{"id":120271,"date":"2026-08-21T11:34:25","date_gmt":"2026-08-21T06:04:25","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=120271"},"modified":"2026-08-21T11:34:25","modified_gmt":"2026-08-21T06:04:25","slug":"supreme-court-redefines-the-meaning-of-industry","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/supreme-court-redefines-the-meaning-of-industry\/","title":{"rendered":"Supreme Court Redefines the Meaning of \u2018Industry\u2019"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>Meaning of \u2018Industry\u2019 Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Supreme Court\u2019s <\/span><b>nine-judge Constitution Bench<\/b><span style=\"font-weight: 400;\">, headed by Chief Justice of India Surya Kant, has delivered a <\/span><b>5:4 <\/b><span style=\"font-weight: 400;\">verdict on the meaning of \u2018industry\u2019 under labour law.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Court has held that the expansive interpretation laid down in the landmark Bangalore Water Supply &amp; Sewerage Board v. R. Rajappa (1978) will not govern future disputes under the Industrial Relations Code (<\/span><b>IRC<\/b><span style=\"font-weight: 400;\">), 2020.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ruling marks <\/span><b>an important shift<\/b><span style=\"font-weight: 400;\"> in India\u2019s labour jurisprudence, particularly regarding the balance between workers\u2019 rights, industrial peace, State functions and ease of doing business.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>The 1978 \u2018Bangalore Water Supply\u2019 Verdict<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The 7-judge Bench in 1978 gave an expansive interpretation to \u201cindustry\u201d under Section 2(j) of the Industrial Disputes Act, 1947.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The \u2018triple test\u2019: <\/b><span style=\"font-weight: 400;\">An activity was treated as an industry if it involved &#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Systematic activity;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Cooperation between employer and employee; and<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Production or distribution of goods or services to satisfy human wants and wishes.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Court held that the profit motive was not essential. Consequently, institutions such as hospitals, educational institutions, municipalities, clubs and certain welfare activities could fall within labour-law protection.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It also evolved the <\/span><b>Dominant Nature Test<\/b><span style=\"font-weight: 400;\"> for organisations carrying out multiple or integrated activities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The broad definition enabled workers to seek <\/span><b>legal remedies<\/b><span style=\"font-weight: 400;\"> concerning wages, working conditions, unionisation, strikes, collective bargaining and protection against arbitrary dismissal.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Why the Definition Matters<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The classification of an establishment as an \u201cindustry\u201d <\/span><b>determines <\/b><span style=\"font-weight: 400;\">whether statutory labour protections and dispute-resolution mechanisms apply to its employees.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The expansive 1978 interpretation, however, <\/span><b>generated substantial litigation<\/b><span style=\"font-weight: 400;\">. A later Constitution Bench referred to the resulting increase in labour litigation as a \u201c<\/span><b>docket explosion<\/b><span style=\"font-weight: 400;\">\u201d.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The issue became particularly contentious after <\/span><b>LPG <\/b><span style=\"font-weight: 400;\">(liberalisation, privatisation and globalisation), as activities earlier performed by the State increasingly shifted to private entities.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Supreme Court\u2019s Majority View<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The majority held that the definition of \u201cindustry\u201d under Section 2(p) of the Industrial Relations Code, 2020 must be interpreted on a clean slate.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It should not be \u201cburdened\u201d by the 1978 interpretation of Section 2(j) of the repealed Industrial Disputes Act.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The 1978 judgment therefore remains <\/span><b>relevant for legacy disputes<\/b><span style=\"font-weight: 400;\"> pending under the 1947 Act, but it will <\/span><b>not serve as the foundation<\/b><span style=\"font-weight: 400;\"> for interpreting the IRC in future cases.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">CJI Surya Kant also observed that aspects of the triple test could have been articulated differently to better reflect the statutory provision. The Court\u2019s detailed formulation of the modified test is awaited.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Pending vs Future Cases<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Pending proceedings under the Industrial Disputes Act, 1947<\/b><span style=\"font-weight: 400;\">: Continue to be governed by the Bangalore Water Supply interpretation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Future disputes under the IRC, 2020<\/b><span style=\"font-weight: 400;\">: Will be governed by the new statutory framework and the Court\u2019s prospective interpretation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This distinction prevents retrospective disruption and unequal treatment of workers involved in existing disputes.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Justice Nagarathna\u2019s Dissent<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Justice B.V. Nagarathna, joined by Justices Dipankar Datta and Ujjal Bhuyan, opposed reconsideration of the 1978 judgment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">She argued that the <\/span><b>broad definition remains necessary<\/b><span style=\"font-weight: 400;\"> in an economy transformed by privatisation and liberalisation, where workers have increasingly moved from public-sector to private-sector employment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">She maintained that merely because an activity is performed by the State, it does not automatically become a sovereign function.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Government-run social welfare schemes and services may constitute industrial activities depending upon their nature.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">She also defended the Dominant Nature Test, arguing that the focus should be on the <\/span><b>character of the activity<\/b><span style=\"font-weight: 400;\"> rather than simply on who performs it.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Justice Datta<\/b><span style=\"font-weight: 400;\"> emphasised that institutional credibility requires respect for finality, while <\/span><b>Justice Bhuyan<\/b><span style=\"font-weight: 400;\"> supported retaining the established framework.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Justice Joymalya Bagchi<\/b><span style=\"font-weight: 400;\">: Adopting a nuanced position, he held that the IRC should not be encumbered by the 1978 judgment in future disputes, but disagreed with the majority\u2019s proposed reformulation of the triple test.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Legislative and Policy Background<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Industrial Disputes (Amendment) <\/span><b>Act, 1982<\/b><span style=\"font-weight: 400;\"> attempted to narrow the definition of \u201cindustry\u201d, but the relevant provision was never brought into force.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Between 2019 and 2020, Parliament consolidated 29 labour laws into <\/span><strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/labour-codes\/\" target=\"_blank\">four <\/a><\/strong><span style=\"font-weight: 400;\"><strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/labour-codes\/\" target=\"_blank\">Labour Codes<\/a> <\/strong>&#8211;<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Code on Wages, 2019<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Industrial Relations Code, 2020<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Occupational Safety, Health and Working Conditions Code, 2020<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Code on Social Security, 2020<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The labour reforms have faced <\/span><b>strong opposition<\/b><span style=\"font-weight: 400;\"> from trade unions, reflecting the continuing tension between labour protection and labour-market flexibility.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Way Forward<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The judgment seeks to create <\/span><b>a clearer distinction<\/b><span style=\"font-weight: 400;\"> between legacy disputes and the new labour-law regime.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Its ultimate impact will depend on the precise formulation of the new definition of \u201cindustry\u201d and whether it succeeds in reducing litigation without weakening workers\u2019 statutory protection.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The larger policy challenge is to <\/span><b>achieve a balanced labour regime<\/b><span style=\"font-weight: 400;\"> that protects workers from exploitation while providing enterprises and public institutions with sufficient flexibility to function efficiently.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/www.thehindu.com\/news\/national\/supreme-court-upholds-definition-of-industry-as-per-industrial-relations-code-2020\/article71367986.ece\" target=\"_blank\" rel=\"nofollow noopener\"><b>TH<\/b><\/a><b> |\u00a0<\/b><a href=\"https:\/\/indianexpress.com\/article\/legal-news\/supreme-court-industry-definition-labour-law-case-10841195\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Supreme Court\u2019s nine-judge Constitution Bench, headed by Chief Justice of India Surya Kant, has delivered a 5:4 verdict on the meaning of \u2018industry\u2019 under labour law. <\/p>\n","protected":false},"author":19,"featured_media":120291,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[9679],"class_list":["post-120271","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-meaning-of-industry","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120271","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=120271"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120271\/revisions"}],"predecessor-version":[{"id":120279,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/120271\/revisions\/120279"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/120291"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=120271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=120271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=120271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}