Supreme Court Revises Industry Definition Under Labour Law

Key facts

• The Supreme Court, by a 5:4 majority, modified the test for determining what constitutes an 'industry' under the Industrial Disputes Act.
• A nine-judge bench headed by Chief Justice of India Surya Kant held that the reference questioning the 1978 Bangalore Water Supply ruling was maintainable.
• The court modified certain aspects of the 'triple test' laid down in the 1978 Bangalore Water Supply and Sewerage Board v A Rajappa judgment.
• The reformulation will operate only prospectively and will not unsettle pending or concluded cases.
• The court clarified that its observations are confined to the Industrial Disputes Act and should not be treated as an interpretation of 'industry' under the Industrial Relations Code 2020.
• The bench was split on whether the 1978 formulation itself required reconsideration, with four judges dissenting.