In Defence of the Triple Test: A Case for Retaining the Standard in Bangalore Water Supply (Part-II)

The five-judge bench in Jaibir Singh had not only assailed the precedential value of the BWSSB but also questioned the substantive worth of the Triple Test and its inclusion of charitable organisations, liberal professions and educational institutions within the rubric of industry. Criticising the BWSSB for being ideological and one-sided, it drew attention to the incongruity between modes of industrial actions like strikes, lay-off, closure, etc. and the work of hospitals and educational institutions.[1]

Instruments of collective bargaining and mechanisms of dispute settlement contemplated by the IDA may indeed be ill-suited for small charitable and educational institutions. As Justice Sujata Manohar had observed in Coir Board, Ernakulam v Indira Devi P.S. that while ‘’it is of paramount importance that a proper law is framed to promote the welfare of labour…the kind of measures…may have to be tailored to suit the nature of such organisations, their infrastructure and their financial capacity as also the needs of their employees.”[2] Nonetheless, in absence of a separate law that provides legal protection to employees in educational institutions and charitable organisations, it would be regressive to exclude such sectors from the ambit of the definition of industry through judicial fiat. It must be noted that even the 1982 amendment had envisaged the formulation of a special law for such employees. The Statement of Objects and Reasons of the Industrial Disputes (Amendment) Act, 1982 had stated:

“[I]t is proposed to exclude from the scope of this expression, certain institutions…However, …it is proposed to have a separate law for the settlement of individual grievances as well as collective disputes in respect of the workmen of these institutions.”

In fact, the Union of India had in its submission in the Jaibir Singh case, referred to the absence of an alternative legal machinery as a reason for not bringing the amended definition into force. Since no such legal machinery has been created at the central level till date, substituting the Triple Test with a more restrictive standard would render millions of workers vulnerable and without any legal machinery for protection of their employment rights. As it is, less than 10% of the workforce in India is covered by formal labour laws.[3] Therefore, any rollback of the definition of industry which would further exclude workers from legal protection without creation of a parallel legislative framework would be an acutely retrograde measure. Keeping this in mind, it is submitted that the nine-judge bench (if constituted) would be well-served by maintaining the status quo and not disturb the precedential weight of this decision. With the Union of Ministry of Labour being currently engaged in the process of codification of Industrial Relations laws[4], the question of overhaul of the definition of Industry ought to be left to the political branches of the government.

It must also be noted that the language of section 2 (j) is itself very unwieldy. Use of words of very wide denotation like undertaking, manufacture, calling, service, employment and avocation pose a formidable interpretive challenge since a literal reading of some of these terms would entail inclusion of every conceivable type of workplace into the ambit of definition. Not surprisingly, beginning with the D.N. Banerjee v P.R.Mukherjee,[5] the first case placed before the Supreme Court on this definition, judges have struggled to evolve a coherent framework.[6] As Justice Bhagwati observed in Workman of Indian Standards Institution, “the tests have not been uniform, they have been guided by empirical rather than a strictly analytical approach.”[7] Indeed, standards espoused in different cases have often reflected the ideological preferences of the judges and not any consistent doctrinal standard founded on the language or purpose of section 2(j). Therefore, it is arguable that any judicial reconsideration of the Triple Test may lead to imposition of another ideologically-driven standard. As such, it would be prudent for the nine-judge bench to show restraint and persist with BWSSB’s Triple Test – a standard that has operated as a precedent for more than three decades by now.

In the previous two posts, I have sought to refute the argument that BWSSB does not constitute a binding precedent and proposed that not only have the standards for setting aside an established precedent have not been met in this case but that abandonment of the Triple Test in absence of an alternative legal regime, would lead to exclusion of a large swath of workers from ambit of legal protection. At the same time, I submit that there are certain points of the BWSSB plurality which have been a source of confusion in the subsequent cases and do require further clarification. The foremost among them is the scope of the sovereign function exception. As mentioned earlier, Justice Chandrachud questioned the very need for such an exception. But between Justice Krishna Iyer (who wrote for himself, Justice Bhagwati and Justice Desai) and Justice Beg, there was a majority support behind the sovereign function doctrine. Yet, we must note that Justice Beg had a different view on both the terminology and scope of the exception.

Indeed, even Justice Iyer’s opinion itself spoke in different voices on sovereign functions. On one hand, he described sovereign functions of the State as ‘the primary and inalienable functions of a constitutional government’. On the other hand, he hinted that the exception may go beyond such inalienable state functions with his assertion that apart from Articles 309 to 311 and statutes dealing with the defence, “other legislation dealing with employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial. Disputes Act, 1947.”[12] As a result, the status of employees of statutory bodies which are not engaged in inalienable state functions remain unclear. Indeed, many of recent conflicts on the definition of industry have pertained to the status of employees of government departments covered by statutory rules.[13]

A later 2-judge bench decision in Agricultural Produce Market Committee v Ashok Harikuni had further clarified that the “dichotomy between sovereign and non-sovereign function could be found by finding which of the functions of the State could be undertaken by any private person or body”[14] and that only those which could not be undertaken are sovereign functions. However even with respect to such inalienable functions of the state, Justice Iyer had also suggested that not every one of the employees of departments related to justice, defence, taxation, legislature, would be thrown out of the umbrella of the Act’. Since the dividing line between those employees to be excluded and those to be included within the umbrella of the statute was not clarified, the precise scope of the sovereign exception has been left hazy even for the classically primary functions of the state.

The other major element of confusion in the jurisprudence of BWSSB relates to the status of research institutions. While holding them to be industry even when run without profit motive, Justice Iyer had reasoned that research throws up discoveries and inventions that are often sold and patented and are valuable contributions to the wealth of the nation. Does this mean, as ruled in the Physical Research Laboratory v K.G. Sharma,[15] that institutions carrying out pure research which is not exploited for commercial purpose, would not be industry? If so, how would this proposition be reconciled with the rejection of commercial character and profit motive as decisive elements that the Triple Test entailed?

These questions require elucidation from the nine-judge bench so that some of the confusion that has emerged in the post BWSSB era can be dispelled. Instead of looking to reconsider and jettison the Triple-Test which provides for a universal, uncluttered and comprehensive framework for defining the ambit of industry, the bench should seek to iron out the creases that have developed in its application. It is pertinent to note in this context that the reference to a five-judge bench in Jaibir Singh had been necessitated by a conflict between Chief Conservator of Forests v Jagannath Maruti Kondhare[16] and State of Gujarat v Pratamsingh Narsinh Parmar[17] on the status of forestry department and the need for clarity on the scope of sovereign function exception. This is precisely the task that the Supreme Court should discharge in the latest reference. A modest endeavour to clarify the ambiguities in the BWSSB verdict on the status and ambit of sovereign function exception and research institutions would not only strengthen the BWSSB framework but also infuse further stability to law on this question. An overhaul of the definition and possible enactment of a supplementary legislation is a task better left for the legislature.