Integrated establishment test governs lay-off compensation disqualification where quarry and factory function as one undertaking.

Section 25E of the Industrial Disputes Act is construed strictly because it creates a disqualification to lay-off compensation. Where "one establishment" is not defined, the test is the ordinary industrial or business unity of the undertaking, assessed by ownership, management and control, finance, employment, functional integrality, common purpose and geographical proximity. Applying those indicia, a limestone quarry supplying the principal raw material exclusively to a cement factory, under common management and finance, was treated as part of the same establishment. The fact that the units fell under different statutory regimes did not prevent that conclusion. The workmen were therefore disqualified from lay-off compensation under section 25E(iii).

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Issues: Whether the limestone quarry and the cement factory constituted one establishment for the purpose of disqualification from lay-off compensation under clause (iii) of section 25E of the Industrial Disputes Act, 1947.

Analysis: Section 25C confers a right to lay-off compensation, while section 25E creates disqualifications and must be construed strictly. The Explanation to section 25A identifies what may constitute an industrial establishment, but it does not lay down the test for determining whether different units form one establishment. Where the statute is silent, the question depends on the ordinary industrial or business sense of the undertaking, assessed on relevant factors such as unity of ownership, management and control, finance, employment, functional integrality, general unity of purpose and geographical proximity. On the evidence, the quarry supplied the principal raw material exclusively to the factory, was under the same overall management, shared finance and employment arrangements, and formed a feeder unit indispensable to the factory's working. The existence of different statutory jurisdictions under the Mines Act and the Industrial Disputes Act did not require the units to be treated as separate establishments for the purposes of section 25E(iii).

Conclusion: The quarry and the factory were one establishment, so the lay-off was due to a strike in another part of the same establishment and the workmen were not entitled to lay-off compensation under section 25E(iii).

Final Conclusion: The award of the Industrial Tribunal was set aside and the appeal was allowed, the claim for lay-off compensation failing on the statutory disqualification.

Ratio Decidendi: Where the statute does not define one establishment, the question is determined by the integrated industrial or commercial unity of the undertaking, and a feeder unit may form part of the same establishment for section 25E(iii) when the relevant indicia of unity are satisfied.

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