Case: Secretary, Madras Gymkhana Club Employees'Union Vs. Management Of The Gymkhana Club

2. The Madras Gymkhana Club is admittedly a members club and not a proprietary club. On December 31, 1962 its membership was about 1,200 with 800 active members. The object of the club is to provide a venue for sports and games and facilities for recreation and entertainment. For the former, it maintains a golf course, tennis courts, rugby and football grounds and has made arrangement for billiards, pingpong and other indoor games. As part of the latter activities it arranges dance, dinner and other parties and runs a catering department which provides food and refreshments not only generally but also for dinners and parties on special occasions. The club employs ax officers (a Secretary, a Superintendent and four Accountants and Cashiers), twenty clerks and a large number of peons, stewards, butlers,etc. Its catering department has a separate managerial, clerical and other staff. Altogether there are 194 employees. The affairs of the club are managed by a Committee elected annually. Two of the members of the Committee work as Hony. Secretary and Hony. Treasurer respectively.3. The membership of the club is varied There are resident members,members, temporary members, garrison members, independent lady members, etc. The resident members pay an entrance fee of Rs. 300 and Rs. 20 per month as subscription. Garrison members and independent lady members do not pay any entrance fee and their subscription is Rs. 10 per month. Guests, both local and from outside, are admitted subject to certain restrictions as to the number of days on which they can be invited to the Club. The club runs tournaments for the benefit of members and for exhibition toThe income and expenditure of the club are of the order of four and a quarter lakh rupees, its moveable and immovable properties are worth several lakh rupees and its wage bill is between one and two lakh rupees. The question in this appeal is whether the respondent club can be said to be an industry for the application of the Industrial Disputes Act, 1947. The Tribunal, after considering many decisions rendered by this Court and also by the High Courts in India, came to the conclusion that the club was not an industry and the claim for bonus behalf of its employees was therefore unsustainable.

Court's reasoning:
5. These definitions have been before this Court on many occasions and we have reached a point when one can say that at least some attributes of "industry" and industrial disputes" may be taken as well established. These ceases concerned such diverse institutions and establishments as municipalities, hospitals, solicitors firm and university. Any enquiry to determine the application of the definitions to new establishments cannot overlook the settled view. We find it convenient to say a few words about the earlier decisions of this Court, before embarking upon an analysis of the definitions in relation to a membertwo cases lay down that for an activity to be an industry it is not necessary that it must be carried on by private enterprise or must be commercial or result in profit. It is sufficient if the activity is analogous to the carrying on of a trade or business and involves cooperation between employers and employees. This result Is reached by extending the meaning of undertaking to cover adventures not strictly trade or business but objects very similar.9. The definition of employer in out Act clearly shows that a local authority may become an employer if it carries on an industry. This means that a municipality if it indulges in an activity which may be properly described as industry may be involved in an industrial dispute. Local bodies are primarily subordinate branches of governmental activity. They function for public purposes but some of their activities may come within the calling of employers although the municipalities may not be trading corporations. Local authorities take away a part of the affairs of Government in loacl areas and they exercise the powers of regulation and subordinate taxation. They are politicaland agencies for the exercise of governmental functions. But if they indulge in municipal trading or business of have to assume the calling of employers they are employers whether they carry on or not business commercially for purposes of gain or profit.The later cases of this Court view the matter a little differently and formulate further tests. Of the tests, the first is that the activity must be organised as business or trade is ordinarily organised. This is to be taken with the earlier test that undertaking must be analogous to business, trade or calling. It will be seen that these do not widen the meaning of undertaking but tend to narrow it. The second is that the activity need not necessarily be preceded by procurement of capital in the business sense nor must profit be a motive. So long as relationship of employer and workmen is established with a view to production of material goods or material services, the activity must be regarded as an undertaking analogous to trade or business. We shall now review the cases in which these tests areproves that what must be established is the existence of an industry viewed from the angle of what the employer is doing and if the definition from the angle of the employers occupation is satisfied, all who render service and fall within the definition of workman come within the fold of industry irrespective of what they do. Here is then no need to establish a partnership as such in the production of material goods or material services. Each person doing his appointed task in an organisation will be a part of the industry whether he attends to a loom or merely polishes door handles. The fact of employment as envisaged in the second part is enough provided there is an industry and the employee is a workman. The learned professions are not industry not because there is absence of such partnership but because viewed from the angle of the employers occupation, they do not satisfy the test. A solicitor earns his livelihood by his own efforts. If his work requires him to take help from menials and other employees who carry out certain assigned duties, the character of the solicitors work is not altered. What matters is not the nexus between the employee and the product of the employers efforts but the nautre of the employers occupation. If his work cannot be described as an industry his workmen are not industrial workmen and the disputes arising between them are not industrial disputes. The cardinal test is thus to find out whether there is an industry according to the denotation of the word in the first part. The second part will then show what will be included from the angle of employees. We shall now apply this approach to the definition in the light of the earlier decisions of this Court in so far as they are consistent and then determine whether the club in this case can come within the meaning of industry as determined bybroadly the definition of industrial dispute contains two limitations. Firstly, the adjective industrial relates the dispute to an industry as defined in the Act and, secondly, the definition expressly states that not disputes and differences of all sorts but only those which bear upon the relationship of employers and workmen and the terms of employment and conditions of labour are contemplated. As such dispute may arise between different parties, the Act equally contemplates disputes between employers and employers or between employers and workmen or between workmen and workmen. The definition of the expression industrial dispute further shows that certain disputes can never be considered under the Act. For example, dispute between Government and an industrial establishment or between workmen andare not the kind of disputes of which the Act takethis way the general nature of the dispute, the parties to the dispute and the contents of the dispute are, therefore, reasonably clear. A dispute must however be an industrial dispute or, as the several definitions already noticed say, must arise in relation, to an industry. This is where the difficulty begins because the statutory definition of industry has led to some divergence of views in theLabour Tribunals, the High Courts and even in thisthe inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purposes of industrial disputes although industry is ordinarily something which employers create orhave all the terms except employer defined by the statute. Our task is to give meanings to the words which are intended to lay down the full connotation.Taking each operation by itself and determining on the basis of facts whether it is an industry without attempting towhether it is a business, or a trade, or an undertaking, or manufacture, or calling of employers, is to ignore somewhat the guidance afforded by the statute through its own dictionary. Therefore, while we accept the views expressed uniformly we think any view which seems contradicted by later decisions because it was unrelated to the words of the definitions should not be allowed to harden. We also take the opportunity of relying a little more on the guidance from thedistinction of an essential or direct connection does not appear to be so strong as the distinction that in the one case the result is the production of material goods or services and in the other not.25. It is, therefore, clear that before the work engaged in can be described as an industry, it must bear the definite character of trade or business or manufacture or calling or must be capable of being described as an undertaking in material goods or material services. Now in the application of the Act, the undertaking may be an, enterprise of a private individual or individuals. On the other hand it may not. It is not necessary that the employer must always be a private individual who carries, on the operation with his own capital and with a view to his own profit. The Act in terms contemplates cases of industrial disputes where the Government or a local authority or a public utility service may be thewhere the activity is to be considered as an industry, it must not be casual but must be distinctly systematic. The work for which labour of workmen is required, must be productive and the workmen must be following an employment, calling or industrial avocation. The salient fact in this context is that the workmen are not their own masters but render service at the behest of masters. This follows from the second part of the definition of industry. They again when private individuals are the employers, the industry is run with capital and with a view to profits. These two circumstances may not exist when Government or a local authority enter upon business, trade, manufacture or an undertaking analogous to trade.28. The labour force includes not only manual or technical workmen but also those whose services are necessary or considered ancillary to the productive labour of others but does not include any one who, in an industrial sense, will be regarded, by reason of his employment or duties as ranged on the side of the employers. Such are per sons working in a managerial capacity or highly paid supervisors.29. Further the words are industrial dispute and not trade dispute. Trade is only one aspect of industrial activity; business and manufacture are two others. The word also is not industry in the abstract which means diligence or assiduity in any task or effort but a branch of productive labour. This requiresin some form between employers and workmen and the result is directly the product of this association but not necessarily commercial.The expressions terms of employment and conditions of labour indicate the kind of conflict between those engaged in industry on oppositesides. These words take in dispute as to the share in which the receipts in a commercial venture shall be divided and generally cover hours of work and rest, recognition of representative bodies of workmen, payment for piece work,and overtime, benefits, holidays, etc. The definition takes in disputes between employees and employees such as demarcation disputes and disputes between employers and employers such as wage warfare in an area where labour is scarce and disputes of a like character. The whole paraphernalia of settlement; conciliation, arbitration (voluntary as well as compulsory) agreements, awards etc. shows that human labour has value beyond what the wages represent and therefore is entitled to corresponding rights in. an industry and employers must give them their due. Industry is the nexus between employers and employees and it is this nexus which brings two distinct bodies together to produce a result. We do not think that the test that the workmen must not share in the product of their labours adopted in one case can be regarded as universal. There may be occasions when the workmen may receive a share of the produce either as part of their wages or as bonus or as a benefit.30. This ends discussion of what is an industry. We are not in a position to consider whether the Madras Gymkhana Club fulfils the tests laid down by this Court and accepted here byare, however, observations which are clearly obiter, that even amembers club is an industry. Founding itself on those observations the Union contends that the club in the present case must also be treated as an industry. In fine the claim is based on the following considerations: (a) that the club is organised as an industry is organised on a vast scale with multifarious activities, (b) that facilities of accommodation, catering, sale of alcoholic andbeverages, games etc. are provided, (c) that the club runs parties at which guests are freely entertained and(d) that the club has established reciprocal arrangements with other clubs for its members. In our opinion none of these considerations is sufficient to establish that the club is an industry within the Industrial Disputes Act.31. We cannot go by the size of the club or the largeness of its membership or the number or extent of these activities. We have to consider the essential character of the Club activity in relation to the definition of industry. As we said before the definition is in two parts. The first part which we called the denotation or the meaning of the word shows what an industry really is and the second part contains the extended connotation to indicate who will be considered an integral part of the industry on the side of employees. Beginning with the second part, it may at once be conceded that the activity of the club is conducted with the aid of employees who follow callings or avocations. Therefore if the activity of the employers is within the realm of industry, the answer must be in favour of the Union. But taking the first part of the definition it may also be said that the club does not follow a trade or business. Its activity cannot be described as manufacture and the running of clubs is not the calling of the members or its managing committee.Here the appearances are somewhat against the club. It is not of any consequence that there is no profit motive because that is considered immaterial. It is also true that the affairs of the club are organised in the way business is organised, and that there is production of material and other services and in a limited way production of material goods mainly in the catering department. But these circumstances are not truly representative in the case of the club because the services are to the members themselves for their own pleasure and amusement and the material goods are for their consumption. In other words, the club exists for its members. No doubt occasionally strangers also take benefit from its services but they can only do so on invitation of members. No one outside the list of members has the advantage of these services as of right. Nor can these privileges be bought. In fact they are available only to members or through members.It may be said that members come and members go but the club goes on forever. That is true in a sense. We are not concerned with members who go out. The club belongs to members for the time being on its list of members and that is what matters. Those members can deal with the club as they like. Therefore, the club is identified with its members at a given point of time. Thus it cannot be said that the club has an existence apart from theThat case is one which may be said to be on the verge. There are reasons to think that it took the extreme view of an industry. We need not pause to consider the Hospital case because the case of a members club is beyond even the confines established by that case. In our judgment the Madras Gymkhana Club being a members Club is not an industry and the Tribunal was right in so declaring.