Functional integration test for industrial unity: separate press and publishing concerns could not pool losses for bonus computation.

Functional integration, rather than common ownership alone, determines whether two business activities form one industrial unit for bonus computation. The Supreme Court noted that the test is whether the activities are so integrated that one cannot conveniently and reasonably exist without the other. Although the press and the publishing venture were under common ownership, the absence of a common capital fund, pooled profits, or a combined labour force, together with separate accounts and separate cashiers, showed that they remained distinct concerns. The losses of the publishing business could therefore not be set off against the profits of the press for calculating bonus, and the appeals were dismissed.

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Issues: Whether the Pratap Press and the Vir Arjun paper constituted one industrial unit so that the losses of the paper business could be pooled with the profits of the press for deciding bonus payable to the workmen.

Analysis: The decisive test was whether the two activities were functionally integrated to such an extent that one could not conveniently and reasonably exist without the other. The ownership of both concerns was common, but unity of ownership by itself was not enough. The record did not show a common capital fund, pooled profits, or a combined labour force, and the manner in which the employer actually treated the two concerns did not establish that they were one integrated unit. Separate accounts, separate cashiers, and the business character of a press and a publishing venture supported the view that the two activities were distinct.

Conclusion: The Press and the Vir Arjun were separate industrial units, and the losses of the Vir Arjun could not be set off against the profits of the Pratap Press for computing bonus. The appeals were therefore dismissed.

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