Newspaper establishment definition for Majithia Wage Board

By Team Legal Helpline India, January 11, 2015

A brief discussion on Newspaper establishment definition for Majithia Wage Board

After the pronouncement of the judgment directing all newspaper establishments to pay the benefits of Majithia Wage Board to its employees, most of the newspaper establishments have reluctantly started granting the benefits halfheartedly. Now another issue has cropped up as most of the affected employees from both journalists and non-journalist category are facing another problem of fixation of their benefits under the Wage Board. Most of the establishments; with a view to circumvent the laws and deny the benefits to employees have adopted manifold strategy including misrepresentation of their turnovers and floating different companies, legal entities to bifurcate the gross revenue of the entire establishment. Another mischief being played by some of the establishments is indulging in wrong fixation of beneficiaries as per their grades. Employees performing the duties which make them entitled to higher grade of scale are often issued misleading appointment letters and are asked to perform various duties which are covered by higher pay scale. All this is done surreptitiously to circumvent the laws and deny the benefits of the wage board to the employees.

Majithia Wage Board has foreseen this hence dealt with this subject by inserting Clause 3 (a) (ii) which reads as under:

(ii) Notwithstanding the clubbing of different departments, branches and centres of newspaper establishments on the basis of their own gross revenue, the units of the newspaper establishments of all the classes as categorized in paragraph 6 of this Chapter shall not be stepped up by more than two classes over and above the classes to which they belong according to their gross revenue, as a result of their clubbing.

Explanation ? For the purpose of this clause,
(a) If there are different units / branches / companies of one classified newspaper establishment in one town or city and adjoining areas, even though carrying different names, these will be treated as one single unit of that newspaper establishment.?

This issue has earlier been dealth by the Supreme Court way back in 1962 in the land mark case Associated Cement Companies v. Their Workmen. Although the dispute in that case arose in connection with the Industrial Disputes Act, 1947, to appreciate whether two units constitute “one establishment” the Supreme Court discussed the issue after taking into account the following six factors:
1. Ownership.
2. Control and supervision.
3. Finance.
4. Management and employment.
5. Geographical proximity.
6. Unity of purpose and functional integrality.

The above said preposition was earlier also elaborated in the wage board report as under:

“What then is ‘one establishment’ in the ordinary industrial or business sense? The question of unity or oneness presents difficulties when the industrial establishment consists of parts, units departments, branches, etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units, etc. with different locations, near or distant, the question arises what tests should be applied for determining what constitutes ‘one establishment’?. It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units, etc. If in their true relation they constitute one integrated whole, we say that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes disqualification therefore. Thus, in one case the unity of ownership, management and control may be the important test; in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for consideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organization; many enterprises may have functional integrality between factories which are separately owned; some may be integrated in part with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities it may be difficult to discover the real thread of unity.”

Another important case which is from the newspaper industry is the ?Management of Pratap Press v. Secretary, Delhi Press Workers Union? wherein Supreme Court expressed the view that the most important test is the “functional integrality” test, unity of finance, unity of employment (or labour). It was said that where two units belong to one proprietor, there is almost always a likelihood of unity of management. “Functional integrality” was explained to mean, “such functional inter-dependence that one unit cannot exist conveniently and reasonably without the other and on the further question whether in matters of finance and employment the employer has actually kept the two units distinct or integrated.”

Thus the determinative factor is the functional integrality between the different units, legal entities created by the employer. Whether two units are one or distinct will have to be considered where an establishment consists of different departments or has branches whether situated in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. In such cases, the Court has to consider how far there is functional integrity between the two units, whether one unit cannot exist conveniently and reasonably without the other, and on the further question, in matters of finance and employment, the employer has actually kept the two units distinct or integrated.
It is therefore imperative that the employees/unions stuck with such subjects to make an assessment of the situation and analyze them on the following factors:

i) Whether all the companies, units, legal entities working in respect to the newspaper establishment have a common owner, if yes, then they are to be treated as one unit.

ii) Whether the work being done in different units of the newspaper establishments are related to each other or not. If outsourced company is also working for other establishments or it is a camouflage created by the employer to bifurcate the employees vis-?-vis the gross revenue of the establishment to circumvent wage board recommendations.

iii) If all units are located in one proximity which may also include the same office premises or the houses of the Directors, owners, proprietors etc.

iv) Finances of the said companies can be verified by obtaining the balance sheet and the inter se transactions between all of them.

v) Management is common for all the companies then they are liable to be treated as one under law.


In case the employees feel that the newspaper establishment is showing its grouping wrongly and is claiming its fitment in lower revenue classification as a result whereof the employees are getting lesser benefits, they should take up the matter with the management first and then with the labour authorities.

If the employee finds that he is being made to do work for a higher grade and is being paid the benefits of a lower grade, he can approach the labour court and raise an industrial dispute . Even the union can espouse his claim without his signatures hence the employee need not be worried of victimization by the employer in any manner.


Only remedy available in such cases is the raising an industrial dispute which the employees of Daily Pratap had done earlier and contested up to Supreme Court to get the cat out of the bag and show a trend to the entire newspaper industry. There is no other remedy under law hence unions or the representatives of the workers, working journalists should first of all collect all the necessary documents and initiate proceedings before the Labour Authorities and take the matter to its logical conclusion to show a path to all other employees who are being denied their legitimate rights.

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