"Supreme Court rules 1978 industry definition inapplicable to Industrial Relations Code"
Triple Test
BWSSB 1978 criterion: systematic activity + employer-employee cooperation + production of goods/services satisfies 'industry'.
Industrial Relations Code, 2020
Consolidates IDA 1947, Trade Unions Act 1926, and Industrial Employment (Standing Orders) Act 1946 into one statute.
India's labour law framework was built over decades on a foundation of central legislation, the most important 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. The definition was therefore not merely technical — it was a threshold question about which workers the law would protect at all.
In 1978, a seven-judge Constitution Bench delivered a landmark ruling in Bangalore Water Supply and Sewerage Board v. Rajappa (BWSSB). The bench introduced the 'triple test': an undertaking qualifies as an 'industry' if it involves (i) systematic or organised activity, (ii) organised through cooperation between employer and employee, and (iii) aimed at the production or distribution of goods or services to satisfy human wants. Crucially, profit motive was held irrelevant. This brought hospitals, universities, municipalities, and charitable institutions within the fold of 'industry'. Only core sovereign functions — defence, the judiciary, and law and order — were exempted. This interpretation governed Indian labour law for nearly five decades.
Between 2019 and 2020, Parliament enacted four Labour Codes to consolidate 29 central labour laws. The Industrial Relations Code, 2020 (IRC) replaced the IDA, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. The IRC came into force in November 2025. Its Section 2(p) defines 'industry' afresh, immediately raising the question of whether the expansive 1978 BWSSB interpretation carries over to the new Code.
The significance of the BWSSB triple test lay in its conceptual shift: it moved the focus away from the employer's identity or profit motive toward the nature of the activity being carried out. A hospital run by a charitable trust was still an 'industry' because it systematically organised labour to provide a service satisfying human needs. This approach dramatically widened the protective ambit of the IDA, extending collective bargaining rights and dispute resolution mechanisms to workers in sectors previously considered outside the industrial sphere.
The IRC's Section 2(p) contains explicit exclusions and a freshly worded definition, making it textually distinct from the IDA's Section 2(j). This distinction became the crux of the constitutional question: could a definition crafted under a repealed statute automatically govern interpretation under an entirely new legislative framework? …
The Trade Disputes Act of 1929 provided for
Which principle among the following was added to the Directive Principles of State Policy by the 42nd Amendment to the Constitution?
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 'triple test' laid down in Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978), consider the following statements:
1.An organisation must have a profit motive to qualify as an 'industry' under the test.
2.The test requires a systematic or organised activity with an employer-employee relationship.
3.Production or distribution of goods or services for human wants is one of the three elements.
Which of the statements given above is/are correct?
Which of the following laws were replaced by the Industrial Relations Code, 2020?
1.The Industrial Disputes Act, 1947
2.The Trade Unions Act, 1926
3.The Factories Act, 1948
4.The Industrial Employment (Standing Orders) Act, 1946
Select the correct answer using the code given below:
Consider the following assertion and reason:
Assertion (A): The Supreme Court's nine-judge bench ruled that the 1978 BWSSB definition of 'industry' does not apply to the Industrial Relations Code, 2020.
Reason (R): The Industrial Relations Code, 2020 defines 'industry' under Section 2(p), which is a fresh statutory definition independent of the Industrial Disputes Act, 1947.
Which one of the following is correct in respect of the above?
Which of the following activities were brought within the definition of 'industry' by the Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978) judgment?
1.Hospitals run by charitable trusts
2.Municipal corporations providing sanitation services
3.Core defence establishments of the Union Government
4.Educational institutions with employer-employee relationships
Select the correct answer using the code given below:
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