A, a lawyer and B a company secretary by profession had established a firm and started giving consultancy to the various company/clients of Delhi/NCR region. In the short span of 5 years they had made good reputation and
CS Professional · Labour Laws & Practice · PYQS · December 2021
A, a lawyer and B a company secretary by profession had established a firm and started giving consultancy to the various company/clients of Delhi/NCR region. In the short span of 5 years they had made good reputation and also started to appear NCLT and NCLAT. For the smooth discharges of functioning of the firm they employed a team of around 20 people which includes lawyers, Stenographer, accountants, computer operators, peon and driver for smooth discharge of function. One peon X apart from his normal function also used to work as domestic servant at the house of A. The brief function of the Stenographer is to prepare the petition and other correspondence of the firm. He also entrusted with the function of making the attendance record of other staff members and maintain the diary of the cases pending before the various court, he also used to work late hours apart from his normal duty hours. After two years, the services of peon X and stenographer was terminated. They raised an industrial dispute relating to their termination. Now in the lights of provisions of Industrial Disputes Act, 1947, answer the following questions : Whether the Firm established by Mr. A and B is covered in the domain of Industry for extending the benefits of Industrial Disputes Act, 1947? How far the services of domestic servants are covered under the concept of Industry of the IDA 1947?
Answer & Explanation:
According to the 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. The Supreme Court carried out an in-depth study of the definition of the term industry in a comprehensive manner in the case of Bangalore Water Supply and Sewerage Board v. A Rajiappa, AIR 1978 SC 548 , after considering various previous judicial decisions on the subject and in the process, it rejected some of them, while evolving a new concept of the term "industry" by laying down triple test. The Supreme Court observed that professions, clubs, educational institutions, co-operatives, research institutes, charitable projects and other kindred adventures, if they fulfil the triple tests listed in (1), cannot be exempted from the scope of Section 2(j). A restricted category of professions, clubs, co-operatives and 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. If in a pious or altruistic mission many employ themselves, free or for small honoranum or like return, mainly drawn by sharing in the purpose or cause, such as 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 of the holiness, divinity or 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 undertakings alone are exempt not other generosity compassion, developmental compassion or project. A solicitor's establishment can be an "industry" (as per Bangalore Water Supply and Sewerage Board v. A Rajiappa , case). Regarding liberal professions like lawyers, doctors, etc., the test of direct cooperation between capital and labour in the production of goods or in the rendering of service or that cooperation between employer and employee is essential for carrying out the work of the enterprise. The personal character of the relationship between a doctor or a lawyer with his professional assistant may be of such a kind that requires complete confidence and harmony in the productive activity in which they may be cooperating. In view of the above, Firm established by Mr. A and B is covered in the domain of Industry for extending the benefit of and domestic service are not included in industry.
Topics: Industrial Disputes Act, 1947
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