Over the years, the Supreme Court (“SC”) has played a pivotal role in the enforcement of labour laws in India, achieving industrial harmony and stimulating cooperation between employers and employees. There have been numerous instances wherein judicial activism, in light of glaring legislative inadequacies, has ensured the enforcement of labour laws in India. Some of these instances shall be discussed below.
Before the landmark judgment in the case of Bangalore Water Supply & Sewerage Board v. A. Rajappa (“BWSSB”), several disputes arose relating to the definition of the term ‘industry’ under the Industrial Disputes Act, 1947 (“IDA”) and whether or not establishments belonging to the categories of hospitals, educational and research institutions, clubs, governmental departments, etc. came within the ambit of ‘industry’ continued to baffle the courts. Owing to this, the SC in the BWSSB case stepped in and expanded the definition of ‘industry’ to incorporate all establishments that involved an employer-employee relationship and that were otherwise kept outside the scope of the definition of ‘industry’ owing to the activities performed by them and the objectives pursued by them. The SC, therefore, formulated a ‘Triple Test’ to determine whether an enterprise is an ‘industry’ or not. According to this test, an enterprise is an ‘industry’ if: (i) it performs a systematic activity; (ii) involves the cooperation between employers and employees; and (iii) is undertaken through the production and/or distribution of goods or services to further human wants and needs. Thereafter, this test was borrowed and incorporated into the definition of ‘industry’ under Section 2(j) of the IDA through an amendment in 1982 and later on incorporated in section 2(p) of the Industrial Relations Code, 2020 (“Code”) as well. Therefore, now the law that stands is that all establishments, irrespective of the objectives pursued by them, would be termed as an industry as long as they satisfy the triple test.
Further, in the case of Agriculture Produce Market Committee v. Ashok Harikuni, the issue that arose before the SC was whether a market committee established under the state act and functioning without any profit motive would be termed as an ‘industry’. Herein, the court observed that mere statutory status of a corporation would not make an enterprise cease to be an industry. The court held that only the inalienable functions of government would fall outside the ambit of industry and as long as a function can be performed by private individuals, it would not be termed as a state function. Further, the Court posited that even though government funding towards welfare activities is an essential function of the state, it can be performed by private individuals as well. Therefore, while interpreting whether a body created under a statute is an industry or not, it is pertinent to discern the pith and substance of the statute. Hence, this judgment ensured that establishments are not able to escape liability under the IDA merely because of the manner in which it chooses to exercise its function, or due to the power conferred upon it.
The SC has also played a vital role in determining who can be a ‘workman’ under the IDA. The definition of ‘workman’, as defined under Section 2(s) of the IDA, has been amended several times to widen its scope. The existence of an employer-employee relationship is a precursor for the determination of ‘workman’ under the IDA. For a person to bring a case within the definition of ‘workman’, he must prove that he is employed under the contract of service rather than a contract for service. The SC, over the years, has formulated different tests including the supervision and control test, the economic control test, the integration test, etc. to determine the existence of an employer-employee relationship. The court in the case of Workmen of Nilgiri Coop. Market Society Ltd. v State of Tamil Nadu opined that a single test is not sufficient to determine the existence of an employer-employee relationship. Therefore, a more holistic approach must be adopted, and all these tests must be considered while making such determination. These tests have been formulated to ensure that the employers of an establishment are not able to camouflage themselves as independent contractors to escape the clutches of law. D.C. Dewan Mohideen Sahib & Sons v. Industrial Tribunal, Madras is one such case wherein the SC was successful in bringing the workers of the establishment within the scope of a contract of service despite the employer of the establishment trying to prove otherwise. The issue that arose, in this case, was whether the people employed by contractors to work in the beedi concerns were ‘workman’ under the IDA. The SC, while applying the supervision and control test, held the people to be ‘workman’ and stated that these contractors were merely the branch managers of the management of the establishment, and therefore the relationship of an employer and an employee existed between them. The Court observed that the so-called independent contractors did not, in reality, have any independence as they had no right to insist upon the management to supply them with raw materials in case the latter chose otherwise, and the management had the right to reject the beedis in case they failed to meet standards. This means that the management had full supervision and control over the operations of the workers. In essence, the system of employing a contractor who then further employed nine people to work in the establishment was merely a disguise to avoid the rules laid out in the law. Hence, the SC managed to protect innocent workers from victimisation and exploitation by their employers who could misuse the loopholes in law to the disadvantage of workers.
With respect to the right of workers to protest against injustices caused by the actions of their employers, the SC in the case of All India Bank Employees v. National Industrial Tribunal held that a strike, while legal under the IDA, does not grant any fundamental right to participate in it. Further, the SC,in the case of Kameshwar Prasad v State of Bihar spelt out the concept of ‘demonstrations’ for the protection of the right of workers to protest. There is no provision under the labour laws which define the term ‘demonstration’ in contrast to the term ‘strike’ that has been defined under section 2(zk) of the Code. In the Kameshwar Prasad case (supra), the respondent had placed an outright ban on government servants from participating in either demonstrations or strikes. The SC in this case defined demonstrations as “a visible manifestation of the feelings or sentiments of an individual or a group”. Further, the court clarified that demonstrations such as dharna, gherao, etc., are a form of speech and expression and thus, if a particular form of demonstration falls within the ambit of Article 19(1)(a) and Article 19(1)(b) of the Constitution of India (“Constitution”), then it is the fundamental right of a person to participate in it. However, the court further noted that the demonstrations must be peacefully conducted outside work hours without any breach of tranquillity or disorder. If the demonstrations involve any sort of violence, they cannot avail the protection under Article 19 of the Constitution. Hence, conducting peaceful demonstrations is a fundamental right of citizens as long as they are not hindering the operations of the employer. Therefore, no person, be it a government employee or any other employee, can be banned from participating in peaceful demonstrations to protest for the protection of their interests. This was a leap in the protection of rights of workers and thereby, the enforcement of labour laws in India. With regards to the prevention of sexual harassment of workers at workplaces, the SC in the case of Vishaka v State of Rajasthan noted that there are essentially no legislative rules for the protection of women in the workplace from sexual harassment and for enforcing gender equality. The SC further opined that each incident of sexual harassment in a workplace is in clear violation of the fundamental right of ‘Gender Equality’ and the rights guaranteed under Article 14, 15, and 21 of the Constitution. Since there was a lack of laws in such a situation, a complainant would have to go through the lengthy and complicated process of filing a criminal complaint against the accused. In light of these issues and to ensure the proper enforcement of the rights of the complainant, the SC defined the term ‘sexual harassment’ for the first time and laid down the guidelines and norms for protection from such sexual harassment. These guidelines had to be strictly observed at all workplaces or other institutions. These included guidelines such as duties of the employers, formation of a special committee to hear and act on all grievances etc. This judgment is, therefore, another laudable piece of jurisprudence since it later became the foundation for the enactment of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 ensuring that gender justice is also fully incorporated in the labour laws of India.
Ishan Goel and Arushi Gupta, fifth-year students at the JGLS.
Picture Credits: The Wire
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