The Industrial Disputes (Amendment) Act, 1982 | Labour and Industrial Law - CLAT PG PDF Download

Amended Definition of 'Industry'

Industrial Disputes (Amendment) Act, 1982

The term "Industry" refers to any organized effort involving cooperation between an employer and their workers (regardless of whether these workers are directly employed or hired through an agency, such as a contractor) aimed at producing, supplying, or distributing goods or services to meet human needs or desires (excluding purely spiritual or religious wants). This definition encompasses various activities, regardless of factors like capital investment or profit motive.

Inclusion of Specific Activities

• Activities of the Dock Labour Board: Any actions taken by the Dock Labour Board under the Dock Workers (Regulation of Employment) Act, 1948, are considered part of the industry.
• Promotional Activities: Any efforts related to promoting sales or business by an establishment fall under this definition.

Exclusions from Industry Definition

• Agricultural operations, unless integrated with another activity where the latter is predominant. Note that activities in a plantation, as defined in the Plantations Labour Act, 1951, do not qualify as agricultural operations.
• Hospitals or dispensaries.
• Educational, scientific, research, or training institutions.
• Institutions managed by organizations solely engaged in charitable, social, or philanthropic services.
• Khadi or village industries.
• Activities of the Government related to sovereign functions, including those by Central Government departments involved in defense research, atomic energy, and space.
• Domestic service.
• Activities carried out by individuals or bodies of individuals in a profession, if they employ fewer than ten people.
• Activities conducted by a cooperative society, club, or similar organization, if they employ fewer than ten people.

Definition of Workman

• A “Workman” is defined as any individual (including an apprentice) engaged in an industry to perform manual, unskilled, skilled, technical, operational, clerical, or supervisory tasks for compensation, regardless of whether the terms of employment are explicitly stated or implied.
• In the context of an industrial dispute, a workman also includes:
• Any individual who has been terminated, laid off, or retrenched due to or as a result of the dispute.
• Any individual whose termination, layoff, or retrenchment has triggered the dispute.
• However, the definition excludes certain categories of individuals:
• Those subject to the Army Act, 1950, the Air Force Act, 1950, or the Navy Act, 1957.
• Individuals employed in the police service or as prison officers or employees.
• Persons primarily engaged in managerial or administrative roles.
• Supervisory staff earning more than Rs. 1,600 per month.
• Individuals whose job functions are predominantly managerial in nature.

Key Aspects of Workman Definition

• The term “employed in any industry” implies that the individual must be engaged in an activity classified as an “industry” under Section 2(j). This includes those involved in activities incidental to the industry.
• For instance, in the case of J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. L.A.T., the Supreme Court ruled that workers maintaining gardens at company bungalows were engaged in operations related to the main industry.
• The definition also emphasizes the relationship of “employer and workman,” typically established through a contract of employment, which can be explicit or implied.
• Even part-time or casual workers fall under the category of workman if they meet the criteria.

For instance, a part-time employee is considered a worker if they are obligated to work fixed hours daily. Similarly, a casual worker is also regarded as a workman.

Types of Work Covered by Workman Definition

• The definition of “workman” encompasses individuals engaged in:
• Skilled or unskilled manual work
• Supervisory work
• Technical work
• Clerical work
• If a person performs multiple tasks, they are classified based on their primary responsibility. For example, if a person is mainly involved in supervisory duties but occasionally does clerical work, they are considered a supervisor.
• Manual work refers to tasks requiring physical effort, as opposed to mental or intellectual effort.
• Individuals in supervisory roles are classified as workmen only if their monthly salary exceeds Rs. 1,600.
• The specific job title is less important than the nature of the duties performed. For instance, if a person primarily does supervisory work but also has some clerical responsibilities, they are classified based on their main role.

In conclusion, the definition of "workman" is broad and inclusive, covering various types of work and emphasizing the nature of the employment relationship. It aims to protect the rights of individuals engaged in different forms of labor within industries.

Whether Teachers are Workmen or Not

• After the amendment of Section 2(s) of the Act, the question of whether teachers qualify as workmen has been addressed in several cases. However, these cases were determined based on the definition of workman prior to the amendment.
• The Supreme Court, in the case of Sunderambal v. Government of Goa, ruled that teachers employed by educational institutions do not fall under the category of workmen as per Section 2(s) of the Act. The Court argued that the primary role of teachers, which is imparting education, does not align with skilled or unskilled manual work, supervisory work, technical work, or clerical work. It emphasized that manual work involves physical exertion, whereas teaching is primarily an intellectual endeavor.
• A person engaged in technical work is also considered a workman. Technical work involves tasks that require specialized training or scientific or technical knowledge. If an individual is employed for their technical qualifications, they are deemed to be engaged in technical work, regardless of whether they spend their entire time on technical tasks. Professions such as engineering, foremanship, technology, medicine, and drafting fall under the definition of workman.
• A medical representative whose main responsibility is promoting sales through canvassing is not classified as a workman (1990 Lab IC 24 Bom. DB). However, a salesman whose duties encompass both manual and clerical tasks, such as assisting customers, preparing cash memos, and aiding the manager in daily operations, is considered a workman (Carona Sahu Co. Ltd. v. Labour Court 1993 1 LLN 300). A temple priest is also not regarded as a workman (1990 1 LLJ 192 Ker.).
• Individuals employed primarily in managerial and administrative capacities are excluded from the definition of "workman." For instance, a development officer in the Life Insurance Corporation (LIC) is considered a workman (1983 4 SCC 214). In the case of Standard Vacuum Oil Co. v. Commissioner of Labour, the Court observed that if an individual supervises subordinate officers, makes decisions, and ensures the efficient conduct of assigned tasks, they are in a position of management. Occasional assignments of supervisory, managerial, or administrative tasks do not remove a person mainly performing clerical duties from the purview of Section 2(s).

Industrial Dispute

• Definition: An "Industrial Dispute" refers to any disagreement or conflict between employers and employers, employers and workmen, or among workmen, concerning employment, non-employment, terms of employment, or labor conditions of any individual. This definition is outlined in Section 2(k) of the Act.
• The key aspects of this definition can be understood as follows:
  • Existence of a dispute or difference: There must be a clear disagreement or difference between the parties involved.
  • Parties to the dispute: The dispute can be between employers, employers and workmen, or workmen themselves.
  • Connection with employment or labor conditions: The dispute should be related to employment, non-employment, terms of employment, or conditions of labor of any person.
  • Relation to an industry: The dispute should pertain to an industry as defined in Section 2(j) of the Act.
• Existence of a dispute or difference: The presence of a dispute or difference between the parties is crucial to the definition of an industrial dispute. Typically, a dispute arises when workmen make a demand that the employer rejects. However, the demand must be one that the employer can fulfill. The dispute should be well-defined and substantial, not just a personal quarrel or minor grievance. An industrial dispute signifies a significant and persistent difference that could threaten industrial peace if not resolved. It only exists when workmen raise the issue with their employer. A demand made to the government without the workmen first raising it with their employer does not constitute an industrial dispute.
• Court Rulings on Industrial Dispute: The Supreme Court in Bombay Union of Journalists v. The Hindu stated that for making a reference under Section 10, it suffices if an industrial dispute exists or is anticipated at the time of reference. Therefore, even without formal demands by the employer, an industrial dispute exists if the demands were raised during conciliation. When an industrial dispute is referred for adjudication, it is presumed to exist.
• Parties to the Dispute: Most industrial disputes involve employers and workmen, but the definition includes other combinations to broaden the scope of "industrial dispute." Disputes can be raised by workmen themselves, their union, or federation on their behalf, as workmen have the right to collective bargaining. It is not necessary for a registered trade union to raise the dispute. A dispute can be raised by a minority union or a substantial number of union members. However, members of a union who are not workmen of the employer against whom the dispute is raised cannot convert an individual dispute into an industrial dispute. Individuals supporting the cause must be directly and substantially interested in the dispute. Industrial disputes can also be initiated and continued by legal heirs after a workman’s death.
• Individual Dispute vs. Industrial Dispute: Before the introduction of Section 2-A, the Supreme Court ruled that an individual dispute was not an industrial dispute. However, it could become an industrial dispute if taken up by a union or a significant number of workmen. This principle was upheld in the case of Newspaper Ltd. v. Industrial Tribunal. In the case of Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, the Supreme Court clarified that not every dispute concerning "any person" qualifies as an industrial dispute. There must be a community of interest. A dispute may start as an individual dispute, but if workmen collectively claim it as their own due to a community of interest, it becomes an industrial dispute. Even if all workmen do not join the dispute, if it affects workmen as a group, it is an industrial dispute. The membership of the union at the time of dismissal is not a determining factor. The necessity of community of interest, not union membership, is crucial for an individual dispute to transform into an industrial dispute. Whether the individual dispute has been supported by a substantial number of workmen is case-specific. If support is withdrawn later, it does not affect the jurisdiction of the adjudicating authority. However, at the time of making a reference for adjudication, the individual dispute must be espoused; otherwise, it will not become an industrial dispute, and the reference will be invalid.

Dismissal of Individual Workman to be Deemed as Industrial Dispute

• As per Section 2-A, when an employer discharges, dismisses, retrenches, or terminates the services of an individual workman, any dispute or difference arising from such action shall be considered an industrial dispute, even if no other workman or union is involved.
• Section 2-A is not limited to the mere act of discharge, dismissal, retrenchment, or termination of an individual workman. It encompasses any dispute or difference between the workman and employer that is connected with or arises out of such actions. For instance, a claim for gratuity is connected with the termination of services. The phrase "arising out of" implies a close connection between the two, where one thing is a consequence of another.
• In the case of Mackinnon Mackenzie & Co. Ltd. v. I.M. Isaak, it was clarified that a claim for gratuity arises out of termination because it flows from the termination of services. The Tribunal is responsible for deciding the entitlement to gratuity, as it is a matter for determination.

Subject Matter of Dispute

• The dispute must pertain to employment, non-employment, terms of employment, or conditions of labor of any individual. The Federal Court explained the term "employment or non-employment" in the case of Western India Automobile Association v. Industrial Tribunal. If an employer refuses to re-employ a dismissed workman, the dispute relates to non-employment. Conversely, if a union insists that a specific individual should not be employed by the employer, the dispute concerns employment.
• The term "terms of employment" encompasses all terms and conditions outlined in the employment contract. It includes terms understood and applied by parties in practice or by common consent, even if not explicitly stated in the contract.
• The expression "condition of labor" is broader and refers to amenities provided to workers and the conditions under which they work. It includes aspects such as worker safety, health, and welfare. The definition of industrial dispute in Section 2(k) covers any disagreement between an employer and workmen regarding their terms of employment. Settlements between employers and workmen impact their terms of employment.
• Payment of pension can be a subject matter of an industrial dispute. A dispute regarding the confirmation of a workman officiating in a higher grade is also considered an industrial dispute. However, disputes related to the employer's failure to keep verbal assurances, claims for compensation for loss of business, and disputes involving workmen who are not employees of the purchaser's estate are not classified as industrial disputes. Payment of pension can be a subject matter of an industrial dispute.

Dispute in an "Industry"

• To qualify as an "industrial dispute," the disagreement or difference must be connected to an industry. The existence of an "industry" is a prerequisite for an industrial dispute. Without the presence of an industry, no industrial dispute can arise.
• The concept of "industry" has been elaborated in various contexts. In the case of Pipraich Sugar Mills Ltd. v. P.S.M. Mazdoor Union, it was determined that an industrial dispute can only emerge within an "existing industry" and not in a completely closed one. Merely fitting the dispute within the definition of Section 2(k) does not imply that the right being enforced is solely created or recognized under the Industrial Disputes Act.
• Section 2(a) of the Act defines 'Appropriate Government' to encompass both the Central and State Governments, outlining their respective jurisdictions in relation to industrial disputes. The Constitution of India also provides for the jurisdiction of both the Central and State Governments over labor and industrial disputes concerning legislative and executive powers.
• The definition of Appropriate Government in Section 2(a) of the Act is comprehensive. To clarify its meaning, it can be divided into the following six categories:
• (i) Central Government as Appropriate Government:
  • For industrial disputes concerning any industry operated by or under the authority of the Central Government, the Central Government is the Appropriate Government. Examples include defense factories, Central Government printing presses, mint houses, and opium factories.
  • In cases where industrial disputes involve industries operated by a Railway Company, the Central Government is the Appropriate Government.
  • If the industry is a controlled industry, as specified by the Appropriate Government under Section 2(a), the Central Government is the Appropriate Government.
• (ii) Central Legislation: For industrial disputes concerning industries established under provisions of Central legislation, the Central Government is the Appropriate Government.
• (iii) Specified Industries:
  • For industrial disputes concerning specific industries specified by the Central Government, such as the Industrial Finance Corporation of India Ltd., Air Transport Services, Banking, Insurance Companies, Mines, Oil Fields, Cantonment Boards, or major ports, the Central Government is the Appropriate Government.
• (iv) Other Industries: In relation to all other industrial disputes not covered under the above categories, the State Government is the Appropriate Government.
• The jurisdiction of the Tribunal to adjudicate upon a dispute depends on the referral by the Appropriate Government as per this definition. If the referral is made by a government that is not the Appropriate Government, the Tribunal will not acquire jurisdiction, and any award rendered would be invalid.
• The phrase "under the authority of Central Government" has been a subject of controversy. It signifies a legal power granted by one person to another to perform an act. The term "carried on by or under the authority of the Central Government" implies a direct nexus with the industry through servants or agents of the Central Government.
• The expression "carried on by or under the authority of the Central Government" does not apply to industries operated by private individuals or limited companies. Such industries are not considered carried on by or under the authority of the Central Government. The jurisdiction of the Appropriate Government is determined by the nature of the industry and the government’s authority over it.
• The second part of Section 2(a) designates the State Government as the Appropriate Government for all industrial disputes not specified under sub-clause (i). This provision has led to litigation, especially in cases where concerns have establishments in more than one State. The employee's dispute is referred for adjudication by the State Government, except in cases falling under Section 2(a)(i) of the Act.
• The courts have generally relied on principles governing the jurisdiction of Civil Courts in determining the Appropriate Government. The jurisdiction is based on where the dispute substantially arises. If the workman is employed in a separate establishment, the dispute arises at that location, establishing a connection between the dispute and the State’s territory.
• There has been ambiguity regarding whether the existence of a separate branch or establishment in a State other than the one where the industry headquarters are located is necessary for considering that State as the Appropriate Government. Some High Courts have proposed the idea of two Appropriate Governments for the same dispute, allowing a reference by either of them to be valid.