Overview
On 20 August 2026, a nine‑judge Bench of the Supreme Court delivered a landmark judgment on the definition of “industry” under the old Industrial Disputes (ID) Act. The Court reaffirmed the “Triple Test” laid down by Justice V.R. Krishna Iyer in the 1978 BWSSB case. While the ID Act was repealed on 21 November 2025 when the Industrial Relations Code (IRC) came into force, the Court’s decision has significant interpretative consequences.
Key Developments
- The nine‑judge Bench, headed by Chief Justice of India Surya Kant, kept the Triple Test applicable to all pending disputes under the repealed ID Act.
- A majority held that the BWSSB case should not be a “sheet anchor” for interpreting Section 2(p) of the IRC.
- In dissent, Justice B.V. Nagarathna argued that the reference to BWSSB was unnecessary and that the Triple Test should remain untouched.
- The judgment underscores that the essence of the Triple Test is embedded in Section 2(p), despite the majority’s attempt to detach it.
Important Facts
The Triple Test requires three conditions for an activity to be called an industry:
- It must be a systematic activity (regular and organized).
- There must be cooperation between employer and employee.
- The activity should involve production or distribution of goods/services to satisfy human wants, excluding purely religious or spiritual services.
Profit motive is not a deciding factor. Only “sovereign functions” (e.g., police, defence) are excluded.
Exam Relevance
Understanding the definition of “industry” is crucial for GS‑3 (Economy) questions on labour law reforms, industrial relations, and the impact of liberalisation since 1991. The case also touches upon GS‑2 (Polity) as it involves judicial interpretation of statutes and the role of the Supreme Court in shaping policy. Aspirants should note how legal definitions affect workers’ rights, retrenchment procedures, and strike regulations.
Way Forward
Courts and tribunals must interpret Section 2(p) in line with the Triple Test’s spirit, ensuring that a change of statute does not alter legislative intent. This approach will preserve a balanced framework that protects workers while providing employers a regulated path for retrenchment and closure, thereby promoting industrial peace.