8 L a b o u r L a w a n d L a b o u r R e l a t io n s

I n t r o d u c t io n 7

The Supreme Court in' Dharangadhara Chemical Works L td v. State o f

court without any reference to the seven-judge bench decision in Bangalore Water
Saurashtra, AIR 1957 SC 264 has, however, interpreted the term ‘workman’ in a
Supply held that the postal department was part o f the sovereign fiinctions o f the
restricted sense when it ruled;
State and, therefore, the establishment o f the Sub-Divisional Inspector o f Post was
not an ‘industry’ under section 2 (j) of the Industrial Disputes Act, 1947. This view The essential condition o f a person being a woriaiian within the terms o f
was followed in Bombay Telephone Canteen Employees Association, Prabhadevi this definition is that he should be employed to do the work in that industry,
Telephone Exchange v. Union, o f India and Another, (1997) 6 SCC 723 where the that there should be, in other words, an employment of his by the employer
court held that workmen employed in the departmental canteen o f Telephone Nigam and that there should be the relationship between the employer and him as
Limited were holditig civil posts and therefore not workmen within the meaning o f between employer and employee or master and servant. Unless a person
the Industrial Disputes Act, 1947. However, a three-judge bench o f the Supreme is thus employed there can be no question o f his being a workman within
Court in General Manager Telecom v. S. Srinivasa Rao, AIR 1998 SC 657 revived the definition o f the term as contained in the Act.
and restated the decision in Bangalore Water Supply by holding that the Telecom Assuming that the definition o f workman requires a master-servant relationship,
Department o f the Union o f India was an ‘industry’. It held that judicial discipline a question arises as to how to ascertain the existence o f that relationship. In
requires that the decision in Bangalore Water Supply should be followed. It also Dharangadhar a Chemical Works the court ruled ‘that the test which is uniformly
ruled that the decision o f a two-judge bench o f the court in Theyyam Joseph and applied in order to determine the relationship is the existence o f a right o f control in
Another and Bom bay Telephone Canteen Em ployees’ Association ‘cannot be respect o f the manner in which the work is to do be done’. Again in Workmen o f
treated as laying down the correct law’. Food Corporation o f India v. Food Corporation o f India, (1985) 2 LLJ 4 the court
In Coir Board, Ernakulam\. Indira Devi P.S., 1998(78) FLR 845 a two-judge construed the word ‘employed’ in the sense o f ‘a relationship brought about by
bench o f the Supreme Court held that since the difficulty had arisen because o f the express or implied contract o f service in which the employee renders service for
judicial interpretation given to the definition o f ‘industry’ in the Industrial Disputes which he is engaged by the employer and the latter agrees to pay him in cash or kind
Act, 1947, there was no reason why the matter should not be judicially re-examined. as agreed between them or statutorily prescribed’. According to the court it discloses
But in Coir Board Ernakulam, Kerala State v. Indira Devi P.S., 1999 LLR 319 a a relationship o f command and obedience.
three-judge bench, presided over by the Chief Justice,’ruled that the judgment This requirement o f a ‘workman’ being employed as servant, restricts the
delivered by seven-judge bench o f the court in Bangalore Water Supply did not coverage o f the definition o f ‘workman’ and excludes, besides independent
require reconsideration. contractors, dependent entrepreneurs. Thus, the decision renders millions o f
The issue was again re-opened in State ofU. P. v. Jai Bir Singh, (2005) 5 SCC 5> dependent entrepreneurs legal orphans.
The issue arose because o f conflict between the two benches o f the Supreme Court The test laiddown in Dharangadhara was invoked and applied in Chintaman
in Chief Conservator o f Forests v. Jagannath Maruti Kondhare, (1996) 2 SCC 293 Rao v. State o f Madhya Pradesh, (1958) 2 LLJ 252 to determine whether a person is
o f three judges and State ofGujarat v. Pratam Singh Narsinh Parmar, (2001) 9 SCC a ‘worker’ under the Factories Act, 1948. However, the court relaxed the qualitative
713 o f two judges. The Five-Judge Bench o f the Supreme Court referred the matter and quantitative contents o f the ‘direction and control’ test laid down in
to the Chief Justice for re-consideration o f the judgment o f the court in Bangalore Dharangadhra Chemical Works (supra) and Shankar Balaji Waje v. State o f
Water Supply cdise,{\91?,)2 SCC 213, which is still pending. Maharashtra, (\9 6 2 ) 1 LLJ 119, distinguished the Bnc/zc/jartt/5/jaA-ma case on the
facts and applied the criteria laid down in the Chintaman Rao case.
Workman
The court in Employers in relation to Punjab N ational Bank v. Ghulam
Like the word ‘industry’ the term ‘workman’ has also been subject-matter o f D astagir,{\91S) 1 LLJ 312 clarified that the direction and control test laid down in
controversy before the judiciary. A survey o f decided cases reveals that whenever Dharangadhara Chemical Works case and Shivanandan Sharma v. Punjab
an industrial dispute arises an objection often taken by the employer is that the National Bank, (1955) 1 LLJ 688 required that the employer must exercise the
employee is not a ‘workman’. In order to appreciate the controversy it may be control and supervision.
relevant to note the definition o f ‘workman’ which has been defined under Section In Hussainbhai v. Alath Factory, 1978 Lab. I.C. 1264 the court tried to mitigate
2(s) to mean any person (including an apprentice) employed in any industry to do t ie hardship caused by the decision in Dharangadhara Chemical Works by
any skilled or unskilled manual, supervisory, technical or clerical work for hire or extending the coverage o f ‘workers’ to include ‘dependent entrepreneur’. Krishna
reward. Iyer J. laid down the following tests for determining the scope o f the term ‘worker’:
 I nt r o d u c t io n 9 10 L a b o u r L aw and L a b o u r R elations

Where a workeror group of workers labours to produce goods or services In order to mitigate this hardship caused as a result o f judicial pronouncements
and these goods or services are for the business of' another, that other is, Section 2A was inserted by the Industrial Disputes (Amendment) Act, 1965. This
in fact, the employer. He had economic control over the workers’ section came into force on 1 December, 1965. By this section it is provided that a
subsistence, skill, and continued employment. If he for any reason, chokes dispute or difference between an individual workman and his employer connected
off, the worker virtually laid off. The presence o f intermediate with or arising out o f (i) discharge, (ii) dismissal, (iii) retrenchment, (iv) or otherwise
contractors with whom alone the workers have immediate or direct termination of service o f an individual workman, shall be deemed to be an “industrial
relationship ex-contractu is of no consequence when, on lifting the veil or dispute” even though no fellow workmen or any union o f workmen is a party to the
looking at the conspectus o f factors governing employment, we discern said dispute. However, the scope o f Section 2A is limited. It does not apply in cases
the naked truth wrapped in different perfect paper arrangement that the o f dispute arising from the transfer or promotion or any punishment such as
real employer is the Management, not the immediate contractor. demotion or withholding o f increment imposed on such employee.

The aforesaid decision has provided relief to millions o f persons who had been The other controversy is about the interpretation the expression “any person”.
excluded from the purview o f ‘workmen’. It is submitted that the word ‘employed’, The Supreme Court in Workmen o f Dimaktichi Tea Estate v. Management o f
as used in the Industrial Disputes Act, 1947, by itself signifies ‘engaged’ and that, Dimakuchi Tea Estate, (1958 (1) LLJ, 500), (dealt in Part IV o f this book) held that
wherever necessary the legislature has limited the scope o f the word by using the expression ‘any person.’ must be read subject to such limitations and
appropriate qualifying expression.^ qualifications as arise from the context. The two crucial limitations are: (1) the
dispute must be a real dispute capable o f settlement or adjudication by one party to
In Workmen ofN ilgiri Co-operative Marketing Society v. State o f Tamil Nadu,
the other, and (2) the person regarding whom the dispute is raised must be one in
(2004) 3 s e e 514 the Supreme Court held that the control and the organization tests
whose employment, non-employment, temis of employment, or conditions o f labour
are not the only factors which cari be said to be decisive in'determining whether a
(as the case may be) the parties to the dispute have a direct or substantial interest.
person is a workman or not. The court evolved the doctrine o f integrated approach
In the absence o f such interest the dispute cannot be said to be a real dispute
in determining whether a person is a workman or not.
between the parties. Where the workmen raise a dispute as against their employer
Individual and Industrial Dispute the person regarding whose employment, non-employment, terms o f employment
or condition o f labour the dispute is raised need not be strictly speaking a workman
The key issues involved in Section 2(k) (reproduced in Part IV) are two fold; within the meaning o f the Act but must be one in whose employment, non­
(i) Is an individual dispute an industrial dispute? employment, terms o f employment or conditions o f labour the workmen as a class
(ii) What is the scope o f the expression “any person”? The first issue has have a direct or substantial interest.
evoked considerable conflict o f opinion. Prior to the Supreme Court decision in
Newspaper Ltd. v. State Industrial Tribunal, U.P. and Others, AIR 1957 SC 532 D. Settlement o f Industrial Dispute
decided cases disclosed three different views as to the meaning o f the expression
The Industrial Disputes Act, 1947 provides machinery for prevention as well as
‘industrial dispute’, namely, a dispute between an employer and single workman;
persuasive, voluntary and coercive processes o f settlement o f industrial dispute
(i) cannot be an ‘industrial dispute’, (ii) can be an industrial dispute, and (iii) cannot
which has been examined in Part V of the book.
per se be an industrial dispute but may become one if taken up by a trade ilnion or
a number of workmen.
Works Committee
The controversy was set at rest by the Supreme Court in the Newspaper Ltd. v.’
State Industrial Tribunal, U.P. and Others, k \K 1957 SC 532 where it was held that For prevention o f industrial dispute the Industrial Disputes Act o f 1947, provides
a dispute between an employer and a single workman does not fall within the for the constitution o f Works Committees. The functions o f the Works Committees
definition o f industrial dispute, but if the workmen as a body or a considerable have been stated in Part V. Thus, in North Brook Jute Company v. Their Workmen,
section o f them make a common cause with the individual workman then such a ( 1961) (1) LLJ 5 80 the Supreme Court observed that the Works Committees are not
intended to supplant or supersede the unions for the purpose o f collective
dispute would be an industrial dispute. However, in later cases the Supreme Court
relaxed the above requirements. bargaining. Their task is only to smooth away frictions that might arise between the
workmen and the management in day-to-day working. The decision, it is submitted,
^ S.C. Srivastava, “Industrial Jurisprudence" in S.K. Verma and Kusum (eds.) Fifty Years of has drawn a clear line between the role o f Works Committee and trade unions. The
Supreme Court, Indian Law Institute (2000) p. 442.