The ratification of the United Nations Convention on the Persons with Disabilities by India was an epoch making event for the realization and recognition of the rights for persons with disabilities. Various aspirations have been enunciated within the CRPD which the Indian system agreed to adopt for the full emancipation of the civil and political rights. The mandate of the CRPD is very broad and all-encompassing subjecting every organization and institution to certain duties for the fulfillment of the goals laid down in the preamble.
In this regard, the new law which is set forth to be brought in to comply with India’s international obligations and adopt a legislation which shall be in tandom with the CRPD has a hug task upfront. It has to comply with the standards of the Convention and at the same time provide a legal framework for these rights within the existing paradigm of Indian polity. One such major challenge faced by the law formation process is to include the private sector within the ambit of the new law to satisfy the requirements of the CRPD. The new law shall have the constant struggle of drawing a balance between the autonomy given to the private sector under the Indian laws and to comply with the norms of the CRPD by its phased inclusion.
Towards this end, the aim of this paper is to understand and study how the private sector shall be included within the new legislation so that it can provide a constitutionally sound definition at the same time ensure inclusion of the private player. The definition of ‘establishment’ shall be framed and looked at from the stand point of the Indian legal jurisprudence and how the scope of rights obligations can be expanded. The paper shall start out with analyzing the problems in the present definition as proposed by the Committee forming the new law in their draft report (Chapter I). It shall then proceed to study the need for the inclusion in light of the preamble of the CRPD and that of the new law (Chapter II). This shall be followed with an overview of the need to include the private sector within the definition and the specific chapters/areas under the new law where their role will become relevant (Chapter III). The next part shall play a crucial role as it shall study the jurisprudence developed around Article 12 of the Constitution and also the interpretation of labour law legislations in India and device a strategy of inclusion by using the abovementioned methodologies (Chapter IV). Finally, a draft definition shall be proposed based on this study and with justifications for every clause on how the inclusion can be suggestively carried out (Chapter V).
There is little debate around the fact that government bodies have to be subject to the provisions of the Act and thus comply with the entitlement based provisions of the legislation. Thus, when it comes to government companies, public sector undertakings, ministries, government departments and authorities controlled by the State, there is no issue with the fact that they have to figure in the definition of ‘establishment’. However, it has to be noted that the definition of ‘establishment’ is going to act as the dictionary for the legislation to see as to which organizations are and institutions are subject to this legislation. The entitlements shall not only be restricted to the guarantee of rights, equality and non-discrimination but shall also extend to reservations in educational institutions, employment and other forms of reasonable accommodation. Hence, it shall be worthwhile to define the term in a manner to take on board maximum sectors without the ambivalence of facing a challenge to the definition.
In this light, the first problem with the present definition is the complete inclusion of the ‘private sector’. In India, the private sector has not been much interfered with by the State and thus does not get regulated by enactments giving benefits to a particular group or community. Moreover, in May 2010, the Supreme Court held that the PWD Act, 1995 does not apply to any private corporation and they are not obliged to provide the benefits under the Act. This is evidence of the fact that even for beneficial legislations, the Indian legal system does not mandate the inclusion of the private sector.
The second issue with the definition is the use of the term ‘corporation’ in isolation. Alongside, the definition also states that ‘any autonomous body formed by or under a Central Act’ shall be treated as an establishment. This would entail even companies formed under the Companies Act, 1956 as they would comply with the condition of being a body formed under a Central Act. The problem faced with such a situation is that it would include even the small private companies which would then need to accommodate in terms of the provisions of the Act. In light of such circumstances, the purpose of the Act would be defeated which is to include the majority stake holders in the private sector and not target the sector as a whole.
Over and above this, the Supreme Court in the Dalco case clarified that the definition of establishment under Section 2 (k) of the PWD Act does not include private companies as they are not formed under the Companies Act but independent bodies. It stated that the act is only a facilitator and the bodies get registered under the same which would not extend to implying that the body has been formed under the statute. The meaning of corporations formed under a Central Act was restricted to corporations having government holding or control.
Hence, the definition now has to be framed in a manner that it includes the private players in a specific manner and does not leave any scope of ambiguity as regards companies, trusts or societies formed under various central or state statutes. This exercise shall also have to ensure that only those stakeholders in the private sector get included which are capable of making necessary provisions as regards their obligations under the Act and exclude the small businesses simultaneously.
Being one of the few legislations which has a preamble, it is important for us to analyse the definitions in light of the objects laid down by the preamble. The preamble shall help set the tone for the legislation and aid in interpretation of the definitions for fulfillment of the objectives of the Act. While taking guidance from the preamble, it seems necessary to increase the scope of the application of the Act from the public sector to other institutions as well.
In this regard, the preamble commences by realization of the need to strengthen the existing legal framework and policy as regards disability rights in India. As far as the present legislative policy is concerned, the PWD Act only governs and provides for entitlements in state run institutions or public bodies. The accommodation of the private sphere is done by way of incentivizing the provision of benefits to persons with disability. An example of such an incentive is the ‘Scheme of Incentives to Employers in the Private Sector for providing Employment to Persons with Disabilities’. The scheme was devised to create 100,000 jobs. As per the scheme, the government would reimburse the employers’ contribution to the provident fund for disabled employees earning up to Rs. 25,000 for the first three years. In spite of heavy incentives being given to the private companies, the scheme was able to generate only 465 jobs. Hence, it is evident that there has to be additional tool along with incentivizing the sector which shall help accommodate the disabled persons in private corporations also.
The later part of the preamble which is relevant for the consideration of the definition is the effective implementation of the UN CRPD which can be analysed as follows.
The aim of the new legislation is the effective implementation of the CRPD. In this light it becomes important to appreciate the principles laid down in the CRPD and implement the same through effective policy measure. Even the convention brings out the fact that efficient participation from the private player has to be catered for the successful realization of the rights under the convention. This can be done by providing incentives and by mandatory measures playing side by side. For example, Article 27 of the CRPD states that for the realization of equal participation and non-discrimination at work and employment, thee government shall undertake to promote employment in the private sector by policy measures like affirmative action programs etc.
This indicates that the private sphere is well comprehended within the scope of realization of rights for the disabled people and requires being included within the purview of the new legislation. The only question to be answered now is as to how they should be brought in so that there is a balance between the autonomy of the private sector and the internalization of the rights into the system as a whole.
Moreover, the extent of application of the Convention includes that States should ensure that there is no discrimination against the disabled persons in any private enterprise. Hence, the definition of ‘establishment’ has to be devised in a manner that it takes on board, both, the issue of private participation in granting entitlements and also cater to non-discrimination and equality rights for the disabled in the private sphere.
The convention includes the private sector as a necessary agent when it comes to issues like employment, accessibility and education etc. It provides that the states should provide adequate incentives to the private entities so as to maintain at least 5 % of their work force comprising of persons with disability. However, there are two issues with such incentive provision.
The first issue being that the incentivization for the private entities has not fulfilled the objective completely. Hence, it would become necessary to take a step further from just providing incentives. Moreover, with trade liberalization, government itself and many other big players are involving themselves in large scale activities. This has given a wide scope of employment to the people of India.
Along with this, even in the field of education, the private entities have had major success in setting up various multi-disciplinary institutions catering to a large community of students and employees. The big private players carry out activities on a large scale providing high level of employment and opportunities to the citizens. The sole reason for this inclusion is that such activities very starkly resemble the government welfare functions which the State carries out through other statutory and non-statutory bodies.
A key to this exercise is to provide such enumeration in the definitional clause which would propagate through the whole statute and substantiate on the organizations which would be bound by the obligations created under the Act for the progressive development and realization of the rights of the disabled persons.
It is very important to first analyse where the private player shall have a role to play so as to consider an effective definition of ‘establishment’. The specific areas where the private sector shall have to be subject to the Act are:
The next area where the private sector shall be clued in is the one on awareness raising. The measures that have to be carried out for mechanisms to educate the public about sensitization of disability rights have a major role envisioned for the private sector. The private player in these measures shall have to participate actively in the various methodologies of awareness building strategies.
The accessibility norms shall have to be structured in a manner to include the private sector to be subject to the responsibilities to create a barrier free environment. Accessibility comes through as the most important chapter where the private sector shall have a major role to play. This is also because most of the public access areas have been privatized and thus, the norms shall have to designed in a manner to engulf these areas to provide access on all fronts to the disabled. Accessibility in this regard would mean and include provisions through infrastructural, communication, transport, intellectual changes etc. So, even the private sector in this regard would be required to take positive action in terms of creating access to the person with disability.
To sensitize the private sector for opening up their doors for disabled people, umpteen numbers of seminars, workshops and conferences had been conducted. Due to indifferent attitude to the issue by the private sector, the job opportunities to the physically challenged people were not provided. The next and the most obvious area in this context where the private sector shall have to be included is the provision of reservations and benefits in education and employment. The community has seen employment in private sector as one of the biggest challenges faced by persons with disability and the inclusion of the private sector is seen largely in the context of creating job opportunities and employment reservations. Hence, the affirmative action provisions shall also have a strong influence on the private player.
There seem to be two alternatives in which the definition can be structured and include the private sector within it. One way is to look at how the Indian Courts have tried to include the private companies and enterprises within the provision of Article 12 as ‘other authority’. The other method is to look at the definition of ‘establishment’ under various labour legislations and analyse how they can be used for a beneficial legislation so as to ascertain the rights of the disabled persons at such places. The attempt of this paper shall be to see which approach fits in better for the better realization and effectuating the rights of the disabled community at maximum number of places at the same time manage a constitutionally valid definition.
Article 12 includes the term ‘other authorities’ within its terms as a part of State. The Constituent Assembly thought it was necessary to add the term for keeping an inclusive term for the progressive expansion of the functions of the State and the institutions which can be considered under it. The intention was to increase the scope of the State instrumentalities when the state adopts functions other than sovereign functions to indulge in welfare activities.
The interpretation of the term ‘other authorities’ has caused a good deal of difficulty and the judicial opinion has undergone changes over time. To encompass the scope of government functions which extend to social welfare activities, the Supreme Court developed the ‘agency/instrumentality of the State’.
According to the test, any institution or corporation which performs the functions of the State and are under government control would be considered as part of State under Article 12. For this reason, the issue is very clear as regards government companies, or bodies set up specifically by a statute for the purpose of a specific function.
Statutory Bodies: The first major expansive interpretation was laid down in Sukhdeo Singh v. Bhagat Ram. Here, the court made a distinction between bodies formed by a statute and under a statute and held that those bodies possessing statutory character are definitely a part of ‘other authorities’. The factors that are relevant for such a consideration are: whether the body is state funded, whether the expenses for the agency are being borne by the state, whether the state has created a monopoly for the functioning of the authority, whether the government has deep and pervasive control etc. Thus, the position as regards corporations which are formed for a specific purpose or under a specific statute is clear and they have to form a part of the definition of ‘establishment’. Hence, the definition shall definitely include and expressly state about statutory bodies formed by the State and controlled by the State.
Non-statutory bodies: The issue as regards non-statutory bodies like registered societies was answered in Ajay Hasia v. Khalid Mujib. The court argued that the intention of creating has to be ascertained and considered instead of the way the body is formed. The factors for considering the governmental nature of the body were laid down in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology. The court stated that question to be answered is whether in light of the facts, the entity is financially, functionally and administratively dominated by or under the control of the State.
It is difficult to distinguish between governmental functions and non-governmental functions. Perhaps the distinction between governmental and non-governmental functions is not valid any more in a social welfare State where the laissez faire is an outmoded concept and Herbert Spencer's social statics has no place. The contrast is rather between governmental activities which are private and private activities which are governmental.
It has to be recognized that our Constitution is an ongoing document and, thus, should be interpreted liberally. Interpretation of Article 12, having regard to the welfare and large scale activities carried out by private and public players calls for a new approach. The Constitution, it is trite, should be interpreted in the light of our whole experience and not merely in that of what was the state of law at the commencement of the Constitution. This was recognized by Sinha J. in his dissenting opinion in Zee Telefilms Ltd. v. Union of India. He stated that the primary question which is required to be posed is whether the body in question exercises public function. The same was observed by Mathew J. in Sukhdev Singh case where he went on to say that even big companies and trade unions would answer the said description as they exercise enormous powers. The consideration was of the fact that new lights in the citizens have been created and if any such right is violated, they must have access to justice.
Thus, as regards non-statutory bodies, the language of the definition shall have to translate the agency-instrumentality test and bring out the governmental functions within the statute. Thus the definition shall mention the bodies that have control, aid, administration, finance etc. carried out by the State.
How the private player can be brought in: The expansion in the definition of State is not to be kept confined only to business activities of Union of India or other State Governments but must also take within its fold any other activity which has a direct influence on the citizens. It is indeed difficult to define what a public function or a public duty means. When defined in broad terms, it means those activities carried out by any entity which is in the nature of sovereign activities of the State or rendered for the benefit of the public at large.
In India, the activities of the state have increased since the time of independence. Apart from acting in the capacity as a sovereign, the government has also involved itself in various welfare, economic and non-sovereign activities. The purposive expansion of the scope of ‘other authorities’ was to engulf the state’s functions into the realm of subjecting them to fundamental rights and not allowing a hands off approach to create a new body which can perform its functions independently and not be a part of the State.
On an analysis of the direction in which this has proceeded, we can see that the courts have given excessive importance to the paradigm of rights of the citizens. There have been instances where complete autonomous bodies or entities having only state funding but autonomous administration have been subject to the ‘public function’ test. It is the functionality of the organization and not its creation that has become relevant. There can be certain situations where private and completely autonomous bodies can perform activities which the State performs and hence require to be subjected to obligations for the realization of the rights of the people at these places.
The other way in which establishments have been defined in India is in labour law legislations. These laws detail certain conditions or requirements which ought to be applied for the Act to apply to a particular area or entity. The method of enumeration is used for legislations regulating the labour movement and also the beneficial legislations. Broadly speaking an establishment is a single business location of a company which is engaged in a single activity. The Department of Labor specifies:
An establishment may also be a store, office or other physical entity that sells or produces goods or services that is physically distinct from any other facility operated by a business.
For example, Section 2 (h) of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 defines establishment as any place or premise in which any manufacturing process connected with the making of beedi or cigar is being carried out. Similarly, under the Contract Labour (Regulation and Abolition) Act, 1970 the term has been defined with the specific requirements as per the Act.
Other welfare legislations like the Maternity Benefits Act, Payment of Gratuity Act, Payment of Bonus Act etc. mention that the establishment to which the legislations shall apply include any factory, industry or any other area where a manufacturing process takes place. Thus, the beneficial legislations are working on the enumerations laid down in the major labour legislations like Factories Act and Industrial Disputes Act. Hence, it is important to analyse the definitions of ‘factory’ and ‘industry’ to understand the definitional clause ‘establishment’ in context.
The term ‘factory’ has been defined with an enumeration of those premises having 10 or more employees including temporary workers. Compared to this, the definition of ‘industry’ is very broad which includes any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes. The Supreme Court has given a very wide interpretation to ‘industry’ in the Bangalore Water Supply and Sewage Board v. Rajappa. The Bangalore Water case expanded the scope of “industry” considerably which was not in tune with the post-1960 trend that by and large tried to confine the scope of “industry”. Justice Krishna Iyer beneficially constructed and expanded the scope of “industry”, keeping in mind the welfare nature of the statute. This was done in order to extend the benefit to other categories as well that were not deemed as industries earlier by the Supreme Court in its various decisions. As a result of the purposive and expanded interpretation, a lot of bodies like hospitals, educational institutions, research organizations, charitable trusts and various establishments were considered as industries. This is evidence of the fact that even labour legislations have been given liberal interpretation for the want of granting and effectuating benefits to the employees at maximum number of places.
Being a beneficial legislation, the definition of ‘establishment’ under the new act can carry forward the activism developed around the term ‘industry’ under labour law legislations so as to include the big private corporations and companies. Alongside, the enumeration laid down in the Factories Act, 1948 regarding the number of employees shall have to be balanced to engulf the private sector as the definition of ‘industry’ being too broad would create certain problems. First, the jurisprudence around the term industry shall also end up including the small professions and domestic businesses which might not have the economic and commercial viability to provide for the benefits under the new statute. Second, the statute will have to contain a definition which has definite amount of certainty so as to avoid litigation on the question of which entities fall within the purview of the Act.
In this regard, the definition shall embody this interpretation of industry to bring in most of the private players. Thus shall be done by striking a balance between the jurisprudence of Article 12 and the articulation of industries by Bangalore Water Supply case.
Majority of the PWD in the rural areas are employed as wage labourers in agriculture which is not only one of the lowest return occupations in India but also inappropriate for the PWD due to the physical nature of the work. Low levels of education act as a constraint to their engagement into skill based occupation and limits their option to physical work in agricultural fields. While in the rural Indian context, education does not translate into improved livelihood options, without functional literacy and basic numerical knowledge, engagement in other options gets barred.
Hence, one major concern which has to be addressed while defining ‘establishment’ is to cater to the functional needs of persons with disabilities in the rural areas. The definition shall have to be devised in a manner to include the private sector functions in rural India at the same time exclude from its purview the small private businesses with the area so as to avoid dis-incentivizing the small stakeholders.
Since the Act purports on including the private sector within its ambit, it has to be ascertained that such inclusion is constitutionally valid and hence a reasonable restriction on the private sector’s trade and business under Article 19 (6). The ground on which the State can place a reasonable restriction under Article 19 (60 on Article 19 (1) (g) is the interest of general public.
Under the present scheme of the law, the inclusion of the private sector can be justified on two grounds. First, the rights guaranteed under the new statute cannot be effectuated and realized completely without the private sector playing a role in its implementation mechanism. In such a situation, when the interest of rights of the public requires that the private sector be included, such private interest shall be overridden by the interest of the public. Second, the Indian laws have started recognizing the need of expanding the scope of the application of laws to garner better and efficient accountability. This has been done by including the private institutions within the scope of the law by direct mention of the same.
Article 15 (5) in this regard is a very string example which directly subjects private unaided educational institutions to state based reservations for other backward classes. The Right to Education Act also includes the private and non-recognised schools to be governed by the Act and subjects them to the obligations to provide benefits to the right holders. Similarly, the Right to Information Act engulfs the ‘agency-instrumentality’ test to determine a public authority as it also talks about direct and indirect state control or funding for an institution.
This section shall provide with a draft definition based on the understanding and study as carried out above and provide a justification for every part of the definition. The definition as framed to fulfill the mandate of an all encompassing definition which conveniently includes the private sector is as follows:
‘Establishment’ means and includes
Department and Ministries of Government;
Local authorities and authorities or bodies owned, controlled or aided by the Central or State Government;
Any statutory or non-statutory body created, owned, financially or administratively controlled or aided by the Central or State Government or any entity performing such public functions or welfare activities;
Any company, society, industry or other non-statutory body which provides employment in rural and urban areas
Unless under the scheme prepared by the Disability Rights Authority the entity satisfies the requirements to be exempted for cause of undue hardship; or
Any establishment as the Central or State Government may notify in the Official Gazette
Explanation 1: The term ‘industry’ in (iv) shall have the same meaning as in Section 2 (j) of the Industrial Disputes Act, 1947
The definition shall be an inclusive one as the scope of the definition need not be kept restrictive to the terms mentioned therein. The private sector is an ever increasing one and realizing that new realms of this sector shall be included with the progressive development of the law, the definition should be able to take them in when required. Hence, the definition shall use the word ‘means and include’ so as to leave the scope for other entities to be brought in through judicial interpretation and use of an inclusive definition.
At the outset it has to be understood that the entire private sector cannot be included within the scope of the Act as this would not stand a constitutional challenge. Such a step would be considered as an unreasonable restriction on the small private businesses and thus violative of Article 19 (1) (g). This would mean that the definition shall have to be framed in a manner to include those entities which perform governmental and public function and also those big private players which are involved in performing welfare activities. The scope of the definition shall have to exclude the small private players completely.
Based on this study, clause (i) and (ii) directly subject the government bodies to the Act and this is something which is without any debate. To expand the scope of public bodies, the ‘public function test’ and ‘agency-instrumentality’ test have been translated in a legal format within clause (iii). Therefore, clause (iii) includes statutory and non-statutory bodies which are controlled, aided, funded or administered by the State. The words statutory and non-statutory are used together to include those institutions formed by a statute and also do away with the effect of the judgment of the Dalco case. Thus the companies, societies etc. would be considered as non-statutory bodies but showing government links.
The second part of the definition talks about private entities which perform similar public functions. Thus, the private bodies which are involved in welfare activities shall be taken in here. The word such bodies has been used to keep this part ejusdem generis to the first part and thus avoiding the need to define public function. Therefore, this part shall include those entities which are performing tasks similar to those entities under the first part.
A model of universal inclusion has been adopted for the middle sized and other private bodies to be included. Since the major focus for inclusion of the private sector is for catering to the needs of employment at these places, the definition has been framed around the activity of providing employment. The definition adopts the approach taken by the courts as regards the term ‘industry’ which caters to a majority of the private sector companies. The clause states that all employers which are running an industry or a factory shall be brought within the term of the definition of ‘establishment’.
Alongside the universal paradigm, a mode of exclusion is provided where the Disability Rights Authority shall form certain parameters to decide who shall be exempted from the obligations under the Act. This shall serve a two-fold purpose. First, the exclusion shall be framed in a structural manner which shall be beneficial to those falling in the category and save the time and expenses of individual litigation and declaration. Secondly, the Act shall not bar the small businesses from carrying out their activities and the legislation shall not be a disincentive for the small players. In this regard, economic undue hardship shall help those opt out from the obligations when they are not in a position to fulfill them.
In this manner, the definition shall try and fulfill its mandate of being in line with the CRPD for realization of the goals and rights for persons with disability and at the same time try and include the private sector within its realm so as to guarantee the rights and entitlements to the persons with disability at the private establishments also.