Define Industry as laid down under the Industrial disputes Act 1947.
Does an
Educational Institution or hospital come within the definition of an industry?
Introduction: – The main objective of the Industrial dispute Act, 1947 is to
investigate and settle industrial disputes. The act aims at, speedy resolution of the
industrial disputes, smooth relation between the labour and the management and
uninterrupted production of the industries.
INDUSTRY
Industry is defined in section 2(j) of the Industrial Dispute Act, 1947, and defines it
as any business, trade, undertaking, manufacture, or calling of employers and
includes any calling, service, employment, handicraft or industrial occupation or
avocation of workmen”.
The definition of Industry was amended by the government in the year 1982 (act
no. 46 of 1982), but till today the new definition has not been implemented
because the amendment did not have notified any specific from which the new
definition will be implemented .
The industry in simple language is systematic and organised cooperation between
the employee and the employer for the purpose of production.
The Supreme Court laid down guiding principles in its judgement in Bangalore
Water Supply’s case AIR 1978 SC 548, to known whether a particular
establishment is an “industry” for the purpose of industrial dispute resolution. The
following are the principles laid down by the court: –
1. Triple Test Formulae- An enterprise is prime facie “industry if it is:
1. Systematic activity.
2. Organised by cooperation between Employers and employees.
3. For the production and distribution of good and services, calculated to
satisfy human wants and wishes (not spiritual or religious).
2. It is immaterial whether or not there is profit motive or whether or not there
is capital, i.e. absence of profit motive or gainful objective is irrelevant.
3. The true focus is functional and the decisive test is the nature of the activity
with special emphasis on the employer-employee relations.
4. If the organization is a trade or business, it does not cease to be one because
of philanthropy animating the undertaking
5. All departments integrated with industry will also be industry.
6. Sovereign functions of the government (strictly understood, alone qualify as
exemption) are exempted from the definition of the industry.
Hospitals
7. Management of Safdarjung Hospital v. Kuldip Singh AIR 1970 SC
1406, it was held that a place where patients are treated by department of the
government was not an industry because it was a part of the functions of the
government. Charitable hospitals run by Government or even private
associations cannot be included in the definition of industry because they
were not analogous to trade or business. If hospitals, nursing home or a
dispensary is run as a business in a commercial way, there may be elements
of industry.
8. In Dhanraj Girls Hospital v. Workmen AIR 1975 SC 2032, it was held
not to be an industry, as it was not carrying on any economic activity in the
nature of trade or business.
9. While holding hospital an industry in Bangalore Water Supply v A.
Rajappa AIR 1978 SC 548, the Supreme Court overruled the decisions
of Safdarjung Hospital and Dhanraj Girl Hospital case, and approved the
law laid down in Hospital Mazdoor Sabha case AIR 1960 SC 610. It was
held that hospital facilities are surely services and hence industries.
10.Therefore, a government as well as a charitable hospital run by a private
trust, offering free services and employing a permanent staff is an industry.
Educational Institutions: –
11.In Bangalore Water Supply Case AIR 1978 SC 548 the Supreme Court
while holding the educational institutions as industry overruled the its earlier
decision in University of Delhi v. RamNath AIR 1963 SC 1873, in which
the court held that the university is not an industry.
