i)The definition of “industry” has evolved and expanded significantly over a period of time by the

legislative acts and judicial decisions. The journey of such evolution has been symbolic primarily
because of lack clarity in the legislative intent as embodied in the law and conflicting judicial
approaches regarding the ambit of such definition.

Section 2 (j) of the Industrial Disputes Act, 19471 can be divided into two components. The first
component enumerates as the statutory meaning of ‘industry’; the second component provides as
to what does an industry includes within its definition. This definition is not exhaustive and
cannot be treated as restricted in any sense has therefore been subjected to immense judicial
scrutiny.

ii) The concept of workman is central to the concept of an industrial dispute as an industrial
dispute can be raised either by a "workman" or an "employer." Since the Industrial Disputes Act,
1947 ("ID Act") is a piece of beneficial legislation, the courts have enlarged the scope and
applicability of this Act by giving wide interpretation to the term "workman." Section 2(s)
defines workman as 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,
terms of employment be express or implied and includes any such person who has been
dismissed, discharged or retrenched in connection with, or as a consequence of dispute.

iii)The Industrial Disputes Act, 1947, is an effort on the part of the government to normalize industrial
relations in India. This legislation is premeditated to ensure industrial peace by recourse to a given
procedure and machinery for investigation and settlement of industrial disputes. Its foremost objective
is to provide for an unbiased and equitable settlement of disputes by negotiations, conciliation,
mediation, voluntary arbitration and compulsory adjudication instead of by trial of strength through
strikes and lockouts.

Gist
The employees of Madras Gymkhana Club asked the management for a bonus, which was denied
and the case was taken up in the Supreme Court of India. The court, on 3rd October, 1967 held
that the management of Madras Gymkhana Club was not liable to pay bonus to its workmen, as
the club, as per the definition of “Industry” section 2, ID Act, 1947, was not an industry.

As per the court, the respondent is a non-proprietary members' club. It is organized on a vast scale
with multifarious activities providing a venue for sports and games, and facilities for recreation,
entertainment and for catering of food and refreshment. Guests are admitted but on the invitation
of members. It has 194 employees with a wage bill between one lakh and two lakh rupees. As per

1
Hereinafter referred as the Act, 1947
the definition, Industry means any ‘trade, business, undertaking, manufacture or calling of
employers’, and neither of these is being carried out by respondents. Hence, no charge of Industrial
dispute can be levied as the respondent is not an Industry.

Provisions

MADRAS GYMKHANA CLUB EMPLOYEES UNION V. MANAGEMENT2 dealt with an

important and difficult point in industrial law, namely, the meaning of 'industry' under section
2(j) of the Industrial Disputes Act, 1947. It was one of the vital issues that often came before the
Supreme Court for its decision. The validity of 'reference' for adjudication and the jurisdictional
competence of the adjudicating authority depended on the question as to whether or not the
dispute under reference was an industrial dispute; and this, in turn hinged on the issue whether
the enterprise in which the dispute arose could be deemed an 'industry' within the meaning of the
Act.3 The judicial opinion seems to favor a conclusion that a dispute would be considered an
'industrial dispute' if it had arisen in an 'industry' or 'undertaking' or in an establishment or
enterprise which has the attributes of an 'undertaking' of industrial character, and not otherwise.

Triple Test:

In Bangalore Water Supply vs. A. Rajappa4 a seven judge’s bench of the Supreme Court
exhaustively considered the scope of industry and laid down the following test which has
practically reiterated the test laid down in Hospital Mazdoor Sabha5 case.

Triple Test: where there is systematic activity, organized by cooperation between employer and
employee for the production and/or distribution of goods and services calculated to satisfy
human wants and wishes, prima facie, there is an “industry” in that enterprise. This is known as
triple test. The following points were also emphasized in the case:

1. Industry does not include spiritual or religious services or services geared to celestial bliss,
example, making, on a large scale, Prasad or food. It includes material services and things.

2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint,
private or other sector.

2
A.I.R. 1968 S.C. 554; 1968 L.I.C. (Labour and Industrial Cases) 547. Hereinafter the case is cited as the M.G.C.
and in this note references are to the pages in the L.I.C.
3
The Industrial Disputes Act, 1947,hereinafter referred to as the Act, § 2(j): "industry" means any business, trade, undertaking,
manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or
avocation or workmen.
4
AIR 1978 SC 548
5
Supra
3. The true focus is functional and the decisive test is the nature of the activity with special
emphasis on the employer-employee relations.

4. If the organization is a trade or business it does not cease to be one because of philanthropy,
animating the undertaking.

CONCLUSION

Clubs or self-service institutions or non-proprietary member’s club will be industry

provided they fulfil the triple test laid down in Bangalore Water Supply Case. In Cricket Club of
India vs. Bombay Labour Union6, the question was whether the Cricket Club of India, Bombay
which was a member club and not a proprietary club, although it was incorporated as a company
under the Companies Act was an industry or not. The club had membership of about 4800 and
was employing 397 employees. It was held that the club was a self-service institution and not an
industry and “it was wrong to equate the catering facilities provided by the club to its members
or their guests with a hotel. The catering facility also was in the nature of self-service by the club
to its members. This case has now been overruled.

Madras Gymkhana Club Employees Union vs. Management7, is another case on this
point. This was a member’s club and not a proprietary club with a membership of about 1200. Its
object was to provide a venue for sports and games and facilities for recreation and
entertainment. It was running a catering department which provided food and refreshment not
only generally bur also on a special occasion. It was held that the club was a member’s self-
serving institution and not an industry. No doubt that the material needs or wants of a section of
the community were catered but that was not enough as it was not done as part of trade or
business or as an undertaking analogous to trade or business. This case has also been overruled.

Both Cricket Club of India and Madras Gymkhana are now ‘industry’ as they fulfil the triple test
as laid in Bangalore Water Supply case. Both are systematically organized with the co-operation
of employer and employee for distribution of service to satisfy human wishes.

6
AIR 1969 SC 276
7
AIR 1968 SC 554