UNIVERSITY INSTITUTE OF LEGAL STUDIES

PANJAB UNIVERSITY, CHANDIGARH

A PROJECT REPORT OF LABOUR LAW

On the topic of

THE CONCEPT OF INDUSTRY,

INDUSTRIAL DISPUTE AND WORKMAN

SUBMITTED TO: SUBMITTED BY:

MR. VIRENDER NEGI AMYIA MALHOTRA

ROLL NO.: 385/20

SECTION- B
SEMESTER- 9th
 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of

guidance and assistance from many people and we are extremely
privileged to have got this all along the completion of my project. All
that I have done is only due to such supervision and assistance and I
should not forget to thank them.

I respect and thank Mr. Virender Negi for providing us with an

opportunity to do the project work ang giving me all support and
guidance , which made me complete this project duly. I am extremely
thankful to her for providing such a nice support and guidance,
despite for her busy schedule.

I am thankful to and fortunate enough to get constant

encouragement, support and guidance from all the teaching staffs of
UILS which has helped me in successfully completion of my project
work. Also, I would like to extend my sincere esteems to all staff in
library for their timely support.

AMYIA MALHOTRA
BA LLB HONS.
SEMESTER 9TH
ROLL NO. 385/20
 INDUSTRIAL DISPUTES ACT 1947

The Industrial Disputes Act of 1947 is applicable to whole of India. It modulates Indian
Labour Law to an extent that it supervises trade unions as well as Individual workman
employed in an Industry. It came into existence on 1st April 1947.
The Industrial Disputes Act of 1947 aims at establishing a secure industrial peace and
harmony by providing a full proof mechanism and procedure for the investigation and
settlement of various kinds of industrial disputes by conciliation, arbitration and adjudication
which is clearly provided under the defined statute. The ultimate objective of this act is
"Maintenance of Peaceful work culture within the Industry of India " which is clearly
provided under the Statement of Objects & Reasons of the statute.

Long Title An Act to make provision for the investigation and settlement of
industrial disputes, and for certain other purposes.

Territorial Territories under direct British control, later implemented in the

Extent Princely States upon their integration with the Indian Union

Enacted by Central Legislative Assembly

Assented to 11th March 1947

Commenced 1st April 1947

These laws are only applied to the organized sector. Chapter V of the ‘The Industrial
Disputes Act of 1947 talks about the various kinds of Regulation on strikes and lockouts and
the proper procedure which has to be followed by a Legal instrument of ‘Economic Coercion'
either by the Employer or by the Workmen. Chapter V-B of The Industrial Disputes Act of
1947 which was introduced by an amendment in 1976. It requires that the firms employing
300 or more workers to obtain government permission for layoffs, retrenchments and
closures. It was not widely accepted. This led to a further amendment in 1982 (which took
effect in 1984) widening its scope and reducing the threshold to 100 workers.

FEATURES OF THE INDUSTRIAL DISPUTES ACT:

The Industrial Disputes Act of 1947 act applies to entire India including the state of Jammu
and Kashmir. Some of the features are listed below:

 It usually solves the disputes between employers and workers and generally favours the
arbitration

 It plays an important role in setting up of different committees like the works

committees which functions as a machinery for mutual discussion between employers and
workers so that a friendly relation is promoted between them.

 This act has also created a way for creating permanent conciliation machinery at
various stages. So that there are definite time limits for conciliation and arbitration.

 This act mainly has an emphasis on compulsory adjudication apart from the general
conciliation and voluntary arbitration of Industrial Disputes.

 The Act empowers different organs of Government to refer a particular kind of dispute
to an appropriate authority, i.e., Labour Court, Industrial tribunal and National tribunal
which basically depends upon the nature of the dispute either on its own or on the request
of the parties.

SCOPE AND OBJECT

This is an Act made for the examination and settlement of industrial disputes, and for
different purposes too. This Act centres around any industry carried on by or under the
authority of the Central Government, or by a railway organization or concerning any such
controlled industry as might be indicated for this benefit by the Central Government.

The main objective of The Industrial Disputes Act of 1947 is to

 It is to provide measures for securing and preserving good relations between

employers and employees present in the industry.

 It also aims at providing a suitable machinery for the equitable and peaceful
settlement of the various kinds of industrial disputes.

 It also helps to prevent illegal strikes and lockouts of the employees which are present
in the industry.

 It provides relief to workers against layoffs, retrenchment, wrongful dismissal and

victimization.

 It promotes collective bargaining in the Industry.

  It also seeks to improve the conditions of workers working in the Industry.

 It also puts a stop to unfair labour practices in the Industry.

 A number of authorities for the settlement of industrial disputes and their

power, function, and duties are as follows:

a. Work committee
b. Conciliation officer
c. Board of conciliation
d. Court of enquiry
e. Labour court
f. Tribunal
g. National tribunal

AUTHORITIES UNDER THE INDUSTRIAL

DISPUTES ACT
1. Works Committee1:

Under the Industrial Disputes Act of 1947, the works committee is considered to be one of
the most powerful social institution. It is established not only to secure cooperation between
workers and employers, but also to make the will of the employees effective as they start
working in the management.

According to section 3 of the Industrial Disputes Act, in case an Industry which contains 100
or more workmen which are employed by the Industry or have been employed on any of the
day preceding twelve months, then the appropriate Government by ordinary or particular
order, acquire their employer to build a works committee which contains details of
representatives of employers and workmen engaged in the Industry.

2. Conciliation Officers2:

Conciliation Officers is also one of the authorities which is established under this act.
Conciliation officers are appointed by the appropriate government. Then these appointed
conciliation officers are charged with some duties. There duties can be of mediating between
employer and employee. They can also promote settlement between varied industrial
disputes. Generally, conciliation officers are appointed for a specified area or a specified

1
S.3 of the Industrial Disputes Act, 1947

2
S.4 of the Industrial Disputes Act, 1947
industry in a specified area. The appointment of a Conciliation officer may be permanent or
temporary.

3. Court of Inquiry3:

Habitually the government constitutes a court of inquiry. The court of Inquiry consists of
thirteen or more independent persons which are required to investigate about any subject.
They are made aware about an industrial dispute. A court of Inquiry court consists of two or
more members and out of those 2 members any one of them will be appointed as a chairman.

4. Labour Court4:

Under Section7 of Industrial Dispute Act of 1947 a labour court is established. The
government has been empowered to establish one or more Labour Courts. The main function
of a Labour Court is to settle various kinds of industrial disputes concerning any matter
specified in the second schedule.

Some of the matters which are taken place under a labour court are:

-The propriety or legality of an order passed by an employer under the standing orders.
-The application and interpretation of standing orders.
-The discharge or dismissal of various workers, including the retirement, which are employed
in an Industry.
-Withdrawal of any customary concession or privilege.

5. Industrial Tribunal5:
The appropriate Government by notification within the legal Gazette can represent one or
additional industrial tribunals for the judgment of business disputes regarding any matters
particularly-

 Wages embrace the amount and mode of payment

 Compensative and different allowances

 Hours of labour and rest intervals.

 Leave with wages and holidays.

 Bonus, percentage, provident fund and gratuity.

3
S.6 of the Industrial Disputes Act, 1947

4
S.7 of the Industrial Disputes Act, 1947

5
S.7A of the Industrial Disputes Act, 1947
  Shift operating otherwise than by standing orders

 Rules of discipline

 Rationalization

6. National Tribunal6:

The Central Government by notification within the legal Gazette, represent one or additional
National Industrial Tribunals for the judgment of business disputes within the opinion of the
Central Government involve queries of the national importance of business institutions set in
additional than one State square measure possible to be interested or laid low with such
disputes.

INDUSTRY

6
S.7B of the Industrial Disputes Act, 1947
Industry can be defined as:
Any type of Economic Activity producing GOODS or SERVICES
It is part of a chain - from raw materials to finished product, finished product to service
sector, and service sector to research and development.
It includes AGRICULTURE, MANUFACTURING and SERVICES
Industry varies over time and between different countries.

Sec.2 (j) of the Industrial Disputes Act, 1947 defines ‘industry’ as any business, trade,
undertaking, manufacture, or calling of employers and includes any calling, service,
employment, handicraft or industrial occupation or avocation of workmen”.
An industry exists only when there is relationship between employers and employees, the
former is engaged in business, trade, undertaking, manufacture or calling of employers and
the latter is engaged in the calling, service, employment, handicraft or industrial occupation
and avocation.

Sec. 2(j) gives the definition of industry, which was elaborated upon by the Supreme Court in
the Bangalore Water Supply and Sewerage Board v. R. Rajappa 7. The term industry has
been given a wide scope and the judgment overruled several earlier decisions. The court held-
1. Any activity will be industry if it fulfils the ‘triple test’, as under:

 Systematic and organized activity

 With the cooperation between Employers and employees
 For the production and distribution of good and services whether or not capital
has been invested for this activity.
2. It is immaterial whether or not there is profit motive or whether or not there is capital.

7
AIR 1978 SC 548
3. If the organization is a trade or business it does not cease to be one because of philanthropy
animating the triple test, cannot be exempted from scope of definition of industry.

4. Dominant nature test – whether there is complex of activities, the test would be
predominant nature of services and integrated nature of departments. All departments
integrated with industry will also be industry.

5. The exceptions to industry are-

Casual activities (because they are not systematic).

Small clubs, co – operatives, research labs, gurukuls which have an essentially non-employee
character.

Single door lawyer taking help from clerk (because there is no organized labour).

Selfless charitable activities carried on through volunteers e.g. free legal or medical service.

Sovereign functions – strictly understood, i.e., maintenance of law and order, legislative
functions and judicial function.

Charitable Institutions

These fall into three categories –

(a) Those that yield profit, but the profits are not siphoned off for altruistic purposes;

(b) Those that make no profit but hire the service of employees as in any other business, but
the goods/ services which are the output, are made available at a low or no cost to the
indigent poor; and

(c) Those that are oriented on a humane mission fulfilled by men who work, not because they
are paid wages, but because they share the passion for the cause and derive job satisfaction.

The first two categories are industries, but not the third, on the assumption that they all
involve co-operation between employers and employees.

HOSPITALS
In Dhanrajgiri Hospital v. Workmen8 , the main activity of the hospital was imparting of
training in nursing and the beds in the hospital were meant for their practical training. It was
held not to be an industry, as it was not carrying on any economic activity in the nature of
trade or business.
In Bangalore Water Supply v A. Rajappa9 , the Supreme Court overruled Safdarjung
Hospital and Dhanrajgiri Hospital cases, and approved the law laid down in Hospital
Mazdoor Sabha case. It was held that hospital facilities are surely services and hence
industries. The government departments while undertaking welfare activities cannot be said
to be engaged in discharging sovereign functions and hence outside the ambit of Sec.2(j) of
the Act.

LEGAL FIRMS
In National Union of Commercial Employees v. M.R. Meher, 10 it was held that a solicitor’s
firm is not an industry, although specifically considered, it is organized as an industrial
concern. The court held that a person following a liberal profession does not carry on his
profession in any intelligible sense with the active co-operation of his employees, and the
principal/sole capital which he brings into his profession is his special and peculiar
intellectual and educational equipment.

INDUSTRIAL DISPUTE
Industrial Dispute is “any dispute of difference 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.”

Industrial dispute as defined under Sec. 2(k) exists between-

Parties to the dispute who may be

 Employers and workmen

 Employers and Employers
 Workmen and workmen

a) There should be a factum of dispute not merely a difference of opinion.

b) It has to be espoused by the union in writing at the commencement of the dispute.

Subsequent espousal will render the reference invalid. Therefore date when the dispute was
espoused is very important.
8
AIR 1975 SC 2032
9
AIR 1978 SC 548
10
AIR 1962 SC 1080
c) It affects the interests of not merely an individual workman but several workmen as a class
who are working in an industrial establishment.

d) The dispute may be in relation to any workman or workmen or any other person in whom
they are interested as a body.

Chandrakant Tukaram Nikam and others vs. Municipal Corporation of Ahmedabad and
another11: It was held by the Supreme Court that the Jurisdiction of the Civil Court was
impliedly barred in cases of the dismissal or removal from service, The appropriate forum for
such relief was one constituted under Industrial Disputes Act, 1947.
Jadhav J. H. vs. Forbes Gobak Ltd. 12: In this case, it was held that, a dispute relating to a
single workman may be an industrial dispute if either it is espoused by the union or by a
number of workmen irrespective of the reason the union espousing the cause of workman was
not the majority of the union.

When An Individual Dispute Becomes An Industrial Dispute

Before insertion of Section 2-A of the Act an individual dispute could not per se be an
industrial dispute, but it could become one if taken up by the Trade Union or a number of
workmen. The Supreme Court and majority of Industrial Tribunals held that, a dispute raised
by a dismissed employee would not be treated as an industrial dispute, unless it is supported
by a trade union or by a body or Section of workman.
For an individual dispute to be declared as an Industrial Dispute, the following conditions are
to be satisfied:

1. A body of workmen (trade Union ) or a considerable number of workmen, are

found to have made common cause with the individual workman;
2. That the dispute (individual dispute) was taken up or sponsored by the
workmen as a body (trade union) or by a considerable Section of them before
the date of reference.
Thus, an individual dispute to fall within the definition of industrial dispute, it must be
sponsored by the Trade Union of the workmen or if there is no trade union, it must be
sponsored by the majority of the workmen or it must comply with the requirements of
Section 2-A of the Industrial Disputes Act, 1947.

Section 2-A provides that “where any employer discharges, dismisses, retrenches or
otherwise terminated the services of any 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.”
11
(2002) I L.L.J. 842 (S.C)
12
2005) I L.L.B. 1089 (SC)
Section 2A does not declare all individual disputes to be industrial disputes. It is only when a
dispute is connected with a discharged, dismissed retrenched or terminated workman that it
shall be treated as an industrial dispute. If the dispute or difference is connected with some
other matter e.g. payment of bonus/ gratuity etc. then it would have to satisfy the test laid
down in judicial decisions. Thus only a collective dispute could constitute an industrial
dispute but collective dispute does not mean that the dispute should either be sponsored by a
recognized union or that all or majority of the workmen of an industrial establishment should
be parties to it. (State of Bihar vs. Kripa Shankar Jaiswal13 )
A dispute is an industrial dispute even where it is sponsored by a union which is not
registered but the Trade Union must not be on unconnected with the employer or the industry
concerned. (Express Newspapers (Private) Ltd. Vs. First Labour Court, West Bengal &
Others14 )
Where an individual dispute is espoused by union the question of the employee being a
member of the union when the cause arose is immaterial. Those taking up the cause of the
aggrieved workman must be in the same employment i.e., there must be community of
interest when the act complained against happened and not when the dispute was referred to.

Section 2 (k) compared with Section 2-A

An individual dispute even though not sponsored by other workmen or espoused by the union
would by deemed to be an industrial dispute if it covers any of the matters mentioned in
Section 2-A. So far as the subject matter of the dispute is concerned 2-A does not bring about
any change. The provisions of Section 2(K) alone determine that question.

The only change introduced by Section 2-A is that before its introduction, a dispute even
though was an industrial dispute from the perspective of subjects referred to in Section 2 (k)
would not have become an industrial dispute if it were only an individual dispute and it was
not taken up either by the union or by a substantial body or workmen. But after the
introduction of Section 2-A such a dispute would be an industrial dispute in respect of those
matters specified in that Section even though it is not sponsored by a union or a considerable
number of workmen. Section 2-A can be treated as an explanation to Section 2 (k).

WORKMAN
Workman is the base of the industry. Industry can neither be established or maintained
without the workman. It is the workman who provides labour to the industry. It is the reason
that workman has been given special place in the industrial dispute act. The definition of
workman is important because the act aims at investigation and settlement of industrial

13
AIR 1961 SC 304
14
(1959-60) 17 FJR 413 (Cal)
dispute which implies a difference between an employer and workmen. So, it is very
necessary to decide who is a workman or employees.

Definition

Any person (including an apprentice) employed in any industry to do any manual, unskilled,
skilled technical, operational, clerical or supervisory work for hire or reward, whether the
terms of employment be expressed or implied, and for the purpose of any proceeding under
this Act in relation to an industrial dispute, includes any such person who has been dismissed,
discharged or retrenched in connection with, or as a consequence of, that dispute, or whose
dismissal, discharge or retrenchment has led to that dispute, but does not include any such
person-

 Who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of
1950), or the Navy Act, 1957 (62 of 1957); or
 Who is employed in the police service or as an officer or other employee of a prison;
or
 Who is employed mainly in a managerial or administrative capacity; or
 Who, being employed in a supervisory capacity, draws wages exceeding ten thousand
rupees per mensem or exercises, either by nature of duties attached to the office or by
reason of the powers vested in him, functions mainly of a managerial nature.

Section 2(S) of the industrial dispute act 1947, workman means any person employed in any
industry to do any manual , unskilled, skilled, technical, operational, clerical, supervisory
work for heir or reward whether the term of the employment be expressed or implied and for
the purpose of any proceeding under this act in relation to an industrial dispute including any
such person who has been dismissed, discharged or retrenched in connection with or as
consequences of that dispute or whose dismissal, discharge or retrenchment has led to the
dispute.

Above definition of workman shows following symptoms:

• A workman must be employed in an industry
• Employment for heir or reward
• There shall be some consideration
• Nature of work performed by such person may be manual, skilled, unskilled,
technical, operational, clerical or supervisory.
• Industry in which workman is employed shall be an industry as definition in section
2(J) of IDA 1947
• The section 2(a) of the IDA 1947 clearly mention that the terms of the employment
may be expressed/ implied
• In relation to an industrial dispute a workman includes any such person who has been
dismissed, discharged or retrenchment or as consequences of the dispute has been dismissed,
discharged or retrenched.
Person does not include in workman
• Who is subject to Air Forces Act, Army Act, and Navy Act.
• Person employed in police services or jail services.
• Person employed in managerial or administrative capacity.
• Person employed in a supervisory capacity draws wages exceeding 1600 rupees per
mensem.

The word workmen have been defined by several judicial decisions.

Case laws:
Bihar State Road Transport Cooperation v/s State of Bihar15

It was held that such person has been considered as workman who:
• Was employed as head clerk in the office of regional manager.
• His term of employment was being regulated by the orders of state roadways
department.
• His nature of work was not managerial or administrative.

H.C Chauhan v/s life insurance corporation of India16

It was held that such development officers were held to be workman who:
 Perform daily, manual, mechanical or clerical work
 Do not perform managerial or administrative work
 Cannot appoint or dismiss any other
 Cannot also distribute the work
 Obtained a salary of approx. Rs 500 or more.

15
AIR 1970 SC
16
1982
In Ved Prakash Gupta vs. M/S Delton cable India (P) ltd.,17

It was held that a person employed in managerial capacity or administrative capacity is not a
workman.

In Bhaskaram vs. Kerala State Electricity Board 18

It was held that an apprentice cannot claim any privilege as workman.

In Vimal Kumar Jain vs. Labour Court, Kanpur & Anrs.19 ,

It was held that maintenance engineer supervising the work of maintenance with the power to
grant leave, to initiate disciplinary proceedings and to make temporary appointments is not a
workman.

CONCLUSION

In conclusion, the concepts of "industry," "industrial dispute," and "workman"

under the Industrial Disputes Act are pivotal to the regulation of labour relations
in India. The definition of "industry" encompasses a wide range of economic
activities, fostering a framework for understanding employer-employee
dynamics. "Industrial dispute" highlights the conflicts that may arise in this

17
AIR 1984 SC 914
18
1986 LLN 869
19
AIR 1988 SC 384
context, emphasizing the need for resolution mechanisms to ensure stability and
harmony in the workplace.
The definition of "workman" serves as a crucial determinant for the
applicability of the Act, underscoring the distinctions between various types of
employees based on their roles and responsibilities. The evolving judicial
interpretations reflect a tension between traditional
classifications and the need for inclusivity in labour rights.
Overall, these concepts are essential for promoting fair labour practices and
addressing the complexities of modern employment relationships, ensuring that
workers are afforded the protections and rights necessary for their dignity and
well-being. A careful and contemporary interpretation of these terms is vital for
achieving the Act's objectives of social justice and industrial peace.

BIBLIOGRAPHY
 Dr. H. K. Saharey, Textbook on Labour & Industrial Law. (n..). (n.p.):
Universal Law Publishing. Available at,
https://www.google.co.in/books/edition/Textbook_on_Labour_Industrial
_Law/nlTX0No5lSgC?hl= en&gbpv=0
 Mishra, Case Laws on Industrial Relations: Issues and Implications.
(2006). India: Excel Books. Available online at,
https://www.google.co.in/books/edition/Case_Laws_on_Industrial_Relati
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 Kaul, B. (2008). 'INDUSTRY,' 'INDUSTRIAL DISPUTE,' AND

'WORKMAN': CONCEPTUAL FRAMEWORK AND JUDICIAL
ACTIVISM. Journal of the Indian Law Institute, 50(1), 3-50, available at:
http://www.jstor.org/stable/43952131

 www.indiakanoon.org
 www.legalservicesindia.com
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 epaper.indianexpress.com
 www.thehindu.com