"Supreme Court Bench Leaves Triple Test Standing but Limits Its Future Scope"
Triple Test
Three-part BWSSB test — systematic activity, employer-employee cooperation, production of goods/services — to define 'industry'.
Industrial Relations Code, 2020 (IRC)
Legislation consolidating three labour laws, replacing the IDA; Section 2(p) defines 'industry' under the new regime.
India's labour law framework was built on the Industrial Disputes Act, 1947 (IDA). Section 2(j) of the IDA defined 'industry', and that definition determined which workers could raise industrial disputes, access collective bargaining, and claim protection against unfair dismissal. The scope of the definition was not a technical question. It decided 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. A. Rajappa (BWSSB). The bench introduced the Triple Test: an undertaking qualifies as an 'industry' if it involves (i) systematic 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. 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, 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, raising the immediate question of whether the expansive 1978 interpretation carries over to the new Code.
The Triple Test from BWSSB was significant because it shifted focus from the employer's identity or profit motive to the nature of the activity. 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 was deliberately expansive. It ensured that workers in the public sector, in non-profit institutions, and in government-run utilities could access the IDA's dispute resolution mechanisms.
Critically, the Triple Test was not a one-sided pro-labour device. An expansive definition of 'industry' brought with it not just the IDA's protections but also its restrictions. Employers gained a regulated route to retrenchment and closure. Workers faced a bar on striking at will. …
A legislation which confers on the executive or administrative authority an unguided and uncontrolled discretionary power in the matter of application of law violates which one of the following Articles of the Constitution of India?
'Pressure groups play a vital role in influencing public policy making in India.' Explain how the business associations contribute to public policies.
Consider the following statements regarding the 'Triple Test' laid down in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978):
1.It requires that an activity must be carried out with a profit motive to qualify as an 'industry'.
2.It holds that the nature of the activity, not the identity of the employer, determines whether something is an 'industry'.
3.It exempts sovereign functions such as defence and law and order from the definition of 'industry'.
Which of the statements given above is/are correct?
The Industrial Relations Code, 2020 (IRC) consolidated which of the following central labour laws?
1.Industrial Disputes Act, 1947
2.Trade Unions Act, 1926
3.Factories Act, 1948
4.Industrial Employment (Standing Orders) Act, 1946
Select the correct answer using the codes given below:
Which of the following best explains why the Triple Test from BWSSB (1978) was described as a framework for 'industrial peace' rather than merely a pro-labour device?
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