Meaning and Concept of Industry
The term Industry is a foundational concept under Indian Labour Law and is defined under Section 2(j) of the Industrial Disputes Act, 1947. According to this provision, industry means any business, trade, undertaking, manufacture, or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation of workmen. The definition is intentionally broad to bring a wide range of economic and service activities within the scope of labour welfare legislation. The purpose of defining industry is to determine the applicability of the Industrial Disputes Act and to protect workmen engaged in organized activities. The concept emphasizes systematic activity carried on through cooperation between employer and workmen for the production or distribution of goods or services.
Judicial Interpretation and Triple Test
The scope of the term “industry” has been extensively interpreted by courts. The landmark judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) laid down the famous Triple Test to determine whether an activity qualifies as an industry. According to this test, there must be (1) systematic activity, (2) cooperation between employer and employee, and (3) production or distribution of goods or services to satisfy human wants. The Supreme Court held that even service-oriented institutions like hospitals, educational institutions, and charitable organizations may fall under the definition of industry if these conditions are satisfied. This interpretation expanded the ambit of labour protection and strengthened workers’ rights across sectors.
Exclusions and Legal Importance
Despite its wide scope, certain activities are excluded from the definition of industry. Sovereign functions of the State such as defense, legislative functions, judiciary, and law enforcement are generally not considered industries. However, non-sovereign activities carried out by government departments may still qualify as industries. The definition of industry is crucial because the applicability of provisions relating to industrial disputes, lay-off, retrenchment, strikes, and lockouts depends on it. If an establishment is classified as an industry, both employers and workmen become subject to statutory obligations and protections under the Industrial Disputes Act, 1947, ensuring industrial justice and harmony.
Real-Time Practical Example
A private hospital employing doctors, nurses, technicians, and support staff provides medical services to the public on a systematic basis. There is cooperation between the management and employees, and the service satisfies human needs. Applying the Triple Test laid down in the Bangalore Water Supply case, such a hospital qualifies as an industry under the Industrial Disputes Act. As a result, disputes between hospital management and staff relating to service conditions or termination would be treated as industrial disputes and resolved under labour law mechanisms.
Mnemonic to Remember Industry
Mnemonic: “S.E.R.V.E”
S – Systematic activity
E – Employer–employee cooperation
R – Rendering goods or services
V – Value to human needs
E – Except sovereign functions
This mnemonic helps remember the essential elements of an industry during examinations.
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