On August 20, 2026, a nine-judge Bench of the Supreme Court ruled on how "industry" should be defined under the new Industrial Relations Code (IRC), 2020. Chief Justice of India Surya Kant led the Bench. It held that the IRC's own definition, under Section 2(p), must be read on its own text. It will not automatically follow the 1978 test laid down in Bangalore Water Supply and Sewerage Board vs A. Rajappa, i.e. BWSSB, for the old Industrial Disputes Act, 1947.

What the Court Actually Decided

  • Disputes still pending under the 1947 Act continue to be governed by BWSSB.
  • Future disputes under the IRC will be interpreted afresh, independent of BWSSB.
  • The Chief Justice's opinion set out a "reformulated" version of BWSSB's Triple Test, but said it would apply only going forward, not to any pending case.

How the Nine Judges Differed

  • The majority — the Chief Justice, with Justices Satish Chandra Sharma, Alok Aradhe and Vipul M. Pancholi — held that "industry" under the IRC must be read independently, unburdened by the 1978 precedent.
  • The minority — Justices B.V. Nagarathna, Dipankar Datta and Ujjal Bhuyan — held that re-evaluating the 1978 judgment was "unwarranted."
  • Justice Nagarathna warned that altering the definition could create uncertainty and disrupt industrial peace, calling BWSSB "a child of its time."
  • Justice Joymalya Bagchi backed sending the question to a nine-judge Bench, but disagreed with reformulating the triple test.
  • Justice Bagchi held that the absence of a profit motive does not take an activity outside "industry."

Conclusion

By separating the IRC from the 1978 precedent, the Court leaves the line open. Future cases will decide where employer authority ends and worker protection begins under the new code.

Mains Angle

GS Paper II — Indian Constitution: judicial interpretation of statutes, the role of precedent, and separation of powers; GS Paper III: labour law reform under the Industrial Relations Code, 2020. Practice question: "Examine the significance of the Supreme Court's 2026 ruling that 'industry' under the Industrial Relations Code, 2020, must be interpreted independently of the 1978 BWSSB precedent. What does this mean for continuity in labour law? (150 words)"