NGOs BE TREATED AS INDUSTRIES FOR EMPLOYEE BENEFITS

NGOs be treated as industries for employee benefits: Madras HC 1 Jun 2009 CHENNAI: Can a non-governmental organisation (NGO) be labelled as an `industry'? And, will an NGO employee come under the definition of `workman', so that he could avail himself of the benefits of the Industrial Disputes Act? `Yes', the Madras High Court has said categorically. Merely because an NGO, which is registered as a society, is run with the aid of the government it will not be exempted from the definition of `industry,' a division bench of Justice P Jyothimani and Justice Aruna Jagadeesan ruled. Passing orders on two writ appeals -- one filed by S Thilagavathi and another by Madurai Children's Aid Society, where she worked as assistant matron before being dismissed from service -- the judges said: "We have no difficulty to hold that the children's society is an `industry' within the meaning of Industrial Disputes Act.' Thilagavathi, who was receiving a monthly salary of Rs 27, was terminated from service in 1990 for `misconduct and misbehaviour'. She raised an industrial dispute against the children's society claiming that the NGO was an industry within the meaning of the ID Act. After one full round of litigation in the Madras high court, the industrial tribunal was directed to hear her case. In 1999 the labour court held that the NGO was a children's society. Though it ordered Thilagavathi's reinstatement, it did not award her the entire backwages. The present appeals were preferred by both Thilagavathi, who demanded backwages, and the children's society, which claimed that it was not an industry. The judges, analysing the nature of works allocated to an assistant matron in the NGO, said her works were supervisory in nature and hence covered by the definition of a `workman'. In this regard, they pointed out that she was distributing food, uniform and medicine to beneficiaries, supervised cooking and maintenance works, and maintained registers kept at the observation home. Upholding the tribunal's reasoning that the punishment meted out to Thilagavathi was disproportionate to the charges levelled against her, the judges ordered her reinstatement but refused to direct the NGO to pay her the entire backwages