"Supreme Court rules 1978 'industry' definition does not bind new Labour Code"
Industrial Relations Code, 2020 (IRC)
one of four Labour Codes consolidating 29 central labour laws, replacing the Industrial Disputes Act 1947 among others
Triple test (BWSSB, 1978)
three conditions (systematic organisation, employer-employee cooperation, production of goods/services) used to determine if an activity qualifies as 'industry'
India's labour law framework has long rested on a patchwork of central legislation, the most significant being the Industrial Disputes Act, 1947 (IDA). Section 2(j) of the IDA defined 'industry', and the scope of that definition determined which workers could access collective bargaining, raise industrial disputes, and seek protection against unfair dismissal. For decades, the definition was narrow and contested.
In 1978, a seven-judge Constitution Bench of the Supreme Court delivered a landmark ruling in Bangalore Water Supply and Sewerage Board v. R. Rajappa. The judgment, authored by Justice V.R. Krishna Iyer, gave an expansive reading to 'industry' under Section 2(j). It introduced the 'triple test': any activity that is (i) systematic or organised, (ii) operates on the basis of employer-employee cooperation, and (iii) produces goods or services to satisfy human wants, qualifies as an 'industry'. The ruling brought hospitals, educational institutions, and municipalities within the fold of 'industry'. Only core sovereign functions — the judiciary, defence, law and order — were exempted. This interpretation significantly widened the net of worker protection for nearly five decades.
The four Labour Codes enacted between 2019 and 2020 — covering wages, industrial relations, social security, and occupational safety — were Parliament's attempt to consolidate and modernise 29 central labour laws. The Industrial Relations Code, 2020 (IRC) replaced the IDA, the Trade Unions Act, and the Industrial Employment (Standing Orders) Act. The IRC came into force in November 2025. Its Section 2(p) defines 'industry' afresh, raising the question of whether the 1978 BWSSB interpretation would carry over.
The nine-judge Constitution Bench was convened to resolve precisely this question: does the expansive 1978 definition of 'industry' under Section 2(j) of the IDA govern the interpretation of Section 2(p) of the IRC?
The majority opinion held that it does not. The IRC's definition of 'industry' starts on a 'clean slate' — it is not burdened by the 1978 judgment. The majority reasoned that the IRC is a new, self-contained code with its own legislative intent, and importing the 1978 interpretation would distort that intent. The 1978 BWSSB ruling is now confined strictly to legacy disputes — proceedings already pending before courts, tribunals, and labour authorities under the 1947 Act before the IRC came into force. Those pending cases will continue to be decided under the BWSSB framework.
The majority also offered a 'refinement' of the triple test as a considered opinion. …
Which principle among the following was added to the Directive Principles of State Policy by the 42nd Amendment to the Constitution?
The Trade Disputes Act of 1929 provided for
Consider the following statements:
1.The Factories Act, 1881 was passed with a view to fix the wages of industrial workers and to allow the workers to form trade unions.
2.N.M. Lokhande was a pioneer in organizing the labour movement in British India.
Which of the above statements is/are correct?
With reference to the Constitution of India, prohibitions or limitations or provisions contained in ordinary laws cannot act as prohibitions or limitations on the constitutional powers under Article 142. It could mean which one of the following?
With reference to the Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978) judgment, consider the following statements:
1.It was delivered by a seven-judge Constitution Bench of the Supreme Court.
2.It introduced a 'triple test' to determine whether an activity qualifies as 'industry' under the Industrial Disputes Act, 1947.
3.It exempted all government activities from the definition of 'industry' on the ground that the state performs sovereign functions.
Which of the statements given above is/are correct?
The Industrial Relations Code, 2020 (IRC) consolidated which of the following Acts?
1.Industrial Disputes Act, 1947
2.Trade Unions Act, 1926
3.Contract Labour (Regulation and Abolition) Act, 1970
4.Industrial Employment (Standing Orders) Act, 1946
Select the correct answer using the code below:
Which of the following activities were brought within the definition of 'industry' under Section 2(j) of the Industrial Disputes Act, 1947 by the Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978) judgment?
1.Hospitals
2.Educational institutions
3.Municipalities
4.The judiciary
Select the correct answer using the code below:
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