How Supreme Court’s new ruling changes the definition of ‘industry’ | Explained

A nine-member Constitution Bench of the Supreme Court of India held that the nearly half-century-old interpretation of the term ‘industry’ will not automatically apply to the Industrial Relations Code (IRC), 2020, which came into force in November 2025 and replaced the legacy Industrial Disputes Act, 1947. This decision effectively severs the new labour regime from an expansive, worker-friendly precedent set in 1978, establishing a clean slate for future labour law disputes.

To understand the significance of this judgment, one must look back to the historic 1978 ruling in Bangalore Water Supply and Sewerage Board v. R. Rajappa.

Authored by Justice V.R. Krishna Iyer, that seven-judge Bench significantly broadened the definition of Section 2(j) under the 1947 Act. The 1978 judgment introduced the triple test, which classified systematic or organised operations based on employer-employee cooperation to provide goods or services for consumers as an industry.