Supreme Court Revises Industry Definition Under Labour Law

The Supreme Court of India delivered a nine-judge Constitution Bench judgment on 20 August 2026 on the meaning of “industry” under Section 2(j) of the Industrial Disputes Act, 1947. The Bench was led by Chief Justice Surya Kant and dealt with the scope of the 1978 precedent in Bangalore Water Supply and Sewerage Board v. A. Rajappa.

Section 2(j) of the Industrial Disputes Act, 1947

Section 2(j) of the Industrial Disputes Act, 1947 defines “industry” for the purpose of industrial dispute adjudication in India. The provision is central to the application of labour protections, dispute resolution, and the jurisdiction of labour courts and industrial tribunals. The Supreme Court held by a 5:4 majority that the classic “triple test” from the 1978 Bangalore Water Supply case requires further refinement. The Court also held by a 6:3 majority that the reference seeking reconsideration of the 1978 judgment was validly made and maintainable.

Bangalore Water Supply Triple Test

The Bangalore Water Supply and Sewerage Board v. A. Rajappa case was decided in 1978 by the Supreme Court of India. The judgment became the leading authority on the meaning of “industry” under labour law and used the “triple test” to identify an industry. The reformulated triple test will operate prospectively. Pending disputes under the Industrial Disputes Act, 1947 will continue to be decided using the original 1978 definition. The Court ruled that the 1978 interpretation will not govern the term “industry” under the Industrial Relations Code, 2020. The Industrial Relations Code, 2020 is one of the labour codes enacted to consolidate labour law in India.

Reference Case and Dissent

The reference case was State of Uttar Pradesh v. Jai Bir Singh. The nine-judge Bench reserved its verdict on 19 March 2026 after three days of continuous arguments. Four judges dissented on the merits. Justice B.V. Nagarathna, Justice Dipankar Datta, Justice Ujjal Bhuyan, and Justice Joymalya Bagchi stated that the 1978 Bangalore Water Supply precedent remains correct and does not require modification.

Important Facts for Exams

• The Industrial Disputes Act, 1947 is a central law on industrial disputes in India.
• A Constitution Bench of the Supreme Court can include five or more judges under Article 145 of the Constitution of India.
• The Bangalore Water Supply and Sewerage Board v. A. Rajappa judgment was delivered in 1978.
• The Industrial Relations Code, 2020 is part of the labour law consolidation framework in India.