IN THE HON’BLE LABOUR COURT

AT RANCHI
Application No._______of 2016

IN THE MATTER OF

Mr. JAGDISH…….................................................................................................PETITIONER

V.

MK SEWA SADAN…………..……................................................................RESPONDENT

-Memorial drawn and filed on behalf of the Petitioner

Counsel on behalf of Petitioner

Dheeraj Kumar Palia
Roll no. 269
Sem- VIII ‘A’

1
 TABLE OF CONTENTS

Index of Authorities 3

A. List of Cases 3

B. Books & Commentaries 4

C. Acts, Statutes, Treatises & Conventions 4

D. Internet Sites 4

List of Abbreviations 5

Statement of Jurisdiction 6

Statement of Facts 7

Statement of Issue 8

Summary of Arguments 9

Arguments Advanced 10

Prayer 16

2
 INDEX OF AUTHORITIES

 CASES-

1. Bangalore Water Supply and Sewerage Board v A Rajappa, 1978 Lab IC 778, 782 (SC)
2. Baster v. London printing works, (1899) 1 QB 901
3. Bombay Pinjrapole v Their Workmen, (1971) 2 LLJ 393 (SC)
4. Chandulal v. The Management M/s Pan American world airways, (1985) II LLJ 181 (SC)
5. Dhanrajgirji Hospital v. Workmen, AIR 1975 SC 2032
6. Harprashad shiv Shankar v. A.D. Diwekar, AIR 1957 SC 121
7. Indian Sailors Home Society v. RD Tulpule, (1974) 2 LLJ 227 (Bom)
8. Kamal Kishore Lakshman v. The Management M/s Pan American world airways, (1987)
I LLJ 107 (SC)
9. Kamlesh Kumar Rajanikant Mehta v. Presiding officer central government Industrial
Tribunal No. 1 and Others, (1980) I LLJ 336 (Bom)
10. Lister v Romford Ice & cold storage Co Ltd, (1957) AC 555 (HL)
11. Luma v. Arding, (1955) 10 Exch 734
12. Management of Safdarjung Hospital, New Delhi V. Kuldip Singh Sethi, AIR 1970 SC
1407
13. Luma v. Arding, (1955) 10 Exch 734
14. (1963) 1 LLJ 679 (SC)
15. Baster v. London printing works, (1899) 1 QB 901; Lazarus Gabriel v. UOI, AIR 1957
Hyd 13 (DB)
16. Boulet v. Federated Co-operatives Ltd., 2001 MBQB 174; affrd 2002 MBCA 114
17. Vernon v. British Columbia (Liquor Distribution Branch), 2012 BCSC 133;
18. F.H. v. McDougall, 2008 SCC 53 at para. 40.
 STATUTES:
 Industrial Disputes Act, 1947
 The Apprentice Act, 1961
 The Payment of Wages Act, 1936

3
 BOOKS-

 S. N. Misra, “Labour & Industrial Laws”, 27th Ed. (Rep) 2014.

th
 PL Mallick, “Industrial Law”, 14 Edn. Eastern Book Company.
th
 O.P. Malhotra, “The Law of Industrial Dispute”, Vol. I, 5 Edition, Universal Law
Publishing Co. Pvt. Ltd.
st
 Dr. S.R. Myeni, “Labour Laws”, 1 Edn., Asia Law House, Hyderabad.

 WEBSITES=

 www.manupatra.com
 www.lexis-nexis.com
 www.westlawindia.com
 www.scconline.com

4
 STATEMENT OF JURISDICTION

The Respondent most humbly appears before this Hon’ble Court in under section 11A 1 of the
Industrial Disputes Act, 1947.

1
Powers of Labour Courts, Tribunals and National Tribunals to give appropriate relief in case of discharge or
dismissal of workmen.- Where an industrial dispute relating to the discharge or dismissal of a workman has been
referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication
proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of
discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct
reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the
workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the
case may require: Provided that in any proceeding under this section the Labour Court, Tribunal or National
Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in
relation to the matter.

5
 STATEMENT OF FACTS

 MK Seva Sadan is a charitable Institution in Ranchi employing 100 workmen. Mr. Jagdish
was appointed as a foreman in that Institute on January 2014 with the salary Rs. 10000.
 His function was to supervise and direct the other workers. Sometimes he was also
provided with the clerical duties. On March 2015 due to pressure of work he could not
perform some clerical duties which resulted in some financial loss for the institution.
 The management dismissed him on the ground of negligence of duty after holding a
domestic enquiry.
 The Ranchi employees union supported him and claimed for his reinstatement with
backwages.
 The Respondent challenged that this institution is not an industry.

6
 STATEMENT OF ISSUES

I. Whether MK Seva Sadan is a charitable institution or not?

II. Whether the dismissal of Mr. Jagdesh is valid or not?

7
 SUMMARY OF ARGUMENTS

1. That MK Seva Sadan is an industry and not a charitable institution.

It is humbly submitted before the hon’ble court that MK Seva Sadan is an industry and not a
charitable institution. Sec.2 (j) of the Industrial Disputes Act, 1947 defines 'industry' as any
business, trade, undertaking, manufacture, or calling of employers and includes any calling,
service, employment, handicraft or industrial occupation or avocation of workmen”. In Bangalore
Water Supply and Sewerage Board v A Rajappa, the Supreme Court posed to itself the question;
‘Can charity be an industry?’, and answered it by stating- “This paradox can be unlocked only by
examining the nature of the activity of charity, for there are charities and charitie. Bed rocked on
the ground norms, we must analyse the elements that are charitable economic enterprises,
established and maintained for satisfying the human wants.”

2. That the dismissal of Mr. Jagdish is invalid and unlawful.

It is humbly submitted before the hon’ble court that the dismissal of Mr. Jagdish is invalid and
against the in law. Due to pressure of work he could not perform some clerical duties which
resulted in some financial loss for the institution. Mr. Jagdish was over-burdened, however it is
already decided by the Supreme Court that if the work given to a person is out of his qualification
or expertise, than for that work the person will not be held liable, and also he was over-burdened
in mitigation of the misconduct, Hence the dismissal of Mr. Jagdish is invalid and unlawful.

8
 ARGUMENTS ADVANCED

I. That MK Seva Sadan is an industry and not a charitable institution.

It is humbly submitted before the hon’ble court the MK Seva Sadan is an industry and not a charitable
institution. The question as to what is an industry has baffled the courts ever since the enactment of
the industrial disputes act, 1947. Though the act provides the definition of an ‘industry’ in section 2
(j), the definition is not precise and has defied consistent interpretation. Major thrust of labour
legislation was to provide some relief-in terms of safety 2, health and welfare3-to the industrial workers
to ensure the flow of production and to maintain labour management relations through Indian
Factories Act, 1911, Workmen’s Compensation Act, 1923, Trade Unions Act, 1926, and Trade
Disputes Act 1929.
Sec.2 (j) of the Industrial Disputes Act, 1947 defines 'industry' as any business, trade, undertaking,
manufacture, or calling of employers and includes any calling, service, employment, handicraft
or industrial occupation or avocation of workmen”.
It is to be mentioned here that according to the phraseology of this definition that the definition is in
two parts. The first says that industry means any business, trade, undertaking, manufacture or calling
of employers and the second part provides that it includes any calling, service, employment,
handicraft or industrial occupation or avocation of workmen. “If the activity can be described as an
industry with reference to the occupation of the employers, the ambit of industry, under the force of
the second part takes in the different kinds of activities of employees mentioned in the second part.
In Bangalore Water Supply and Sewerage Board v A Rajappa,4 a seven judge’s bench of the
Supreme Court exhaustively considered the scope of industry and laid down the following test which
has practically reiterated the test laid down in Hospital Mazdoor Sabha5 case:

Triple Test: where there is systematic activity, organized by cooperation between employer and
employee for the production and/or distribution of goods and services calculated to satisfy human
wants and wishes, prima facie, there is an “industry” in that enterprise. This is known as triple test.
The following points were also emphasized in the case:

2
Kamlesh Kumar Rajanikant Mehta v. Presiding officer central government Industrial Tribunal No. 1 and Others,
(1980) I LLJ 336 (Bom)
3
Kamlesh Kumar Rajanikant Mehta v. Presiding officer central government Industrial Tribunal No. 1 and Others,
(1980) I LLJ 336 (Bom)
4
1978 Lab IC 778, 782 (SC)
5
(1980) I LLJ 336 (Bom)

9
 1. Industry does not include spiritual or religious services or services geared to celestial bliss,
example, making, on a large scale, Prasad or food. It includes material services and things.

2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint,
private or other sector.

3. The true focus is functional and the decisive test is the nature of the activity with special emphasis
on the employer-employee relations.

If the organisation is a trade or business it does not cease to be one because of philanthropy,
animating the undertaking. Therefore the consequences of the decision in this case are that
professions, clubs, educational institutions cooperatives, research institutes, charitable projects
and other kindred adventures, if they fulfil the triple test stated above cannot be exempted from
the scope of section 2(j) of the act.

Dominant Nature Test: Where a complex of activities, some of which qualify for exemption, others
not, involve employees on the total undertaking some of whom are not workmen or some departments
are not productive of goods and services if isolated, even then the predominant nature of the services
and the integrated nature of the departments will be true test, the whole undertaking will be
“industry” although those who are not workmen by definition may not benefit by status 6.
"It is clear, however, that though s. 2(j) uses words of very wide denotation, a line would have to be
drawn in a fair and just manner so as to exclude some callings, services or undertakings. If all the
words used are given their widest meaning, all services and all callings would come within the
purview of the definition; even service rendered by a servant purely in a personal or domestic matter
or even in a casual way would fall within the definition. It is not and cannot be suggested that in its
wide sweep the word "service" is intended to include service however rendered in whatsoever
capacity and for whatsoever reason. We must, therefore, consider where the line should be drawn and
what limitations can and should be reasonably implied in interpreting the wide words used in s. 2(j);
and that no doubt is a somewhat difficult problem to decide."7

The decision of the Court in the Bangalore Water Supply8 case was a seminal moment as far as the
question whether Recreational Clubs fall under the definition of Industry. The Court rejected the

6
Bangalore Water Supply and Sewerage Board v A Rajappa, 1978 Lab IC 778, 782 (SC)
7
State of Bombay & Ors. v. The Hospital Mazdoor Sabha & Ors, (1960) 1 LLJ 251 (SC); Secretary, Madras
Gymkhana Club Employees Union v. 'Management of the Gymkhana Club, [1968] 1 S.C.R. 742; Management of
Safdarjung Hospital, New Delhi V. Kuldip Singh Sethi, AIR 1970 SC 1407.
8
1978 AIR 548, 1978 SCR (3) 207

10
 argument of exclusive nature of the clubs and the argument that they do not serve the community.
These two arguments founded the basis of Justice Hidayathulah’s decision in the Madras
Gymkhana Club9 Case. The Court in the BWS case observed that the clubs are open to public for
membership subject to their own rules. The court said that if there is productive cooperation between
employer and employee then a conflict is bound arise between them, be it a social club, mutual
benefit society, public service or professional office. Tested on this yardstick, most clubs will fail to
qualify for exemption.
If we go through the provisions of Industrial Disputes Act, 1947 Act, the position of charitable
Institutions is crystal clear in the eyes of law.
Charitable Institutions fall into three categories –
(a) Those that yield profit, but the profits are not siphoned off for altruistic purposes;
(b) Those that make no profit but hire the service of employees as in any other business, but the
goods/ services which are the output, are made available at a low or no cost to the indigent poor; and
(c) Those that are oriented on a humane mission fulfilled by men who work, not because they are paid
wages, but because they share the passion for the cause and derive job satisfaction.

The first two categories are industries, but not the third, on the assumption that they all involve co-
operation between employers and employees.
In the present matter MK seva sadan is providing employmenent to the workers and there is a
cooperation between employers and employees, and also it is very clear from the facts that MK seva
sadan must be ‘carrying on any business or trade, because the plaintiff was fired because the
respondent suffered financial loss, which clearly shows that that some transactions of money, trade
were going on by the M K Seva Sadan. From the above mentioned case laws it is crystal clear that an
industry exists only when there is relationship employers and employees, the relationship and of
employer employee is there, the case will fall under the ambit of the definition of “industry”. In the
case at hand, Mk Seva Sadan fulfils all the essentials of an industry, since there was a relationship of
employer employee, it fulfils the essentials of the triple test, and Dominant Nature Test, and therefore
it is clear that MK Seva Sadan is a charitable institution and not an industry.

II. That the dismissal of Mr. Jagdish is invalid and against the law.

9
1967 II LLJ 720.

11
 It is humbly submitted before the hon’ble court that the dismissal of Mr. Jagdish invalid and against
the law. Mr. Jagdish due to pressure of work he could not perform some clerical duties which due to
which the management dismissed him on the ground of negligence of duty.Mr Jagdish is a worker of
MK Seva Sadan As per Section 2(s) of ID Act,1947.

“workman” means any person (including an apprentice) employed in any industry to do any
manual ,unskilled ,skilled ,technical ,operational ,clerical or supervisory work for hire or reward
,whether the terms of employment be express or implied ,and for the purposes of any proceeding
under this Act in relation to an industrial dispute ,includes any such person who has been dismissed
,discharged or retrenched in connection with ,or as a consequence of ,that dispute ,or whose dismissal
,discharge or retrenchment has led to that dispute ,but does not include any such person-

I) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950(46 of 1950), or the
Navy Act, 1957(62 of 1957); or

ii) Who is employed in the police service or as an officer or other employee of a prison; or

iii) Who is employed mainly in a managerial or administrative capacity; or

iv) Who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred
rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason
of the powers vested in him, functions mainly of a managerial nature.

The performance of the employee, particularly, whose position is of a management nature, must be
gauged as against an objective standard10

.Where the conduct of the employee is grossly deficient and the likelihood of discharge should be
obvious to the employee, warnings and reasonable notice are not required. An employer will also be
required to establish that the employee’s substandard performance was the fault of the employee and
not the result of factors outside the employee’s control such as the employer’s strategy and operating
procedures, changing market conditions or the performance of other employees. 11

In addition, an employer will not have cause to dismiss an employee for incompetence if the
employer knew that the employee did not have the requisite skill at the time the employee was hired
for, or transferred into, the role12. It is difficult to imagine a case whereby an employer could
summarily dismiss an employee for incompetence on the basis of a single incident unless the
10
1967 II LLJ 720.
11
National Union of Commercial Employees v. M. R. Meher, AIR 1962 SC 1080.
12
Matheson v. Matheson International Trucks Ltd. (1984), 4 C.C.E.L. 271 at 275;

12
 employee had also engaged in another type of wilful misconduct that had the effect of significantly
magnifying the impact of the employee’s act of incompetence. 13

An employer has a very high standard to meet if it intends to rely upon an employee’s incompetence
as justification to terminate an employee’s employment for cause, in the absence of prior warnings,
the employer will have to prove gross incompetence. Even if prior warnings have been given to the
employee, the employer will still be required to prove that the employee’s performance deficiencies
were serious enough that it prejudiced the employer’s business. The employer is going to need
something more than evidence that the employee’s productivity was simply lower than that of other
employee14

In Boulet v. Federated Co-operatives Ltd. 15 the Court of Queen’s Bench of Manitoba summarized the
law relating to summary dismissal for poor performance as:

1. Each case must be decided on its facts. 

2. An employer’s displeasure at an employee’s performance is not enough to warrant dismissal.

There must be some serious misconduct or substantial incompetence.

3. The onus of proving just cause rests with the employer and the standard of proof is beyond a
balance of probabilities. 

4. The performance of an employee, especially one in a management position, must be gauged

against an objective standard. 

5. The employer must establish:

a. the level of the job performance required,

b. that the standard was communicated to the employee,

c. that suitable instruction and/or supervision was given to enable the employee to
meet the standard,

d. the employee was incapable of meeting the standard, and

e. The employee was warned that failure to meet the standard would result in
dismissal. 

13
Radio CJVR Ltd. v. Schutte, 2009 SKCA 92
14
Goldberg v. Natural Footwear Ltd. (1986), 2 A.C.W.S. (3d) 130 (Ont. D.C.) and Fonceca v. McDonnell Douglas
Canada Ltd. (1983), 1 C.C.E.L. 51 (H.C.J.)
15
Boulet v. Federated Co-operatives Ltd., 2001 MBQB 174; affr’d 2002 MBCA 114

13
6. Where the employee’s performance is grossly deficient and the likelihood of discharge should be
obvious to the employee, warnings and reasonable notice are not required.

7. While the standard of incompetence to warrant discharge for cause is severe, the threshold of
incompetence necessary to warrant dismissal for cause is significantly lower where dismissal is
preceded by many warnings indicating unsatisfactory performance. 

8. In considering whether an employer has provided adequate warning to an employee, where the
dismissal is for repeated instances of inadequate work performance, the employer must show:

a. An employer who has condoned an inadequate level of performance by his

employee may not later rely on any condoned behavior as a ground for dismissal. 

b. it has established a reasonable objective standard of performance,

c. the employee has failed to meet those standards,

d. the employee has had warnings that he or she has failed to meet those standards
and the employee’s position will be in jeopardy if he or she continues to fail to meet them; and

e. The employee has been given reasonable time to correct the situation. 

9. An employer who has condoned an inadequate level of performance by his employee may not
later rely on any condoned behavior as a ground for dismissal

10. Condoned behavior is relevant if the employee fails to respond after appropriate warnings.
Condonation is always subject to the implied condition that the employee will be of good behavior and
will attempt to improve.

In the 2013 decision General Labour Union (Red Flag) Bombay vs. K.M. Desai 16 the employer fired an
account executive for cause for poor performance alleging that the employee had failed to meet his sales
targets and had failed to improve his “sales performance” after he was provided with warnings,
coaching and training. The Court found that the employee had been wrongfully dismissed. There was
no evidence that other employees consistently met their quotas. Moreover, the employer failed to lead
any objective evidence that the sales quota was reasonable or attainable. The Court also took judicial
notice of the fact that there had been an economic downturn that may have impacted the dismissed
employee’s performance.

16
Vernon v. British Columbia (Liquor Distribution Branch), 2012 BCSC 133

14
 In the 2015 decision Karmel v Calgary Jewish Academy 17 the court set out the ten elements required for
insubordination to constitute just cause for dismissal:

1. the order must be either clear and specific or must be a breach of policies and procedures well
known by the employee; 

2. the order must be within the scope of the employee’s job duties; 

3. the order must be reasonable and lawful; 

4. the disobedience must be both deliberate and intentional rather than resulting from an honest
mistake as to whether the order was still in effect or under the reasonable belief that he was not
contravening orders; 

5. the order must involve some matter of importance; 

6. unless the act of disobedience is particularly serious it has to be repeated, rather than be an
isolated act of disobedience, in order to constitute cause; 

7. it must be shown that as a result of the disobedience the relationship was so damaged that it could
not be carried on; 

8. it must be shown that the employee understood or should have understood that he ran the risk of
being terminated for disregarding the order; 

9. if there is a reasonable explanation for the disobedience it will not be cause for discharge; and 

10. There will be more latitude shown to long-service employees.

The concept of negligence has been the subject matter of great deal of judicial literature. The decided
cases on the application of this duty in any particular circumstance are no more than an analogy and
18
cannot be regarded more than an existence of a general duty of care.

Supreme Court in Keshav Mills Co. Ltd. V. Union of India,19 upholding the order of the labour court.
In this case, it was held that in view of the serious nature of the mistakes, the plea of the workmen
that he was over-burdened in mitigation of the misconduct was accepted by the court and further held
the termination illegal and invalid.

17
Schulman v. Xerox Canada Ltd. (1986), 15 CCEL 200 (Ont. C.A.)
18
Luma v. Arding, (1955) 10 Exch 734
19
(1963) 1 LLJ 679 (SC)

15
 The question whether a particular act or negligence constitutes gross misconduct or not, will depend
upon its own peculiar facts and circumstances and the nature of work performed by an employee as
well as the status or position he occupies. If the work given to the employee is outside the ambit of
his expertise, than for that work employee will not be held liable 20

In the instant matter also Mr. Jagdish was over-burdened, however it is already decided by the
Supreme Court that if the work given to a person is out of his qualification or expertise, than for that
work the person will not be held liable, and also he was over-burdened in mitigation of the
misconduct, Hence the dismissal of Mr. Jagdish is invalid and unlawful.

Baster v. London printing works, (1899) 1 QB 901; Lazarus Gabriel v. UOI, AIR 1957 Hyd 13 (DB);
20

Navinchandra Shah v. Ahmedabad Cooperative Stores, (1979) 1 LLJ 60 (Guj) (DB)

16
 PRAYER

Wherefore, in the lights of the facts stated, issues raised, arguments advanced and authorities
cited, this Hon’ble Court may graciously be pleased to adjudge and declare that:-

 That, M k Seva Sadan is an industry and not a charitable institution

 That, the Petitioner is entitled to remunerations or reinstatement.
 That, the termination was invalid.

And further pass any other order in the favour of appellant that it may deem fit in the larger
interest of justice.

All of which is humbly pleaded.

S/d __________

Council on behalf of Appellant

17