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Housing societies and labour laws in India

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Housing societies and labour laws in India

Last updated: March 23 2019
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  • Housing societies and labour laws in India

    Are labour laws applicable on housing societies? Do the labour laws dictate terms on employing staff and other related things?
  • #2

    #2

    Re : Housing societies and labour laws in India

    To give you an idea, labour is termed as a significant cost, for all entities engaged in any business and when it comes to housing societies, employing labour can be burdensome as the office bearers are honorary in nature. The Bombay High Court has recently given a ruling, which has wide ramifications and implications on applicability of labour laws to housing societies.
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    • #3

      #3

      Re : Housing societies and labour laws in India

      Thanks! What does the law say about labour law and housing societies?

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      • #4

        #4

        Re : Housing societies and labour laws in India

        Read this:

        Labour laws under the Industrial Dispute Act

        As per the Industrial Dispute Act, 1947, anyone who employs any other person, for carrying out their activity, is deemed to be an industry and thus, all the labour laws apply to the person employing such other person, except for some specific exclusions made thereunder, for the armed forces, etc. This used to create problems for the person who employed any other person for carrying out work for him, as he was required to comply with various labour laws pertaining to working conditions, retrenchment process and payment of retirement benefits. The Supreme Court, in the case of Bangalore Water Supply, had diluted the definition of ‘industry’ under the Industrial Dispute Act, so as to exclude services that are personal in nature and those provided by people employed in the offices of professional like advocates, chartered accountants, solicitors, etc.

        (From the web)
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        • #5

          #5

          Re : Housing societies and labour laws in India

          Thanks again! Any specific cases that set precedents?

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          • #6

            #6

            Re : Housing societies and labour laws in India

            There is one:

            Bombay High Court ruling on applicability of labour laws to cooperative housing societies

            M/s Arihant Siddhi Co-operative Housing Society Limited had employed a watchman, who was paid ex-gratia on termination of his services, upon reaching the age of 60 years. The watchman filed a dispute petition in the labour court later on, seeking direction to be given to the society for his reinstatement, with all back wages. The watchman contended that he was a permanent employee and was terminated, without proper inquiry and retrenchment compensation, as required under the Industrial Dispute Act. The society contested it and contended that the society was not an industry within the meaning of the Industrial Dispute Act and the services rendered by the watchman were of personal nature and therefore, he was not a workman as defined under the Industrial Dispute Act.

            The labour court ruled in favour of the watchman, holding that the society was earning profit, by way of collecting advertisement charges for display of neon signs in the society’s premises, from some of its members who were carrying on commercial activities in the premises. It, thus, ordered for the watchman’s reinstatement with continuity of services and full back wages, while arriving at the conclusion that the society had a profit motive, in giving its place for advertisements.

            The society then filed a petition in the Bombay High Court, against this order. The High Court quashed the order of the labour court, holding that just because the housing society was carrying on some commercial activity, which was not its main activity but just an adjunct to its main activity of providing services to its own members, the society cannot be treated as an industry. So, unless the commercial activity is a predominant activity, the entity carrying the activity cannot be covered under the definition of ‘industry’ under Industrial Dispute Act, as held by Supreme Court in the Bangalore Water Supply and Sewerage Board case.

            (From the web
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            • #7

              #7

              Re : Housing societies and labour laws in India

              Oh! That was very complex! So the High Court could pass a ruling against a society if the predominant activity of the society is commercial, right?

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              • #8

                #8

                Re : Housing societies and labour laws in India

                You can say that, though I haven't come across such ruling. But the ruling establishes such possibility.
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                • #9

                  #9

                  Re : Housing societies and labour laws in India

                  Yes, I guess the ruling establishes the fact that the case would have gone against the housing society if they were involved in a commerical activity. So Housing societies that are involved in full fledged commericial activities may not have the easy way out, I guess.

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