Introduction Industrial relations constitute one of the most delicate

and complex problems of the modern industrial society.

This phenomenon of a new complex industrial set-up is
directly attributable to the emergence of Industrial
Revolution.
Pre-industrial revolution period.
Advent of industrial revolution.

 Neither viewed as a venture of employers alone nor

profit if considered as its sole objective.
It is considered to be a venture based on purposeful
cooperation between management and labour in the
process of production and maximum social good is
regarded as its ultimate end and both management
and employees contribute in their own way towards
its success.
Alwar plant of Eicher Tractor- Productivity- 32 percent
increased in 1994 , 38 percent in 1997.

Is no more an unorganized mass of ignorant works

ready to obey without resentment or protest the
arbitrary and discretionary dictates of management.
The management has to deal with employees today not
as individuals but also as members of organized social
groups who are very much conscious about their
rights and have substantial bargaining strength.
(collective bargaining)
Example: Workers at The General Motors Plant at Halol.

 The objective of evolving and maintaining sound

industrial relations is not only to find our ways and
means to solve conflicts to resolve differences but also
to secure the cooperation among the employees in the
conduct of industry.

Historical Background

The Employers and Workmens

Disputes Act, 1860
Speedy and summary disposal of disputes by
Magistrates.
Disputes concerning wages of workmen employed
in railways, canals and other public works.
The act was concerned with specific industries and
with only those disputes that give rise to a cause of
action in civil courts.

Trade Disputes Act , 1920

Courts of inquiry and conciliation boards .

Forbade strikes in pubic utility services.
The act also made a strike illegal, if its object was
other than the furtherance of a trade dispute, or
if the object of the strike was to inflict hardships on
the community or
to coerce a government decision.
No provision for settling industrial disputes.

Trade Disputes Act, 1929

Repealed Trade Disputes Act, 1920.
Started the age of state intervention in the settlement of
industrial disputes.
Armed the government with powers to intervene in industrial
disputes.
Special provisions regarding strikes in public utility services and
general strikes affecting the community as a whole.
The main purpose of the Act was to provide a conciliation
machinery, so as to bring about a peaceful settlement of industrial
disputes.
This act was amended in the year 1938
the amendment authorizing the central and provincial governments
to appoint conciliation officers for mediating in or promoting the
settlement of industrial disputes .

Defence of India Rules

GOI promulgated the Defence of India Rules, to meet exigency created by
the Second World War.
Rule 81(A) gave powers to the appropriate governments to
intervene in industrial disputes,
appoint industrial tribunals and
to enforce the award of the tribunal on both the sides.

National Commission on Labour

this rule was intended to provide speedy remedies for industrial disputes, by
referring them compulsorily to conciliation or adjudication, by making the
awards legally binding on the parties, and by prohibiting strikes or lockouts
during the pendency of conciliation or adjudication proceedings and for two
months thereafter. This rule put a blanket ban on strikes which did not arise out
of genuine trade disputes.
The rule was promulgated under the stress of the emergency caused by the war,
it proved to be an important step forward in the development of the industrial
law in the country

Industrial employment ( Standing Orders) Act 1946

At about the same time, the GOI placed on the statute book,
the Industrial employment ( Standing Orders) Act 1946.

Industrial Disputes Act, 1947

The Industrial Disputes Bill was introduced in the central
legislative assembly, on 8 October 1946.
The bill embodied the essential principles of r 81 (A) of
the Defence of India rules as well a certain provisions of
the Trade Disputes Act 1929, concerning the
investigation and settlement of industrial disputes.
The bill was passed by the assembly in March 1947
It became a law with effect from 1 April 1947.

Main Objects

 To provide a machinery and forum for the

investigation of industrial disputes and for the
settlement thereof and for the purpose analogous and
incidental thereto.
To ensure social justice to both the employers and the
employees
To advance the progress of industry by bringing
about harmony and a cordial relationship between the
parties.
To protect workmen against victimization by the
employer and
To ensure a termination of industrial disputes in a
peaceful manner.

 Life Insurance Corporation of India v.

D.J.Bahadur AIR 1980 SC 2181, V.R.Krishna Iyer
J. speaking for the supreme court has observed that
the Industrial Disputes Act is a benign measure of
dispute-resolution and set up the necessary
infrastructure so that the energies of partners in
production may not be dissipated in counterproductive battles and assurance of industrial justice
may create a climate of goodwill.

 Workmen of Dimakuchi Tea Estate v. Management of

Dimakuchi Tea Estate, AIR 1958 SC 353
Supreme Court Analysed objects of the act Amity and Good Relations
Investigation of Industrial disputes
Prevention of Illegal Strikes
Collective Bargaining.

 industry means
any business, trade , undertaking , manufacturing or
calling of employers
and includes
any calling, service, employment, handicraft, or
industrial occupation or avocation of workmen.

 Bangalore Water Supply and Sewerage Board v. A.

Rajappa (1978) 2SCC 213
New definition of Industry inserted in 1982- not
come into force.

Triple Test:
1. Systematic Activity
2. Organized by co-operation between employer
and employee
3. For the production and/or distribution of
goods and services calculated to satisfy human
wants and wishes .

 A look at the definition, dictionary in hand,

decisions in head and Constitution at heart,
leads to some sure characteristics of an
'industry',
An industry is a continuity, is an organized
activity, is a purposeful pursuit-not any isolated
adventure, desultory excursion or casual,
fleeting engagement motivelessly undertaken.
Such is the common feature of a trade, business,
calling, manufacture-mechanical or handicraftbased- service, employment, industrial
occupation or avocatio

 an 'industry' cannot exist without co-operative

endeavour between employer and employee. No
employer, no industry; no employee, no industry
An industry is not a futility but geared to
utilities in which the community has concern.
This much flows from a plain reading of
the purpose and provision of the
legislation and its western origin and the
ratio of all the rulings. We hold these
triple
ingredients
to
be
unexceptionable.

 I. 'Industry', as defined in Section 2(j)

(a) Where (i) systematic activity, (ii) organized by cooperation between employer and employee, (the direct and
substantial element is commerical)(iii) for the production
and/or distribution of goods and services calculated to satisfy
human wants and wishes.
(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 employeremployee relations.
(d) If the organization is a trade or business it does not cease
to be one because of philanthropy purposes.

 All organized activity possessing the triple elements,

although not trade or business, may still be
'industry' (provided the nature of the activity, viz.
the employer-employee basis, bears resemblance to
what we find in trade or business. This takes into
the fold of 'industry' undertakings, callings and
services adventure 'analogous' to the carrying on of
trade or business'.
(i) professions, (ii) Clubs (iii) educational
institutions (iv) co-operatives, (v) research institutes
(vi) charitable projects and (vii) other kindred
adventures, if they fulfill the triple tests, cannot be
exempted from the scope of Section 2(j).

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 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 true test. The whole
undertaking will be 'industry' although those who
are not 'workmen' by definition may not benefit by
the status.

 (b)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, then they can
be considered to come within Section 2(j)

Municipalities and Municipal

Corporations D.N.Banerji v. P.R.Mukherjee, (1953) 1 LLJ 195
Baroda Borough Municipality v. Its Workmen, AIR
1957 SC 110
Corporation of City of Nagpur v. Its Employees
(1960)
Bangalore water supply case.

D.N.Banerji v. P.R.Mukherjee, (1953)

1 LLJ 195
A Head Clerk and a Sanitary Inspector of the Budge
Budge Municipality were dismissed on certain
charges by the Municipality.
The dispute relating to the validity of dismissal was
referred by State of West Bengal to the Industrial
Tribunal for adjudication.
The Industrial Tribunal directed the reinstatement of
those persons.

 Against this order, the Municipality filed a writ petition

under Article 226 and 227 before the Calcutta High Court,
but the petition was dismissed.
Aggrieved by this order, the Municipality filed an appeal
before the SC.
Corporation contended that they were not carrying on
any industry but only the normal functions assigned
them under the statute.

 Justice Chandersekhara Aiyar observed:

There is nothing however to prevent a
statute from giving the word "industry" and
the words "industrial dispute" a wider and
more comprehensive import in order to
meet the requirements of rapid industrial
progress
It is obvious that the limited concept of what an
industry meant in early times must now yield place to
enormously wider concept so as to take in various and
varied forms of industry.

 Undertaking in the first part of the definition and industrial

occupation or avocation in the second part obviously mean
much more than what is ordinarily understood by trade
or business.
The definition was apparently intended to include within
its scope what might not strictly be called a trade or business
venture.
Municipal activity could not be truly regarded as a
business or trade it would fall within the scope of the
expression undertaking.

 The only ground on which one could say that

what would amount to the carrying on of an
industry if it is done by a private person ceases to
be so if the same work is carried on by a local
body like a Municipality is that in the latter there
is nothing like the investment of any capital or the
existence of a profit earning motive as there
generally is in a business. But neither the
investment of capital nor the existence of a profit
earning motive is sine qua non or necessary
element in the modern conception of industry.

 The very idea underlying the entrustment of such

duties or functions to local bodies is not to take
them out of the sphere of industry but to secure
the substitution of public authorities in the place
of private employers and to eliminate the motive
of profit-making as far as possible.

 The undertaking or the service will still remain within the

ambit of what we understand by an industry though it is
carried on with the aid of taxation, and no immediate
material gain by way of profit is envisaged.

We are forced to the conclusion that

the definitions in our Act include also
disputes that might arise between
municipalities and their employees
in branches of work that can be said
to be analogous to the carrying out
of a trade or business.

Baroda Borough
Municipality v. Its
Workmen,
AIR case,
1957
SCreiterated
Relying on D.N.Banerjee
the court
that branches of work that can be regarded as
110.
analogous to carrying of a trade or business,
would fall within the meaning of an industry.

 It is now finally settled by the decision of this Court in D.

N. Banerji v. P. R. Mukherjee that a municipal
undertaking of the nature we have under consideration
here is an 'industry' within the meaning of the definition
of that word in s. 2(j) of the Industrial Disputes Act, 1947,
and that the expression 'industrial dispute' in that Act
includes disputes between municipalities and their
employees in branches of work that can be regarded as
analogous to the carrying on of a trade or business.

The State of Bombay and

Ors.Vs.The Hospital Mazdoor
Sabha and Ors. AIR 1960 SC
610

Whether the group of

Hospitals run by the State of

Bombay are industry within the meaning of the

Act ?

 "undertaking" means "anything undertaken"; any

business, work or project which one engages in or
attempts, an enterprise
"trade 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 the liberal arts or learned
professions and from agriculture
"business" is a wider term not synonymous with
trade and means practically "anything which is an
occupation as distinguished from a pleasure

 Prima facie, if the definition has deliberately used

words of such wide import, it would be necessary
to read those words in their wide denotation; and
so read, Hospitals cannot be excluded from the
definition.

Rule of
sociis

Construction

noscuntura

Appellants Contention
In construing the definition, we must adopt the
rule of construction noscuntur a sociis.

 Supreme Court rejected the contention

and held
It must be borne in mind that noscuntur a sociis
is merely a rule of construction and it cannot
prevail in cases where it is clear that the wider
words have been deliberately use in order to
make the scope of the defined word
correspondingly wider.

 It is clear, however, that though s. 2(j) uses words

of very wide denotation, a line would have to be
drawn in a fair and just manner so as to exclude
some callings, services or undertakings. If all the
words used are given their widest meaning, all
services and all callings would come within the
purview of the definition; even service rendered by a
servant purely in a personal or domestic matter
or even in a casual way would fall within the
definition.

 It is not and cannot be suggested that in its wide sweep

the word "service" is intended to include service
howsoever rendered in whatsoever capacity and for
whatsoever reason.

 Which are the attributes, the presence of which

makes an activity an undertaking within s. 2(j),
on the ground that it is analogous to trade or
business?

 It is difficult to state these possible attributes definitely or

exhaustively;
as a working principle it may be stated that
an activity systematically or habitually undertaken for
the production or distribution of goods or for the
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 cooperation 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 oneself
nor for pleasure.

 Is quid pro quo necessary for bringing an

activity under s. 2(j) ?
Supreme Court held that the question as to
whether any activity in question is an
undertaking under s. 2(j) the doctrine of quid pro
quo can have no application.

Therefore, we are satisfied that the

High Court was right in coming to the
conclusion that the conduct and
running of the group of Hospitals by
the appellant amounted to an
undertaking under s. 2(j) and the
relevant provisions of the Act were
applicable.

 Corpn. of City of Nagpur v. Its Employees (1960)1

LLJ 523 (SC)
The court drew a distinction between (a) regal
and (b) municipal function of the corporation,
the latter being analogous to business or trade.

The following five characteristics are stated to be the

conditions implicit in the definition:
1. the activity must concern the production or
distribution of goods or services;
2. it must be to serve others but not to oneself;
3. it must involve co-operative effort between
employer and employee, between capital and labour;
4. it must be done as a commercial transaction; and
5. it must not be in exercise of purely governmental
functions.

The court summed up its conclusion in the

following words: The definition of industry in the Act is very
comprehensive. It is in two parts; one part defines
it from the stand point of the employer and the
other from the stand point of he employee. If an
activity falls under either part of the definition, it
will be an industry within the meaning of the Act.

 The history of industrial disputes and the legislation

recognizes the basic concept that the activity shall be
an organized one and not that which pertains to
private or personal employment.
The regal functions described as primary and
inalienable functions of State though statutorily
delegated to a Corporation are necessarily excluded
from the purview of the definition.
Such regal functions shall be confined to legislative
power, administration of law and judicial power.

 If a department of a Municipality discharges

many functions, some pertaining to industry as
defined in the Act and other non-industrial
activities, the predominant functions of the
department shall be the criterion for the
purposes of the Act.
The court also ruled that neither investment of
capital nor profit motive was sine qua non for
determining whether an activity was an
industry or not.

 The doctrine noscuntur a sociis cannot be

invoked in cases where the intention of the
Legislature is clear and free of ambiguity.
The words "analogous to the carrying out of a
trade or business" emphasize more the nature of
the organized activity implicit in a trade or
business than to equate the other activities with
trade or business.

 If a service rendered by an individual or a

private person would be an industry, it would
equally be an industry in the hands of a
Corporation.
If a service rendered by a Corporation is an
Industry, the employees in the departments
connected with that service whether financial,
administrative or executive would be entitled to
the benefits of the Act.

Ahmedabad Textile Industrys

Research Association v. State of
Bombay, (1060) 2LJ 720 (SC)
Whether an association for research,
maintained by the textile industry and
employing technical and other staff,
was an industry?

Court held.
Applying the tests laid down in Hospital Mazdoor
Sabha, the court held that the activity of the
association was an industry because
it provides material services to a part of the
community,
it was carried on with the help of employees,
it was organized in a manner similar to that in a
trade or business and
there was co-operation between the employers
and the employees.

National Union of Commercial

Employees v. Meher, (1962) 1
LLJ 241

Are the professional activities like

solicitors firm, architects office,
medical polyclinics and surgeries, firm
of chartered accountants etc.
industries?

 A new test was added: that the association of capital

and labour must be direct and essential.
The services of a solicitor were regarded as those of
an individual, depending upon his personal
qualifications and ability, to which the employees did
not contribute.
The contribution of the employees in the case of a
solicitors firm had no direct or essential nexus with
the advice or services rendered by the solicitor.
Reason:- the doctrine of direct co-operation and the
special features of liberal professions.

University of Delhi v. Ramnath

(1963) 2 LLJ 335 (SC)
Whether the bus drivers employed by the
Delhi University were workmen, and this
question, in its turn, depended upon the
jurisdictional question viz: whether the
education activity of the Delhi University
would be an industry or not?

 Narrowing down the concept of service, the

court held that educational institutions would not
fall within the meaning of an industry, because
their aim was education and the teachers
profession was not to be equated to that of
industrial workers.

 The SC held that the drivers employed by the University

were not employed in industry because:
1. predominant function of the University was to impart
education;
2. teachers were not workmen; and
3. others ( persons other than teachers) were insignificant
in number and did minor and insignificant work.

 Madras Gymkhana Club Employees

Union v. Gymkhana Club, (1967) 2 LLJ
720
The court reviewed all the earlier cases and
made its own comments on them.
The main question was:
Whether the activities of the Madras
Gymkhana Club which was a members club,
fell within the definition of an industry?

 The claim was based on the contention that the

club was organized as an industry , as it was
organized on a vast scale, with multifarious
activities; that facilitates of accommodation,
catering, sale of alcoholic and non-alcoholic
beverages, games, etc. were provided; that the
club was running parties at which guests were
frequently entertained; and that the club had
established reciprocal arrangements with other
clubs, for its members.

 Hidayatullah C.J., in Gymkhana ruled that the

club was not an 'industry'.
It is not of any consequence that there is no profit
motive because that is considered immaterial.
It is also true that the affairs of the club are
organized in the way business is organized, and
that there is production of material and other
services and in a limited way production of
material goods mainly in the catering
department.

But

these circumstances are not truly

representative in the case of the club because the
services are to the members themselves for their
own pleasure and amusement and the material
goods are for their consumption.
...before the work engaged in can be described as
an industry, it must bear the definite character of
'trade' or 'business' or 'manufacture' or 'calling'
or must be capable of being described as an
undertaking resulting in material goods or
material services.

Management of Safdarjung
Hospital v. Kuldip Singh sethi
(1970) 2 LLJ 266
Ruling in the Hospital Mazdoor Sabha
case has now been considerably
shaken by the pronouncement in the
Madras Gymkhana Club.

First Appeal
Safdarjung Hospital is not embarked on an
economic activity which can be said to be
analogous to trade or business.
There is no evidence that it is more than a place
where persons can get treated.
This is a part of the functions of Government and
the Hospital is run as a Department of
Government.
It cannot, therefore, be said to be an industry.

Second appeal
The Tuberculosis hospital is wholly charitable
and is a research institute. The dominant purpose
of the Hospital is research and training, but as
research and training cannot be given without
beds in a hospital, the hospital is run.
Treatment is thus a part of research and training.
In these circumstances the Tuberculosis Hospital
cannot be described as industry.

Third Appeal The objects of the Kurji Holy Family Hospital are
entirely charitable. It carries on work of training
research and treatment. Its income is mostly from
donations and distribution of surplus as profit is
prohibited.
It is, therefore, clear that it is not an industry as laid
down in the Act.

 Bangalore Water Supply and

Sewerage Board
Vs.
A. Rajappa and Ors., AIR1978SC548
M. Hameedullah Beg, C.J., Y. V. Chandrachud, P.
N. Bhagwati, V. R. Krishna Iyer, Jaswant Singh,
V. D. Tulzapurkar and D. A. Desai, JJ.
The leading case on the point, which perhaps may
be treated as the mariner's compass for judicial
navigation .

Triple Test:
1. Systematic Activity
2. Organized by co-operation between employer
and employee
3. For the production and/or distribution of
goods and services calculated to satisfy human
wants and wishes .

Bangalore Water Supply and Sewerage Board

Vs.
A. Rajappa and Ors., AIR1978SC548
An industry is a continuity, is an organized
activity, is a purposeful pursuit-not any isolated
adventure, desultory excursion or casual, fleeting
engagement motivelessly undertaken. Such is the
common feature of a trade, business, calling,
manufacture-mechanical or handicraft-basedservice, employment, industrial occupation or
avocation.

 an 'industry' cannot exist without co-operative

endeavour between employer and employee.
An industry is not a futility but geared to utilities
in which the community has concern.
We hold these triple ingredients to
be unexceptionable.

 All organized activity possessing the triple

elements, although not trade or business, may still
be 'industry' (provided the nature of the activity,
viz. the employer-employee basis, bears
resemblance to what we find in trade or business.
This takes into the fold of 'industry' undertakings,
callings and services adventure 'analogous' to the
carrying on of trade or business'.

Pious or altruistic Missions

Lawyers volunteering to run a free legal services
clinic
Doctors serving in their spare hours in a free
medical center
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.

 Bangalore Water Supply and Sewerage Board Vs.

A. Rajappa and Ors., AIR1978SC548
over-ruled Safdarjung, Solicitors' case,
Gymkhana, Delhi University, and Hospital
Mazdoor Sabha is hereby rehabilitated.

Industrial Disputes (Amendment)

Act, 1982
"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,--

whether or not,- (i) any capital has been invested for the purpose of
carrying on such activity; or
(ii) 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 5A of the Dock Workers
(Regulation of Employment) Act, 1948 (9 of 1948);
(b) any activity relating to the promotion of
sales or business or both carried on by an
establishment.

but does not include- any agricultural operation

hospitals or dispensaries;
educational, scientific, research or training institutions;
institutions owned or managed by organisations wholly
or substantially engaged in any charitable, social or
philanthropic service; or
khadi or village industries
any activity of the Government relatable to the
sovereign functions of the Government

 any domestic service; or

any activity, being a profession practised by an
individual or body or individuals, if the number of
persons employed by the individual or body of
individuals in relation to such profession is less than
ten;
any activity, being an activity carried on by a cooperative society or a club

Industry to be replaced by
Establishment-NCL-II
The Second National Commission on labour has
recommended that the proposed Labour
Management Relations Act should be made
applicable to all establishments employing 20 or
more workers, irrespective of the nature of the
activity in which the establishments engaged.
The commission felt that, in view of this
recommendation, there was no need to define the
term industry.

 The commission recommended that the term

establishment may be defined as a place or places
where some activity is carried on with the help and cooperation of workers.(para 6.39,p39)

Postal and Telecom

departments
Sub Divisional Inspector of Post Vaikam & Ors.
Theyyam Joseph & Ors. (1996) 8SCC 489
Whether the establishment of the Sub Divisional
Inspector of Post was an Industry?
A two judge bench of the SC answered the
question in negative and held that the functions
of the Postal Department are part of the
sovereign functions of the State and it is,
therefore not an industry.

 Senior Superintendent of Post Office. Postal

department, Ludhiana v. Baljit Singh. 2012(1) SLR 199
Yes it is and industry. Based on Bangalore Water Supply.

National Remote Sensing Agency

National Remote Sensing Agency v. Additional Tribunal
cum Additional Labour Court, Hyderabad. (2003) LLR
108
Yes. ( not performing any sovereign function)

 NRSA is an instrumentality of Central

Government
But same is not part of either Department of
Defence or Department of Space
It is autonomous body
It is not Central Government Company/
undertaking concern or any Central Government
undertaking concern
Its industrial activity is not carried on by or
under authority of Central Government

 Nothing is placed before Court in order to show

that there is relationship of principal and agent
between Central Government and petitioner
Organization Nor is it a specified controlled
industry - Its own General Body and Managing
Committee to manage its affairs
It does not require any specific authority of
Government of India to carry on its day-to-day
activities.

 Therefore it is clear that NRSA does not carry on

its activities under authority of Central
Government - Therefore NRSA is industry within
meaning of that term as defined in Section 2(j) of
Act

Forest Department of State

State of Gujarat v. Pratamsingh Narsingh

Parmar, (2001) 8 SCC 713
The two judge bench of the Supreme Court held
that the forest deparment could not be held to be
industry .

Radio and Doordarshan

All India Radio v. Santosh Kmar and another,
(2003)
Appellants contention:
All India Radio and Doordarshan Kendra
discharge sovereign functions of the State and
they are not industries within the meaning of
Section 2(j).

 The Supreme Court dismissed the appeal and held

The functions which are carried on by All India Radio
and Doordarshan Kendra cannot be said to be confined
to sovereign functions as they carry on commercial
activity for profit by setting commercial advertisements
telecast or broadcast through their various Kendras and
Stations by charging fees.

Re-examination of the
decision in Bangalore Case
Coir Board Ernakulam v. Indira Devi P.S (1998)
The two judge bench of the Supreme Court
directed that the matter be placed before the
Honble CJI to consider whether a larger Bench
should be constituted to re-consider the decision
of this court in Bangalore Water Supply Case.

 The three judge Bench presided over by the CJI

ruled that the judgement delivered by seven
Judges in Bangalore Water spply case does not
require any reconsideration.

Not Industry Domestic Services- Not industry

Indian Audit Department
Accounts department
Income tax department
Office of Chartered Accountant

 Borrowed from Section 8 of the (English)

Industrial Courts Act, 1919.
Royal Commission of Labour suggested widening
the coverage of the definition.
The Trade Disputes (Amendment) Act, 1938,
accordingly amended the definition.
The amended definition of the trade dispute was
incorporated in the Industrial Dispute Act, 1947.

Industrial dispute means

any dispute or difference(factum of Industrial
dispute)
between
employers and employers, or
between employers and workmen, or
between workmen and workmen,
which is connected with the
employment or non-employment or the terms of
employment or with the conditions of labour,
of any person.

Elaborate..
This definition includes all the aspects of a dispute.
It, not only includes the disagreement between
employees and employers, but also emphasizes the
difference of opinion between worker and worker.

 The disputes generally arise on account of poor wage

structure or poor working conditions.
This disagreement or difference could be on any matter
concerning the workers individually or collectively.
It must be connected with employment or nonemployment or with the conditions of labor.

Factum of Industrial Dispute

The existence of a dispute or difference is the key to
the expression industrial dispute.
Shambhu Nath Goyal v. Bank of Baroda, (1978)
2SCC, 353
Real and substantial difference having some
element of persistency and continuity till resolved,
and likely, if not adjusted, to endanger the
industrial peace of the undertaking or the
community.

 Bombay Union of Journalists v. The Hindu, (1961)

Supreme Court held that the industrial dispute
must be in existence or apprehended on the date
of reference.

 The Sindhu Resettlement Corp. Ltd. V. The

Industrial Tribunal of Gujarat & Ors AIR
1968 SC 529
Facts: R.S.Ambwaney was employed by Appellant, as an
account clerk.
Subsidiary Company was formed by Appellant.
R S was appointed in subsidiary company as an
Account Clerk.

 His services were terminated, after payment of retrenchment

compensation and other dues payable to him.

RS demanded retrenchment compensation from the

appellant also.
The same was refused by the Appellant.
R S case was taken up by Mazdoor Mahajan Sangh,
Gandhidham.

 MMSG wrote a letter to the management of the appellant

asking for payment of retrenchment compensation to RS
on the ground that the appellant had refused to take him
back in its employment.
There were some conciliation proceedings also.

On the report of the Conciliation Officer,

Government referred the dispute to Industrial
Tribunal for adjudication.

 The Tribunal gave its award directing reinstatement of

Respondent RS and payment of back wages .
Appellant challenged the award before the HC by petition
under article 226 but the same was dismissed.
Consequently, the appellant filed special leave in Supreme
Court.

 Issues: (1) that respondent , having been given permanent

appointment in Sindhu Hotchief and having
obtained retrenchment compensation from that
Company, could not claim that he was still holding a
post in the appellant Corporation and could not,
therefore, claim reinstatement;

 that the dispute that was raised by respondent

MMSG as well as respondent RS with the
management of the appellant was confined to
compensation for retrenchment and did not relate to
the validity of the retrenchment of reinstatement, so
that the Government of Gujarat had no jurisdiction
to refer the dispute to the Industrial Tribunal which
it did;

Supreme Court held:

It may be that the Conciliation Officer reported to
the Government that an industrial dispute did exist
relating to the reinstatement and payment of
wages to RS, but when the dispute came up for
adjudication before, the Tribunal, the evidence
produced clearly showed that no such dispute
had ever been raised by either respondent with
the management of the appellant.

 If no dispute at all was raised by the respondents

with the management, any request sent by them
to the Government would only be a demand by
them and not an industrial dispute between them
and their employer.

 An industrial dispute, as defined, must be a dispute

between employers and employers, employers and
workmen and workmen and workmen.
A mere demand to a Government, without a
dispute being raised by the workmen with their
employer, cannot become an industrial dispute.

 On these facts, it is clear that the reference made by

the Government was not competent. The only
reference that the Government could have made had
to be related to payment of retrenchment
compensation which was the only subject-matter of
dispute between the appellant and the respondents.

M/s Village Papers Ltd. V State of Himachal

Pradesh (1993) Lab.IC 99
Full Bench of the High Court has summarized the views
expressed by the Supreme Court and High Court :
1.A mere demand made to the Government without it being
raised by the workmen with their employer cannot become
an Industrial Dispute.
2.If such a demand is made to the Government, it can be
forwarded to the management and if rejected, becomes an
industrial dispute.
3.
The demand need not be in writing, unless the matters
pertains to a public utility service (section 22).

4. The demand need not be sent directly to the

employer; nor it is essential for it to be made
expressly; it can be even implied or constructive,
e.g., by way of filing an appeal or refusal of an
opportunity to work
5. A demand can be made through the
Conciliation Officer, who can forward it to the
management and seek its reaction. If the reaction is
negative and not forthcoming and the parties
remain at loggerheads, a dispute exists and a
reference can be made.

 Only that dispute which exists or is apprehended

can be referred.

Parties to the Industrial Dispute

Trade Unions not mentioned in the definition of
industrial dispute because they act on behalf of the
workmen and , therefore, when a trade union raises a
dispute, the workmen are deemed to be parties to the
dispute.
Inter union dispute had not been held to be an
industrial dispute.

Subject Mater of Industrial

Dispute
Terms of Employment
Basic wages
Dearness allowance & other allowances
Wages on promotion
Wages on demotion
Wages on transfer out of town
Wages for over-time work ,Wages for work on
holiday,Payment of wages,Recovery of wages
Bonus

 Conditions of labour
Hours of work
Holidays
Leave
Health
Safety
Welfare of labour
Alteration of conditions of service of employees

Non-employment Termination of Service

Dismissal
Discharge
Retrenchment
Compulsory retirement
Temporary Unemployment
Suspension
Layoff

Scope of any person

The word any person has not been limited to
workmen.
Though the expression must receive a more general
meaning, it cannot mean anybody or everybody
in this world.
It cannot include an outsider.

 The requirement of the definition, that the dispute

must relate to the employment or non-employment
of the terms of employment or the conditions of
labour of any person , necessarily, therefore,
imports a limitation in the sense that a person in
respect of whom the employer-employee relation
never existed or can never exist, cannot be the
subject-matter of an industrial dispute between
employer and the workmen.

 Whether it is competent for the workmen of the

industry to raise a dispute not for themselves but
for other employees of the industry, who were not
workmen?

 The crucial test of direct and substantial interest.

In the absence of such interest, no industrial dispute
could be raised with regard to such a person.
This test was approved by a majority of the Supreme
Court in Workmen of Dimakchi Tea Estate v.
Dimakuchi Tea Estate (1958)1LLJ 500(SC)

Facts Mr. Banerjee was appointed by the Tea Estate as

an Assistant Medical Officer, on three months
probation.
After three months his services were terminated
by the management after paying him one months
salary in lieu of notice.
The legality of the termination of service was
questioned

 The cause of the Assistant Medical Officer was espoused

by the worker union of tea estate.
The Government of Assam referred the dispute to the
Industrial Tribunal about his reinstatement.
The management raised a preliminary objection that the
Assistant Medical Officer was not a workmen and
hence the Industrial Tribunal had no jurisdiction to
adjudicate the question of reinstatement.

 The tribunal upheld the managements plea.

"Dr. Banerjee being not a 'workman', his case is
not one of an "industrial dispute" under the
Industrial Disputes Act and his case is therefore
beyond the jurisdiction of this Tribunal and the
Tribunal has therefore no jurisdiction to give any
relief to him."

Appeal to the Labour Appellate

Tribunal of India, Calcutta.
Tribunal affirmed that Dr. Banerjee was not a
workman within the meaning of the Act.
The Appellate Tribunal then said :
"A dispute between the employers and employees to
be an industrial dispute within the meaning of
section 2(k) of the Industrial Disputes Act, must be
between the employers and the workmen. There
cannot be any industrial dispute between the
employers and the employees who are not
workmen."

On appeal before the SC a question arose

Whether a dispute in relation to a person who is
not a workman falls within the scope of the
definition of industrial dispute contained in s.
2(k) of the Industrial Disputes Act, 1947."

Appellant Counsel formulated four

limitations any person:
The dispute must be a real and substantial one in
respect of which one of the parties to the dispute can
give relief to the other; e.g., when the dispute is
between workmen and employer, the employer must
be in a position to give relief to the workmen. This
according to learned counsel for the appellants, will
exclude those cases in which the workmen ask for
something which their employer is not in a position
to give. It would also exclude mere ideological
differences or controversies.

2) The industrial dispute if raised by workmen must

relate to the particular establishment or party
of establishment in which the workmen are
employed.
(3) The dispute must relate to the employment, nonemployment or the terms of employment or with
the conditions of labour of any person, but such
person must be an employee discharged or in
service or a candidate for employment.

(4) The workmen raising the dispute must have nexus

with the dispute either because they are personally
interested or because they have taken up the cause of
another person in the general interest of labour welfare.

Supreme Court held: any person cannot mean anybody and everybody
in this world.
"any person" cannot be completely equated with
'any workman'.

 person in respect of whom the employer-employee relation

never existed or can never possible exist, cannot be the
subject-matter of a dispute between the employers and the
workmen.
The dispute must be a real dispute between the parties to
the dispute so as to be capable of settlement or adjudication
by one party to the dispute, giving the necessary relief to the
other.
It is the community of interest of the class as a whole the
class of employers or class of workmen- which furnishes the
clear nexus between the dispute and the parties to the dispute

 The Court in its majority judgement accordingly held

that the medical officer was not the workman. He could
not be held to have any community of interest with the
other members of the union.

Problem A tea estate was sold .

The purchaser continued to employ the labour and some
other members of the staff of the seller.
Under the agreement of sale an option was given to the
purchaser to continue to employ the members of the staff.
It also made the seller liable for the claims made by the
members of the staff not retained in service by the purchaser.
The claims by the members of the staff not retained in
service by the vendee tea estate was raised by the workmen
of the vendee tea estate.

 Whether the dispute raised by such workmen

regarding the employment of rest of the staff was
an industrial dispute?

Problem 2 The business of M/s Kays Construction Co. was

taken over by a private company called M/s Kays
Construction Co.(Pvt.) Ltd.
The successor company had the proprietor, his wife
and Manger of the vendor company as its director.
The transferee employer refused to employ
certain workmen of the transferor employer.
The workmen of the transferee employer raised a
dispute regarding unemployment by transferor
employer of the erstwhile co-employees of the
transferor employer.

Answer
The definition of the expression industrial
dispute was wide enough to cover a dispute raised
by the workmen in regard to the non-employment
of others who may not be the workmen at the
material time.

 Whether regular workmen of Company can raise

an industrial dispute relating to contract labour
with the employer?

 Standard Vacuum Refining Co. of India Ltd. V.

Their Workmen, AIR (1960) SC 948.

 Regular workmen of Company raised an industrial

dispute relating to contract labour.
The dispute is that the workers of the contractor (who
in effect were doing the work of the company)
unlike regular workmen of the company were
getting low wages and were not provided any
security of tenure.
The regular workmen who raised their disputes,
therefore, wanted that the contract system should be
abolished and the contractors be considered as
workmen of the company.

SC helddispute was an industrial dispute because:

(i) the regular workmen of the company had a
community of interest with the contractors
workers (who were, in effect, working for the same
employer),
(ii) the workmen had substantial interest in the
subject-matter of the dispute of contractors
workers in the sense that the class to which they
belonged (namely workmen) was substantially
affected thereby and
(iii) the company could give relief in the matter.

 Whether the workmen belonging to class III (who

drew less than 500 per month) of the RBI were
entitled to raise a dispute in respect of Class II
employees who were doing supervisory nature of
duties and drawing more than Rs. 500 per month
and were excluded from the ambit of workmen.

 if the dispute regarding employment , non

employment, terms of employment or conditions of
labour of non-workmen in which workmen are
themselves vitally interest, the workmen may able
to raise an industrial dispute.

 Delhi Municipal Workers Union v. Municipal Corpn of

Delhi (1999)
A dispute relating to a compassionate appointment was raised
by the son of a deceased employee.
The tribunal dismissed the claim for compassionate
appointment on the grounds:
1. the said person was never in the employment of the
corporation.
2. he was not workman as defined in s 2(s) of the Act, and
3. there could be no industrial dispute between him and the
corporation

Delhi High Court held that

a dispute relating to a compassionate appointment,
raised by the son of a deceased employee, was an
industrial dispute.
The court relied on the decision rendered in Kays
Construction Co, in which it was held that in order
to be an industrial dispute, it need not be a dispute
directly between the employer and his workmen and
that the definition of an industrial dispute was wide
enough to cover a dispute raised by the employers
workmen, in regard to the non-employment of
others who may not be his workmen at the material
time.

 How to ascertain whether an

individual dispute has acquired
the character of an industrial
dispute?

 the test is whether at the date of the reference the

dispute was taken up as supported by the Union
of the workmen of the employer against whom
the dispute is raised by an individual workman
or
by an appreciable number of workmen.

 The persons who seek to support the cause of the

workmen must themselves be directly and
substantially interested in the dispute,
persons who are not employees of the same
employer cannot be regarded as so interested,
that by their support they may convert an
individual dispute into an industrial dispute.

 An Individual worker, unsupported by

appreciable number of workmen or the union,
has no remedy under the IDA, 1947.

 Section 2A- Dismissal, etc., of an

individual workman to be deemed to
be an industrial disputeInserted in1965
Amended in 2010
Attempts to mitigate some of the hardships caused
as a result of judicial pronouncements.

 Section 2A. (1) Where any employer discharges, dismisses

,retrenches or otherwise terminates the services of an
individual workman, any dispute or difference between
that workman and his employer connected with, or arising
out of, such discharge, dismissal, retrenchment or
termination shall be deemed to be an industrial dispute
notwithstanding that no other workman nor any union of
workmen is a party to the dispute.
Clause 2 &3 Inserted in 2010.

Lay-off Retrenchment
and
Closure Under Industrial
Dispute act

Introduction Previously, lay-off was a practice that had no provision

for compensation. However, in 1953, the President
promulgated the Industrial Disputes (Amendment)
Ordinance which made a provision for payment of
compensation for lay-off. This ordinance was repealed
and replaced by Industrial Disputes
(Amendment) Act, 1953.

 Lay-off is a practice whereby the employer cannot give

employment to workmen for various reasons including
shortage of raw materials, coal or power, accumulation
of stocks, break-down of machinery etc, or
for any other connected reason.
It has been defined under Section 2(kkk) of the Act. If a
workman, whose name is on the muster rolls of the
industrial establishment presents himself for work and
is not given

 employment within two (2) hours of presenting himself,

he shall be deemed to have been laid-off for that day
All industrial establishments in India have to ensure
compliance with the various labour legislations
including the ID Act. The application of the provisions
pertaining to lay-off is restricted by virtue of Section
25A.

Section 25-A
It states that industrial establishments with below fifty
(50) workmen on an average per working day in the
preceding calendar month, or industrial establishments
which are of a seasonal character, will not be bound by
Section 25C to 25E.

Section 25-A
such workmen:
(a) will not be entitled to any compensation for being
laid off.
(b) will not be entered into the muster rolls of the
employer.
(c) will not fall under any of the exceptions to avail
compensation.

 It is important to note that workmen are entitled for

compensation only if they have been in continuous
service. Defined under section 25B of the Act, a
workman is said to be in continuous service if he provides uninterrupted service, which includes
interrupted service due to sickness, accident, strikes
which on are not illegal, lock out or cessation of work
not due to the fault of the workman.

 The service is construed as continuous for a period of 1

year if the workman works in the previous year for:
190 days- below the ground in a mine.
240 days- in any other job.

 The service is construed as continuous for a period of 6

months if the workman works in the preceding 6
months for:
95 days- below the ground in a mine.
120 days- in any other job.

 In Sur Enamel & Stamping Works Ltd v. Their Workmen,

(1963) 2 LLJ 367, 379 (SC), per Das Gupta J.the
Supreme Court held that before a workman can be
considered to have completed one year of continuous
service in an industry, it must be shown that he was
employed for a period of at least twelve (12) calendar
months and during those twelve
(12) calendar months he had worked at least two
hundred and forty (240) days.

 Prior to 1953, the work lay-off was not used in

any legislative enactment in India.
Lay-off means the failure, refusal or inability of
an employer on account of shortage of coal,
power or raw materials or the accumulation of
stocks or
the breakdown of machinery or natural calamity
or for any other connected reason
to give employment to a workman whose name is
borne on the muster rolls of his industrial
establishment and who has not been retrenched.

Explanation Every workman who presents himself for work

during normal working hours on any day and is
not given employment by the employer within
two hours of his so presenting himself shall be
deemed to have been laid-off for that day within
the meaning of this clause:

 Provided that if the workman, instead of being given

employment at the commencement of any shift for any
day is asked to present himself for the purpose during the
second half of the shift for the day and is given
employment then, he shall be deemed to have been laidoff only for one-half of that day:

 Provided further that if he is not given any such

employment even after so presenting himself, he shall not
be deemed to have been laid-off for the second half of the
shift for the day and shall be entitled to full basic wages
and dearness allowance for that part of the day.

Prohibition of Lay-offSection 25M

Till 1976, there was no provision for preventing
lay-off in the IDA, 1947.
In seventies a number of cases of large-scale layoff were reported.
In order to prevent avoidable hardship and to
maintain higher tempo of production and
productivity the IDA,1947 was amendment in
1976 whereby restrictions had been imposed on
the employers right to lay-off by section 25M.

 Section 25M, applies to every industrial

establishment (not of seasonal character) in
which not less that one hundred workmen were
employed on the average per working day for the
preceding twelve months.

 No workman (other than a badli workman or a

causal workman) shall be laid-off by his
employer except with the prior permission of the
appropriate Government, obtained on an
application made in this behalf. unless such layoff is due to shortage of power or to natural
calamity, and in the case of a mine, such lay-off is
due also to fire, flood , excess of inflammable gas
or explosion.

 An application for permission shall be made by

the employer in the prescribed manner stating
clearly the reasons for the intended lay-off and a
copy of such application shall also be served
simultaneously on the workmen concerned in the
prescribed manner.

 Where the workmen (other than badli workmen

or casual workmen) of an industrial
establishment, being a mine, have been laid-off
under sub-section (1) for reasons of fire, flood or
excess of inflammable gas or explosion, the
employer, in relation to such establishement ,
shall within a period of thirty days from the date
of commencement of such lay-off, apply, in the
prescribed manner, to the appropriate
Governemnt for permission to continue lay-off.

 Where an application for permission has been

made, the appropriate government , after making
such enquiry as it thinks fit and after giving a
reasonable opportunity of being heard to the
employer, the workmen concerned and the
persons interested in such lay-off, may, having
regard to genuineness and adequacy of the
reasons of such lay-off, the interest of the
workmen and all other relevant factors ,

 by order and for reasons to be recorded in writing, grant

or refuse to grant such permission and a copy of such
order shall be communicated to the employer and the
workmen.

Where an application for permission under

has been made and the appropriate government
does not communicate the order granting or
refusing to grant permission to the employer
within a period of sixty days from the date on
which such application is made, the permission
applied for shall be deemed to have been granted
on the expiration of the said period of sixty days.

An order of the appropriate government granting

or refusing to grant permission shall, subject to
the provisions of sub-section (7), be final and
binding on all the parties concerned and shall
remain in force for one year from the date of such
order.

 The appropriate government, either on its own motion or

on the application made by the employer or any
workman, review its order granting or refusing to grant
permission under sub-section (4) or refer the matter to a
Tribunal for adjudication.

Workmen not entitled to

compensation Section 25 E
(i) Refuses to accept any alternative employment
in the same establishment or
in any other establishment belonging to the same
employer situate in the same town or village or
situated within a radius of five miles from the
establishment to which he belongs.

ii) Not present himself for work at the

establishment at the appointed time during
normal working hours at least once a day;
(iii) If such laying-off is due to a strike or slowingdown of production on the part of workmen in
another part of the establishment.

Associated Cement Companies Ltd. V.

Their Workmen, AIR 1960 SC 56
The Associated Cement Companies were the owners
of Chaibasa Cement Works and Rajanka limestone
quarry, both situated in the State of Bihar, about a
mile and a half apart.
Limestone is the chief raw material needed for the
manufacture of cement.
The cement works, therefore, depended exclusively
on the quarry for its limestone.
Unions of the workers in the quarry gave a notice of
a general stay-in strike if certain demands were not
met.

 All conciliation efforts failed and the strike began.

Consequently, the management closed down some
parts of the cement works because of the shortage of
limestone, and laid-off certain workers.
Renewed conciliation then brought strike to an end.

 The Unions demanded lay-off compensation for the

workers of the cement works for the period of the
closure.
The management refused.
This give rise to an industrial dispute, which the
Bihar Government referred to an industrial tribunal.

 The question, specifically, was whether the lay-off

of workers in parts of the cement works, caused by
the strike in the adjacent quarry, was within the
meaning of section 25E:
No compensation shall paid to a workman who has
been laid-off.(iii) if such laying off is due to a
strike..on the part of workmen in another part of
the establishment.
In other words, was the quarry a part of the
establishment of the cement works?

 The Industrial tribunal held that the quarry was not a part of
the cement works.
SC held
In our view, the quarry and the factory constituted one
establishment within the meaning of cl. (iii) of s. 25E of the
Act. The disqualification in cl. (iii) clearly applied and the
workmen at the factory were not entitled to claim lay-off
compensation.

Retrenchment
1953-definition was inserted
Section 2(oo)
Retrenchment to mean:
Termination of service by the employer for any
reason whatsoever otherwise than as a punishment
inflicted by way of disciplinary action, but does not
include:

 (a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age
of superannuation if the contract of employment
between the employer and the workman concerned
contains a stipulation in that behalf; or
(bb) termination of the service of a workman as a
result of the non-renewal of such contract in
accordance with the provisions therein;
(c) termination of the service of a workman on the
ground of continued ill-health.

Following are excluded from the definition:1.Workman who had dismissed as a measure of
punishment inflicted by way of disciplinary action,
or
2.Voluntarily retired, or
3.Retired on reaching the age of superannuation or
4.been discharged on the ground of continued illhealth.

 Since 1953 a retrenchment of workmen with at least

one years continuous service, employed in a nonseasonal factory having fifty or more workers, is
valid only when it satisfies the following conditions:
Conditions precedent to Retrenchment of WorkmenSection 25N
(i) service of one months notice of the workmen, or
payment of wages for the notice-period;

 (ii) payment of retrenchment compensation to the workmen;

and
(iii) service of notice on the appropriate government or the
specified authority in the prescribed manner.

Conditions precedent to retrenchment of

workmen-Section 25 F- No workman employed in any industry who has
been in continuous service for not less than one
year under an employer shall be retrenched by
the employer until(a)The workman has been given one month's
notice in writing indicating the reasons for
retrenchment and the period of notice has
expired, or the workman has been paid in lieu of
such notice, wages for the period of the notice;

(a) The workman had been paid, at the time of

retrenchment, compensation which shall be
equivalent to fifteen days average pay (for
every completed year of continuous service) or
any part thereof in excess of six months; and
(b) Notice in the prescribed manner is served on
the appropriate Government or such authority
as may be specified by the appropriate
Government by notification in the Official
Gazette.

Object of Section 25F

Realizing the position that an employer could not be expected to carry
the economic dead weight of surplus age of labour, the legislature
provided for the compensation under this section to soften the rigour
of hardship resulting from an employee being thrown out of
employment though for no fault of his.

Section 25F
The person claiming the protection of section 25F
must be
1.Having the relation of employee with the
employer
2.He must be a workman within the meaning of
section 2(s)
3.The establishment in which he is employed must
be an industry within the meaning of s. 2(j) and

He must have put in not less than one year of

continuous service as defined by s. 25B under the
employer.
This conditions are cumulative. If any one of these
conditions is lacking, the provisions of this section will
not be attracted.

Section 25F-Condition precedent

to retrenchment of workmen
Section 25F postulates three conditions to be
fulfilled by an employer for effecting a valid
retrenchment, namely: 1. one months notice in writing indicating the
reasons for retrenchment or wages in lieu of such
notice;
2. payment of compensation equivalent to fifteen
days, average pay of every completed year of
continuous service or any part thereof in excess
of six months; and

 3. notice to the appropriate government in the prescribed

manner

 The management alone can determine when

workmen have to be retrenched, and how many have
to go.
A tribunal can only interfere where retrenchment has
been resorted in bad faith.(Tea Districts Labour
association v. Ex-Employees of Tea District Labour
Association, (1960) I LLJ 802 (SC)

 In retrenching workmen the management has to follow the

rule last come, first go. If in any case it does not follow
that rule , it must record its reason therefore. Departure from
this rule without valid reasons renders a retrenchment
invalid.(Section 25G-Procedure for retrenchment)
Retrenchment is ordinarily resorted to in a continuing
business.
Section 25 F has no application to a closed or dead industry;
Hariprasad v. A.D.Dwelker, AIR 1957 SC 121

Pipraich Sugar Mills v. Pipraich Sugar

Mills Mazdoor Union, AIR 1957 SC 95
Supreme Court held:

Retrenchment connotes in its ordinary

acceptation that the business itself is being
continued but that a portion of the staff or the
labour force is discharged as surplusage and
the termination of services of all workmen as a
result of closure of the business cannot therefore
be properly described as retrenchment.

 Barsi Light Railway Co. v. Oglekar (K.N.),

Hari Prasd Shivshanker Shukla v.
A.D.Divalkar, AIR 1957 SC 121
Held:
The statutory definition of the word retrenchment
merely laid emphasis upon economic concept of the
terms and for any reason whatsoever meant
for any economic reasons whatsoever in a
continuing or existing running industry.

 Justice S.K.Das observed:

..retrenchment defined in Section 2(oo) and
used in section 25-F has no wider meaning than
the ordinary accepted connotation of the word: it
means the discharge of surplus labour or staff by
the employer for any reason whatsoever,
otherwise than as a punishment inflicted by way
of disciplinary action, and it has no application
where the services of all workmen have been
terminated by the employer.

 State Bank of India v. N.Sundara Money, AIR

1976 SC 1111
This case not only makes a departure from the
interpretation of the Court in Barsi Light case,
but also impliedly overrules the decision.

Facts:
The respondent was appointed as a Cashier, off
and on, by the State Bank of India between 4th
July, 1970
and
November 18,
1972.
There were intermittent breaks in the service of
the respondent but he had completed 240 days in
a year within the fold of deemed which bore
the termination of service of workman after a
few days was challenged in view of sections 2(oo)
and 25-F.

Justice Krishna Iyer delineating the scope of

retrenchment observed:
A breakdown of section 2(oo) unmistakably
expands the semantics of retrenchment .
Termination for any reason whatsoever, are the
key words. Whatever the reason, every
terimination spells retrenchment. So the sole
question is , has the employees service been
terminated? To protect the weak against the
strong , this policy of comprehensive definition
has been effectuated.

Santosh Gupta v. State Bank of

Patiala, (1980) 2 LLJ 72 (SC)
Facts:
The State Bank of Patiala terminated the services
of one of its workman who had put in more than
240 days of service, [ deemed continuous service
for a year under Section 25 B(2)] on the ground
of her failure to pass the prescribed test provided
for confirmation in service.

 She was neither served with a notice required

under section 25 F(a) , nor paid retrenchment
compensation under Section 25F(b).
Whether termination of service of the workman
by the Bank due to failure of the workman to
pass the prescribed test for confirmation in
service amounted to a retrenchment?

 Supreme Court preferred to adopt a broad

interpretation to the expression retrenchment
and stated:
if due weight is given to the words " the
termination by the employer of the service of a
workman for any reason whatsoever and if the
words for any reasons whatsoever are
understood to mean what they plainly say, it is
difficult to escape the conclusion that the

 retrenchment must include every termination of service

of a workman by an act of the employer. Except those
not included in Section 25-F or not expressly provided for
in any other provisions of the Act such s Section 25-FF
and 25-FFF.
The SC accordingly held that the discharge of
the workman on the ground that she did
not pass the test which would have
enabled her to be confirmed was
retrenchment.

 Justice Krishna Iyer speaking for the Supreme Court

observed:
We are disposed to stand by the view that
discharge, even where it is not occasioned by a
surplus of hands, will be retrenchment, having
regard to the breadth of the definition.

L.Robert D. Souza v. Executive

Engineer, Southern Railway (1982)
A question arose whether the termination for
unauthorized absence from duty by workmen
amounted to retrenchment?

 The definition of expression retrenchment in

section 2(oo) is so clear and unambiguous that no
external aids are necessary for its proper
construction.
Therefore, we adopt as binding the well settled
position in law that if termination of service of a
workman is brought about for any reason
whatsoever, it would be retrenchment except if
the case falls within any of the excepted
categories.

 Voluntarily Resignation-If Retrenchment?

M/s JK Cotton Spinning and Weaving Mills Co.
Ltd., Kanpur v. State of U.P (1990) IICLR 542

 An employee had voluntarily resigned.

The resignation was accepted by the employer.
Subsequently a dispute was raised by the workman
which went up to the Allahabad HC.
The HC held it to be a case of retrenchment and
ordered payment of retrenchment compensation

 On appeal, the Supreme Court held that

when a contract of service is terminated on the employee
exercising his right to quit, such termination cannot be
said to be at the instance of the employer to fall within the
first part of the definition of retrenchment .
The court accordingly held that voluntarily resignation
amounted
to
voluntarily
retirement
and
not
retrenchment.

Project Employment- Not

covered
Surendra Kumar Sharma v. Vikas Adhikari, 2003
LLR 625 (SC)

Facts The appellant was employed as a junior engineer

on daily wages for a period of 100 days in a
scheme known as rural employment programme.
On completion of 100 days, the authority passed
a specific order of termination on 29.12.1988.
But the appellant was offered yet anther
temporary employment in a scheme known as
Jeevan Dhara vide order dated 17.1.1989.

 The employment was extended from time to time up to

12.6.1989.
The last order of appointment was made for a period of
seven days which was issued on 24.6.1989 and which
came to an end on 30.6.1989.
Thereupon, appellant and a few others filed a writ
petition before the HC.

High Court held that: As the posts have been abolished the question of
their regularization did not arise.
The workmen were given employment under the
schemes on an ad hoc basis, and from the very
beginning knew that the employment was of a
temporary nature and co-terminus with the
scheme itself, and therefore, they could not be
said to have been retrenched within the meaning
of section 2(OO) and they are not entitled to the
relief of reinstatement if the provisions of section
25F were not complied with.

Supreme Court ruled that:

Those employed under the scheme , could not ask
for more than what the scheme intended to give
them.
To get an employment under such scheme and to
claim on the basis of the said employment, a right
to regularization, is to frustrate the scheme itself.
It is wrong to approach the court with the
problems of those employed under such schemes
with a view to providing them with full
employment and guarantying equal pay for equal
work.

 Automatic termination of service not covered under

retrenchment.
Also depends on the language of the contract
agreement.

Retrenchment of workmen
due to closure of a unit..?

 Not a Retrencment.

Termination of service of
Probationer?

 Not retrenchment

Termination as a result of
Closure?

 Striking off the name of absentees Retrenchment.

Re- employment of
retrenched workmen
Section 25- H permits, on
preference basis.

 Closure- Section 2(cc) (added in 1982)

Closure means the permanent closing down of a place of
employment or part thereof.

Sixty Days Notice to be given of

intention to close down any
undertaking- Section 25FFA (ins. in
1972)Chapter 5A

 1. An employer who intendeds to close down an

undertaking shall serve, at least sixty days before
the date on which the intended closure is to
become effective, a notice, in the prescribed
manner, on the appropriate Government stating
clearly the reasons for the intended closure of the
undertaking.

 Provided that nothing in this section shall apply

to (a) an undertaking in which (i) less than fifty workmen are employed, or
(ii) less than fifty workmen were employed
on an average per working day in preceding
twelve months,
(b) an undertaking set up for the construction
of buildings, bridges, roads, canals, dams or
for other construction work or project.

 Section 25 FFF-Compensation to workmen in case

of closing down of undertakings.
Where an undertaking is closed down for any
reason whatsoever, every workman who has been
in continuous service for not less than one year in
that undertaking immediately before such
closure shall, be entitled to notice and
compensation in accordance with the provisions
of section 25F, as if the workman had been
retrenched:

An undertaking which is closed down by reason

merely of(i) Financial difficulties (including financial losses); or
(ii) Accumulation of undisposed stocks; or
(iii)The expiry of the period of the lease or license granted
to it; or
(iv)In case where the undertaking is enganged in mining
operations, exhaustion of the minerals in the area in
which such operations are carried on,
shall not be deemed to be closed down on account of
unavoidable circumstances beyond the control of the
employer

 Mining Operation-

where an undertaking engaged in mining

operations is closed down by reason merely of
exhaustion of the minerals in the area in which
such operations are carried on, no workman shall
be entitled to any notice or compensation, if
(a) the employer provides the workman with
alternative employment.
(b) the service of the workman has not been
interrupted by such alternative employment.

Construction Industry
(2) Where any undertaking set-up for the
construction of buildings, bridges, roads,
canals, dams or other construction work is
closed down on account of the completion of
the work within two years from the date on
which the undertaking had been set-up, no
workman employed therein shall be entitled to
any compensation under clause (b) of section
25F,

but
if the construction work is not so completed within
two years,
he shall be entitled to notice and compensation
under that section
for every completed year of continuous service

 Section 25-0 Procedure for closing down an

undertaking
An employer who intendeds to close down an undertaking of
an industrial establishment shall, in the prescribed manner,
apply, for prior permission at least ninety days before the
date on which the intended closure is to become effective, to
the appropriate government, stating clearly the reasons for
the intended closure of the undertaking and a copy of such
application shall also be served simultaneously on the
representatives of the workmen in the prescribed manner

Section 25R. Penalty for

closure
Any employer, who closes down an undertaking
without complying with the provisions of subsection (1) of section 25-O shall be punishable
with imprisonment for a term which may extend
to six months, or with fine which may extend to
five thousand rupees, or with both.

Difference between Closure and

Lock Out
In the case of closure, the employer closes or
winds up his business permanently.

But in lock-out the place of business is temporary

close. The business is not terminated. Lock-out
occurs in a continuing business.

 Lock-out is a weapon in the hands of the

employer to compel the employees to accept his
proposals, whereas closure is a matter of policy of
the employer as to whether he should run or not
the business.
A lock-out does not result into severance of
employer-employee relationship. The conditions
of service of workers are not affected adversely
nor any inflictment of punishment takes place by
a lock-out. In the case of closure the services of
the workers are terminated

Lock-out which is legal and justified does not

involve payment of wages or compensation.
But a closure of the business entitles the workers
with closure compensation as provided in
Chapter VA of the IDA, 1947.

Lock-out & Lay-off

Lock-out and lay-off - Similarities
Both are the acts of the employer.
Both involves subsisting employer-workman
relationship.

Differences
A lock-out is resorted deliberately by the
employer as a coercive measure and usually
involves a temporary closure of the place of
business.
A lock -out occurs in a continuing business and
does require compensation.
A legal lock out does not entail payment of
compensation.

Lay-off and lock out

In lay-off statute makes it obligatory on the part
of the employer to pay compensation in
accordance with the provisions of the IDA, 1947.
In lock-out , it is discretionary with the tribunal
to grant wages for the period of lock-out
depending upon the situations.

Lay-off and Retrenchment

Common features
Both are measure of economy.
Both are declared by the employer.
Statutory compensation must be paid.

Differences
Retrecnhment is a permanent measure to remove
surplus staff.
In lay-off employer-workmen relationship
subsists,
In Retrenchment, the relationship is terminated.
Lay-off is temporary. Retrenchment is
permanent measure.

Lay-off and Closure

Common features
Both are measures of economy.
Adopted by the employer.
Both require statutory compensation.
Differences
Lay-off is temporary while closure is permanent.
In lay-off employer-workmen relationship
subsists,
In closure employer-workmen relationship is
terminated.

Introduction Today, in each country of globe whether it is

democratic, capitalist, socialist, give right to strike to
the workers.
This must be the weapon of last resort because, if this
right is misused, it will create a problem in the
production and financial profit of the industry.
Would ultimately affect the economy of the country.

Position in India
In India right to strike is not a fundamental right but a
legal right and with this right statutory restriction is
attached in the Industrial dispute Act, 1947.

 In India unlike America right to strike is not expressly

recognized by the law.
The trade union Act, 1926 for the first time provided
limited right to strike by legalizing certain activities of a
registered trade union.
Now days a right to strike is recognized only to limited
extent permissible under the limits laid down by the law
itself, as a legitimate weapon of Trade Unions.

 The right to strike in the Indian constitution set up is

not absolute right but it flow from the fundamental
right to form union.
As every other fundamental right is subject to
reasonable restrictions, the same is also the case to
form trade unions to give a call to the workers to go on
strike and the state can impose reasonable restrictions.

 All India Bank Employees Association v. I. T. , the

Supreme Court held,

"the right to strike or right to declare lock out may be

controlled or restricted by appropriate industrial
legislation and the validity of such legislation would
have to be tested not with reference to the criteria laid
down in clause (4) of article 19 but by totally different
considerations."

 Thus, there is a guaranteed fundamental right to form

association or Labour unions but there is no
fundamental right to go on strike. Under the Industrial
Dispute Act, 1947 the ground and condition are laid
down for the legal strike and if those provisions and
conditions are not fulfilled then the strike will be illegal.

Definition of Strike-Section
2(q)
Strike means a cessation of work by a body of persons
employed in any industry acting in combination, or
a concerted refusal, or
a refusal, under a common understanding of any number of
persons
who are or have been so employed
to continue to work or to accept employment;
Note- even half hour of stoppage of work- amounts to
strike
Standard Vaccum Oil Co. Madras V. Gunaseelam (1954)

Provision of valid strike

Section 22(1) of the Industrial Dispute Act, 1947 put
certain prohibitions on the right to strike. It provides
that no person employed in public utility service shall
go on strike in breach of contract..
Public Utility Services Any railway service
Any service in, or in connection with the working of,
any major port or dock,
service;

 Any section of an industrial establishment, on the

working of which the safety of the establishment or the
workmen employed therein depends;

Any postal, telegraph or telephone service;

Any industry, which supplies power, light or water to
the public;
Any system of public conservancy or sanitation

 Any industry specified in the[First Schedule] which the

appropriate Government may, if satisfied, that public
emergency or public interest so requires, by notification
in the Official Gazette, declared to be a public utility
service for the purposes of this Act, for such period as
may be specified in the notification:

Section 22(1)
It provides that no person employed in public utility
service shall go on strike in breach of contract:
(a) Without giving to employer notice of strike with in
six weeks before striking; or
(b) Within fourteen days of giving such notice; or
(c) Before the expiry of the date of strike specified in
any such notice as aforesaid; or

 (d) During the pendency of any conciliation proceedings

before a conciliation officer and seven days after the
conclusion of such proceedings.

 These provisions do not prohibit the workmen to go on

strike, they are just the conditions.
Not applicable to non- public utility services.
Notice is not necessary when already a lock out is in
existence.
The definition of strike itself suggests that the strikers
must be persons, employed in any industry to do work.

Notice of strike
Notice to strike within six weeks before striking is not
necessary where there is already lockout in existence.
InMineral Miner Union vs. Kudremukh Iron Ore
Co. Ltd.,(1989)1 LLJ 277,(Karnt) it was held that the
provisions of section 22 are mandatory and the date on
which the workmen proposed to go on strike should be
specified in the notice. If meanwhile the date of strike
specified in the notice of strike expires, workmen have
to give fresh notice.

 It may be noted that if a lock out is already in

existence and employees want to resort to strike, it is
not necessary to give notice as is otherwise required.

 Life Insurance Corporation of India and others v.

Amlendu Gupta and others,(1988)II Lab LJ 495
(Calcutta)
Syndicate Bank v. K. Umesh Naik (1994)

General prohibition of strike The provisions of section 23 are general in nature. It

imposes general restrictions on declaring strike in
breach of contract in the both public as well as nonpublic utility services
(a)During the pendency of conciliation proceedings
before a board and till the expiry of 7 days after the
conclusion of such proceedings;
(b)During the pendency and 2 month's after the
conclusion of proceedings before a Labour court,
Tribunal or National Tribunal;

 (c)During the pendency and 2 months after the

conclusion of arbitrator, when a notification has been
issued under sub- section 3 (a) of section 10 A;
(d)During any period in which a settlement or award is
in operation in respect of any of the matter covered by
the settlement or award.

 The principal object of this section seems to ensure a

peaceful atmosphere to enable a conciliation or
adjudication or arbitration proceeding to go on
smoothly. This section because of its general nature of
prohibition covers all strikes irrespective of the subject
matter of the dispute pending before the authorities. It
is noteworthy that a conciliation proceedings before a
conciliation officer is no bar to strike under section 23.

Illegal Strike Section 24 provides that a strike in contravention of

section 22 and 23 is illegal (1)A strike or a lockout shall be illegal if,
In contravention of Section 23. and 10.

 Strike declared in the consequence of an illegal lockout

shall not be deemed to be illegal

Definition of lock-out Section

2(i)
lock-out means the
temporary closing of a place of employment, or
suspension of work, or
the refusal by an employer to continue to employ any number of
persons employed by him;

 Section 23 contain general prohibition of strike and

lock-out.
Section 22 are limited in their scope. They apply to
strikes and lock-outs in public utility services.