Page 170 - DMGT516_LABOUR_LEGISLATIONS

Unit 7: Dispute Resolution and Industrial Harmony

goods and services calculated to satisfy human wants and wishes. If these tests are satisfied Notes
prima facie, there is an "industry". The decisive test is functional and the focus is on the
nature of activity with special emphasis on the employer-employee relations. Absence of
profit motive or gainful objective is irrelevant wherever the undertaking is - whether in
the public, joint, private or other sector. If the organisation is a trade or business, it does
not cease to be one because of philanthropy animating the undertaking. All organised
activity possessing the triple elements, although not trade or business, may still be industry
provided the nature of the activity on the employer-employee basis bears resemblance to
what is to be found in a trade or business. This would take into the fold of the word
"industry" all undertakings, calling and services analogous to the carrying on the trade or
business. The consequences are: (i) professions; (ii) clubs; (iii) educational institutions; (iv)
other kindred adventures, if they fulfil the above triple tests, cannot be exempted from the
scope of Section 2(j). However, a restricted category of professions, clubs, cooperatives
and even gurukulas and little research labs may qualify for exemption if, in simple
ventures, substantially, and going by the dominant nature of criterion, substantively, no
employees are entertained but in minimal matters, marginal employees are hired without
destroying the non-employee character of the unit. A single lawyer, a rural medical
practitioner or urban doctor with a little assistance and/or menial servant may ply a
profession but may not be said to run an industry. That is not because the employee does
not make a contribution nor because the profession is too high to be classified as a trade or
industry with its commercial connotations but because there is nothing like organised
labour in such employment. Voluntary free medical clinic, Ashramites working at the
bidding of the holiness etc. may be exempted. Sovereign functions (governmental functions)
strictly understood qualify for exemption but not the welfare activities or economic
adventures. Where complex activities are carried on, some of which may qualify for
exemption, the test will be what is "dominant activity" as propounded in the Nagpur
Corporation Case. The whole undertaking will be "industry" although those who are not
workmen by definition may not benefit by the statute (Bangalore Water Supply and Sewerage
Board vs. A. Rajappa, 1978 I LLJ 349).
Hospitals carry out systematic activities with organised cooperation between employer
and employees, and also render services to human beings. Consequently, hospitals are
industries. The altruistic, charitable or non-profit intention does not subtract the hospital
or other organisations from the definition of industry.

Schools, Colleges, Universities, Solicitor's Offices, Gymkhana, Clubs, Institutes, Charitable
Projects, are also within the definition of industry.
Devasthanam as a whole is not an industry within the meaning of the Trade Unions Act or
I.D. Act. It cannot be regarded as carrying on trade or business. But the electricity and
water departments of the TTD will be an industry or analogous to an industry and the
employees in those department would be workmen within the meaning of the Trade
Unions Act and they will be entitled to register themselves under the Act. Similarly,
persons employed in TTD as drivers and conductors are also workmen employed in an
industry (T.T. Devasthanam vs. Commissioner of Labour, 1979 I LLJ 448).

The term 'industry' must be analogous to trade or business and have an element of economic
venture. The function organization of the agricultural department of the Punjab Government
is to render help to the agriculturists in the pursuit of farming and the nature of its work
is largely advisory. The department does not delve in economic ventures of any kind and
the character of its activity is neither that of trade or business nor any economic venture.
Therefore, the department cannot come within the ambit of the definition of 'industry' in
Section 2 (j) of the Act, and, as such no reference can be made in respect of any industrial

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