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25 August 2026

Supreme Court judgment on 'industry' definition

This is a landmark nine-judge Supreme Court judgment interpreting the definition of 'industry' under labor laws, which directly impacts industrial relations, constitutional interpretation, and the transition from the ID Act to the Industrial Relations Code.

2 min read Day 5 of 5 2 questions 2 prelims

Notes

  • On August 20, 2026, a nine-judge Supreme Court Bench delivered a judgment regarding the definition of 'industry' under Section 2(j) of the Industrial Disputes (ID) Act, 1947.
  • The reference originated from State of U.P. vs Jai Bir Singh (2005), which questioned the 1978 Bangalore Water Supply and Sewerage Board (BWSSB) vs A. Rajappa judgment.
  • The BWSSB judgment established a 'Triple Test' to define an industry, covering systematic operations involving employer-employee cooperation to provide goods or services, excluding only core sovereign functions.
  • The Industrial Relations Code (IRC), 2020, which came into force on November 21, 2025, repealed the ID Act, 1947.
  • The nine-judge Bench held that the interpretation of 'industry' under the IRC, 2020 must be determined independently based on its own text and scheme, rather than being bound by the BWSSB precedent.
  • The Court clarified that the BWSSB framework remains applicable to pending cases under the repealed ID Act, 1947, but will not serve as the 'sheet anchor' for interpreting the IRC.
  • Four judges in the majority opinion proposed a 'reformulated' Triple Test, though they acknowledged it is hypothetical and prospective, not applying to pending cases.
  • Minority opinions (Justices Nagarathna, Datta, and Bhuyan) argued that the reference was unnecessary or academic due to the repeal of the ID Act, and that the BWSSB precedent should not be discarded.
  • The debate highlights the tension between the 'worker-oriented' approach of the BWSSB judgment and the evolving economic landscape, including the 'ease of doing business' policy.

Part of a longer story

This is day 5 of 5 in Supreme Court ruling on 'industry' definition under Industrial Relations Code, which has been running since 21 August 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. The Supreme Court's recent judgment on the definition of 'industry' marks a transition from the legacy of the Bangalore Water Supply and Sewerage Board (BWSSB) case to the Industrial Relations Code, 2020. Discuss the implications of this shift for labour rights and the adjudication of industrial disputes in India. 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. The 'Triple Test' established in the 1978 BWSSB judgment was instrumental in expanding the scope of labour protections in India. Critically examine the rationale behind the Supreme Court's decision to decouple the interpretation of 'industry' under the new Industrial Relations Code from this long-standing judicial precedent. How does this impact the constitutional mandate of social justice and the protection of workers' rights? 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. Which of the following best describes the 'Triple Test' established in the Bangalore Water Supply and Sewerage Board (BWSSB) vs A. Rajappa (1978) case?

  2. What is the current legal status of the Industrial Disputes (ID) Act, 1947, following the enactment of the Industrial Relations Code (IRC), 2020?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-08-25/supreme-court-judgment-on-industry-definition