These appeals are directed against the order of the learned Single Judge dated 22.11.2006 made in W.P.Nos.12028/2000 and 58/2001 whereby and whereunder, the award of the Labour Court in I.D.No.353/1991 dated 12.05.1999 was set aside in W.P.No.12028/2000 and also claim of the appellant was negatived in W.P.No.58/2001.
2.The facts are briefly stated below :-
The second Respondent Society by name Madurai Children Aid Society [for short, 'the Society'], represented by its Secretary, is registered under the Societies Registration Act and the appellant was working as an Assistant Matron on a monthly salary of Rs.27/-. In view of her misconduct and misbehaviour, the management terminated her service by order dated 18.09.1990 and her accounts were settled. Aggrieved over the same, the appellant raised an Industrial Dispute in I.D.No.353/1991 in which a preliminary issue was raised as to whether, the second Respondent is an 'Industry', wherein it was held by the Labour Court that the Society was an industry, as against which, the second Respondent filed Writ Petition in W.P.No.13691/1994 and a learned Single Judge of this Court held that the second Respondent was not an Industry within the meaning of Industrial Disputes Act, hereinafter referred to as 'the Act'. Aggrieved over the same, appellant filed W.A.No.38/ 2006 and a Division Bench of this Court allowed the appeal and directed the Labour Court to hear afresh and pass orders. The matter was taken up for adjudication by the Labour Court once again and by award dated 12.05.1999, Labour Court held that the second Respondent society is an Industry and granted the relief of reinstatement of the appellant with continuity of service but without back-wages.
3.The second Respondent challenged the said order in W.P.No.12028/2000 on the ground that it is not an industry and therefore, the appellant is not entitled to the reliefs as granted by the Labour Court. The appellant preferred W.P.No.58/2001 aggrieved against the portion of the Judgment disallowing back-wages. Both the Writ Petitions were heard together and a common order was passed by the learned Single Judge holding that the second Respondent society is not an industry within the meaning of the Industrial Disputes Act and set aside the award of the Labour Court. Incidentally, the learned Single Judge dismissed the Writ Petition filed by the appellant in W.P.No.58/2001.
4.The learned Single Judge observed that the activity of the society is essentially a governmental function and is in no way, even remotely, analogous to trade or business and therefore, it cannot possibly come within the ambit of industry. Further, as the work of the society has been done only to promote physical and mental state of the children and not have any economic activity, the Society cannot be held to be an industry as it is doing neither trade nor business. Further, it held that the appellant was engaged as Assistant Matron for the purpose of taking care of the children and she cannot come within the purview of definition of workman. By holding so, the learned Single Judge held that it is not necessary to go into the factual aspects regarding evidence adduced for proving the charges levelled against the appellant and thereby, set aside the award.
5.Mr.V.Prakash, learned Senior Counsel appearing for the appellant submitted that the Hon'ble Supreme Court in Bangalore Water Supply & Sewerage Board and A.Rajappa and ors., 1978 (1) LLJ 349, reviewed the earlier dicta on the interpretation of the wide words "Industry" before proceeding to formulate positively and negatively, and decisive principles for identifying an industry under the Act, which is authoritative until overruled by a larger Bench or superseded by a legislative branch and referred to the relevant passage in the said Judgment which laid down the following principles saying that they are authoritative and they are not exhaustive.
"Industry, as defined in
Section 2(j) and explained in Banerji's case has a wide import :-
"I.(a)Where (i) systematic activity, (ii)organized by cooperation between employer and employee [the direct and substantial element is chimerical] (iii)for the production and/or distribution of goods and services calculated to satisfy human wants and wishes [not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food], prima facie, there is an industry in that enterprise.
(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 specific emphasis on the employer-employee relations.
(d)If the organization is trade or business it does not cease to be one because of philanthropy animating the undertaking.
II. Although
Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.
(a)Undertaking must suffer a contextual and associational shrinkage as explained in Banerji [supra] and in this Judgment; so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I [supra], 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, adventures analogous to the carrying on the trade or business. All features, other than the methodology of carrying on the activity viz., in organizing the cooperation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy.
III.Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.
(a)The consequences are (i)professions, (ii)clubs, (iii)educational institutions, (iv)cooperatives, (v)research institutes (iv)charitable projects and (vii)other kindred adventures, if they fulfil the triple tests listed in I [supra], cannot be exempted from the scope of
Section 2(j).(b)A restricted category of professions, clubs, cooperatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantially and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit.
(c)If, in a pious or altruist mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding or the holiness, divinity or the like central personality, and the services are supplied free or at nominal cost and 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. Such eleemosynary or like undertakings alone are exempt not other generosity, compassion, developmental passion or project.
IV.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 of Delhi case [supra] 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 as explained in the Corporation of Nagpur [supra], will be the true test. The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status.
(b)Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by the 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).(d)Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.
6.In the said case, the Hon'ble Supreme Court overruled Safdarjung Hospital case, AIR 1970 SC 1407, Solicitors case AIR 1962 SC 1080, Gymkhana case AIR 1968 SC 564, Delhi University case AIR 1963 SC 1873, Dhanrajgirji Hospital case AIR 1975 SC 2032 and other rulings, whose ratio runs counter to the principles enunciated above and the Hospital Mazdoor Sabha case, AIR 1960 SC 610 was rehabilitated. The learned Senior Counsel argued that by applying the said principles, the second Respondent would come within the purview of "Industry" as defined under the Industrial Disputes Act, (hereinafter referred to as 'the Act').
7.Per contra, the learned Counsel Mr.N.Damodharan, appearing for the second Respondent supported the Judgment of the learned Single Judge on all aspects.
8.The evidence placed on record before the Labour Court discloses that the second Respondent society is being used as an observation home for children and that the Government is providing aid to this institution and that apart the expenses are met out by getting donations. The society is giving vocational training to the children for self-help jobs and also in gardening and as per the bye-laws of the Management, properly allocated works are being carried out as per the rules and regulations in accordance with the duty hours and further its accounts are being audited every year. It is evident from the above that there are systematic activities in the second Respondent society and that there are joint efforts by the employer and employees and further, it is being carried out for human necessities.
9.In Bangalore Water Supply and Sewerage Board case, the Hon'ble Supreme Court held that Bombay Pinjrapoles in the said case was an industry, justifying the conclusion with a different process of reasoning, that Pinjrapoles are industries, not because they have commercial motives, but because despite their compassionate objectives, they share business like orientation and operation.
10.The Hon'ble Supreme Court further held that two categories of charitable institutions would fall within the definition of industry and they are :-
(1)where the enterprises, like any other, yields profits but they are siphoned off for altruistic objects.
(ii)Where the institution makes no profit but hires the services of employees as in other like businesses but the goods and services, which are the output, are made available, at low or no cost to the indigent needy who are priced out of the market.
11.The second one, as stated supra, could be applied to the present case, for the reason, the manner in which the activity in question is organized or even arranged in the second Respondent society is with the cooperation between the employer and the employee for its success and the object is to render material service to the community, and they are the tests which identifies the second Respondent as an industry.
12.It is pertinent to point that merely because the society is run with the aid of the Government, it will not be exempted from the definition of industry and the said view gains credence from the decision reported in Workmen of Indian Standards Institution vs. Management of Indian Standards Institution, 1976(1) LLJ 33. In the said case, the majority of the Three Judges Bench relied more upon the Hospital Mazdoor Sabha case reported in 1960 (1) LLJ 251, than on the Safdarjung Hospital's case and ultimately held that the Indian Standards Institution which was run by the Government of India is an industry. This was also pointed out in Bangalore Water Supply and Sewerage case by the Hon'ble Supreme Court. By applying the said principles stated supra, we have no difficulty to hold that the second Respondent society is an 'industry' within the meaning of Industrial Disputes Act.
13.Admittedly, the appellant was working as an Assistant Matron in the second Respondent society and now the question that would arise is whether the appellant is a 'workman' as defined under the Act. After the changes brought out by the Amendment Act, 1956, depending upon the nature of work, the present definition has added the following two categories to the work viz., (i)Supervisory work and (ii)Technical work. Further, the definition has added the words "whether the terms of employment be express or implied" after the words "hire or reward" and thus made the definition more comprehensive. It has enlarged the scope of definition by using the words "any such person who has been dismissed, discharged or retrenched has led to that dispute" as an industrial dispute.
14.So, for an employee in an industry to be a workman, under the definition after its amendment, it is manifest that he must be employed to do -
(i)manual work;
(ii)unskilled work;
(iii)skilled work;
(iv)technical work;
(v)operational work;
(vi)clerical work;
(vii)supervisory work.
So to determine whether an employee is a workman, as defined under
Section 2(s) of the Act, the principal nature of duties and functions are to be seen. A Three Judge Bench of the Hon'ble Supreme Court held in Burma Shell Distribution Company of India Ltd. vs. Burma Shell Staff Association, 1970 (2) LLJ 594 that in order to bring an employee within the ambit of the definition of workman, the nature of work performed by him must fall within one or the other of the above seven classifications.
15.Now adverting to this case, some of the duties of the Assistant Matron, as disclosed by the list supplied by the learned Counsel for the second Respondent, which are enumerated below has to be looked into -
(a)to help the matron in official duties;
(b)to distribute food materials from the Cooperative Society to the children, to record the same in the stock register and to prepare a list of materials and hand it over to the cook;
(c)to supervise the work of the cook, to distribute uniform and medicines and maintain stock register for the same;
(d)to supervise cleaning work;
(e)to maintain various registers for different purposes relating to the children who are kept in the observation home; and so on.
16.The above said duties inter-alia carried out by the appellant can certainly be termed as supervisory character and also clerical work incidental thereto. A person doing work of a supervisory nature has been added in the definition of workman by the Amendment Act, 1956. But this clause excludes such a person who being employed in supervisory activity :-
(i)draws wages exceeding Rs.1,600 p.m. or
(ii)exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mostly of managerial nature.
17.This has been clearly laid down in Burmah Shell's case (1970) 2 LLJ 590. The appellant does not come under the above two clauses as her last drawn salary, as seen from the records is Rs.27/- per month and she is not doing any duties of a managerial nature. Therefore, we are of the view that the appellant would very well come under the definition of workman, within the meaning of Sec.2(s) of the I.D. Act and therefore, we are not inclined to agree with the view of the learned Single Judge on the above aspects.
18.In the appeal, the appellant has challenged the findings of the Labour Court dated 12.05.1999 on the ground that disallowing back-wages is not sustainable especially when the Labour Court held that the punishment against her is disproportionate to the charges levelled against her. The facts culled out from the evidence would show that she was making false complaint against her co-workers and thus her conduct and misbehaviour was such that it led to the framing of charges. After domestic enquiry, charges were held to be proved and she was dismissed from service by order dated 18.09.1990 against which, she raised an Industrial Dispute before the Labour Court, Madurai. After thorough analysis of evidence let on both sides, the Labour Court has held that the charges levelled against the appellant was proved. However, the Tribunal held that the punishment awarded to her was on the higher side and disproportionate to the charges made against her. On holding so, it directed the second Respondent to reinstate her with continuity in service but without back-wages, in order to give her an opportunity to correct herself.
19.We have heard the learned Counsel on either side on this point and we are unable to find any impropriety or illegality in the findings of the Labour Court. Therefore, it is not desirable to come to the conclusion different from the one arrived at by the Labour Court. Therefore, we confirm the findings of the Labour Court.
20.In the result,
(a)The order of the Tribunal directing reinstatement of the appellant with continuity of service but without back-wages is confirmed and the order of the learned Single Judge is set aside and W.A.No.1375/2007 is allowed.
(b)The order of the Tribunal finding the appellant guilty of charges and the consequential denial of back-wages, is sustained and W.A.No.1376/2007 stands dismissed.
(c)There is no order as to costs.
(P.J.M., J.) (A.J., J.) 12.05.2009 Index: Yes/no Internet: Yes/no tar To
1.The Presiding Officer, Labour Court, Madurai.
2.The Secretary, Madurai Children's Aid Society, No.164, Kamarajar Salai, Madurai 625 009.
P.JYOTHIMANI , J.
and ARUNA JAGADEESAN, J.
tar P.D. Judgment in W.A.Nos.1375 & 1376/2007 12.05.2009