Industry, industrial dispute, individual dispute, worker and employer

1. “Industry”: section 2(p) of the IR Code

Industry means any systematic activity carried on by co-operation between an employer and worker (whether the worker is employed directly or through an agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not wants or wishes that are merely spiritual or religious), whether or not capital has been invested and whether or not the activity is carried on with a motive of gain or profit. It does not include:

• institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service;
• any activity of the appropriate Government relatable to its sovereign functions, including all activities of the Central Government departments dealing with defence research, atomic energy and space;
• any domestic service; and
• any other activity notified by the Central Government.

The old section 2(j) of the ID Act was a list of words (“any business, trade, undertaking, manufacture or calling of employers” and “any calling, service, employment, handicraft, or industrial occupation or avocation of workmen”) without a test. The courts supplied the test. The Industrial Disputes (Amendment) Act, 1982 tried to substitute a narrower definition, but it was never brought into force.

2. Bangalore Water Supply and the triple test

In Bangalore Water Supply and Sewerage Board v. A. Rajappa, 1978 INSC 41, AIR 1978 SC 548, (1978) 2 SCC 213, a seven-judge Bench held the Water Supply Board to be an industry. Krishna Iyer J. laid down the triple test: where there is (i) systematic activity, (ii) organised by co-operation between employer and employee, (iii) for the production or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious ones), the activity is an industry. Further propositions:

• Absence of profit motive or capital is irrelevant, whether the venture is public, private or joint.
• The focus is on the nature of the activity and the employer-employee relation, not on the motive of the employer. Professions, clubs, educational institutions, co-operatives, research institutes and charitable projects are industries if they satisfy the test.
• Dominant nature test: where an undertaking has several activities, the predominant nature of the whole decides; departments that are integrated with it go with it.
• Only sovereign functions, strictly understood, are excluded, not welfare activities or economic ventures of government. Severable industrial units of a sovereign department remain industries.

The decision overruled the narrower view in Safdarjung Hospital (1970) and approved State of Bombay v. Hospital Mazdoor Sabha, 1960 INSC 15, AIR 1960 SC 610, which had held a government hospital to be an industry. Notice how section 2(p) of the Code takes the triple test into its main clause and then writes in the exclusions (charitable institutions, sovereign functions, domestic service) that Rajappa had refused to make.

3. The reference to a larger Bench and its outcome

In State of U.P. v. Jai Bir Singh, 2005 INSC 258, (2005) 5 SCC 1, a Constitution Bench of five judges, hearing whether the State's Social Forestry Department was an industry, doubted Rajappa and referred its correctness to a larger Bench. The matter later went to nine judges.

The nine-judge Bench decided the reference on 20 August 2026: State of U.P. v. Jai Bir Singh, 2026 INSC 897. There are several opinions. What can safely be said:

• Rajappa was not overruled. Disputes under the repealed ID Act, including pending ones, are to be decided by the Rajappa triple test.
• The opinion of Surya Kant CJI (for four judges) said the test could have been better framed, requiring an activity with a discernible commercial character analogous to trade or business, but stated this expressly as a hypothesis that does not disturb pending or concluded proceedings.
• The opinions of Surya Kant CJI, Narasimha J. and Bagchi J. say that Rajappa is not to be the sheet anchor for interpreting section 2(p) of the IR Code, which must be read on its own text. Datta J. (with Bhuyan J.) held that Rajappa needs no reconsideration. Nagarathna J. thought the old section 2(j) may bear on section 2(p), but not the other way round.

4. “Industrial dispute” and the individual dispute

Section 2(q) of the Code (old section 2(k)): any dispute or difference between employers and employers, employers and workers, or workers and workers, connected with the employment or non-employment, the terms of employment or the conditions of labour of any person. Under the old Act a dispute had to be collective, that is, espoused by a union or a substantial body of workmen, and the “any person” had to be someone in whose employment the workmen had a direct and substantial interest: Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, 1958 INSC 2, AIR 1958 SC 353 (dispute over the termination of an assistant medical officer, who was not a workman, held not an industrial dispute).

Section 2A of the ID Act (inserted in 1965) made a dispute over the discharge, dismissal, retrenchment or termination of an individual workman an industrial dispute even if no other workman or union took it up. The Code goes further:

• Section 2(q) itself includes a dispute between an individual worker and the employer connected with or arising out of discharge, dismissal, retrenchment or termination.
• Section 4(9) repeats the deeming rule in the words of old section 2A(1).
• Section 4(10) lets the worker apply directly to the Industrial Tribunal once forty-five days have passed after he applied to the conciliation officer (old section 2A(2)). Under section 4(11) the application must be made within two years of the discharge, dismissal, retrenchment or termination (old section 2A(3) allowed three years).

Other individual grievances (for example, about promotion or leave) still need collective support to become industrial disputes; for those, the Grievance Redressal Committee under section 4 is the first forum.

5. “Worker” (old “workman”)

Section 2(zr): any person (except an apprentice) employed in an industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, the terms of employment being express or implied. It expressly includes working journalists and sales promotion employees, and, for proceedings about an industrial dispute, a person dismissed, discharged or retrenched in connection with the dispute. It excludes persons:

• subject to the Air Force Act, the Army Act or the Navy Act;
• employed in the police service or as an officer or employee of a prison;
• employed mainly in a managerial or administrative capacity; or
• employed in a supervisory capacity drawing wages above Rs 18,000 a month (or a higher amount notified by the Central Government). The old section 2(s) limit was Rs 10,000.

The test is the main or dominant duty, not the designation. In H.R. Adyanthaya v. Sandoz (India) Ltd., 1994 INSC 313, (1994) 5 SCC 737, a Constitution Bench held that medical representatives were not workmen because their work was not manual, technical, clerical or supervisory; the Code reverses that result for sales promotion employees by naming them. The Code also defines a wider term, employee (section 2(l)), which includes managerial and administrative staff; the dispute-resolution machinery is built around the narrower “worker”.

6. “Employer”

Section 2(m): a person who employs, directly or through any person, one or more employees or workers in his establishment. For a government department it is the authority named by the head of the department (or the head himself); for a local authority, its chief executive. It includes the occupier and manager of a factory, the person with ultimate control of any other establishment, the contractor, and the legal representative of a deceased employer. Where workers are engaged through an intermediary, courts look at who really controls the work and pays for it: Hussainbhai v. Alath Factory Thozhilali Union, 1978 INSC 118, (1978) 4 SCC 257 (the factory owner, not the intermediate contractors, held the employer).

7. Problem

Ravi works as a shift supervisor in a private factory and draws Rs 32,000 a month. He is dismissed. No union takes up his case. Can he raise an industrial dispute?

Issue. Whether Ravi is a “worker”, and if so whether his individual dismissal is an industrial dispute.

Law. Section 2(zr) includes supervisory work but excludes a person employed in a supervisory capacity drawing wages above Rs 18,000 a month. Section 2(q) and section 4(9) make a dismissal dispute of an individual worker an industrial dispute without union support.

Application. If Ravi's main duty is supervision, his wage of Rs 32,000 takes him outside the definition, and the dispute machinery is not available to him whatever the merits. If the evidence shows that his work is mainly technical or clerical and supervision is only incidental, the wage ceiling does not apply and he is a worker (Adyanthaya: the dominant duty decides). He may then go to the conciliation officer and, after forty-five days, apply directly to the Tribunal under section 4(10), within two years of dismissal.

Conclusion. Everything turns on the nature of his main duties. As a true supervisor above the ceiling he must sue in a civil court on his contract; as a worker he can invoke section 4.

How this is examined

The January 2026 paper asked, for 10 marks, what an industrial dispute is and when an individual dispute becomes an industrial dispute, and set “Workman” as a short note. Expect “Define industry with reference to decided cases” as an essay: the definition, the old section 2(j), Hospital Mazdoor Sabha, Rajappa and the triple test, the 1982 amendment, Jai Bir Singh (2005 and 2026), and the exclusions in section 2(p).