Joseph, it was held that the functions of the Postal

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Department are part of the sovereign functions of the state, it is, therefore, not an 'industry'. This case was decided without reference to the Bangalore Water Supply case. In G.M, Telecom verses Srinivasa Rao (supra), it was held that the decision in Theyyam Joseph case cannot be treated as laying down the correct law. In Physical Research Laboratory verses K.G. Sharma, the Physical Research Laboratory was held not an 'industry' because it is purely a research organization discharging governmental functions and a domestic enterprise than a commercial enterprise, though it is taking employees' co-operation in achieving its purpose. In Agricultural Produce Market Committee verses Ashok Harikuni, (2000) 8 SCC 61, it was held, on facts, that none of the functions of the Market Committee established under Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 "are sovereign or inalienable functions of the state". Therefore, such a market committee was held to be an 'industry'. In Bharat Bhawan Trust verses Bharat Bhawan Artists' Association, (2001) 7 SCC 630, the issue before the Supreme Court was whether a trust for promotion of art and culture could be called an 'industry'. Without deciding the said issue finally, it was held, since Bharat Bhawan Trust is engaged only in promotion of art and preservation of artistic talent and its activities being not of those in which there can be a large scale production to involve co-operation of efforts of the employer and employee, it is doubtful to hold it as an 'industry' under the definition given under S. 20) of the ID Act. In State of Gujarat verses Pratam Singh Narsingh Par mar, it was held that if a dispute arises as to whether a particular establishment or part of it wherein an appointment has been made is an industry or not, it would be for the person concerned who claims the same to be an 'industry', to give positive facts for coming to the conclusion that it constitutes an 'industry'. Ordinarily, a department of the Government cannot be held to be an industry and rather it is a part of the sovereign function. In this case on the basis of the assertion made by the Chief Conservator of Forests the Court held that the scheme that had been undertaken by the department of the State of Gujarat wherein the employee had been recruited cannot be regarded as a part of the sovereign functions of the state. The Court distinguished this case and Chief Conservator of Forests v Jaganath Maruti Kondhare, (1996) 2 SCC 293. In the latter case the Forest Department of the State of Maharashtra was held to be an 'industry'. In Som Vihar Apartment Owners' Housing Maintenance Society Ltd. verses Workmen, Association or Society of apartment owners employing persons for rendering personal services to its members, held, not "industry" for the purposes of S. 2(j), Industrial Disputes Act. Such employees would not be "workmen" under the Act.

In Parmanand verses Nagar Palika, Dehradun, (2003) 9 SCC 290, Engineering Department of Municipality (respondent Nagar Palika) was held an 'industry' Inclusion of municipality in the Constitution by itself would not change this position.

In State of U.R verses Jai Bir Singh, (2005) 5 SCC 1, five judge Bench of the Supreme Court observed that interpretation given by majority Judges (Krishna lyer, J. speaking for himself and Bhagwati and Desai, JJ) in Bangalore Water Supply & Sewerage Board verses . A. Rajappa, is over expansive and one sided i.e. only worker oriented. Court held that it requires reconsideration by a larger Bench for the following reasons:

(1) The decision in Bangalore Water Supply case was not a unaminous decision;

(2) Of the five Judges who constituted majority, three had given a common opinion but the two others had given separate opinions projecting a view partly different from the views expressed in the opinion of the other three Judges;

(3) Majority opinion expressed the view that their interpretation was only tentative and temporary till the Legislature stepped in and removed vagueness and confusion;

(4) Judges in the said decision rendered different opinions at different points of time in some instances without going through opinion of other three Judges;

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(5) Worker-oriented approach in construing the definition of industry, unmindful of the interest of the employer and the public who are the ultimate beneficiaries, is a one-sided approach and not in accordance with the provisions of the Act;

(6) "Sovereign functions", should not be confined to its traditional concept but should comprehend public welfare activities which Government undertakes in discharge of its constitutional obligations and as such should fall outside the purview of "industry". Hence, hospitals and educational and research institutions, etc. should be kept outside the purview of "industry";

(7) Even though the Act was amended in 1982 yet it has remained unforced and confusion still prevails;

(8) The judicial interpretation seems to be one of the inhibiting factors in enforcement of the amended definition. The helplessness of the legislature and the executive in bringing into force the amended definition makes reference imperative;

(9) In Bangalore Water Supply case not all the Judges in interpreting the definition clause invoked the doctrine of noscitur a sociis. Unanimous decision of a Bench of Six Judges in Safdarjung Hospital, (1970) expressing the view that although "profit motive" is irrelevant, in order to encompass the activity within "industry" the activity must be "analogous to trade or business in a commercial sense";

(10) Experience of past years showing that the majority view in Bangalore Water Supply, instead of ushering in industrial peace, has given rise to large number of awards granting reinstatement in service and huge amounts of back wages to workers compelling the employers having moderate assets to close down their industries causing harm not only to employers and workers but to the public in general, they being the ultimate beneficiaries;

(11) Interpretation should be a balanced one having regard to the interest of the workers, the employers as also the public. Object of the Act has to be kept in view;

(12) Liberal profession based on talent, skill and intellectual attainments such as those of lawyers, doctors, chartered accounts, architects, etc. should not fall within "industry".

The Supreme Court concluded that it is, therefore, for the large Bench of the Supreme Court to interpret the definition clause in the present context with the experience of all these years, keeping in view the unenforced amended definition of "industry".

In Umesh Korga Bhandari verses Mahanagar Telephone Nigam Ltd., it was held (on the question whether MTNL included in the definition of industry as it stands) that in light of question as to scope of meaning of "industry" having been referred to larger Bench in Jai Bir Singh case (2005) 5 SCC 1, present appeals to remain pending till decision of the larger Bench.

In State of Rajasthan verses Ganeshi Lal, (2008) , it was held that the accepted concept of "Industry" cannot be applied to Law Department of the Government.

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2

Workman

Definition of Workman Section 2(s) of the Industrial Dispute Act, 1947 (as amended in 1982 w.e.f. 21.8.1984) gives the definition

of workman' which is reproduced below:- "Workman" means any person (including an apprentice) employed in any industry to do any manual,

unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes 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-

(1) who is subject to the Air Force Act, 1950, or the Army Act, 1950 or the Navy Act, 1957, or (2) who is employed in the police service or as an officer or employee of a prison; or (3) who is employed mainly in a managerial or administrative capacity;

or

(4) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. Note: The scope of the term 'workman' has been enlarged by the Industrial Disputes (Amendment) Act, 1982 to cover the supervisory staff whose wages do not exceed Rs. 16007- per month. Before the amendment the limit was Rs. 500/-per month. For earlier definitions of 'workman' see H.R. Adyanthaya case.

The definition of workman as given in the Act is analyzed as under: Analysis of Definition of Workman 1. Industry. The person must be employed in an industry within the meaning of S.2(j)of I.D. Act, 1947. 2. Employer-employee relationship. The essential condition of a person being a workman within the term of

the definition is that he must be employed in an industry, i.e., there must be employment of his by the employer and there must be a relationship between the employer and him as between employer and employee or master and servant. It is necessary that a person to be a workman must be in a 'contract o/service', and not contract for service.' Merely a contract to do some work is not enough. An independent contractor is excluded from the definition of workman as there does not exist the relationship of master and servant in such a case. In other words an independent contractor js not a workman. An independent contractor is not under the control of the master. The element of control distinguishes an employee from an independent contractor.

In Dharangdhara Chemical Works, verses . State of Saurashtra, it was observed that the uniformally applied test to determine employer-employee relationship is the existence of the right in the master to supervise and control the work done by the servant not only in directing what work the servant is to do, but also the manner in which he shall do his work.

The test is, however, not accepted as universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done as in the case of a captain of a ship or chauffeur or report on the staff of a newspaper.

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In Short verses J. W. Henderson Ltd., (1946) AC 24 (HL), the House of Lords gave four indicia of contract of service, viz., (a) the master's power of selection of his servant, (b) the payment of wages or other remuneration, (c) the master's right to control the method of doing the work, and (d) the master's right of suspension or dismissal. But it was further observed:

"Modern industrial conditions have so much affected the freedom of the master in cases in which no one could reasonably suggest that the employee was, thereby converted into an independent contractor that, if and when an appropriate occasion arises, it will be incumbent on this House to reconsider and to restate these indicia. For example, (a), (b) and (d) and probably also (c) are affected by the statutory provisions and rules which restrict the master's choice of men supplied by the labour bureau, or directed to him under the Essential Work provisions, and his power of suspension or dismissal is similarly affected. These matters are also affected by trade union rules which are at least primarily made for the protection of wage-earners." Therefore, it was held by the House of Lords that the principal requirement of a contract of service is the right of master in some reasonable sense to control the method of doing the work.

The position in law is thus summarized in Halsbury's Laws of England, Vol. 22, page 112, para 191:- " Whether or not, in any given cases, the relation of master and servant exists is a question of fact; but in all cases the relation imports the existence of power in the employer not only to direct what work the servant is to do but also the manner in which the work is to be done; and until the position is restated as contemplated in Short verses J. W. Henderson Ltd., (1946) AC 24 (HL), we may take it as the prima facie test for determining the relationship between master and servant." The principle which emerges from these authorities is that the prima facie test for determination of the employer-

employee relationship is the existence of a right to control not only what is to be done by the servant but also the manner in which he shall do his work But the nature or extent of control which is required to establish the relationship of employer and employee varies from business to business and is by its very nature incapable of precise definition. The correct method of approach, therefore, would be to consider whether having regard to the nature of work there was due control and supervision by the employer. In this connection Flecher Moulton, L.J., in Simmons verses Health Laundry Company observed as follows:

"In my opinion it is impossible to lay down any rule of law distinguishing the one from the other. It is a question of fact to be decided by all the circumstances of the case. The greater the amount of direct control exercised over the person rendering the service by the person contracted for the stronger the grounds 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 and that the contract is not one of service."

On the authority of Sadler verses Henlock, Blake verses Thirst and Halsbury's Laws of England the Supreme Court field in Dharangdhra Chemical Works Ltd. v State of Saurashtra, that a person can be workman even though he is paid not per day but by the job. If a person is a worker and not a contractor it makes no difference that his work is piece work. It was further observed in that case that to determine "whether a person is a workman or an independent contractor is whether he has agreed to work personally or not. If he has, then he is a workman and the fact that he takes assistance from other persons would not affect his status." In this case the Supreme Court held that the 'aghiaras' engaged in salt works (seasonal activity) who had agreed to work personally, and on whom there was due control and supervision having regard to the nature of work, are workmen even though they employ other persons to assist them.

In Chintaman Rao and Another verses State of M.R, it was held that test laid down in Dharangdhara Chemical Works case (supra) with respect to S.2(s) of the Industrial Disputes Act would also apply to S.2(l) of the Factories Act. It was further pointed out that the question whether a particular person working in a factory was an independent contractor or a worker would depend upon the terms of the contract entered into between him and the employer and no general proposition could be laid down which would apply to all cases. This

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was reiterated in Hussainbhai, Calicut verses The Alath Factory Tezhilali Union, Kozhikode, AIR 1978 SC 1410.

In Hussainbhai case a number of workmen were engaged in the making of ropes in a factory of the petitioner but they were hired by contractors who had executed agreement with the factory to get such work done. An industrial dispute arose when the factory refused employment to 29 workers atid the matter was refened by the State Government for adjudication, it was held by the Supreme Court the they fell within the definition of'workman1. The Court said: "The facts found art that the work done by the workmen was an integral part of the industry concerned. that the raw material was supplied by the management, that the factory premises belonged to the management and the finished product was taken by the management for its own trade. The workman was broadly under the control of the management and rejected articles were directed to be rectified by the management." Thus it was held that the workmen were workmen of the petitioner Who is an employee in Labour Law? This was the short question raised in the instant case but covered by earlier decision. The Court further said: "The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business subststance, skill, and continued employment. the, for any reason, chokes off. the worker is, virtually, laid off. The presence of intermediate contractors with whom alone workers have immediate or direct relationship ex controctu 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. Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry; the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of 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 appearances," "'Workman " and an Independent contractor compared. The broad distinction between a workman and an independent contractor lies in this that while the former himself agrees to work, the latter agrees to get other persons to work. If a person who agrees himself to work and so work is a workman. A workman does not cease to be a workman by reason merely of the fact that he gets other persons to work along with him and that those persons are controlled and paid by him. What detenuines whether a person is a workman or an independent contractor is whether he has agreed to work personally or not. If he , then he is a workman and the fact that he takes assistance from other persons would not affect his status. Dharangdhara Chemical Works Ltd. verses Stat. of Saurashtra.

An employee unlike the contractor is under the control and supervision of the employer in respect of the details of the work. A contractor on the other hand is required to do specific work for other persons without submitting himself to their control in respect of the details of the work, Chintaman Rao verses . State of M.R,. In M/s. Shining Tailors verses Industrial Tribunal 11 U.R Luchnow and Others, (1983) 4 SCC 464, it was held that payment on piece rate by itself does not disprove the relationship of master and servant. On [acts, the right to reject the work or to refuse further work, held establish master servant relationship.

An independent contractor is one who undertakes to produce a given result but so that in the actual execution of the work he is not under the control or order of the person for whom he does it, and may use his own discretion in things not specified before hand. A workman is under the command of his master as to the manner in which he shall do his work.

Dismissed and discharged workman is still a workman. For the purposes of any proceeding under the I.D. Act, 1947 in relation to an industrial dispute, workman 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.

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In G.B. Pant University of Agriculture & Technology verses State of U.P., the workers of the cafeteria, required by regulations to be maintained in a residential university and to be compulsorily used by resident-students, were held employees of the university. The Apex Court applied the twin conventional tests of implicit obligation and overall control and supervision to determine the issue. It was further held that mere financial difficulties could not justify taking of a view to the contrary.

In Indian Banks Association verses Workmen of Syndicate Bank, (2001) 3 SCC 36: Commission agents, deposit collectors of banks, although were not regular employees, held, nonetheless covered. Relationship of master and servant did exist between the bank and such workmen. Banking Regalation Act did not bar employment of persons on commission basis.

In Workmen of Nilgiri Co-operative Marketing Society Ltd. verses State of Tamil Nadu, (2004) 3 SCC 514: it was held that to determine whether a contract is a contract of service or contract for service and whether the employees concerned are employees of the contractor, test of organisation or control and supervision are not the only decisive tests. Different test, held, applicable in different facts and circumstances,. All relevant factors must be integrated. The factors which would have bearing on the result are: (a) who is the appointing authority; (b) who is the paymaster; (c) Who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision; (0 the nature of the job whether it is professional or skilled work; (g) nature of establishment; (h) the right to reject. In this case marketing service society getting works done through third parties contracts, having regard to all relevant factors and circumstances, held, such workers were not workers of the factory. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract and the person doing the work will not be a servant. The Court further held that the burden of proof lies on the party setting up plea regarding the existence the impugned relationship. It is a pure question of fact whether workers employees of principal employer or of contractor.

In Oil and Natural Gas Corporation Limited K.G. Project Rajahmundry verses N. Satyanarayan and Others, (2003) III LLJ 289 AP, labourers engaged by the second respondent for doing certain work for the appellant were held not workmen of the appellant.

3. Nature of duties: To be a workman a person must be employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. Manual work involves hard physical work requiring use of hands, e.g., a Mali looking after the gardens. Unskilled work requires no special skill or training, e.g., a peon. Skilled work requires ability gained by special experience or training, e.g.; a carpenter. Technical means dealing with the practical, industrial or mechanical arts or the applied sciences. Technical work involves the application of scientific or technical knowledge. Clerical work means the work relating to office clerks. It involves minor duties such as typing letters, filing letters, writing cash book, keeping records etc. It does not involve excessive physical or mental work. Supervisory work, e.g., recommending leave application, involves directing or managing the work of others. If the person is employed in a supervisory capacity he must not be drawing wages exceeding Rs. 1600/- per month and he must not be working mainly in a managerial capacity.

In Burmah Shell Oil Storage and Distributing Co. verses Management Staff Association it was held by the Supreme Court that if the work done by an 'employee' is not skilled or unskilled manual work, supervisory work, technical work or clerical work, he would not be a workman. The specification of four types of work is obviously intended to lay down that an employee is to become a workman only if he is employed to do work of one of those types, while there may be employees who, not doing any such work, would be out of the scope of the word "workman" without having to resort to the exceptions. An example, which appear to be very clear, will be that of a person employed in cavassing sales for an industry.

Frequently, an employee is required to do more than one kind of work or he may be doing clerical work as well as supervisory work. He may be doing manual work as well as supervisory work. He may be doing technical work as well as supervisory work. In Burmah Shell Oil Storage and Distributing Co. verses Management Staff Association, , the Supreme Court following May & Baker (India) Ltd. verses Workman, South Indian Bank Ltd. verses A.R. Chacko, and Anand Bazar Patrika (Private) Ltd. verses Its Workman, (1970) 3 SCC 248, held that

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principle is now well settled that a workman must be held to be employed to do that work which is the main work he is required to do even though he may be incidentally doing other types of works. In Anand Bazar Patrika case the Court held that if a person is mainly doing supervisory work but incidentally or for a fraction of the time also does some clerical work, he is employed in supervisory capacity, and, conversely, if the main work done is of clerical nature, the mere fact that some supervisory duties are also carried out incidentally or as a small fraction of the work done by him will not convert his employment as a clerk into one in supervisory capacity. In Jaques verses Owners of Steam Tug Alexandra, (1921) 2 AC 399, it was held by the House of Lords that the real test is the substantial nature of the employment.

Similarly in Punjab Co-operative Bank Ltd. verses R.S. Bhatia, AIR 1975 SC 1898, it was held that a person shall be deemed to be employed to do that work which is his main work he is required to do even though incidentally does some other types of work also. In this case an accountant of a bank was held not to be employed mainly in a managerial or administrative capacity merely because of the fact that he used to sign salary bills of the staff.

In S.K. Maim verses . Carona Sahu Co, Ltd., the larger bench of the Supreme Court held as follows: "Whether or not an employee is a workman under S.2(s) of the Industrial Dispute Act is required to be

determined with reference to his principal nature of duties and functions. Such question is required to 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 strait-jacket formula which can decide the dispute as to the real nature of duties and functions being performed by an employee in all cases. When an employee is required to do more than one kind of work it becomes necessary to determine under which classification under S. 2(s) the employee will fall for the purposes of deciding whether he comes within the definition of workman or goes out of it. The designation of an employee is not of much importance and what is important is the nature of duties being performed by the employee. The determinative factor is the main duties being performed by the employee concerned and not some works incidentally done Viewed from this angle, if the employee is mainly doing supervisory work but incidentally or for a fraction of time also does some manual or clerical work, the employee should not be held to be doing supervisory work. Conversely, if the main work is of manual, clerical or of technical nature, the mere fact that some supervisory or other work is also done by the employee incidentally or only a small fraction of working time is devoted to some supervisory works, the employee will come within the purview of "workman" as defined in S.2(s) of the Industrial "Disputes Act,"

In the above case, on facts, Incharge of shop was held not a workman The above case is based upon the definition of workman before it was amended by Act 46of 1982 w.e.f 21.8.1984.

In H.R. Adycmthaya verses Sandoz (India) Ltd,, AIR 1994 SC 2608, the Supreme Court held that in order to fall within the definition of workman, a person must be employed to do any of categories of work mentioned in the main body of the definition (viz., manual, unskilled, skilled, technical, operational etc.) and it is not enough that he is not merely covered by any of the four exceptions to the definition. It further held that the word 'skilled' must be read ejusdem generis to mean skilled whether manual or non-manual and as such medical representatives are not skilled workmen, nor 'technical' or 'operational' workers. Their work is not covered by any type of works mentioned in the main body of the definition. Section 2(d) of the Sales Promotion Employees (Conditions of Service) Act, 1976 (as originally stood prior to its amendment in 1986 w.e.f. 6.5.1987) provided that sales promotion employees drawing wages not exceeding Rs. 750 per mensum (excluding commission) or Rs. 9,000 per annum (including commission) only included within the definition. It was held that the definition clause is not discriminatory Workmen doing work can be classified on the basis of their income. It is a matter of legislative discretion in which Court cannot interfere. The object of the legislation appears to be to give protection to the service conditions of the weaker sections of the employees belonging to the said category.

In Hitssan Mithu Mhasvadkar verses Bombay Iron and Steel Labour Board, (2001) 7 SCC 394, it was held that predominant nature of the service of a person is the true and proper test. Designation alone of the employee is not decisive and what really should go into consideration is the nature of his duties and the powers conferred upon,

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as well as the functions assigned to him. An Inspector appointed under s. 15 of the I.D. Act, 1947 cannot be considered to be engaged in doing any manual, unskilled, technical, operational, clerical or supervisory work and the mere fact that in the course of performing his duties he had also to maintain, incidentally, records to evidence the duties performed by him, day to day, cannot result in the conversion of the post of "Inspector" into any one of the said nature without which the appellant could not fall within the definition of "workman". The powers of an Inspector and duties and obligations casts upon him as such are identical and akin to law enforcing agency or authority and also on a par with prosecuting agency in the public law field.

In Mukesh K. Tripathi verses . Senior Divisional Manager, LIC, it was held that the definition of workman in S. 2(s) is exhaustive. Hence the position in law as it obtains today is that a person to be a workman under the Industrial Disputes Act must be employed to do the work of any of the categories viz manual, unskilled, skilled, technical, operational, clerical or supervisory for hire or reward. The same must be established even if a person does not perform managerial or supervisory duties. It is not enough that he is not covered by any of the four exceptions to the definition. S. K. Verma, (1983) , Delton Cable, (1984) and Ciba Geigy, (1985), held to be not good law in the light of the Constitution Bench decision in H.R. Adyanthaya case. Instead ratio of May and Baker case, and cases following the same as approved in H.R. Adyanthaya followed. It was held, on facts, the appellant had not adduced any evidence whatsoever that he had preferred any skilled, unskilled, manual, technical or operations duties. His letter of appointment clearly proved that he was appointed as apprentice and not to do any job that fitted the above descriptions. The appellant was held not workman. The cases of S.K. Verma, (1983) 4 SCC 214, Delton Cable, (1984) 2 SCC 569 and Ciba-Geigy, (1985) 3 SCC 371 are based on facts found in those cases. They have, therefore, to be confined to those facts. S. K. Verma has not been expressly overruled in H.R. Adyanthaya but once the said decision has been held to have been rendered per incuriam it cannot be said to have laid down good law.

In Mukesh K. Tripathi, (2004) 8 SCC 387, the following cases were followed: H.R. Adyanthaya verses Sandoz (India) Ltd., (1994) 5 SCC 737; May and Baker (India) Ltd. verses Workmen, (1964) 3 SCR 560; Burma Shell Oil Storage & Distribution Co. of India Ltd. verses Burma Shell Management Staff Association, (1970) 3 SCC 378.

In Mukesh K. Tripathi, (2004) 8 SCC 387, the following cases were rendered per incuriam and not good law (they have, therefore, to be confined to those facts):

S.K. Verma verses Mahesh Chandra, (1983) 4 SCC 214; Ved Prakash Gupta verses Delton Cable India (?) Ltd., (1984) 2 SCC 569; Arkal Govind Raj Rao verses Ciba Geigy India Ltd., (1985) 3 SCC 371; Sundarambal verses Government of Goa, Daman.

In Sonepat Co-op. Sugar Mills Ltd. verses . Ajit Singh, (2005), it was held that to fall within the definition of workman, job of employee concerned must fall within one or the other categories enumerated in the said expression. Merely showing that the employee concerned had not been performing any managerial or supervisory duties does not ipso facto make him a workman. In this case the respondent workman, possessing a law degree appointed as a Legal Assistant, claimed to be a workman performing tasks of "legal clerical nature". He rendered legal opinions, drafted pleadings, represented appellant before various courts/authorities and discharged quasi-judicial function as an enquiry officer in domestic enquiries against workman. It was held that such a job would not make him a workman under Section 2(s). Job of a clerk ordinarily implies stereotype work without power of control or dignity or initiative or creativeness. Whether same is being performed by an employee needs to be determined upon a finding as regards the dominant nature of the job performed. Respondent did not perform any stereotype job and the same involved creativity. The Court give instances that teachers serving in an educational institution, advertising managers, chemist employed in a sugar mill, gate sergeant in charge of watch and ward staff in a tannary and a welfare officer in a commercial educational institution, have all not been held to be workmen.

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In Anand Regional Co-op. Oil Seedsgrowers' Union Ltd. verses Shileshkumar Harshadbhai Shah, it was held that for determining the question as to whether a person employed in an industry is a workman or not, not only the nature of the work performed by him but also the terms of the appointment in the job performed are relevant considerations. Supervision contemplates direction and control. While determining the nature of the work performed by an employee, the essence of the matter should call for consideration. An undue importance need not be given for the designation of an employee or the name assigned to the class to which he belongs. What is needed to be asked is as to what are the primary duties he performs. For the said purpose, it is necessary to prove that there were some persons working under him whose work was required to be supervised. In this case the employee being in charge of a section and that too a small one in the quality control department of an oil seedgrowers' cooperative society, without any authority to initiate departmental proceedings against the sub-ordinates, was held not a workman under Section 2(s).

In Muir Mills Unit of NTC (U.R) Ltd. verses Sway am Prakash Srivastava , it was held that the respondent 1 having been appointed as a Legal Assistant on probation, and the task he was assigned being those of a professional, he did not fall within the definition of "workman".

In C. Gupta verses Glaxo-Smithline Pharmaceutical Ltd., it was held that whether a particular employee comes within the definition of workman has to be decided factually. The nomenclature is really not of any consequence. While deciding the status of the person, nature of work is really relevant. In the present case, appellant was appointed as "Industrial Relations Executive" in 1977 and was terminated from service in September 1982. He claimed to be a workman in view of his work being of skilled, technical nature as per the amended definition of workman as per Amendment of 1984. The claim was held not sustainable. The duties undertaken by the appellant overwhelmingly fell within managerial cadre. He had admitted in his evidence that apart from the advice to the management from time to time, he had other independent functions such as preparation of draft enquiry reports and conducted domestic enquiries. In his cross-examination he had further admitted that he had tendered legal advice in all the four branches and factories of the Company at Worli. He also admitted that on many occasions he had drafted management enquiries and it was his duty to hold conferences with advocates in relation to the Company's acts. His conditions of service were different from those provided for the workers of the Company. It was further held that the amendment of 1984 was only prospective in operation. In order to hold the appellant as a workman in Section 2(s) prevailing on the date of dismissal should be taken into account.

In National Small Industries Corporation Ltd. verses . verses Lakshminarayanam, (2007) 1 SCC 214, it was held that Section 18 of the Apprentices Act, 1961 categorically provides that apprentices are not workers and provision of law with respect to labour shall not apply to or in relation to apprentices. However, there may be inquiry into whether employee concerned is a "workman" or "apprentice". A person may claim to be a "workman" despite having been appointed as an apprentice if there is material to establish that.

In D. Krishnan verses . Vellore Co-op. Sugar Mill, (2008) 7 SCC 22, it was held that on the facts and in the circumstances of the case the absence of overtime slips disproved the claim of the supervisor to be workman.

In New Delhi Assurance Co. Ltd. verses A. Sankaralingam, (2008) 10 SCC 698, it was held that a workman employed on a part-time basis but under the control and supervision of an employer is a workman in terms of Section 2(s) of the Act and is entitled to claim the protection of Section 25-F.

Whether following are workman or not

Examples

1. Development Officer: A Development Officer of Life Insurance Corporation of India was held to be a workman. Keeping in view the nature of duties performed by such officers and the powers vested in them they cannot be said to be engaged in any administrative or managerial work. Designation or name of

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the post is not a decisive factor. After analyzing the L.I.C. (Staff) Regulations, 1960 it was found that a Development Officer has no subordinate staff working under him. He is generally placed on par with subordinate and clerical staff. He has no authority to bind the Life Insurance Corporation of India, It was observed in this case that maintainability of reference should not be questioned, especially by a public sector corporations, on mere technical grounds, such as, there is no 'industry' or 'industrial dispute' or the employee concerned is not a 'workman". It was further held that interpretation of the provision of the Industrial Disputes Act, 1947 should be liberal and pragmatic so as to advance the object of the Act, "The words any skilled or unskilled, manual, supervisory, technical or clerical work, are not intended to limit or narrow the amplitude of the definition of "workman; on the other hand they indicate and emphasize the broad sweep of the definition which is designed to cover all types of persons employed in an industry, irrespective of whether they are engaged in skilled work or unskilled work, manual work, supervisory work, technical work or clerical work, Quite obviously the broad intention is to take in the entire 'labour force' and exclude the "managerial force'. That, of course, is as it should be," [S.K. Verma verses Mahesh Chandra,.

2. Security Inspector: A Security Inspector deputed at the gate of factory was held to be a workman. The duty of the Security Inspector at the gate of the factory premises was neither managerial nor supervisory in nature in the sense in which those terms are understood in industrial law. Ved Prakash Gupta verses M/s. Delton Cables India (P) Ltd.

3. Clerk of a University: University is an industry and a clerk of the university is a workman [Suresh Chandra Mathe verses Jiwaji University, Gwalior, (1994) 2 LLJ 462 (MP)].

4. Accountants: Accountants who are merely senior clerks with supervisory duties are workmen [South India Bank Ltd. verses A.R. Chacko, AIR 1964 SC 1522]. An Accountant of a bank was held not to be employed in a managerial capacity merely because of the fact that he used to sign salary bills of the staff [Punjab Cooperative Bank Ltd. verses R.S. Bhatia, AIR 1975 SC 1898]. A Stenographer-cum-Accoutant who was appointed as Assistant and was designated as Group Leader W7as held to be a workman [Arkal Govind Raj Rao verses Ciba Geigy of India Ltd. (1985) LLJ 401 (SC)].

5. Assistant Engineer: An Assistant Engineer employed in a sugar factory whose work was mainly technical in nature namely looking after the work of the workmen under him as well as the concerned machines with no power to sanction leave to any of the workmen under him or to take disciplinary action against them was held to be a workman [M/s U. P. State Sugar Corporation Ltd. verses Deputy Labour Commissioner, 1990 Lab 1C 645].

6. Maintenance Engineer: Maintenance Engineer, performing supervisory work and authorised to make temporary appointments, grant leave, initiate departmental proceedings etc., was held as not workman [Vimal Kumar Jain verses Labour Court, Kanpur, 1987 Supp. SCC 40].

7. Internal Auditor: Internal Auditor of a company with duties mainly to report or check up but without any authority to take decisions and bind the company thereby, was held to be a workman [National Engineering Industries Ltd. verses . Shri Kishan Bhageria, AIR 1988 SC 329]. Clerks in the audit department of a Bank are workmen [Lloyds Bank Ltd. verses P.N. Gupta, AIR 1967 SC 428].

8. Teachers: Even though an educational institution has to be treated as an "industry" the teachers employed by educational institutions cannot be called as workmen within the meaning of S.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. The clerical work, if any, they may do, is only incidental to their principal work of teaching [A. Sunder ambal verses Government of Goa, Daman and Dm, AIR 1988 SC 1700]. However, it may be noted that by 1982 amendment, the word "skilled" in the definition of workman is not qualified by "manual". The Blacks Law Dictionary defines 'skilled" as a person possessing practical knowledge of art, science or trade and has the ability

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to apply them in a proper and approved manner and with dexterity. A teacher has knowledge and he is skilled in communicating knowledge and therefore it is argued that a teacher is a 'workman'. In Pramodini Parker verses Indian Cancer Society (1993) 1 LLJ 447, a teacher in handicrafts in Indian Cancer Society was held to be a workman.

In Jagdish PrasadSinha verses . Presiding Officer, Labour Court Lucknow, (1992) 2 LLJ 33 (All), the Headmaster of a school was held not workman. In Management Sacred Heart Convent School verses State of Tamil Nadu, (1992) 1 LLJ 745 (Mad), the Physical Education Teacher was held not workman. In Sonepat Co-op. Sugar Mills Ltd. verses Ajit Singh, AIR 2005 SC 1050, teachers serving in an educational institution have not been held to be workmen.

9. Appraiser engaged by bank: Appraiser engaged by bank purely on commission basis for weighing and testing gold ornaments offered to be pledged to the bank to secure loans is not workman as there is no master-servant relationship although he had undertaken to indemnify the bank for any loss [Puri Urban Co-operative Bank v, Madhusudan Sahu, AIR 1992 SC 1452].

10. Sectional Engineer performing supervisory duties: A Sectional Engineer performing supervisory duties using technical knowledge is not a workman as use of technical knowledge does not change the dominant nature of his supervisory duty to technical [Ramesh S/o Ramarao Wase verses The Commissioner of Revenue Division, (1996) ) Lab LJ 55 (Bom.)].

11. Medical or Sales Representatives: In order to fall within the definition, a person must be employed to do the work of any of the categories, viz. manual, unskilled, technical, operational, clerical or supervisory. It is not enough that he is not covered by either of the four exceptions to the definition.

In view of conflict of opinions of different Benches of the Supreme Court, matter referred to a larger bench in H.R. Adyanthaya verses Sandoz (India) Ltd., AIR 1994 SC 2608: (1994) 5 SCC 737. In this case the Court held that the connotation of the word "skilled" in S.2(s) of I.D. Act in the context in which it is used, will not include the work of sales promotion employee such as the medical representatives in the present case. The work has to be construed ejusdem generis and thus construed, would mean skilled work whether manual or non-manual, which is of the genre of the other types of work mentioned in the definition. The work of promotion of sales of the product or services of the establishment is distinct from and independent of the types of work covered by the said definition. As such the medical representatives are not skilled workers; nor are they "technical" or "operational" workers. Thus their work is not covered by any type of works mentioned in the main body of the definition. As regards the "technical" nature of their work it has been expressly rejected by the Supreme Court in Burmah Shell case.

However, on and from 6.3.1976 by virtue of Sales Promotion Employees (Conditions of Service) Act, 1976 the provisions of ID Act became applicable to the medical representatives depending upon their wages before 6-5-1987 and without the limitation on their wages w.e.f. 6-5-1987 and upon the capacity in which they were employed or engaged. Thus, according to the amendment by the Act 48 of 1986 w.e.f. 6-5-1987 in the Sales Promotion Employees (Conditions of Service) Act, 1976 all sales and medical representatives are workmen except those employed in a supervisory capacity drawing wages exceeding Rs. 1,600 per mensum and those employed or engaged in managerial or administrative capacity.

12. Priest: A priest is not a workman as he cannot be equated with a mere wage earner and his services cannot be treated as manual or clerical etc. [Kesava Bhatt verses Shree Ram Ambulam Trust (1990) 1 Lab. LJ 192 (Ker)].

13. Artist: An artist engaged in the production of a drama or in theater management or to participate in a play can by no stretch of imagination be termed as "workman" because he does not indulge in any manual, unskilled, or technical, operational or clerical works, though he may be skilled,

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it is not such a work which can be read ejusdem generis along with other kinds of work mentioned in the definition given under S.2(s) of the I.D. Act. The work that the respondent artists perform is in the nature of a creative art and their work is neither subject to an order required from the Art Director nor from any of the artists. In performing their work, they have to bring to their work, their artistic ability, talent and a sense of perception for the purpose of production of drama involving in the course of such work the application of correct technique and the selection of the cast, the play, the manner of presentation, the light-and-shade effects and so on. [Bharat Bhawan Trust verses Bharat Bhawan Artists ' Association.

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14, Commission Agents/Deposit Collectors of Banks: Commission Agents/ Deposit Collectors of banks, although were not regular employees, held, nonetheless covered by the definition of workman. It was further held that relationship of master and servant did exist between the

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