New Delhi: The Supreme Court on Monday referred to a nine-judge bench a case seeking to redefine the term ‘industry’, a move that could potentially alter the fate of workers in the formal economy.
“The issue will be decided by a larger bench," a seven-judge headed by chief justice T.S. Thakur said.
At least 250 state bodies from Uttar Pradesh, Haryana and Gujarat had sought to revisit a 1978 ruling of the apex court which defined the term ‘industry’ under the Industrial Disputes Act (IDA), 1947.
The request by the states is seen by some as a move that could potentially shrink labour rights and disrupt the working conditions of employees in the formal economy.
The request is in line with the government’s larger labour reforms push. If the court redrafts the definition of ‘industry’ the way these states are requesting, it could be seen as a judiciary- induced labour reform in the country.
The 1978 verdict said that any establishment would fall under the definition of an industry if an employer-employee relationship existed and there is systematic and organized activity. The ruling led to the categorization of hospitals, educational and research institutions, autonomous institutions, and government departments as industries. The wide interpretation of ‘industry’ allows workers to demand fair wages and guarantees other workers rights in formal employment.
Now, the states want the definition be limited to the manufacturing sector.
“Ever since that historic judgment, there has been an attempt by state governments, autonomous bodies, and charitable institutions to relax the definition. The renewed attempt is to dilute the law and make hiring and firing easier in such organizations on the face that a lot of contract workers are being engaged," said D.L. Sachdeva, national secretary of the All India Trade Union Congress.
“If the industry definition is redrafted as per the wishes of states, workers’ rights will face a setback and may change the fate of workers in the formal sectors. The problem is, if you are changing the definition, then how you are going to protect the service condition of such workers. Do they have an alternative – the answer is ‘no’," Sachdeva added.
The demand is that instead of bringing all organizations involved in systematic economic activities under the Industrial Disputes Act, only institutions involved in profit maximization should be termed industry and be under the industrial dispute act, said K.R. Shyam Sundar, a labour economist and professor at XLRI Jamshedpur. “My sense is since the Supreme Court has forwarded the case to a larger bench, there is a possibility of abridging the definition of industry," said Sundar.
The definition was framed in a case between Bangalore Water Supply and Sewage Board (BWSSB) and some of its employees on whether BWSSB would fall within the term ‘industry’ under the Industrial Disputes Act of 1947. The court had then decided that BWSSB was an industry by a majority vote of five judges against two.
In 2005, a five-judge bench sought a reconsideration of the ruling by a larger bench, as the verdict carries an “over-emphasis on the rights of the workers."