QUESTION 1

(a)

a) Unfair Labour Prac ces

Workers play a key role in the economic growth of a country by contribu ng to the produc on of
goods and services. However, disputes o en arise between employers and employees over issues
like wages, working hours, and union demands. To address these conflicts, the Industrial Disputes
Act, 1947 was introduced to promote industrial peace, ensure workers' welfare, and prevent unfair
prac ces.

Unfair Labour Prac ces:

Unfair labour prac ces refer to decei ul ac ons by employers or employees to gain unfair
advantages. They are prohibited under Sec on 2(ra) and the Fi h Schedule of the Industrial
Disputes Act, 1947. Sec ons 25-T and 25-U outline the provisions and penal es for such prac ces,
including imprisonment or fines.

Unfair Prac ces by Employers:

 Preven ng employees from joining trade unions.

 Harassing or penalizing employees for union ac vi es.

 Dismissing or transferring workers unfairly.

 Using contract workers to reduce wages.

 Refusing collec ve bargaining and promo ng violence among workers.

Unfair Prac ces by Trade Unions:

 Encouraging illegal strikes and using threats.

 Preven ng workers from entering the workplace.

 Damaging property or encouraging violence.

 Refusing to engage in collec ve bargaining.

Legisla on and Penal es:

Under Sec on 25-U, penal es for unfair labour prac ces include imprisonment for up to six months
or a fine of ₹1,000 or both.

Se lement of Industrial Disputes:

Disputes can be resolved through:

1. Collec ve Bargaining: Nego a on between employers and employees without third-party

interference.

2. Concilia on: Involves a neutral conciliator assis ng the par es in reaching a mutual
agreement.

3. Voluntary Arbitra on: Disputes are se led by an arbitrator whose decision is binding.
 4. Adjudica on: If other methods fail, disputes are referred to statutory bodies like the Labour
Court or Industrial Tribunal for resolu on.

These mechanisms ensure industrial peace and safeguard the interests of both workers and
employers.

Authori es under the Industrial Disputes Act, 1947 for Dispute Se lement

The Industrial Disputes Act, 1947 aims to promote labour welfare, prevent unfair prac ces, and
resolve industrial disputes. It provides a detailed se lement mechanism through various authori es,
including:

1. Work Commi ees (Sec on 3):

Work commi ees consist of representa ves from both employers and employees. They aim to
maintain amicable rela ons and prevent disputes. A work commi ee is mandatory where 100 or
more workers have been employed in the previous 12 months. The commi ee ensures peaceful
employer-worker rela ons and takes steps to avoid conflicts.

2. Concilia on Officer (Sec on 4):

The government appoints a concilia on officer to se le disputes through informal nego a on. This
officer can be appointed temporarily or permanently for a specific area or industry. They have the
authority to inquire about disputes and promote industrial peace by assis ng par es in reaching a
mutual agreement.

3. Concilia on Board (Sec on 5):

A board of concilia on consists of a chairman and 2 or 4 members appointed by the government.
The board inves gates disputes and tries to se le them amicably. If the dispute is resolved, a report
is submi ed with a memorandum of se lement; if not, the board submits a report with causes and
recommenda ons.

4. Court of Inquiry (Sec on 6):

The government can appoint a Court of Inquiry to inves gate disputes and submit a report within six
months. It consists of one or more independent persons and func ons like the Bri sh Industrial
Courts Act, 1919. The court inves gates the dispute and provides a detailed report to the
government.

5. Labour Court (Sec on 7):

The Labour Court is cons tuted by the government and headed by a presiding officer.

6. Industrial Tribunal (Sec on 7-A(1)):

The government sets up Industrial Tribunals to se le industrial disputes. These tribunals can be
cons tuted for a specific period or case. The presiding officer heads the tribunal and resolves
disputes that are beyond the jurisdic on of the Labour Court.

7. Na onal Tribunal (Sec on 7-B(1)):

Na onal Tribunals deal with cases of na onal importance or where industries operate across
mul ple states. The Central Government appoints a presiding officer, who must be a High Court
judge, to handle such disputes.

These authori es ensure that industrial disputes are handled efficiently and promote industrial
peace across the country
 QUESTION 1
(b)
b) COLLECTIVE BARGAINING
The Interna onal Labour Organisa on (ILO) states the process of collec ve bargaining to be a
fundamental right available to all workers of any organisa on, meaning all the employees working in
a company are en tled to submit their grievances to their employers and to be able to nego ate for
such grievances. Further, as per the ILO, the process of collec ve bargaining helps reduce inequali es
in the workplace while providing workers with labour protec on.

Generally, collec ve bargaining occurs between members of a company and labour union leaders.
Usually, these union leaders are elected by workers to present their grievances and to represent
them and their interests. The process of collec ve bargaining is involved when an employee’s
contracts are to be renewed or when employers make any modifica ons to the workplace or any
terms of the contract. These modifica ons include, but are not limited to:

1. Employment condi ons,

2. Condi ons of work,

3. Rules related to workplace,

4. Ma ers related to base pay, wages, and over me pay,

5. Holidays, sick days and vaca ons,

6. Benefits related to issues like that of re rement and health care.

Objec ves of Collec ve Bargaining

The primary objec ves of collec ve bargaining are:

 For Employees: To secure fair wages, improved working condi ons, job security, and
protec on against exploita on.

 For Employers: To maintain industrial peace, prevent strikes, and ensure smooth opera ons
by addressing workers' concerns through dialogue.

Goals of Collec ve Bargaining

The main goal of collec ve bargaining is to establish a collec ve bargaining agreement (CBA) that
sets the rules and condi ons of employment for a specified period. Such agreements benefit both
employers and employees by fostering a coopera ve and produc ve work environment.

Types of Collec ve Bargaining

1. Distribu ve Bargaining

2. Integra ve Bargaining

3. Concessionary Bargaining

4. Produc vity Bargaining

Top ten essen al features of collec ve bargaining

1. Collec ve nature of the nego a on process

2. Con nuous nature of the nego a on process
3. Bipar te nature of the nego a on process
4. Discipline
5. Flexibility
6. Implementa on
7. Collec ve bargaining and collec ve agreements are different
8. Essen al condi ons for a successful collec ve bargaining
9. Favourable poli cal climate
10. Freedom of associa on

Process of Collec ve Bargaining

The process of collec ve bargaining involves the following stages:

1. Prepara on

2. Nego a on

3. Bargaining and Agreement

4. Implementa on

5. Grievance Handling and Renego a on

Advantages of Collec ve Bargaining

 Improved Working Condi ons: Nego ated agreements ensure be er wages, job security,
and work-life balance.

 Industrial Peace and Harmony: By addressing concerns through dialogue, disputes are
minimized, preven ng strikes and lockouts.

 Increased Produc vity: Sa sfied employees are more mo vated and produc ve, benefi ng
the organiza on.

 Sense of Empowerment: Employees feel empowered when their voices are heard and their
rights are respected.

Challenges of Collec ve Bargaining in India

 Lack of Legal Backing: India lacks a comprehensive legal framework explicitly suppor ng
collec ve bargaining.

 Low Trade Union Density: Only a small por on of India’s workforce is unionized, limi ng the
effec veness of collec ve bargaining.

 Mul plicity of Trade Unions: The existence of mul ple trade unions o en weakens collec ve
bargaining efforts.
  Employer Resistance: Employers some mes resist engaging in collec ve bargaining due to
fear of increased costs and reduced control.

Landmark Case on Collec ve Bargaining in India

The Karnal Leather Karamchari Sangathan v. Liberty Footwear Company (1990) case was a
landmark judgment where the Supreme Court of India recognized the importance of collec ve
bargaining under the Industrial Disputes Act, 1947, emphasizing that social jus ce can be achieved
through effec ve nego a on between employees and employers.

Conclusion
Collec ve bargaining is an essen al tool for promo ng fair employment prac ces, ensuring industrial
harmony, and safeguarding the rights of workers. While the process has evolved over the years,
challenges remain in India due to the absence of a strong legal framework and low trade union
penetra on. Nevertheless, effec ve collec ve bargaining can create a win-win situa on for both
employees and employers, leading to a more produc ve and peaceful work environment.
 QUESTION 2

Q2. Define industry under Industrial Dispute Act 1947 and elaborate it with the judgment of
Supreme Court in the Bangalore Water Supply and Sewerage Board v. A. Rajappa case.

The term “industry” is defined under Sec on 2(j) of the Industrial Disputes Act, 1947, which states
that an industry includes “any systema c ac vity carried on by coopera on between an employer
and his workmen (whether such workmen are employed by such employer directly or by or
through any agency) for the produc on, supply, or distribu on of goods or services with a view to
sa sfy human wants or wishes.” This defini on was included to ensure that any organized ac vity
involving workers and employers that produces goods or provides services falls under the purview of
labor laws. The main purpose of this broad defini on was to ensure that workers engaged in various
sectors, whether private or public, enjoy protec on under the Industrial Disputes Act. The defini on
includes both profit and non-profit organiza ons, making it clear that the primary focus is not on
genera ng income but on sa sfying human wants and needs.

For an ac vity to be considered an industry under the Act, four essen al elements must be fulfilled.
First, there must be a systema c ac vity that is organized and con nuous, not a casual or one- me
engagement. The ac vity should have a structured process with defined objec ves and a clear
organiza onal framework. Second, there should be coopera on between the employer and the
workmen. The employer provides work, wages, and supervision, while the workmen contribute their
labor and exper se to complete the assigned tasks. Third, the ac vity must involve the produc on,
supply, or distribu on of goods or services. This includes manufacturing industries, service sectors,
and ins tu ons that provide essen al services. Lastly, the ac vity should be aimed at sa sfying
human wants or wishes, which may include tangible goods such as clothing and food, or intangible
services such as educa on, healthcare, and sanita on. It is important to note that the ac vity does
not necessarily have to be for profit. For example, charitable hospitals providing free medical services
or educa onal ins tu ons offering free educa on also sa sfy this criterion.

Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978 AIR 548)

The case of Bangalore Water Supply and Sewerage Board v. A. Rajappa is a landmark judgment
delivered by the Supreme Court of India that significantly expanded and clarified the defini on of
“industry” under the Industrial Disputes Act, 1947. The case arose when the Bangalore Water Supply
and Sewerage Board (BWSSB), a statutory body responsible for providing water supply and sewerage
services in Bangalore, was challenged by its employees, represented by A. Rajappa and others. The
employees raised disputes regarding their working condi ons and demanded be er wages and
treatment. However, BWSSB argued that they were performing a sovereign func on of the State,
providing an essen al public u lity, and hence could not be classified as an industry under the
Industrial Disputes Act. The core legal ques on in this case was whether statutory bodies like BWSSB,
engaged in providing public services, could be classified as an “industry” and thus be subjected to
the Industrial Disputes Act.
In a historic decision, a 7-judge bench of the Supreme Court, led by Jus ce Krishna Iyer, laid down a
comprehensive and broad framework for determining whether an ac vity qualifies as an industry.
The Court rejected BWSSB’s claim that it was performing a sovereign func on and could not be
considered an industry. The Court emphasized that the test to determine industry should be based
on the nature of the ac vity rather than the iden ty of the ins tu on. To simplify the process of
determining what cons tutes an industry, the Supreme Court formulated the Triple Test, which
became a guiding principle for interpre ng the defini on of industry in future cases.

Triple Test to Determine an Industry

The Triple Test formulated by the Supreme Court in this case included three essen al condi ons that
must be sa sfied for an ac vity to be considered an industry. The first condi on is the presence of a
systema c and organized ac vity. The ac vity must be structured, organized, and con nuous, not a
one- me effort or an irregular event. There should be a methodical and regular pa ern of
func oning. For instance, a manufacturing unit producing consumer goods operates systema cally
with defined processes and machinery. Second, there should be coopera on between the employer
and the workmen. The employer provides raw materials, infrastructure, and wages, while the
employees contribute their labor, me, and skills to achieve a common goal. This coopera ve
rela onship forms the backbone of any industrial ac vity. For example, in a sugar factory, the
employer arranges the sugarcane and machinery, while the workers process it into refined sugar.

The third condi on is that the ac vity should involve the produc on, supply, or distribu on of
goods or services to sa sfy human wants or wishes. This element emphasizes that industries are
not limited to manufacturing ac vi es alone but also include service providers, whether in the
private or public sector. The focus is on mee ng human needs, regardless of whether the ac vity is
conducted for profit or as a charitable service. For example, a government-owned power supply
company or a charitable hospital providing medical services qualifies as an industry under this
criterion. The Court clarified that the profit mo ve is not necessary to define an industry. Even if the
ac vity is carried out for charitable purposes or public welfare, as long as it sa sfies the above
condi ons, it qualifies as an industry.

Expanded Scope of Industry Post-Judgment

The judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa significantly broadened
the scope of the term “industry” and brought several previously excluded organiza ons under the
ambit of the Industrial Disputes Act. The Court ruled that public u lity services, statutory
authori es, and service-oriented ins tu ons could be considered industries if they sa sfied the
Triple Test. The decision meant that organiza ons engaged in essen al public services such as water
supply, sanita on, and electricity distribu on, which were earlier thought to be sovereign func ons,
were now brought within the defini on of industry. For example, municipal corpora ons providing
sanita on and water supply services were considered industries a er this judgment.

Addi onally, charitable ins tu ons and educa onal organiza ons were included under the
defini on of industry. Ins tu ons engaged in providing healthcare, educa on, and social welfare
were recognized as industries if they had an organized structure and employed workers. For instance,
a charitable hospital providing free treatment to underprivileged communi es is considered an
industry because it systema cally provides a service that sa sfies human wants. Similarly, clubs and
recrea onal organiza ons that employ workers and operate in an organized manner were also
included. For example, a gymkhana employing coaches, maintenance staff, and administra ve
personnel was considered an industry.

Exclusions from the Defini on of Industry

While expanding the defini on of industry, the Supreme Court also provided certain exclusions to
prevent misuse of the term. The Court clarified that sovereign func ons performed by the State,
such as maintaining law and order, defense, and judiciary, were not industries. Ac vi es that are
inherently linked to the sovereign power of the State, including administra on, legisla on, and the
enforcement of law, were beyond the scope of industry. For instance, the police force maintaining
internal security or the judiciary administering jus ce are performing sovereign func ons and cannot
be classified as industries. Similarly, ac vi es carried out by volunteers or individuals without
systema c employment were excluded. For example, a neighborhood commi ee organizing a
cleanliness drive on a voluntary basis does not qualify as an industry.

Key Observa ons by the Court

The Supreme Court made several significant observa ons while delivering this judgment. One of the
most important observa ons was that profit mo ve is not a determining factor in classifying an
ac vity as an industry. The focus should be on the systema c nature of the ac vity and the
employer-workmen rela onship. Ins tu ons engaged in public welfare and charitable work, as long
as they meet the Triple Test, should be considered industries. The Court also highlighted that
statutory bodies and public authori es that perform commercial or service-oriented func ons may
be classified as industries. For example, the postal department engaged in mail delivery and
telecommunica on services qualifies as an industry because it systema cally provides a service to
meet public needs.

Significance and Impact of the Judgment

The Bangalore Water Supply and Sewerage Board v. A. Rajappa judgment had far-reaching
consequences and significantly impacted the applica on of labor laws in India. One of the major
outcomes was the wider coverage of workers’ rights under the Industrial Disputes Act. By expanding
the defini on of industry, the judgment ensured that workers engaged in various sectors, including
public u li es, charitable organiza ons, and educa onal ins tu ons, could benefit from labor
protec ons. The inclusion of public u lity services and statutory bodies under the defini on of
industry meant that employees working in such organiza ons could raise disputes and seek remedies
under the Industrial Disputes Act.

The judgment also served as a judicial precedent for subsequent cases involving the interpreta on of
the term industry. It provided a clear and structured framework (the Triple Test) that helped courts
assess whether an ac vity qualifies as an industry. Furthermore, the judgment helped prevent
misuse of sovereign immunity by organiza ons that previously claimed exemp on from labor laws
by asser ng that they were performing sovereign func ons. The ruling ensured that only core
sovereign func ons, such as defense, police, and the judiciary, were excluded, while other service-
oriented func ons carried out by public authori es were brought under the ambit of industry.
Conclusion

The judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa revolu onized the
interpreta on of the term “industry” under the Industrial Disputes Act, 1947. It expanded the scope
of the defini on, ensuring that a wide range of organiza ons and sectors came under the purview of
labor laws. By introducing the Triple Test, the Supreme Court provided a structured framework to
determine whether an ac vity qualifies as an industry. The judgment not only protected the rights of
workers across diverse sectors but also prevented the misuse of sovereign immunity by public
authori es. This landmark judgment con nues to influence labor jurisprudence in India and remains
a cornerstone in the protec on of workers’ rights.