The story so far:
Authored by Justice V.R. The nine-judge Bench reflected nuanced positions on the balance between worker protections and modern economic realities. 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. 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. Justice Bagchi said an apprehension that the triple test conceived in the 1978 judgment converted any organised activity into an industry was misplaced.
Justice Bagchi supported the need for the reference to the nine-judge Bench, but expressed his inability to agree to a “reformulated” triple test.
The judge agreed with Justices Nagarathna that even the state could enter into seemingly non-sovereign functions. The concept of ‘sovereignty’ has itself undergone changes with the passage of time. Absence of a profit motive did not take an activity outside the realm of industry, he observed. Justice Datta echoed the need for judicial consistency. Sharing his opinion with Justice Bhuyan, Justice Datta remarked that institutional credibility relies on respecting finality rather than perpetuating doubt over established law.
By severing the IRC from the 1978 precedent, the Supreme Court has set the stage for a new chapter in Indian labour law, leaving it to future courts to decide where the lines between employer authority and worker protections will ultimately be drawn.
He said it was unwise to “re-draft” Justice Iyer’s triple test.
