What is the definition of “industry”

Transcript:

Ever wondered if a university could be considered an “industry” and every employee, a worker? How about a hospital, an advocate’s chamber or a department of the Government of India? 

Unconventional as it may sound, the answer has real consequences. Millions of employees across India, in hospitals, universities, and government departments, may or may not be entitled to the full protections of labour law. And it all comes down to the interpretation of one word: industry.

In 1978, a seven-judge Bench in Bangalore Water Supply v. Rajappa laid down the Triple Test, holding that any systematic activity for the production of goods or rendering of services qualifies as an “industry” under the Industrial Disputes Act. To be an industry, the “profit-motive” of an enterprise was held to be irrelevant. Additionally, no exemption was granted to the “sovereign functions” of the State. This meant that Government Departments would also fall under the definition of industries. 

The ruling was expansive, worker-oriented. It brought hospitals, universities, and charitable institutions all within the reach of labour law. But it also created what Justice Krishna Iyer himself called a “definitional expansionism”, and decades of conflicting judgments followed.

In 2005, a five-judge constitution bench noted that the expanded definition of “industry” has resulted in prolonged litigation and docket-explosion in labour courts. Identifying the need for re-considering of the expanded definition, the five-judge bench referred the decision in Bangalore Water Supply v. Rajappa to a larger bench. 

More than twenty years later, a nine-judge bench, led by Chief Justice Surya Kant, heard arguments on the matter over three days – from 17 March to 19 March, aiming to settle the matter once and for all. 

Curious to know more? We, at the Supreme Court Observer, have everything you need!  

On our case page, you will find detailed hearing reports, a  case background, key issues, argument transcripts and written submission by advocates.  

Access all resources on our case page! Visit www.scobserver.in to know more.