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Economy, business and finance
A new blow to workers
The Supreme Court’s decision to narrow the expansive 1978 definition of “industry” could weaken workers’ legal protections just as privatisation and the new labour codes are making employment more precarious.
The wafer-thin 5:4 majority ruling by a nine-judge Bench of the Supreme Court calling for the revision of the term “industry” has drawn the ire of trade unions and Left parties.
The Bench ruled that the expansive definition of industry, based on the “triple test” standard laid down in a 1978 seven-judge Bench judgment, needed revisitation and that the nature of the activity would determine what constitutes an industry, not merely the presence or existence of employer-employee relations. This, unions say, will impact the working classes by excluding many types of work from the purview of industrial relations and expose them to a wide range of vulnerabilities. Four judges opined that the definition did not warrant a revisitation.
Section 2(j) of the now repealed (on February 2, 2026) Industrial Disputes Act defines industry as “any business, trade, undertaking, manufacture, calling of employers and includes any calling, service or employment, handicraft, or industrial occupation or avocation of workmen”. The scope of this definition has been the subject of judicial scrutiny over the years. The definition was further expanded in a 1978 majority ruling of the Supreme Court (Bangalore Water Supply & Sewage Board vs. A. Rajappa & Others); that definition “held the field” for almost half a century.
It is that order and its re-formulated definition of industry that the nine-judge Bench has sought to correct.
Employees of the Bengaluru Water Supply and Sewerage Board (BWSSB) were penalised for alleged misconduct, and they went to the Labour Court against this move. The BWSSB argued that because it provided basic civic amenities to the public, it could not be called an industry under Section 2(j) of the ID Act. It contended that it fell outside the ambit of the Act and the Labour Court had no jurisdiction over it. The logic was simple: if the BWSSB was not an industry, its employees could not claim the status of “workmen”. The matter went to the Karnataka High Court and then to the Supreme Court.