PolityGS2+ GS3

Supreme Court rules on BWSSB precedent as Industrial Relations Code takes effect

The Hindu·2026-08-25· Read original

"Supreme Court rules on BWSSB precedent as Industrial Relations Code takes effect"

Prelims Facts

  • •The BWSSB judgment (1978) was delivered by a seven-judge Constitution Bench and laid down the expansive Triple Test for defining 'industry' under Section 2(j) of the Industrial Disputes Act, 1947.
  • •The Industrial Relations Code (IRC), 2020 came into force on November 21, 2025, simultaneously repealing the Industrial Disputes Act, 1947.
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Key Terms

BWSSB Triple Test

three-part test from 1978 ruling — systematic activity, employer-employee cooperation, production/distribution of goods or services — to determine if an entity is an 'industry'.

Industrial Relations Code (IRC), 2020

one of four Labour Codes consolidating 29 central labour laws; came into force November 2025, repealing the Industrial Disputes Act, 1947.

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Study Note

BackgroundCore Concept

Background

India's labour law framework was long anchored by the Industrial Disputes Act (ID Act), 1947, which governed the resolution of disputes between employers and workers in 'industries'. A central question under this Act was the definition of 'industry' under Section 2(j): which establishments could workers invoke the Act's protections in? The landmark Bangalore Water Supply and Sewerage Board vs A. Rajappa (BWSSB), 1978 judgment, delivered by a seven-judge Constitution Bench, gave this definition an expansive reading. It laid down the 'Triple Test': any activity involving (1) a systematic activity, (2) organised by cooperation between employer and employee, and (3) for the production or distribution of goods or services, qualified as an 'industry'. This broad reading extended protections to workers in hospitals, educational institutions, and even some government departments.

The BWSSB ruling was controversial from the start. Critics argued it was excessively 'worker-oriented' and ignored employer interests. In State of U.P. vs Jai Bir Singh (2005), a five-judge Bench formally questioned BWSSB's correctness and referred it to a larger Bench. A seven-judge Bench then referred the matter to a nine-judge Bench in 2017. Meanwhile, Parliament enacted the Industrial Relations Code (IRC), 2020, one of four Labour Codes that consolidated 29 central labour laws. The IRC came into force on November 21, 2025, simultaneously repealing the ID Act, 1947.

The Topic Explained

The four Labour Codes, covering wages, industrial relations, social security, and occupational safety, represent the most significant restructuring of Indian labour law since independence. The IRC, 2020 replaces the ID Act and redefines 'industry' under Section 2(p), using language that differs from the old Section 2(j). The IRC also raises the threshold for mandatory standing orders, modifies retrenchment and layoff norms, and introduces a new framework for recognition of trade unions. These changes have significant implications for the bargaining power of workers, particularly in the organised sector.

The constitutional basis for labour legislation is found in the Concurrent List (List III, Seventh Schedule), meaning both Parliament and state legislatures can legislate on labour. Article 42 of the Constitution directs the state to secure 'just and humane conditions of work'. Article 23 prohibits traffic in human beings, forced labour, and begar. …

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Related PYQs

2017GS1 Prelims

Which principle among the following was added to the Directive Principles of State Policy by the 42nd Amendment to the Constitution?

AEqual pay for equal work for both men and women
BParticipation of workers in the management of industries
CRight to work, education and public assistance
DSecuring living wage and human conditions of work to workers
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2017GS1 Prelims

Which of the following are envisaged by the Right against Exploitation in the Constitution of India?

1.Prohibition of traffic in human beings and forced labour

2.Abolition of untouchability

3.Protection of the interests of minorities

4.Prohibition of employment of children in factories and mines

Select the correct answer using the code given below:

A1, 2 and 4 only
B2, 3 and 4 only
C1 and 4 only
D1, 2, 3 and 4
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Practice MCQs

Politymedium

Consider the following statements regarding the Industrial Relations Code (IRC), 2020:

1.It came into force on November 21, 2025, repealing the Industrial Disputes Act, 1947.

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

3.The IRC is the only Labour Code enacted by Parliament; the other three are state subjects.

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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Politymedium

Consider the following statements regarding the BWSSB judgment (1978) and its aftermath:

1.The BWSSB Triple Test was laid down by a seven-judge Constitution Bench.

2.The Triple Test required that an activity be systematic, involve employer-employee cooperation, and produce or distribute goods or services.

3.The five-judge Bench in State of U.P. vs Jai Bir Singh (2005) upheld BWSSB as correctly decided.

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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Politymedium

Match the following constitutional provisions with their subject matter:

List I (Provision) — List II (Subject)

A.Article 23 — 1. Worker participation in management of industries

B.Article 42 — 2. Prohibition of traffic in human beings and forced labour

C.Article 43A — 3. Just and humane conditions of work

D.Article 43 — 4. Living wage for workers

Select the correct answer:

AA-2, B-3, C-1, D-4
BA-1, B-2, C-3, D-4
CA-2, B-4, C-1, D-3
DA-3, B-2, C-4, D-1
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Polityeasy

With reference to the 42nd Constitutional Amendment (1976), which of the following was added as a new Directive Principle of State Policy?

ASecuring equal pay for equal work for both men and women
BSecuring participation of workers in the management of industries
CSecuring a living wage and human conditions of work for workers
DSecuring free legal aid to citizens
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