SC redefines 'industry' under IRC 2020, detaching from 1978 precedent
A nine-member Constitution Bench of the Supreme Court ruled that the 1978 Bangalore Water Supply judgment's expansive interpretation of 'industry' will not automatically apply to the Industrial Relations Code (IRC), 2020. This decision aims to establish a new, clearer framework for labour law disputes, moving away from the worker-friendly precedent set in 1978 by Justice V.R. Krishna Iyer. The new ruling emphasizes interpreting 'industry' based on IRC's specific text and statutory context, ensuring labour rights are protected as fundamental rights. It also highlights the broader societal impact of unemployment on households and stresses the importance of judicial vigilance in protecting workers' dignity and security.
Key Points
- The Supreme Court's nine-member Constitution Bench ruled that the 1978 BWSSB judgment's definition of 'industry' will not automatically apply to the IRC 2020.
- This decision aims to establish a new, clearer framework for labour law disputes under the IRC, moving away from the expansive 1978 interpretation.
- The 1978 ruling, known for its 'triple test,' had significantly broadened the definition of 'industry' to include various activities like hospitals and educational institutions.
- The new interpretation will focus on the specific text and statutory context of the IRC, ensuring labour rights are protected as fundamental rights.
- The ruling also implicitly acknowledges the broader societal impact of unemployment, particularly on households, and calls for judicial vigilance in protecting workers' dignity and security.
Exam Facts
- The ruling was made by a nine-member Constitution Bench.
- The 1978 ruling was in Bangalore Water Supply and Sewerage Board v. A. Rajappa, authored by Justice V.R. Krishna Iyer.
- The Industrial Relations Code (IRC), 2020, came into force in November 2025.
- The IRC 2020 replaced the Industrial Disputes Act, 1947.
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