IMPORTANT POINT
The Telecommunication Department is not an industry and the Rules governing the conditions of service of employees stand attracted and thereby the remedy under Art. 226 of Constitution of India would be available.

Headnote:Industrial Disputes Act, 1947-Section 10(1)-Reference under-Termination of services of canteen employees of Telephone Exchange-They are paid monthly salaries devised by Canteen Committee-Rule governing conditions of service of employees stand attracted-Telecommunication Department is not an industry-Remedy under Art. 226, Constitution of India would be available-Tribunal has no jurisdiction to adjudicate dispute on a reference u/s 10(1) of the Act-Remedy u/s 19 of Administrative Tribunal is available.
       Held : The Telecommunication Department is not an industry and the Rules governing the conditions of service of the employees stand attracted and thereby the remedy under Article 226 would be available. To that area, the Act does not stand attracted. The respondents admit that the dismissed workmen who were holding civil post, by necessary implication, were excluded as workmen under Section 2(s). Even though the activities of the Corporation partake the character of a private enterprise, since the workmen engage themselves in rendering services, it is not an industry. If there exists no statutory rules binding standing orders, necessarily, the reference under Section 10(1) would be valid and the Tribunal has jurisdiction to go into or the employee may avail of judicial review or common law review. (Para 10)
       Further held : On an overall view, we hold that the employees working in the statutory canteen, in view of the admission made in the counter-affidavit that they are holding civil posts and are being paid monthly salary and are employees, the necessary conclusion would be that the Tribunal has no jurisdiction to adjudicate the dispute on a reference under Section 10(1) of the Act. On the other hand, the remedy to approach the constitutional court under Article 226 is available. Equally, the remedy under Section 19 of the Administrative Tribunal Act is available. But, generally, the practice which has grown is to direct the citizen to avail, in the first instance, the remedy under Article 226 or under Section 19 of the Administrative Tribunal Act and then avail the right under Article 136 of the Constitution by special leave to this Court etc. (Para 11)
       It is, therefore, clear that there have been two streams of thinking simultaneously in the process of development to give protection to the employees of the Corporation. Its actions are controlled as an instrumentality of the State and the rules are made amenable to judicial review. Whether there exists no statutory or analogous rules/instructions, the provisions of the Act get attracted. The employees are entitled to avail constitutional remedy under Article 226 or 32 or 136, as the case may be. The remedy of judicial review to every citizen or every person has expressly been provided in the Constitution. It is a fundamental right of every citizen. In the absence of statutory/administrative instruction in operation, the remedy of reference under Section 10 of the Act is available. Therefore, two streams, namely, remedy under the Act by way of reference and remedy of judicial redressal by way of proceedings under Article 226 or a petition filed before the Administrative Tribunal to the aggrieved persons, are co-existing. (Para 9)

Judgement Key Points

The legal document discusses the legal status and remedies available to employees working in government or statutory bodies, specifically in the context of disputes regarding termination, employment conditions, and jurisdiction of tribunals. The key points are as follows:

The telecommunication department is classified as a non-industry entity, and its employees holding civil posts are generally excluded from the scope of industrial disputes under the Industrial Disputes Act. Therefore, disputes related to termination or employment conditions of such employees cannot be adjudicated by industrial tribunals (!) (!) .
Employees working in statutory canteens or similar departments, who are paid monthly salaries and hold civil posts, are considered employees but are not classified as workmen under the relevant law. Consequently, the tribunal's jurisdiction to decide disputes involving such employees is limited, and they are entitled to seek remedies through constitutional courts or administrative tribunals instead (!) (!) .
The remedy under Article 226 of the Constitution of India is available to employees who are excluded from industrial dispute jurisdiction, allowing them to challenge arbitrary, unjust, or unfair actions by their employer. Similarly, remedies under Section 19 of the Administrative Tribunal Act are also applicable (!) .
The document emphasizes that the classification of an entity as an industry depends on the nature of the activity, not on whether the activity is profit-making or charitable. The focus is on whether the activity involves organized cooperation between employer and employee for providing goods or services that are capable of being marketed. Activities undertaken for sovereign or sovereign-like functions are generally excluded from the scope of "industry" (!) (!) (!) (!) .
The scope of "industry" is broad, encompassing activities that are organized, systematic, and involve employer-employee cooperation, even if they are charitable or non-profit in nature. The determination relies on the nature of the activity rather than the motive or capacity for profit (!) (!) (!) (!) .
The concept of "sovereign functions" is clarified to mean activities that are governed by constitutional provisions and are part of the state’s ultimate decision-making authority, such as legislative, judicial, or executive functions. These are generally excluded from the definition of industry unless they are part of an economic activity that resembles trade or business (!) (!) .
The law recognizes two concurrent avenues for employees to seek redress: one through statutory references under the relevant industrial law (when applicable), and another through constitutional remedies such as writ petitions under Article 226 or proceedings before administrative tribunals. The choice depends on the specific classification of the employer and the activity involved (!) (!) (!) .
The classification of a body as an instrumentality or agency of the state depends on factors such as control, the nature of functions, and the presence of public interest elements. When such bodies perform public utility or welfare functions, they are often considered part of the state, and their actions are subject to judicial review (!) (!) (!) .
The legal framework supports that activities performed by government or statutory bodies, especially those involved in welfare, public utility, or sovereign functions, are generally outside the scope of industrial disputes, and their employees must seek remedies through constitutional or administrative channels (!) (!) .
Overall, the document underscores the importance of the nature of activity and the classification of the employer in determining the appropriate remedy and jurisdiction for employment disputes, emphasizing that constitutional remedies are a fundamental right for employees, especially when their employment does not fall within the scope of industrial law.

JUDGMENT

K. Ramaswamy, J.-This special leave petition has come up directly, from the award of the Central Government Industrial Tribunal No. 2, Bombay, made on August 9, 1996 in Reference No. CGIT-2/26/91.

Delay Condoned.

2. The admitted position is that the petitioner-Association, representing five dismissed employees, had sought reference under Section 10(1) of the Industrial Disputes Act, 1947 (for short, the Act ) to the Tribunal. The dispute arose on account of termination by the respondent-Management of the services of the said employees on April 28, 1989; It was alleged that the termination was without any notice and payment of retrenchment compensation under Section 25-F. The reference came to be made on April 19, 1991. The Tribunal has held that the Telephone Nigam Limited, Bombay is not an industry . It, therefore, has no jurisdiction to adjudicate the dispute. Prabhadevi Exchange had a total strength of 3000 employees of the Tele-communication Department, working in three shifts. As per the Administrative Instructions issued by the Government, for the first shift there should be a 3A type canteen, for the second shift A type canteen and for the third shift there should be C type canteen. It was averred that for Type 3A canteen, there should be 57 employees, but only 24 employees were working on April 27.4.1989. The claim of the petitioner is that the dismissed employees had joined the service in 1987. They are claiming wages as per the directions of this Court, i.e., as per the Fourth Pay Commission s recommendations. Since they were insisting upon payment of the wages, it is alleged, the services of five employees were terminated without giving any notice or giving any retrenchment compensation as enjoined by Section 25-F of the Act. Therefore, they sought reinstatement into service with full backwages and with continuity of service. The respondents, on the other hand, contended that the employees working in the canteen are not workmen within the definition of Section 2(s) of the Act nor is the respondent an industry under Section 2(j). They are "treated as holding civil posts in the Central Government". They were paid monthly salaries devised by the Canteen Committee depending upon the increases in the cost of living etc. The provisions of Chapter VI-B of the Act are inapplicable to them. The Tribunal noted the findings as under :

3. Prabhadevi Telephone Exchange employed about 4000 employees which is required under the provisions of Administrative Instructions to have one departmental canteen. In A type canteen, 19 employees are required per shift. It works from 5 a.m. to 12 midnight. In three shifts, there at the relevant time are 24 employees including the concerned five workmen. In view of a judgment of this Court, non-statutory canteen employees are entitled to the benefits of the recommendations of Thirds and Fourth Pay Commissions. The Director of Canteen accordingly directed the Department concerned to pay the canteen employees wages as per the recommendations of the Pay Commission. Departmental Canteen, it is contended by the management, is not an industry as per the Memorandum dated January 12, 1982 of the Director (Welfare), Indian Posts and Telegraphs Department.

4. Relying upon the judgment of this Court in Sub-Divisional Inspector of Posts Vaikkam & Ors. v. Theyyam Joseph1, the Tribunal has held that departmental canteen is not an industry . However, on merits, it has held that termination of the services of the five employees is bad in law. Calling the decision in question, the above special leave petition has been directly filed under Article 136, contending that the ratio in Theyyam Joseph s case is contrary to the judgment of this Court in Bangalore Water-Supply & Sewerage Board, etc. v. R. Rajappa & Ors.2. The judgment, therefore, in Joseph s case is not correct in law. When its correctness was questioned in another case, notice was issued. It is, therefore, contended that the rat

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1997 Supreme(SC) 925

IMPORTANT POINTThe Telecommunication Department is not an industry and the Rules governing the conditions of service of employees stand attracted and thereby the remedy under Art. 226 of Constitution of India would be available.

Cases Referred (12)

IMPORTANT POINT
The Telecommunication Department is not an industry and the Rules governing the conditions of service of employees stand attracted and thereby the remedy under Art. 226 of Constitution of India would be available.