Supreme Court Delinks 1978 Industry Definition From Industrial Relations Code

Gist A nine-judge Constitution Bench of the Supreme Court has ruled that the expansive 1978 judicial definition of an 'industry' will not automatically apply to the Industrial Relations Code IRC , 2020 . This decision effectively severs India's new labour law regime from a legacy precedent that broadly protected workers across diverse sectors, including hospitals and municipalities. Aspirants must note this shift as it establishes a clean slate for future labour disputes, shifting the judicial focus toward balancing modern economic realities against established worker protections. Background Before this ruling, the definition of an 'industry' was governed by Section 2 j of the Industrial Disputes Act, 1947 . In the landmark 1978 Bangalore Water Supply and Sewerage Board v. R. Rajappa case, authored by Justice V.R. Krishna Iyer , a seven-judge Bench established the "triple test." This test defined an industry as any systematic, organized activity involving employer-employee cooperation to produce goods or services for consumers. This sweeping interpretation brought non-profit entities, educational institutions, and civic bodies under labour law purview, excluding only core sovereign functions like defence and judiciary .…