NEWS: The Supreme Court has ruled that the broad 1978 interpretation of “industry” will not automatically apply under the Industrial Relations Code (IRC), 2020.

1978 Bangalore Water Supply Case

• Case: Bangalore Water Supply & Sewerage Board v. R. Rajappa.
• Decided by a 7-judge Constitution Bench.
• Interpreted Section 2(j) of the Industrial Disputes Act, 1947.
• Introduced the “Triple Test” for identifying an industry.

Triple Test

An activity qualifies as an industry if it involves:

• Systematic activity
• Employer–employee cooperation
• Production/distribution of goods or services to satisfy human wants.

Recent SC Ruling

• A 9-judge Constitution Bench held that “industry” under Section 2(p) of the IRC, 2020 must be interpreted based on the new Code’s own language and context.
• The 1978 interpretation does not automatically carry over.

Impact

• Pending disputes: Existing 1978 triple test continues to apply.
• Future disputes: “Industry” will be determined under the IRC, 2020.
• Creates a “clean slate” approach for interpreting the term under the new labour-law framework.