PolityGS2+ GS3

Supreme Court dissent warns against narrowing 'industry' definition under labour code

The Hindu·2026-08-23· Read original

"Supreme Court dissent warns against narrowing 'industry' definition under labour code"

Prelims Facts

  • •The Trade Disputes Act, 1929 introduced a system of tribunals and a ban on strikes in British India, directly tested in 2017 UPSC Prelims.
  • •Hind Mazdoor Sabha was founded in 1948 by Ashok Mehta, T.S. Ramanujam, and G.G. Mehta, tested in 2018 UPSC Prelims.
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Key Terms

Industrial Relations Code, 2020 (IRC)

One of four Labour Codes consolidating the Industrial Disputes Act 1947, Trade Unions Act, and Industrial Employment (Standing Orders) Act.

Bangalore Water Supply judgment (1978)

Supreme Court ruling giving 'industry' an expansive definition covering non-profit and government establishments.

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Study Note

BackgroundCore Concept

Background

India's labour law framework has its roots in colonial-era legislation. The Trade Disputes Act, 1929 introduced a system of tribunals and restricted strikes. After Independence, the Industrial Disputes Act, 1947 (IDA) became the cornerstone of labour relations. It defined 'industry' broadly to determine which establishments and workers fell within its protective ambit. The IDA provided mechanisms for conciliation, arbitration, and adjudication of disputes between employers and workers.

A landmark moment came in 1978, when the Supreme Court decided Bangalore Water Supply and Sewerage Board v. R. Rajappa. A seven-judge bench gave 'industry' an expansive definition. It held that any systematic activity organised with the cooperation of employer and employee for the production or distribution of goods or services, whether or not profit was the motive, qualified as an 'industry'. This definition extended labour protections to hospitals, educational institutions, and government departments. It served as a protective shield for workers across a wide range of establishments for nearly five decades.

India's economic liberalisation from the early 1990s brought new pressures. Private sector growth, outsourcing, and the rise of contract labour created new vulnerabilities for workers. The broad 1978 definition became increasingly important as a counterweight to growing corporate bargaining power. The government eventually consolidated 29 central labour laws into four Labour Codes, one of which is the Industrial Relations Code, 2020 (IRC). The IRC replaced the IDA and redefined 'industry' under Section 2(p).

The Topic Explained

The definition of 'industry' is not a technical formality. It determines which workers can raise an industrial dispute, access labour tribunals, claim protection against unfair dismissal, and organise collectively. A narrow definition excludes large categories of workers from these protections. A broad definition brings more workers under the law's umbrella.

The Bangalore Water Supply judgment of 1978 was deliberately expansive. It rejected the view that 'industry' required a profit motive or a purely commercial character. The court reasoned that the welfare of workers should not depend on whether their employer ran a business or a public service. This made the judgment a bulwark for workers in hospitals, universities, municipalities, and government undertakings, sectors that expanded rapidly after liberalisation.

The Industrial Relations Code, 2020 is one of four Labour Codes enacted to simplify India's complex labour law architecture. …

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Related PYQs

2017GS1 Prelims

The Trade Disputes Act of 1929 provided for

Athe participation of workers in the management of industries.
Barbitrary powers to the management to quell industrial disputes.
Can intervention by the British Court in the event of a trade dispute.
Da system of tribunals and a ban on strikes.
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2018GS1 Prelims

Who among the following were the founders of the "Hind Mazdoor Sabha" established in 1948 ?

AB. Krishna Pillai, E.M.S. Namboodiripad and K.C. George
BJayaprakash Narayan, Deen Dayal Upadhyay and M.N. Roy
CC.P. Ramaswamy Iyer, K. Kamaraj and Veeresalingam Pantulu
DAshok Mehta, T.S. Ramanujam and G.G. Mehta
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Practice MCQs

Politymedium

With reference to the Industrial Relations Code, 2020 (IRC), consider the following statements:

1.The IRC consolidates the Industrial Disputes Act 1947, the Trade Unions Act 1926, and the Industrial Employment (Standing Orders) Act 1946.

2.The definition of 'industry' under the IRC is contained in Section 2(p).

3.The Supreme Court's nine-judge bench held that the Bangalore Water Supply judgment (1978) is binding precedent for interpreting 'industry' under the IRC.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
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Polityeasy

The Trade Disputes Act of 1929, enacted during British rule in India, is historically significant because it:

1.Introduced a system of industrial tribunals for dispute resolution.

2.Granted workers the right to participate in management decisions.

3.Imposed a ban on strikes in certain categories of employment.

Which of the statements given above is/are correct?

A1 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3
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Polityhard

The dissenting opinion in the nine-judge bench ruling on the definition of 'industry' under the Industrial Relations Code, 2020 relied on the English case Greaves v. Tofield (1880) to argue that:

AA new statute always overrides all precedents established under the statute it replaces.
BWhen a new statute replaces an old one on the same subject and purpose, judicial pronouncements on the old statute remain persuasive for the new one.
CThe Industrial Relations Code, 2020 has a fundamentally different purpose from the Industrial Disputes Act, 1947.
DEnglish common law precedents are binding on Indian courts in all matters of statutory interpretation.
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Politymedium

Assertion (A): The Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978) judgment extended the definition of 'industry' to cover hospitals, educational institutions, and government departments.

Reason (R): The Supreme Court held that a profit motive is essential for an establishment to qualify as an 'industry' under the Industrial Disputes Act, 1947.

ABoth A and R are true, and R is the correct explanation of A.
BBoth A and R are true, but R is NOT the correct explanation of A.
CA is true, but R is false.
DA is false, but R is true.
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