NGOs now treated as industries for employee benefits

The Madras High Court has positively answered the question as to whether a Non-Governmental Organization (NGO) be labelled as an `industry'? And, if an NGO employee comes under the definition of ‘workman’, so that he could avail himself of the benefits of the Industrial Disputes Act.

A division bench ruled that 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’.

While passing the order the Judges stated that, "We have no difficulty to hold that the children's society is an `industry' within the meaning of Industrial Disputes Act.''

The present appeal was preferred by Thilagavathi, who was receiving a monthly salary of Rs. 27 and was terminated from service in 1990 for misconduct and misbehaviour. She raised an industrial dispute against the children's society claiming back wages and stating that the NGO was an industry within the meaning of the Industrial Disputes Act. In 1999, the labour court held that the NGO was a children's society and thereby passed order reinstating Thilagavathi but no order as to back wages was issued. The children's society, too, raised an appeal through which it 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'.

The judges ordered her reinstatement but refused to direct the NGO to pay her the entire back wages as it upheld the tribunal's reasoning that the punishment meted out to Thilagavathi was disproportionate to the charges leveled against her.