Introduction

The Constitution of India is considered to be the source of all labour laws, all the matters
related to labour law are covered under List III of Schedule VII i.e. the Concurrent List.

Industrial dispute act 1947 (IDA)

All matters of Industrial dispute are covered under List I of Schedule VII, i.e. the union list.
Laws related to Industrial Dispute (ID) are known as Industrial Laws.

Objective of IDA
 To make provision for investigation and settlement of IDs or certain other
purposes.

History of IDA
In 1920, there was Trade Dispute Act which provided for courts of enquiry & consolation
board. However it did not provide any machinery for settlement of Industrial Disputes.
Therefore it was repealed and replaced by Trade Dispute Act, 1929.

The 1929 Act was amended in 1938; it authorized Central &Provisional Government to
intermediate at the time of IDs.

Further Govt. introduced Defense of India Rules post World War II. Rule 81A gave powers
to the Government to intervene in the Industrial Disputes so as to provide speedy
remedies.Further Standing Orders of 1946 were also passed.

On the basis of Trade Dispute Act, 1938, Defense of India Rules & Standing Orders, 1946,
ID Bill was introduced in the Central Legislative Assembly on 08/10/1945 which embodied
the essential principles of Defense of India Rules & Trade Dispute Act, 1938 concerning
Industrial Disputes.
The Bill was passed in March 1947 & became a law from 1947 which came to be known as
IDA, 1947.
 Industry
Definition of the term industry first originated from IDA, 1947.

Sec 2(j) of IDA, 1947 provides that:

The term ‘industry’ means any business, trade, undertaking, manufacture or calling of
employers & includes any calling, service, employment, handicraft, or industrial occupation
oravocation of workmen.

This section is based on Section 4 of Commonwealth Conciliation& Arbitration Act, 1904

which is an Australian statute.

Section 2(j) of IDA was amended in 1982, which substituted a new definition but since no
enforcement date has been notified so far, the original definition remains in force.

Scope of Industry
The definition of Industry under IDA is a comprehensive one, and it is in two parts:
First part says that it means any business, trade, undertaking, manufacture or calling of
employers.
Second part says that it includes any calling, service, employment, handicraft, or industrial
occupation oravocation of workmen.

One part defines it from the standpoint of the employers and the other from the standpoint of
the employees. Therefore, any activity which falls within either of these two parts
automatically becomes an industry.

Madras Gymkhana Club Employee’s Union vs. Gymkhana Club (1967) 2 LLJ 720.

In this case it was held that the first part of the definition determines an industry by reference
to the occupation of the employers in respect of certain activities which are specified by five
words namely business, trade, undertaking, manufacture or calling.

These words determine the scope of the word industry & they describe what the cognate
expression Industry is intended to convey. This is the significance or denotation of the term.

Business
It is a word of wide import. It is wider than trade and is not synonymous with it and means
practically anything which is not an occupation as distinguished from pleasure.

National Association of Local Govt. Officers v. Bolton Corporation (1943) AC 166 at p. 184
In this case Lord Wright after referring to the definition of ‘trade dispute’ and ‘workmen’
contained in the order of reference to the National Arbitration Tribunal held that the word
“industry” would include within its scope what might not strictly be called “trade or
business”.

Trade
It is not only in the etymological or dictionary sense, but in legal use as well it is a term of
wide scope. It may mean the occupation of a small shopkeeper just as well as that of a
commercial magnate while it may also mean skilled craft.

Undertaking
According to Webster dictionary, an undertaking means anything undertaken or any business,
work or project which one engages or one attempts as an enterprise.

Manufacture
It is a kind of productive activity in which the making of articles or material often on a large
scale is by physical labour or mechanical power.

Employment
It means contract of service between an employer and an employee.

Avocation
It means the way a man passes his life or spends his time.

Whether a municipal corporation comes

under the definition of an industry?

D.N. Banerjee v. P.K. Mukherjee AIR 1953 SC 58

In this case 2 employees of the Municipality were dismissed. The dismissal was questioned
and the matter was referred to the Industrial Tribunal. The tribunal directed reinstatement but
the municipality challenged the award before the High Court and ultimately before the
Supreme Court on the grounds that a Municipality was not engaged in any industry. So the
provisions of the IDA were not applicable.

The Court in this case holding municipal corporation to be an industry held that in true sense
the activities of Municipal Corporation will not fall under the meaning of expression business
or trade. But it may fall under the meaning of undertaking and as the definition provided
under Section 2(j) of IDA covers undertaking as Industry therefore, Municipal Corporation
will be considered as an Industry.

The Court further stated that neither investment of capital nor profit making motive is
essential to constitute an industry as they are generally necessary in a business.

Baroda Borough Municipality v.Its Workmen AIR 1957 SC 110

In this case the Court observed that those branches of work of the municipalities which could
be regarded as analogous to the carrying-on of a trade or business would be industry and the
dispute between municipalities and their employees would be treated as an industrial dispute.

Corporation of City of Nagpur v. Employees.

There was an appeal in the Supreme Court. The question for consideration was “Whether &
to what extent the activities of Corporation of Nagpur came under definition of Industry as
per Section 2(14) of CP & Berar Industrial Dispute Settlement Act, 1947?”

Courts cleared that Corporation will not come under the definition of undertaking as per
Section 2(14) of CP & Berar Industrial Dispute Settlement Act, 1947, but will come under
the definition of business, trade as per Section 2(14) of CP & Berar Industrial Dispute
Settlement Act, 1947. The Court distinguished between legal & municipal functions of
Corporation, & held that legal functions will not come under the definition of industry & such
legal function should be excluded from the ambit of definition of industries & that other
functions will come under the ambit of definition of business or trade.

Conclusion
Corporations will come under the definition of industry as per Section 2(j) of IDA 1947.

Whether hospitals come under the

definition of an industry?
State of Bombay v. Hospital MazddorSabha AIR 1960 SC 610

This is the 1st case before Supreme Court in which the question whether hospitals will come
under the definition of Industry was considered.

In this case 2 employees were terminated by way of retrenchment. The employees filed a writ
petition in the SC for their reinstatement. The writ petition was resisted on the grounds that
the hospitals did not constitute an industry and therefore the provisions of Industrial Dispute
Act are inapplicable.

The Court held that the group of hospitals was run by the State for giving medical relief to
citizens and imparting medical education. The SC held group of hospitals to be industry and
held as follows:

a) State is carrying on an undertaking within the meaning of Section 2(j) of IDA, 1947
when it runs a group of hospitals for giving medical relief and imparting medical
education.
b) An activity systematically or habitually undertaken for production or distribution of
goods or for rendering of material services to the community at large or part of such
community with the help of employees is an undertaking.
c) Question as to who conducts the activity is irrelevant.
d) Absence of capital investment and profit motive or gainful objective is irrelevant.

Safdar Jung Hospital v. Kuldip Singh SethiAIR 1970 SC 1406

In this case the Supreme Court overruled the MazdoorSabha case ruling.
Herein there were 3 hospitals who filed an SLP in the SC in order to get clarity on the point
whether they came under the definition of industry in Section 2(j) of the IDA, 1947.

The 3 hospitals were:

Safdar Jung hospital which was being run by the State
Tuberculosis hospital which was being run by a Research Institute.
KurjiHoli Family Hospital which was being run by a charitable institution.

In this case, SC held that KURJI Holy Family Hospital was not an industry on the ground that
it was essentially charitable institution carrying on work of training, research, treatment,
Safdar Jung hospital and Tuberculosis hospital were also held not to be industry.

Management of Hospital v. it Workmen AIR 1971 SC 1259

In this case, the SC following the ration in Safdar Jung Hospital case clarified that the
hospital run by the State Government were held outside the purview of industry.

Bangalore Water Supply Case

In this case after considering all the precedents the SC overruled the Safdar Jung Hospital
case and reinstated Hospital MazdoorSabha case.
The SC held that all the Hospitals, dispensaries, medical colleges whether run by the
government or private sector are within the scope of industry as defined in Section 2(j) of
IDA, 1947 if they fulfill the Triple Test.
Triple Test
Where
a) Systematic activity;
b) Organized by co-operation between employer and employee;
c) 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.
This is known as the Triple Test.

Effect of Substituted definition

A new definition of Industry has been enacted by way of Industrial Disputes (Amendment)
Act, 1982. In the definition hospitals or dispensaries have been excluded from the purview of
definition of Industry. However, the amended definition has not been enforced.

Conclusion
It can be concluded that at present Hospitals would be considered as Industry as per the
definition given in Section 2(j) of IDA, 1947.

Whether educational institutions will

come under the definition of an
industry?

University of Delhi v. Ramnath AIR 1963 SC 1873.

In this case 2 drivers of Delhi University were terminated because the running of buses for
transporting girl students was going onto a loss. The termination order was challenged on the
ground that the drivers were workmen and the termination of their services amounted to
retrenchment. Hence, they filed petitions before the Industrial tribunal for their reinstatement.
The petitions were contested upon by the University on the preliminary ground that the Delhi
University did not come under the definition of Industry. However, the Tribunal rejected the
plea of Delhi University and decided the case on merits and held that Delhi University will
come under the definition of Industry.

The Delhi University challenged the decision of the Tribunal in the Supreme Court by way of
an SLP on the ground that activity carried on by the University is nit industry.

The SC held that DU is not an industry and gave the following 2 grounds as reasons:
a) The teachers are not workmen under Section 2(s) of IDA, 1947 and hence any
disputes between them and the institution which employed them are outside the scope
of the Act.
b) The work of the University cannot be equated with that of any trade, business,
undertaking or calling of services within the meaning of Section 2(j) of IDA, 1947.

The Court said that education could not be treated as an Industry for the benefit of a very
minor and insignificant number of people who may be employed by the University for
subordinate services.

Bangalore Water Supply Case

The Supreme Court overruled the Delhi University ruling in this case. In this case, the
majority opinion of the Court was that the predominant activity of the educational institutions
is that of imparting education which is a service to the community and therefore, it will come
under the definition of Industry as per Section 2(j) of IDA, 1947. However, the Court
emphasized that those employees of the University who are not workmen within the meaning
of Section 2(s) of the Act, may not get the desired benefits to which a workman in an industry
may be entitled to.

The Court concluded that the case of Delhi University was wrongly decided and educational
institutions will come under the definition of Industry.

Effect of Substituted definition

A new definition of Industry has been enacted by way of Industrial Disputes (Amendment)
Act, 1982. In the definition all educational, scientific, research or training institutions have
been excluded from the purview of definition of Industry. However, the amended definition
has not been enforced.

Conclusion
It can be concluded that at present Educational Institutions would be considered as Industry
as per the definition given in Section 2(j) of IDA, 1947.
 Whether CLUBS will come under the
definition of an industry?

Bengal Club Limited v. Shanti Ranjan Somddar (1957) 1 LLJ 505.

In this case a question arose before the Calcutta High Court that whether company running
club for profit will come under the definition of Industry.
Herein, a single judge took the view that an incorporated company running clubs for profit
and business will come under the definition of Industry as per Section 2(j) of IDA, 1947.

Madras Gymkhana Club Employees Union v. Gymkhana Club (1967) 2 LLJ 720.
Herein the question before the SC was that whether non-proprietary members club is an
Industry or not within Section 2(j) of IDA, 1947.
The Court held that the question could not be decided on the basis of size of the club or
largeness of members or the extent of profit.As the activities of the club did not fall within
the meaning of trade, business, manufacturing or calling of employees, therefore the only
question to be considered is whether it falls within the meaning of an undertaking or not.
After an analysis of constitution of membership it was found out that it existed for its
members and is a self-serving institution. The Court observed that since the club existed for
the services of its members itself and for their amusement and self-satisfaction therefore, it
cannot be called an undertaking and hence clubs will not come under the definition of
Industry.

Cricket Club of India v. Bombay Labour UnionAIR 1969 SC 276

Herein, SC relying on the grounds of Madras Gymkhana Club ruling held that Cricket Club
of India being a self-serving institution was not an industry notwithstanding its catering
facilities provided to its members.

Bangalore Water Supply Case

The SC in this case overruled both the Madras Gymkhana and Cricket Club of India cases
and held that those clubs whose activities responded to the Triple Test laid herein would be
considered as Industry as per Section 2(j) of IDA, 1947.

Conclusion
It can be concluded that at present those clubs are considered as an Industry whose activities
respond to the Triple Test.
Whether CO-OPERATIVE SOCIETIES will come
under the definition of an industry?
This question whether co-operative societies will come under the definition of an industry
was decided on the basis of 2 Australian cases i.e. Queen v. Marshall and Ex Parte Federated
Clerks Union of Australia.

SC after analysing various Indian and foreign rulings held that the co-operative societies
ordinarily cannot fall outside the definition of industry and gave the following reasons:

a) A society is the employer and the members or others are employees, therefore, a
relationship of employer and employee is established.
b) The Court observed that the activity of co-operative societies pertains to nature of
trade and therefore co-operative societies will come under the definition of industry.
c) The Court clarified that if the state is giving encouragement to a co-operative society
that does not mean that it will be exempted from the definition of Industry.
d) If a co-operative society is worked by the members only, then the entity is an industry
because the member workers are paid wages and there can be a dispute regarding
wages and scale of wages among the category of workers.

Rajasthan Rajya Sahkari Samiti Vyavasthapak Union v. Judge, Industrial Tribunal,

Rajasthan 1985 LIC 1023

In this case the Rajasthan High Court held that Rajasthan Co-operative Credit Institution
Cadre authority is an industry.

Conclusion of industry
Coir Board Ernakulam Kerala State v. Indira Devai P.S. (2000) 1 SCC 224.

In this case, a reference was made by a 2 judge bench to reconsider the judgment of the SC in
the Bangalore Water Supply Case. Herein, a 3 judge bench of the SC held that there was no
need of any reconsideration of the judgment on a reference being made by a two judge bench
of this Court which is bound by the judgment of the larger bench.
 Industrial dispute

Industrial Dispute is defined in Section 2(k) of IDA, 1947. This definition is a modification
of definition given in Section 2(j) of Trade Dispute Act, 1929.

Madras Gymkhana Club Employees Union v. Gymkhana Club(1967) 2 LLJ 720.

In this case the Court cleared that the definition expressly states that not all disputes or
differences of all sorts but only those which bear upon the relationship of employer and
workman and the terms of employment and conditions contemplated.

Workmen of Dimakuchi Tea Estate v.The Management of Dimakuchi Tea Estate.

Dr. K.P. Banerjee was appointed as an Assistant Medical Officer of Dimakuchi Tea estate on
a three-month-probation and subject to a satisfactory medical report while his suitability for
permanent employment was to be considered. If considered unsuitable he would have
received 7 day notice in writing terminating his employment. However, if he was found
guilty of misconduct then he would face instant dismissal.

After probation he was to be confirmed if found suitable. After three months of his
appointment he was given an increment but 2 months after that he was terminated with
immediate effect and was offered 1 months’ salary in lieu of notice. The cause of Dr.
Banerjee was espoused by the Union which enquired for the reasons for his discharge and
was informed that the ground of dismissal was incompetence. The case was ultimately
referred to SC.

In this case the SC analysed the definition of Industrial Dispute and observed that it falls
easily and naturally into 3 parts:

a) There must be a dispute or difference;

b) The dispute or difference must be between employers and employers, or between
employers and workmen, or between workmen and workmen;
c) The dispute or difference must be connected with the employment or non-
employment or the terms of employment or with the conditions of labor of any
person.

The Court further held that the expression ‘any person’ occurring in the third part of the
definition clause cannot mean anybody and everybody in this wide world, because a person
in respect of whom the employer-employee relation never existed or can never possibly exist
cannot be the subject-matter of anindustrial dispute.
The SC held that in the instant case Dr. K.P.Banerjee was not a ‘workman’. He belonged to
the medical or technical staff – a different category altogether from the ‘workmen’ and
therefore the provisions of IDA, 1947 would not be applicable to him.

 The definition of Industrial Dispute in Section 2(k) of IDA, 1947 can be divided into 4
parts:
a) Factum of Dispute
b) Parties to the Dispute
 Employer and employer
 Employer and workman
 Workman and workman
c) Subject matter of Dispute
 Employment or non-employment
 Terms of employment or conditions of labour, of any person
d) It should be related to industry.

Narendra Kumar Sen v. Labour Appellate Tribunal (1953) 1 LLJ 6.

In this case the question arose as to what type of disputes can be considered as an Industrial
Dispute. The Court held that the disputes or differences must be something fairly definite and
of real substance and not a mere personal quarrel or grumbling or an agitation.

Shambu Nath Goyal v. Bank of Baroda, Jalandhar (1978) 1 LLJ 484.

In this case the question arose as to what constitutes an Industrial Dispute. The Court held
that an Industrial Dispute comes into existence when the employer and workmen are at
variance and the dispute or difference is connected with the employment or non-employment,
the terms of employment or conditions of labour. In other words, a dispute or difference
arises when the demand is made by the workman to the employer and it is rejected by him
and vice versa.

Bangalore Water Supply Case

In this case, the concept of Industry has been exhaustively considered and clear principles
have been laid down in this regard.

It may be observed that the persons engaged in the establishment which are covered in the
definition of industry under Section 2(j) of IDA, 1947 become workman if they satisfy the
definition of workman as contained in Section 2(s) of IDA, 1947 and dispute on various
matters among them or dispute between employers and employers or dispute between
employers and workman or dispute between workman and workman are all disputes within
the meaning of the Act provided they are connected with the employment or non-
employment or terms of employment or conditions of labour.
 Individual dispute

When an Individual Dispute becomes an Industrial Dispute?

Kandan Textiles v. Industrial Tribunal 1949 LLJ 875.

In this case, the Court held that a dispute between an employer and a single workman cannot
be an Industrial Dispute.

Swadeshi Cotton Mills Company Limited v. Rajamani (1953) 1 LLJ 277.

In this case, the Court held that a dispute between an employer and a single workman can be
regarded as an Industrial Dispute.

Bilash Chandra Mitra v. Balmar Company Limited (1953) 1 LLJ 337.

In this case, the Court held that a dispute between an employee and single workman cannot
per se be an Industrial Dispute but may become one if it is taken up by the trade union or a
number of workmen.

On a contradiction of judicial opinions the SC in the Central Province Transport Service

Case preferred the last of above 3 views and the same was further reaffirmed by the Court in
the case of Newspaper Limited v. Industrial Tribunal(1957) 2 LLJ 1.

Workman v. Dharam Pal Prem Chand (1965) 1 LLJ 668

In this, the Court said that a dispute raised by a single workman cannot become an Industrial
Dispute unless it is supported either by his union or in the absence of union by a substantial
number of workmen.

The principle in the above case was again reiterated in the case of Workmen of Indian
Express Newspaper Private Limited v. Management (1970) 2 LLJ 132.

SECTION 2A introduces and defines that a dispute between an individual workman and his
employer connected with his discharge, dismissal, retrenchment or termination is deemed to
be an Industrial Dispute irrespective of the fact no other workman or any union is party to
that dispute.

Bombay Union of Journalists v. The Hindu, Bombay AIR 1963 SC 318

A journalist was terminated. This issue of termination was raised by union of journalists.
However, it was found out that out of 10 employees 7 were working on the administration
side and out of the 3 left, 2 were members of journalist union.

The SC held that Bombay Union of Journalist does not have competence to raise the issue
and even if they have the competence the same cannot be considered as an Industrial Dispute.

Hari Fertilisers v. State of U.P. 1992 LIC 1877.

In this case, the Court held that a dispute relating to the termination of service, discharge or
dismissal of a workman referred to adjudication under Section 2A cannot be settled by the
Union with the management by entering into a settlement pending such adjudication without
the consent of the worker.

Praga Tools Limited v. Government of A.P 1976 LIC 190.

In this case, it was held that except the dispute relating to the discharge, dismissal,
retrenchment or otherwise termination of service, all other disputes relating to the terms of
employment or conditions of labour of an individual labour such as transfer, wages, bonus,
increments or promotion etc. will require espoused (support or adoption) by a substantial
number of fellow workmen in order to partake the character of an Industrial Dispute.

Bombay Union of Journalists v.The Hindu(1961) 2 LLJ 436.

In this case, the SC held that in order that an individual dispute may become an Industrial
Dispute it has to be established that it had been taken up by the union of employees or by an
appropriate number of employees of the establishment.

JagdishNarain Sharma v. Rajasthan Patrika Limited and Another (1994) 2 LLJ 600 (Raj.)

In this case, it was held that a dispute relating to transfer of a workman will become an
industrial dispute only when it is espoused by a union of workmen or by a substantial number
of workmen employed in an industry.

Express Newspapers (Private) Limited v.First Labour Court, West Bengal and Others.

It was held in this case that a dispute is an industrial dispute even where it is sponsored by a
union which is not registered; but the trade union must not be one unconnected with the
employer or the industry concerned.

Binny Limited v. Their Workmen AIR 1972 SC 1975.

In this case, the Court held that where an industrial dispute existed at the time of making
order of reference this dispute does not cease to be so merely because dispute relating to only
one employee is left over and that the union which raised the dispute chooses not to represent
a particular employee.
 Workman
The term ‘workman’ has been defined under Section 2(s) of IDA, 1947.

Meaning of Apprentice
The expression apprentice has not been defined in IDA, 1947.

An apprentice is one who is a learner of art meaning thereby one who is bound by a legal
agreement to serve an employer for a period of years with a view to learn some handicraft,
trade etc. in which the employer is reciprocally bound to instruct him.

Whether apprentice will come under the definition of Workman as given under Section
2(s) of IDA, 1947?
U.P. State Electricity Board v. Shiv Mohan SinghAIR 2004 SC 5009

The question whether apprentice will be considered as a workman was elaborately discussed
by the SC in this case. The court in this case held that the nature and character of the
apprentice is nothing but that of a trainee and he is supposed to enter into a contract and by
virtue of that contract he is to serve for a fixed period and a fixed stipend. The court further
clarified that as per the provisions of Apprentices Act, 1961 such contracts should be
registered however non-registration of the same would not change the position of the
apprentice to that of a workman.

Hanuman Prasad Chaudhary v. Rajasthan State Electricity Board 1986 LIC 1014 Raj.

The Court herein held that an apprentice governed by Apprentice Act, 1961 is not a workman
for the purpose of IDA, 1947 and the provisions of IDA, 1947 would not be applicable to
him.The Court clarified that for the purpose of Section 2(s) of IDA, 1947 a person who is
designated as an apprentice but is not governed by the Apprentices Act would be a workman
governed by the provisions of IDA, 1947.

Narendra Kumar v. State of Punjab 1985 LIC 541.

Manual Work
It is not confined to work by the application of hands but comprises work involving physical
exertion as distinct from mental or intellectual exertion.

BLC Ltd. V. Ram BahadurJamadar(1975) 1 LLJ 422.

In this case it was held that even workmen who do not work with their hands but work with
their legs or remain standing on duty would be doing manual work.

For instance members of watch and watch staff employed for the security of the properties or
of a concern do manual work.

Unskilled Work
Any person who does any work which does not require any special skill to perform the work
assigned is termed to be doing unskilled work.

Bata India Ltd. v. B.M.Nathani 1978 LIC 386.

In this case, the workman concerned was a salesman in a shoe shop. Herein, the Gujarat High
Court held that the nature of his job was of unskilled labour. The fact that he tried to impress
upon the customer that the shoe manufactured by the company were durable was not his
principle duty.

In another decided case, work of peon, sweepers etc. is held to be unskilled labour.

Skilled Work
After the amendment any type of skilled work performed by the employee will fall within the
definition of Section 2(s) of IDA, 1947.

The work of an artist employed by an advertising expert on work which could be done only
by person with artistic talent and requisite technique has been held to be a skilled work.

Laxmi Devi Sugar Mills Ltd. v. State of U.P. (1955) 2 LLJ 1.

The work of a bench chemist in a sugar mill which consisted mainly of carrying out chemical
analysis and recording results with typing work has been held to be a skilled work.

Technical Work
The technical nature of work has been added to the definition by the Amendment Act of
1956.

Pabbojan T Co. Ltd. v. Labour Court 1977 LIC 721.

The work of a personal manager who was a qualified lawyer in giving advice and guidance to
the management with respect to labour laws was held not to be of technical nature.

Marshall Briganza v. S.R. Sawant(1975) 2 LLJ 189 Bom.

In this case, a film cameraman has been held to be a workman as film photography is a
technical work.
Operational Work
It means an operative person who is to do physical operation by hand or machines,
occupation in productive labour are skilled or unskilled person employed in any industry.
One who operates or works in any industry, trade or profession a workman in any industry
are an artisan or a mechanic. (Something is wrong with the definition…check!!)

Clerical Work
It is similar with routine stereotype work which does not involve any initiative, control or
dignity.

Punjab National Bank Ltd. v. Certain Workmen (1953) 1 LLJ 368.

In this case, an assistant manager of a bank whose duty is purely of clerical nature who puts
up notes regarding leave and staff matters to the managers who passed orders on them was
held to be doing clerical work.

Distinction between Workman and Contractor

D.C. Works Ltd. v. State of SaurashtraAIR 1957 SC 264.

In this case, SC provided a clear distinction between Workman and Contractor. The SC
observed that the broad distinction between workman and independent contractor lies in this
that while the former agrees himself to work, the latter agrees to get other persons to work.
 Lay-off
Lay-off has been defined under Section 2(kkk) of IDA, 1947.

‘Lay-off’ means putting aside workmen temporarily. In case of a lay-off, the employer
employee relationship does not come to an end but is merely suspended. This is so because
the employer’s failure or refusal or inability to give employment is cause by the reasons
beyond his control and he has no intention to refuse permanently to give work to workmen.

Essentials of Lay-off
The analysis of definition of lay-off as provided under Section 2(kkk) of IDA, 1947 brings
out following essentials:

a) There must be
i) A failure;
ii) Refusal; or
iii) Inability

Of the employer to give employment to a workman.

In the case of Central India Spinning, Weaving and Manufacturing Co. Ltd., Nagpur v. State
Industrial Court,{ (1959) 1 LLJ 468 (Bom). } the Bombay High Court held that the key to
the definition is to be found in the words “the failure, refusal or inability of an employer”.
These words make it clear that the unemployment has to be on account of a cause which is
independent of any action or inaction on the part of workmen themselves.

b) The failure, refusal or inability to give employment must be on account of one or more of
the following reasons:
 Shortage of coal, or
 shortage of power, or
 shortage of raw materials, or
 The accumulation of stock, or
 The breakdown of machinery, or
 Natural calamity, or
 Any other connected reasons.

Management of Kairbetta Estate v. Rajamanickam

In this case, the SC held that ‘any other reason’ must be similar to the preceding reasons
specified in the definition. The SC interpreted the phrase ‘any other person’ by applying the
principle of ésjudem generis.
c) A workman who is so deprived of employment must be such whose name is borne on the
muster rolls of his industrial establishment.
d) The workman in question must not have been retrenched.

Classification of Lay-off
As per the definition of lay-off in Section 2(kkk) of IDA, 1947 lay-offs may be classified on
the basis of duration as follows:

a) Lay-off for a day occurring when work is denied within 2 hours of his presenting
himself for work.
b) Lay-off for one half of day occurring when work is denied in the first half of the shift
but the workman is called in the second half of the shift for doing work.
c) Lay-off for more than a day but not amounting to retrenchment.

Rights of workmen laid off

Section 25-C of the IDA, 1947 provides for compensation to employees laid off.

It can be divided into the following points:

a) Whenever a workman (other than a badli or casual workman);

b) Whose name is borne in the muster rolls of an industrial establishment; and
c) Who has completed not less than one year of continuous service under an employer
whether continuously or intermittently, is laid off ;
d) Except for such weekly holidays as may intervene;
e) He shall be paid by the employer for all days during which he is so laid off,
compensation equal to fifty percent of the total of the basic wages and dearness
allowance;
f) That would have been paid had he not been so laid off.

Badli Workman
Badly workman means a workman who is employed in an industrial establishment in the
place of another workman whose name is borne on the muster rolls of the establishment but
ceases to be regarded as Badli workman if he has completed one year of continuous service in
the establishment.

The right of workmen to lay-off compensation is designed to relieve the hardship caused by
unemployment due to no fault of the employee.

When the laying off of the workmen is referred to in Section 25-C it is the laying off, as
defined in Section 2(kkk) and so, workmen who can claim the benefit of Section 25-C must
be workmen who are laid off and laid off for reasons contemplated by Section 2(kkk); that is
all that Section 25-C means.

Section 25-E provides for the cases wherein workmen are not entitled to compensation. It
provides that no compensation will be paid to a workman who has been laid off:

a) If he refuses to accept any alternative employment in the same establishment from

where he has been laid off, or in any other establishment belonging to the same
employer;
b) If he does not present himself for employment at the establishment at the appointed
time during normal working hours at least once a day;
c) If such lay-off is due to strike or slowing down of production on the part of workmen
in another part of establishment.

Duties of Employer in connection with a Lay-off

The following duties are cast on the employer in connection with a lay-off:

a) It must be a justified lay-offeffectedbona fide and not mala fide.

b) The stoppage of work if resorted to during working hours must be notified by notice
put on the notice board and must be in accordance with the standing orders.
c) The period of detention of workmen if stoppage occurs during working hours should
not exceed two hours after the commencement of stoppage.
d) If the unemployment caused by lay-off is for a short period, the unemployment should
be treated as compulsory leave wither with or without wages.
e) If the lay-off is for an indefinitely long period, the services may be terminated by due
notice or payment of notice pay in lieu of notice.
f) The compensation must be paid at the rates for period specified in Section 25-C of
IDA, 1947.

In the case of Raga Textiles Ltd. v. Their Workers, (1952) 1 LLJ 247 it was held by the Court
that the period of lay-off should not be left indefinite.
 Lock-out
Lock-out has been defined under Section 2(l) of IDA, 1947.

Lock-out means the:

a) Temporary closing of a place of employment; or

b) The suspension of work; or
c) The refusal of an employer to continue to employ any number of persons employed
by him.

Basis of Lock-Out
Lock-out is a weapon in the hands of employers. Lock-out mainly happens when:

a) There is a labour controversy; or

b) The employer dislikes employees’ activities as a Union.

The employer declares a lock-out in order to compel his employees to accept the demands
made either by him or another employer or to withdraw demands made by them upon him or
by other employees upon another employer or other employers.

Essentials of Lock-Out
Following are the essentials of a lock-out:

a) Temporary cessation of work or withholding of work in some form.

b) The element of a demand for which the factory is locked out.
c) The intention to re-open or take the workers back if they accept the demands.

Difference between Lay-Off and Lock-Out

The question whether concept of lock-out can be brought within the definition of lay-off
came up for consideration in the case of Management of Kairbetta Estate v.
RajamanikamAIR 1960 SC 893 wherein the SC tried to distinguish between the two concepts
of lay-off and lock-out and observed as follows:

a) In case of lay-off the employee can be only laid off as per the grounds contemplated
under Section 2(kkk) of IDA, 1947 whereas in case of lock-out there are no such
grounds contemplated.
b) In case of lay-off there is continuity of business whereas in case off lock-out there is
closure of the business temporarily or for the time being.
c) Nature of the two concepts is entirely different and so are the consequences.
d) In case of lay-off the employees who are laid off are entitled to compensation but
there is no compensation to employees in case of lock-out.
 e) Lock-out is an anti-thesis of strike, is declared by the employer as the weapon of
collective bargaining and available to the employer to persuade, by a coercive
process, the employees to see his point of view and to accept his demands while
layoff is actuated by the exigencies of the business.

Similarities between lay-off and lock-out

There are mainly two similarities between the 2 concepts:

a) Both lock out and lay off are of a temporary nature and they are warranted only in the
case of emergency, however the nature of emergency in each case is different.
b) In both the cases, there is temporary suspension of employees and the relationship of
employment is suspended temporarily.
c) Both lay-off and lock-out are weapons in the hands of employer.

(ADD SECTION 22 and SECTION 23.. EXPLAIN IN OWN WORDS FROM BARE ACT)
 RETRENCHMENT
Retrenchment has been defined under Section 2(oo) of IDA, 1947.

Retrenchment means discharge of surplus labour or staff in a continuing industry. It is not

necessary that removal of surplus must be only when the establishment runs in losses. It may
operate at any level of profits.

Hari Prasad Shiv Shanker v. A.D. Divlekar (1957) SCR 57 (SC).

The Court in this case clarified the intention of legislature behind using the expression ‘for
any whatsoever’. The court said it means that it does not matter why the surplus have been
discharged if all other requirements of the definition are fulfilled then it would be
retrenchment.

Essentials
1) Termination of an employee by the employer.
2) Termination must be on the ground of surplus labour.
3) Service which is terminated must have capacity to be continued.
4) Termination shouldn’t be because of victimisation of labour or unfair labour practices
by employer.
5) Termination must be for proper reason as of economy, installation of new labour
saving machinery.

State Transport Controller V. Industrial Tribunal(1965) 2 LLJ 376

The question whether particular termination is retrenchment or by way of punishment for

disciplinary action would depend upon the facts & circumstances of each case.

Laxman Das V. Indian Express Newspapers Bombay Pvt. Ltd.1977 LIC 823

Workmen participated in a strike, & were victimised, & disciplinary action was taken against
them, division bench of High Court of Delhi held that the workmen were been punished by
way of a disciplinary action and therefore the termination of their service was held outside
the definition of retrenchment.

It was further observed that the termination of service by way of disciplinary action is
directly in conflict with the termination by way of retrenchment as the former is by way of
punishment while the latter is in the interest of economy or because the employer didn’t need
the services of the workman who had become surplus.
The definition of retrenchment given in Section 2(oo) of the IDA, 1947 makes it clear that
retrenchment is a type of termination of service and as such cases which would not amount to
termination would be out of the scope of retrenchment.
The definition specially excludes the following cases of termination as retrenchment:
a) Termination of service as a punishment inflicted by wasy of disciplinary action. e.g.
discharge of efficiency, or suspension for dishonesty etc.
b) Voluntary retirement of workmen where they left their services on receiving notices
of retrenchment and did not attend work during notice period.
c) Termination under expressly stipulated contracts or non-renewal of contracts of
employment on expiry of such contracts.
d) Retirement on reaching superannuation age. Two requirements must be complied
with in order to bring a case under this clause:
 There must be a stipulation on the point of retirement in the contract of
employment; and
 The stipulation must be in regard to the age of superannuation.
e) Termination of service on the ground of continued ill health. E.g. an employee
suffering from senile debility; physical unfitness’ infirmity on account of old age etc.
HarvillasKushwah v. Sports Authority of India (1996) 1 LLJ 450 (MP)
Termination on the ground that the employee was suffering from diabetes was held to
be illegal. The court held that mere ill health is not sufficient to take the termination
outside the ambit of retrenchment. Such termination would amount to retrenchment
only when it is proved that it was on the ground of continuous ill health.
Bisra Stone Lime Co. Ltd. v. Workmen (1992) 1 LLJ 616 (Ori.)
In this case, it was held that continuous ill health suggests that it is prolonged for a
considerable period and that ill health which is intermittent cannot be termed as
continuous.

Retrenchment: how different from other concepts

Compared with strike and lockout, in retrenchment no employment relationship subsists
while in strike and lock out it continues.

Retrenchment is distinct from lay off in as much as in lay off the employment
relationship is not terminated but merely suspended.

(ADD CONDITIONS PRECEDENT TO RETRENCHMENT i.e. SECTION 25N)

 strike
Strike is one of the oldest and most effective weapons of labour in its struggle with capital for
securing economic justice. The basic strength of a strike lies in the labour’s privilege to quit
work and thus bring a forced readjustment of conditions of employment.

Strike is a weapon in the hands of employee; it is adopted as means to compel the employer
to enforce compliance of demands made on their employer, in such an action the work is
stopped by the workmen under common understanding.

Strike has been defined under Section 2(q) of IDA, 1947.

Strike means cessation of work. It may be resorted to:

a) By a body of persons employed in any industry acting in combination; or

b) A concerted refusal; or
c) A refusal under a common understanding of persons who are or have been employed to
continue to work or to accept employment.

Essentials of Strike
a) There must be cessation of work.
b) The cessation of work must be by body of persons employed in the industry.
c) The persons carrying out a strike must be acting in a combination.
d) Strikers should be working in an establishment which could be called an industry within
the meaning of Section 2(j) of IDA, 1947.
e) There must be a concerted refusal.
f) Strikers must stop work for some demand relating to employment or non- employment or
terms of employment or conditions of labour of any person.
Tata Iron and Steel Co. Ltd. v. its Workmen (1967) 1 LLJ 381 (Pat.)
In this case, the Court has held that mere cessation of work does not come within the purview
of strike unless it can be shown that such cessation of work was a concerted action for the
enforcement of an industrial demand.

Cessation of work acting in combination

A combination means an agreement or a concert. In order to establish such concert there need
not be no formal meetings, discussions or even an interchange or a mutual consent or assent
to a common purpose or a cause of a conduct, but once it is proved that cessation of work or
refusal to work was result of concerted action on the part of the workers or of workers acting
in combination under a common understanding, such a stoppage even for a short period for
two to four hours must fall within the definition of a strike.
The cessation of work may take any form. It must, however, be temporary and not for ever
and must be voluntary. No duration can be fixed for this.

Objects of Strike
Following are usually the objects behind Strike:

a) Achievement of some economic gains; or

b) Defence of mutual interests; or
c) Promotion of union objectives.

Is strike a fundamental right?

All India Bank Employees’ Association v. National Industrial Tribunal AIR 1962 SC 171.

The question whether the strike is a FR came up for consideration before the SC in this case.
It was contended that when Art 19(1)(c) guarantees the right to form association, a guarantee
is also implied that the fulfilment of every object of an association so formed is also a
protected right and every association shall effectively achieve the objects for which it was
formed without any interference by law except on the grounds set out in Article 19(4).

The Court rejecting the contention held that the right to form union guaranteed under Article
19 (1)(c) thus does not carry with it a FR in the union so formed to achieve every object for
which it was formed and therefore, there is no FR to strike.

B.R.Singh v. UOI AIR 1990 SC 1

Herein, SC observed that the necessity to form unions is obviously for voicing the demands
and grievances of the labourers and therefore, trade unions with sufficient membership
strength are able to bargain more effectively with the management. This bargaining power
would be considerably reduced if it is not permitted to demonstrate. Strike in the given
situation is only a form of demonstration and the right to strike is not absolute under our
industrial jurisprudence and restrictions have been placed upon it.

Go Slow Strike
Bharat Sugar Mills Ltd. v. Jaisingh

A committee to consider and report on the question of go slow in industries was appointed by
Bihar Central Standing Labour Advisory Board. The Committee made several
recommendations including one that go slow without at least a 7 day notice would be treated
at par with strike; two the notice would remain in force for four weeks and it would not be
necessary to notify the exact date of starting the go slow but that the conciliation proceedings
must be concluded within four weeks of the notice; three go slow due to malpractices by the
management would be justified.

All these recommendations were accepted by the Govt. of Bihar by way of a resolution.

S U Motors v. Their Workmen (1990) 2 LLJ 39 (SC)

In this case, SC observed that go slow is a serious misconduct and a covert and more
damaging breach of contract of employment. It has not been recognised as a legitimate
weapon. Hence, once it is proved the guilty workmen may face a deduction from wages and
even dismissal from service.

(ADD SECTION 22; SECTION 23; EFFECTS OF LEGAL STRIKE; EFFECTS OF

STRIKE ON CONTRACT OF EMPLOYMENT; WAGES ON STRIKE)
(ALL THESE ARE IN CLASS NOTES AND SECTIONS NEED TO BE EXPLAINED IN
YOUR OWN WORDS.)