National Commission on Labour (1967)||
Legislation in the field of labour was undertaken in this country as a consequence of (i) the requirements of the working class, (ii) the acceptance of ILO Conventions/Recommendations, and (iii) the conclusions reached at the ILC/SLC or similar consultative/advisory bodies formed in the States. Enactments have been brought on the statute book with a view to providing the necessary benefit or relief to labour or for setting up a machinery for resolving differences and disputes between workers and management. With the passage of time and as a result of changes brought about in society, and the changing concepts of the obligations of the State, some of the Acts needed amendments and others required to be enacted. Judicial pronouncements on the provisions of the Acts, as also administrative difficulties in the working of some of the provisions, have influenced the nature of the amendments. The process of improving the law has thus been continuous.
33.1 Item 2 of our terms of reference requires us "to review the existing legislative and other provisions intended to protect the interest of labour, to assess their working and to advise how far these provisions serve to implement the Directive Principles of State Policy in the Constitution on labour matters and the national objective of establishing a socialist society and achieving planned economic development". In discussing this item within the Commission, a view was expressed that we should make suggestions for amending the various pieces of legislation. The other view was that we should not take upon ourselves the responsibility which a Law Commission alone would be competent to discharge. We have accepted the latter interpretation on our terms of reference. At the same time, in the course of the evidence, suggestions have been made in regard to the adequacy or otherwise of some provisions of the existing legislation, particularly the definition of certain terms under the Industrial Disputes Act, 1947. A suggestion has also been made to have a uniform definition of terms like 'workman' 'worker' under the different enactments.
33.2 As has been stated in an earlier chapter, we do not
consider it feasible nor desirable to have a uniform definition of terms under various
enactments. At the same time, we feel that some of the terms defined under the Industrial
Disputes Act such as 'industry' and 'workman'
may require some modifications. The present position and the view of the Commission in regard to these are discussed in the following paragraphs.
33.3 Industry : Under Section 2(J) of the
Industrial Disputes Act, 1947,
'industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.
33.4 The definition of 'industry', as it has been interpreted, is very comprehensive in scope. Questions arose from time to time whether hospitals, clubs, municipalities, educational institutions, etc., fell within the scope of the term. In deciding these issues, it has been generally held by courts/tribunals that profit motives or money consideration for the services rendered is not an essential characteristic ; that while the regal and sovereign functions of the State are outside the scope of the definition, other functions of Government which are not of a regal character, fall within the definition. Hospitals, even those run by Government, have been held to be 'industry' since running of hospitals is not a regal function of the State. While municipalities, as such, are held to be non-industrial, any branch of its work that can be regarded as analogous to the carrying on of a trade or business involving cooperation between employers and employees, falls within the definition of 'industry'. Religious or humanitarian institutions, private and domestic activities, professional activitiesóliberal professions, are outside the purview of 'industry'. The offices of Chartered Accountants, Solicitors are not 'industry' nor are educational institutions or clubs run solely for the benefit of their members. Research institutions maintained by industry and employing technical and other staff, however, come within the scope of the term.
33.5 Suggestions have been made, in the evidence before the Commission, for the amendment of the definition of the term 'industry', by some so as to restrict its scope and by others to enlarge it. It has been urged that the term 'industry' should cover only profit earning industrial and commercial establishments employing more than 50 workmen and that it should
exclude voluntary organisations, charitable institutions and organisations like Chambers of Commerce. A strong plea has also been made that Government hospitals should be excluded from its scope. On the other hand, it has been urged that the term 'industry' should cover within its scope teaching institutions, universities and professional offices like Offices of Chartered Accountants and Solicitors. The Study Group on Labour Legislation has given a very comprehensive and all inclusive definition of the word 'establishment' (which replaces the word 'industry' in the draft code prepared by the Group).
33.6 In our view, there appears to be no valid ground for narrowing the scope of the definition of 'industry' as it stands to-day. In fact, there is a case for enlarging its scope so as to cover teaching or educational institutions or institutes, universities, professional firms and offices etc., whose employees are at present denied the protection of the provisions of the Industrial Disputes Act. In saying so, we are not unmindful of the fact that the problem of industrial relationship pertaining to the administration of teaching institutions and universities presents several distinctive features and they will have to be carefully considered before such institutions are brought within the purview of the definition of 'industry'. The autonomy of the universities is a very important concept which is respected in all democratic countries. Besides, the salaries of teachers employed by the university or colleges affiliated to it are, in some cases, determined not by the university or the colleges on the one hand and the teachers on the other, but the University Grants Commission and the State Governments and the Union Government also come into the picture. The staff employed by educational institutions broadly consists of two categories viz-, administrative and teaching ; and the problems of these two categories of staff may not always be the same or identical. That is why we would suggest that the extension of the scope of the definition of 'industry' should be made by stages in a phased manner over a reasonable period, depending upon the administrative arrangements to meet the requirements of the law and upon the consideration of a number of other relevant factors.
33.7 Besides, it is necessary to emphasise that if the scope of the concept of 'industry' has to be expanded to cover teaching institutions and universities, it may become necessary to provide for a different set-up to deal with the problems or disputes which may arise in such institutions. As we have just pointed out, these institutions have certain special distinctive characteristics, and even if employees working in them are, in future, included within the definition of 'workmen', care will have to be taken to sec that a special procedure, self-contained in character, is provided for dealing with grievances or industrial disputes raised by the employees and a special machinery set up in that behalf. But these are matters of detail and we do not propose to deal with them.
33.8 Hospitals and non-profit-making philanthropic institutions which devote themselves to humanitarian work are at present included within the meaning of the term 'industry'. It is, we think, desirable that Government should consider whether in respect of such institutions a special procedure could not be devised to avoid hardship to the community and at the same time give satisfaction to the workers engaged therein.
33.9 Workman : Section 2(S) of the Industrial Disputes Act, 1947 defines "workman" as any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes 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 personó
(i) who is subject to the Army Act, 1950 or the Air Force Act, 1950 or the Navy (Discipline) Act, 1934; or
(ii) who is employed in the police service or as an officer or other employee of a prison ; or
(iii) who is employed mainly in a managerial or administrative capacity ; or
(iv) who being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
33.10 The present position is that all workmen are employees, but all employees are not workmen within the meaning of the definition. Unless a person concerned is employed
in an industry, he will not be a workman within the definition of this section. It is for this reason that teachers employed in educational institutions are not 'workmen', as educational institutions do not fall within the definition of industry. Persons employed in temples are similarly not 'workmen'. Apart from those who are subject to the Army Act or are in the police service, the persons who are excluded from the definition of 'workman' are those who are employed mainly in a managerial or administrative capacity or those, who being employed in a supervisory capacity, draw wages exceeding Rs. 500 per month or those whose functions are mainly of a managerial nature. The term 'managerial' or 'administrative' have not been defined in the Act. The mere fact that a person is designated as 'managerial' or 'administrative' is not conclusive proof of his being so, but has to be established by the actual nature of work done by him. The salary limit of Rs. 500 per month is associated with a person in supervisory capacity and not in case of managerial or administrative personnel. The salary limit does not apply to persons doing work of a technical nature. Therefore, a technical person continues to be a workman regardless of the amount of salary or remuneration drawn by him. This is how highly paid employees have come to be classified as workmen under the I.D. Act.
33.11 Some of the suggestions that have been made for amending the definition of the term 'workman' are : (i) that the salary limit should be raised to Rs, 750, (ii) that it should be raised to Rs. 1600 as under the Bonus Act, and (iii) that it should be all-inclusive and cover all persons irrespective of their functions or salaries and should exclude only persons subject to the Army Act etc., police personnel, persons in charge of an establishment and apprentices, trainees and domestic servants.
33.12 Our view is that the definition of the word 'workman' should be based both on functional as well as remuneration criteria. While only managerial and administrative personnel may be excluded irrespective of their salary, supervisory and other personnel whose remuneration exceeds a specified limit could also be reasonably excluded. This limit which is Rs. 500 per mensem at present could be suitably raised in such a way as to put an end to the present anomaly of very highly paid personnel resorting to industrial action and seeking the protection of the provisions of this Act. Raising of the wage ceiling will be particularly justified in view of the fact that in industries using advanced technology wages of many of the supervisory workers are found to be in excess of the prescribed maximum i.e., Rs. 500.
33.13 Strike : Under Section 2 (Q,) of the Industrial Disputes Act, 1947, 'strike' means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.
33.14 'Strike' is cessation of work by a body of persons acting in combination and takes various forms. The various forms of 'strike are : 'sit-down', 'stay-in', 'tool-down', 'pen-down', 'boycott', 'picketing'. 'Strike' can be primary, secondary or sympathetic. 'Strikes' can also be justified and unjustified. A 'go-slow' is not like an ordinary strike, but it can be a misconduct under Standing Orders. The duration or the purpose for which a strike is undertaken does not appear to be of any consequence as these two items do not figure in the definition.
33.15 A suggestion has been made that the definition should be modified so as to specify that the cessation or refusal to work should be in consequence of a labour/industrial dispute. Another suggestion has been made that concerted actions like 'go-slow' and 'work-to-rule' should be brought within the scope of the definition.
33.16 We consider that the present definition is quite comprehensive and may not require any change. The forms of labour protest, such as, 'go-slow' and 'work-to-rule' may be treated as misconduct or unfair labour practices under the standing orders.
33.17 Wages : Section 2(rr) of the Industrial Disputes Act, 1947 defines 'wages'
as all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment and includesó
(i) such allowances (including dearness allowance) as the workman is for the time being entitled to ;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles ;
(iii) any travelling concession ;
but does not include (a) any bonus ;
(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force ;
(c) any gratuity payable on the termination of his service.
33.18 The definition of 'wages' is quite exhaustive. The question whether a particular type of remuneration could form part of 'wages' as defined in the Act is primarily a question of fact as it would depend upon the circumstances of the case. For instance, free food and tiffin supplied to hotel workers by their employers has been held to be part of wages within the meaning of the definition. Whereas the term 'wages' occurs in the I.D. Act, under the Payment of Bonus Act, the term used is 'salary or wages'. The term 'wages' is differently defined in various enactments like the Payment of Bonus Act, the Workmen's Compensation Act, and the Payment of Wages Act. It has been suggested in the evidence before us that the definition of 'wages' under the I.D. Act should include the items now excluded.
33.19 Items like bonus, contributions to Provident Fund, and other benefits and Gratuity on termination of services where gratuity has become a term of service under an award or settlement, have all become regular elements of workers' remuneration and should, therefore, be included as part of a worker's wage.
33.20 Appropriate Government: Section 2(a) of the Industrial Disputes Act, 1947 defines "appropriate Government" as :
(i) In relation to any Industrial Dispute concerning any industry carried on by or under the authority of the Central Government, or by a railway company (or concerning any such controlled industry as may be specified in this behalf by the Central Government) or in relation to an Industrial Dispute concerning the Employees' State Insurance Corporation established under Section 3 of the Employees' State Insurance Act, 1948 (34 of 1948), or (the "Indian Airlines" and "Air India" Corporations established under Section 3 of the Air Corporations Act, 1953 (27 of 1953), or the Agricultural Refinance Corporation Act, 1963 (10 of 1963), or the Deposit Insurance Corporation established under Section 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961), or the Unit Trust of India established under Section 3 of the Unit
Trust of India Act, 1963 (52 of 1963), or a banking or an insurance company, a mine, and oilfield, a Cantonment Board or a major port, the Central Government, and
(ii) in relation to any other Industrial Dispute, the State Government.
33.21 Important words in this definition are "carried on by or under the authority of the Central Government". An industry carried on by or under the authority of the Central Government is a Central Government industry which-may be carried on directly by the Central Government or by somebody or person nominated by the Government for that purpose. Industries which are carried on for the purposes by incorporated commercial corporations which are governed by their own constitutions cannot be described as carried on or under the authority of the Central Government as these corporations are independent legal entities and run the industries for their own purpose. Even when the Central Government owns the entire share capital and controls these corporations, their industries are still worked under the authority of their own constitutions or charter. Sometimes difficulties arise in determining as to which Government is the appropriate Government when a concern has establishments in more than one State. The Act contains no provisions bearing on this question nor does it contemplate a joint reference by two States. The question has to be decided on the principles governing the jurisdiction of courts to entertain actions or proceedings. The Act does not deal with "cause of action" nor does it indicate what factors will confer jurisdiction on the Tribunals. Hence a State in which the disputing parties reside or the subject matter of an industrial dispute substantially arises will be the appropriate Government in relation to that dispute.
33.22 Minerals like iron ore, mica, manganese, etc., are found in mines. For 'mines' the appropriate Government is the Central Government, but factories processing the minerals found in the mines fall under the sphere of the State Government concerned. In industries like cement, iron and steel, fertilizer, oil refineries, etc., a part is subjected to control of Central Government and another of State Government. Many unions and some employers have suggested that these be brought under the authority of the same Government.
33.23 In our view, there is a case for bringing these two wings of the same industry under the jurisdiction of the authorityóCentral or State.