Supreme Court scraps 1978 industry definition for new labour code

A nine-judge Supreme Court bench, by a 6:3 majority on August 20, held that the 1978 Bangalore Water Supply judgment's expansive definition of 'industry' will not apply to disputes under the Industrial Relations Code, 2020. The 1978 verdict had granted workers in hospitals, schools and municipalities legal protections under the Industrial Disputes Act, 1947. The majority, led by Chief Justice Surya Kant, said the new code must be interpreted on its own text, not burdened by the old precedent.

The court ruled that the 1978 'triple test' remains valid only for legacy cases pending under the repealed 1947 Act. Justice B.V. Nagarathna dissented, arguing the reference was unwarranted and that a broad definition of industry is essential to safeguard workers' rights in India's privatising economy. She was joined by Justices Dipankar Datta and Ujjal Bhuyan. Justices P.S. Narasimha and Joymalya Bagchi wrote separate opinions agreeing with the majority.

The verdict is prospective: all future disputes under the 2020 Code will be adjudicated based on the Code's own language. Detailed judgments are awaited.