List of top Legal Studies Questions on Labour & Industrial Law

The landmark judgment of Bangalore Water Supply and Sewerage Board v. A. Rajappa & Others, delivered by the Supreme Court of India in 1978, significantly influenced the interpretation of the term ‘industry’ under the Industrial Disputes Act, 1947. The case cantered on whether the Bangalore Water Supply and Sewerage Board, a statutory body, could be classified as an industry under the Act, thereby making its employees eligible for certain protections and benefits. Prior to this case, the definition of ‘industry’ had been subject to varied interpretations, leading to confusion and inconsistency in its application. The Industrial Disputes Act, 1947, broadly defined ‘industry’ to include any business, trade, undertaking, manufacture, or calling of employers and any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. However, this expansive definition left room for ambiguity, especially concerning statutory bodies and non-profit organizations. In this case, the Bangalore Water Supply and Sewerage Board argued that it was not an industry, emphasizing its statutory duties and public welfare objectives. The Board contended that its primary purpose was to provide essential services, not to engage in profit-making activities typical of private enterprises. On the other hand, the respondents, including A. Rajappa, argued that the Board’s activities fell within the scope of an industry as defined by the Act, and thus, its employees should be entitled to the benefits and protections accorded to workers in industries. The Supreme Court, in its judgment, undertook a comprehensive analysis of the term ‘industry.’ The bench, led by Chief Justice M. Hameedullah Beg, laid down a broad and inclusive definition of ‘industry.’ The Court asserted that what mattered was the nature of the activity and the relationship between the employer and the employees. This interpretation aimed to ensure that a wide range of workers, including those employed in public utility services, statutory bodies, and even some non-profit organizations, would be covered under the protective umbrella of the Industrial Disputes Act. The decision in Bangalore Water Supply v. A. Rajappa & Others had far-reaching implications. It extended the scope of labour protections to a broader spectrum of workers, ensuring that more employees could benefit from the dispute resolution mechanisms and other safeguards provided under the Industrial Disputes Act. This judgment underscored the judiciary’s role in interpreting labour laws to promote social justice and protect workers’ rights in a rapidly industrializing nation.
(Extract from Bangalore Water Supply v. A. Rajappa & Others, 1978 2 SCC)
Section 25-N of the Industrial Disputes Act, 1947 prescribes the conditions precedent to retrenchment of workmen. Section 25-O provides for the procedure for closing an undertaking of an industrial establishment. Under Section 25-N of the Act before retrenchment of workman can be affected two conditions must be fulfilled namely (a) the workman has been given three months’ notice in writing indicating the reasons for retrenchment or paid in lieu of such notice, wages for the said period; and (b) the prior permission of the appropriate Government has been obtained by the employer upon an application having been made. Sub-section (3) of Section 25-N vests power in the State Government to grant or refuse permission to retrench an employee. Section 25-O enjoins an employer, who intends to close an undertaking to apply for prior permission at least ninety days before the date on which the intended closure is to become effective, setting out the reasons for the intended closure and simultaneously serve a copy of such application on the representatives of the workmen in the prescribed manner. Sub-section (9) of Section 25-O provides that where an undertaking is permitted to be closed or permission for closure is deemed to be granted, every workman, who is employed in that undertaking immediately before the date of application for permission under the said section, shall be entitled to receive compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.
Evidently, both Section 25-N and 25-O are couched in a mandatory form. They give effect to the public policy of preventing the exploitation of labour by commanding the employer to follow the defined process for retrenchment of an individual or group of employees or for closure of the establishment as such.
Evidently, both Section 25-N and 25-O are couched in a mandatory form. They give effect to the public policy of preventing the exploitation of labour by commanding the employer to follow the defined process for retrenchment of an individual or group of employees or for closure of the establishment as such.
Read the excerpts from an opinion piece entitled "Labour Law Suspension: Hit The Workers When They Are Down" by Pranab Bardhan, Professor of Graduate School at the Department of Economics at the University of California, Berkeley, published by Bloomberg Quint and answer the questions below:
It is interesting that while Indian states are trying to suspend labour protection and make it easier for employers to sack workers, many other countries are trying to minimise lay-offs in this period of crisis by giving wage subsidy to employers to induce them to keep the workers on the payroll. These programs are an effort to reduce displacement, distress, and loss of worker morale, and at the time of economic recovery less friction and de-skilling. The wage subsidies are quite substantial in Europe, Canada, Australia, and New Zealand. It is also being attempted in some developing countries like Argentina, Bangladesh, Botswana, China, Malaysia, Philippines, South Africa, Thailand, and Turkey.
In the continuing sordid saga of callousness and brutality with the millions of suddenly unemployed migrant workers over the last six weeks since lockdown, an interesting fact to note is that employers who mostly had stopped paying them over this period, thus causing widespread hunger and homelessness, have lobbied with state governments to stop sending them back to their villages so that they remain available when the industries restart. I am actually in favour of a thorough overhaul. The current labour laws, tangled and outdated as they are, serve the long-term interests of neither the employers nor the workers. At the beginning of this century, the Second National Commission of Labour made a whole set of sensible recommendations for such an overhaul, but they remain largely unimplemented. I would support abolishing the firm size limit on labour retrenchment altogether, provided there is a provision for adequate unemployment benefits, both for regular and contract workers, and there is something like a state-provided universal basic income supplement as a fall-back option for everybody. "Allowing more flexibility in hiring and firing has to be combined, as part of a package deal, with a reasonable scheme of unemployment compensation from an earmarked fund, to which employers and employees should both regularly contribute." For far too long businesses in India, with some notable exceptions, have considered labour as a necessary but troublesome cog in the production machine, and the focus is to squeeze the maximum out of it with minimum pay and benefits while brandishing the threat of job insecurity. Organised labour, often under politicised partisan leadership from outside, has played that adversarial game. It is in the long-term interests of both sides to see at the ground level that labour-friendly practices can actually enhance long- term productivity and profitability. If cooperation can replace mutual suspicion and labour representatives can be trusted to participate in corporate governance as is the practice, say, in Germany and a few other European countries labour organisations can play a responsible role in achieving mutually beneficial goals. Taking the cover of the pandemic to unilaterally whittle down labour protections is going the opposite way, to distrust, and labour unrest.