The Bombay High Court has clarified that the determination of whether a department constitutes a part of a larger establishment for the purposes of labour law is not based on any single, rigid formula but on a cumulative and holistic assessment of all relevant factors. In the present case, the Court noted that a cumulative assessment of factors, including the absence of a separate legal identity, the overarching financial and administrative control by the Municipal Corporation, and the strong functional interdependence with other municipal departments, conclusively establishes that the Fire Brigade is an integral part of the Municipal Corporation and not a separate, independent establishment.
The High Court explained that the internal administrative arrangements, such as a separate budget or the specialised, non-transferable nature of its staff, do not alter the fundamental reality that the department exists to perform essential civic functions that the Corporation is statutorily obligated to discharge. Therefore, the Court held that Fire Brigade must be regarded as part of the Municipal Corporation establishment, rendering the provisions of the Industrial Employment (Standing Orders) Act, 1946, and the Prevention of Unfair Labour Practices Act, applicable to its employees.
A Single Judge Bench of Justice Amit Borkar observed that disputes regarding whether different units form a single establishment must be resolved by applying well-settled principles of ‘unity of establishment’ and ‘functional integrality’. It emphasized that the inquiry is not mechanical and requires a holistic assessment of several indicators, including unity of ownership, management, control, finance, employment, and general unity of purpose. No single test can be treated as absolute or decisive.
The Bench noted that where the management claims that its units are independent, the burden of proof lies on it to produce the best evidence, as the relevant facts are within its exclusive knowledge. Failure to do so allows the court to draw an adverse inference.
Further, the Bench observed that the Fire Brigade has no separate legal identity; it cannot sue or be sued in its own name, and its service conditions and disciplinary control flow from municipal statutes. The historical origin of the fire service prior to the current municipal corporation was deemed irrelevant to its present legal status, which is determined by the current statutory framework under which the Municipal Corporation controls the department.
Having a separate budget line for the Fire Brigade is merely an internal management practice and does not signify financial autonomy, clarified the Bench, while pointing out that there was no evidence to show that the department possessed independent powers to raise funds, enter into contracts, or frame its own financial policies without the approval of the parent body.
The Bench noted that the Fire Brigade functions within the municipal administrative hierarchy and its duties are closely interconnected with several other departments, such as building proposals, disaster management, and engineering. Hence, the issuance of mandatory No Objection Certificates for buildings demonstrates that the department is woven into the daily functioning of municipal administration.
Lastly, the Bench observed that the non-transferability of Fire Brigade officers to other departments reflects specialisation of skills rather than organisational independence. Similarly, the presence of workshops for vehicle repair was considered incidental to the department’s primary public function of emergency response and not an independent industrial or commercial activity.
Briefly, the petitioner, Mumbai Fire Services Union, filed a complaint challenging the termination order issued against Devidas Lokhande, a Fireman and the Assistant General Secretary of the Union. The termination was a result of a departmental inquiry initiated after Mr. Lokhande, in his capacity as a union office bearer, gave an interview to a television channel following a major fire incident in 2015 that resulted in the death of four senior fire officers. In the interview, he allegedly made accusations of corruption against senior officers of the Municipal Corporation.
The Union contended that the departmental inquiry and the subsequent dismissal were illegal because the employees of the Municipal Corporation are governed by the Industrial Employment (Standing Orders) Act, 1946, and the Model Standing Orders framed thereunder. Consequently, the Union filed Complaint alleging unfair labour practices under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
The respondent Municipal Corporation contested the complaint, arguing that its Fire Brigade Department does not constitute an ‘industrial establishment’ within the meaning of the Industrial Employment (Standing Orders) Act, 1946. The Labour Court, however, held that the Fire Brigade Department is an industrial establishment and found the inquiry to be unfair. However, the Industrial Court set aside this finding, holding that while the Municipal Corporation is an industrial establishment, its Fire Brigade Department is not.
Appearances:
Advocates Neeta Karnik and Piyush Todkar, for the Petitioner
Advocates B.D. Birajdar and Santosh Mali, for the Respondent
