FAQ – The Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947, is a small Act of big importance. It is small in size but its scope and application are very wide. Over the past 35 years or so it has given birth to enormous case law which has increased its importance still more. The noble aim of the Act is to reduce or resolve differences between the employers and the workmen with a view to increasing the industrial production of the country. The workmen of the country could not have been able to secure better conditions of service but for the machinery available under the Act for raising and settling disputes It is important to note that since its enactment in 1947 the Act has undergone several minor and major amendments to make it more useful and more complete. The latest amendments to the Act are carried out in 2010.

Q. What is the object of the Industrial Disputes Act, 1947?

A. The object of the Act is two fold: (1) to improve the service conditions of industrial workers and (2) by means of that to bring about industrial peace which would in its turn accelerate productive activity of the country resulting in its prosperity.
Note:- Observation in Hindustan Antibiotics v. Workmen, 1967 I L.L.J. 114.

APPLICABILITY OF THE ACT

Q. Which establishments are covered by the Act?

A. The application of the Act is so comprehensive that it covers every kind of organised activity undertaken with the co-operation of the employees for the production and/or distribution of goods and services calculated to satisfy human wants and wishes, irrespective of who undertakes it, with what motive it is undertaken or what is the number of workmen with the help of whom it is undertaken.

Note:- As held in Bangalore Water Supply and Sewerage Board v. A. Rajappa, 1978 II LL.J. 73 (S.C.)

Q. Is the Act applicable to a closed Industry?

A. The Act is not applicable to a dispute arising after an industry has been closed and the closure is real and bona fide.
Note:-Held in Pipraich Sugar Mills Ltd. v. P.S.M.M. Union, 1957 ILL.J. 235

Q. Which persons are covered by the Act?

A. Every person employed in an industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work is covered by the Act. But if such a person (i) is employed mainly in a managerial or administrative capacity, or (ii) is employed in a supervisory capacity and draws more than Rs. 10,000/- per month as his wages effective from 15.9.2010; or (iii) exercises functions mainly of a managerial nature, he is not covered by the Act. S.2(S)

Q. What is meant by “appropriate Government”?

A. Section 2(a) of the Act divides disputes into two categories. The authority to deal with disputes specified in sub-clause (i) of section 2(a) is vested in the Central Government and therefore the Central Government is the appropriate or competent Government in relation to such disputes. The authority to deal with disputes specified in sub-clause (ii) of Section 2(a) is vested in the State Governments and therefore a State Government is the appropriate or competent Government in relation to such disputes. S.2(a)

Q. What is meant by “industry”?

A. The word industry has a wide import and it includes any business, trade, undertaking, manufacture or calling of employers or any calling, service, employment, handicraft, or S.2(j) industrial occupation or a vocation of a workman. 

Q. Is the Public Works Department (Building and Roads) of Government an industry?

A. According to the “dominant nature test” for deciding whether a department is an industry or not, sovereign functions alone qualify for exemption, not the welfare activities or economic adventures undertaken by the Government. Therefore, where the functions permi adventuriorks Department (Building and Roads) of Government are not purely sovereign, the department would have to be held as an industry. Note:-Held in State of Punjab v. Hari Dass & Anr., 1999 II CLR 876.

Q. Is the Bombay Iron and Steel Labour Board an industry?

A. The Bombay Iron and Steel Labour Board is entrusted with regal functions of the State i.e., functions of administration of law, and therefore it is not an industry.
Note: Held in Husain Mithu Mhasvadkar v. Bombay Iron & Steel Labour Board, 1990 CLR 860,

Q. Is an educational institution an industry?

A. An educational institution has to be treated as an industry but a teacher in an educational institution cannot be considered as a workman.
Note:-Held in A. Sundarambal v. Government of Goa, Daman & Diu, 1988 II CLR 316.

Q. Is the Central Railway Library an industry?

A. The object of the Central Railway Library not being the satisfaction of materialistic human needs, it is not an industry.

Note:- Held in Suhas Baskar Gadre v. V.V. Savjee, 1990 IICLR 102.

Q. Is the Law Department of Government an industry?

A. The Law Department of Government can, by no stretch of imagination, be considered as an industry.
Note: Held by the Supreme Court of India in State of Rajasthan v. Ganeshi Lal, 2008 | CLR 431.

Q. Is the Judicial Department of Government an industry?

A. Administration of justice being clearly the exercise of the inalienable sovereign function of the State, the Judicial Department of Government is not an industry.
Note:- Held in Govindbhai Kanabhai Maru v. N.K. Desai, 1988 I CLR 597.
Q. Is the directorate of a State Lottery an industry?
A. The directorate of a State Lottery, which employs 50 to 60 persons, carries on commercial activities, and makes profit is an industry.
Note:- Held in State of Punjab v. Parvesh Kumar, 1994 II L.L.N. 668.

Q. Is All India Radio an industry?

A. All India Radio is an industry. The mere fact that there is a Service Code dealing with some of the aspects of the employer- employee relationship between the Government and its employees does not amount by necessary implication to the exclusion of the provisions of the Industrial Disputes Act to Government servants.
Note:- Held in All India Radio v. Presiding Officer, Industrial Tribunal-cum-Labour Court, 1987 I CLR 246.

Q. Is “Doordarshan” an industry?
A. Doordarshan, which carries on activity for profit by getting commercial advertisements telecast through its various Kendras by charging fees, is an industry.
Note:- Held in All India Radio v. Santosh Kumar, 1998 I CLR 684 (S.C.). 
Q. Is a tourism department of a Government an Industry?
A. A tourism department of a Government, whose activities have commercial and economic features quite apart from what a Government does or is expected to do in the discharge of its sovereign functions, is an industry.
Note:- Held in Mohanan v. State of Kerala, 1994 I CLR 419.
Q. Is a “Bhavan” maintained by a State Government an industry?
A. Maintaining a “Bhavan” was not a sovereign function. A “Bhavan” fell within the ambit of industry as defined in Section 2(j) of the Act.
Note: Held in Madhya Pradesh Bhavan v. Shiv Kumar Tiwari, 2003 I LLJ 932 (Del.H.C.). 
Q. Is the nursery division of the Forest Department of the Government of Gujarat an Industry?
A. The nursery division is not performing any sovereign function. The activities of the division relate to production or distribution of goods and services for satisfying human wants and desires of consumption. The division is growing plants and selling them including the wood received therefrom in public on commercial basis. It is preparing wooden furniture from the said wood and selling it in public in open market. It can be said to be an industry.
Note:-Held in State of Gujarat v. Aher Jaga Ramshi, 2006 III CLR 377 1 (Guj.H.C.)
Q. Is a trade union an industry?
A. A trade union which carries on systematic activities by co- operation of its employees for the distribution of services calculated to satisfy material wants of workmen is an industry.
Note:-Held in Dattatraya Gopal Paranjpe v. Rashtriya Mill Mazdoor Sangh & Ors., 1995 I CLR 1024.
Q. Is Tata Sports Club an industry?
A. Tata Sports Club, which is engaged in systematic activity and is organised by co- operation between the Club and its employees; and provides services calculated to satisfy human wants and wishes, is an industry
Note: Held in Ratilal B. Ravji v. Tata Sports Club & Anr., 1997 II CLR 902