Centre seeks free hand in defining 'industry'
New Delhi, March 18 -- The government has argued that it be given a free hand in deciding what is a "sovereign function", and, by implication, what is an "industry", in a case before the Constitution Bench of the Supreme Court that has the potential to define the purview of labour laws.
On Tuesday, the Centre told a nine-judge Constitution bench that while the expansive "triple test" for defining industry, evolved in the 1978 Bangalore WaterSupply case remains sound in law, its indiscriminate applicationhas blurred the line between commercial activity and constitutionally mandated governance, and that the final determination of what constitutes a "sovereign function" should rest with the executive.
Opening arguments in the long-pending reference on the definition of "industry" under labour law, Attorney General R Venkataramani argued that social welfare schemes and governmental functions cannot be treated as "industrial activity", even if they involve organisational or operational elements resembling commercial undertakings.
At the same time, the Centre made a significant pitch for institutional deference, urging the court to refrain from exhaustively defining sovereign functions and instead leave it to the government- subject to judicial review- to determine what activities fall within that category.
The bench, led by CJI Surya Kant and comprising justicesBV Nagarathna, PS Narasimha, Dipankar Datta, Ujjal Bhuyan,Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe and VipulM Pancholi, commenced hearings in the reference arising fromState of Uttar Pradesh Vs Jai Bir Singh.
The bench is examining whether the expansive interpretation in Bangalore Water Supply case requires reconsideration, a question first referred to a larger bench in 2017.
The outcome could significantly reshape the scope of labour protections under industrial law. A narrower definition of "industry" would exclude a wide range of institutions and government-linked bodies from industrial dispute mechanisms, while reaffirming the earlier ruling would retain the broad sweep of labour adjudication into non-commercial sectors.
In written submissions, the Centre endorsed the legalsoundness of the "triple test" laid down in the 1978 ruling -- systematic activity, employer-employee cooperation, and production or distribution of goods or services for human needs-as a principled framework for identifying "industry" under Section 2(j) of the Industrial Disputes Act, 1947.
However, it cautioned that the problem lies not in the test itself but in its "over-broad" and "indiscriminate application", particularly to government departments, welfare schemes and charitable institutions....
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