Context

• The Supreme Court’s August 20, 2026 judgment on the meaning of industry under labour law revisits the landmark Bangalore Water Supply and Sewerage Board v. A. Rajappa (BWSSB), 1978 judgment.
• The case concerned the validity of its Triple Test for determining whether an activity qualifies as an industry under Section 2(j) of the Industrial Disputes Act (ID Act), 1947.
• However, the ID Act had already been repealed and replaced by the Industrial Relations Code (IRC), 2020, which came into force on November 21, 2025.

Background to the Reference

• In BWSSB, the Supreme Court adopted a broad interpretation of industry based on a Triple Test involving systematic activity, employer-employee cooperation and production or distribution of goods or services.
• In State of U.P. v. Jai Bir Singh (2005), a five-judge Bench questioned BWSSB and referred it for reconsideration. A seven-judge Bench subsequently referred the matter to a nine-judge Bench in 2017.
• The nine-judge Bench framed questions concerning the correctness of BWSSB, the 1982 amendment, the IRC, government welfare activities and sovereign functions.
• Yet, with the repeal of the ID Act, the Reference had arguably become academic and otiose.

A Judgment on a Repealed Law

• Several judges recognised the difficulty of deciding an issue concerning a repealed statute.
• Justice D. Datta and Justice U. Bhuyan held that the Reference required no answer.
• Justice B.V. Nagarathna described the exercise as unnecessary and academic, while Justice P.S. Narasimha noted that repeal had made the determination unnecessary.
• This raises an important principle of judicial restraint. Courts generally decide live controversies rather than provide abstract interpretations of laws that no longer operate.
• The IRC is an independent legislative enactment and must be interpreted according to its own language, structure and purpose.
• Since Section 2(p) of the IRC was not directly before the Court, its interpretation should be left to an appropriate future case.

The Hypothetical Reformulation of BWSSB

• The Chief Justice, writing for four judges, nevertheless proposed a hypothetical reformulation of the Triple Test.
• It would not apply to pending disputes, which remain governed by BWSSB, and cannot govern future cases under the repealed ID Act.
• The opinion also stated that BWSSB should not become the sheet anchor for interpreting the IRC.
• This creates a tension: while declining to interpret the IRC directly, the Court indicated how an important precedent should not be used in interpreting it.
• Justice Nagarathna adopted a more restrained position, holding that BWSSB’s relevance to the IRC should be determined through a comparison of the actual statutory provisions in a concrete case.

Why BWSSB Became Controversial?

• The deeper controversy concerns the perceived pro-worker character of BWSSB.
• Jai Bir Singh criticised its worker-oriented approach for allegedly overlooking employers' interests. Similar concerns appear in the present judgment through references to freeing labour law from the perceived burden of BWSSB.
• However, employer and worker do not generally possess equal bargaining power. Labour law exists precisely because contractual freedom cannot eliminate structural inequality.
• Justice Bagchi’s observation that a workman seldom negotiates as an equal captures this reality.

Labour Rights and the Meaning of ‘Industry’

• The ID Act sought to maintain industrial peace, provide minimum labour protections and establish mechanisms for resolving industrial disputes.
• Consequently, the definition of industry was not merely technical. It determined who received statutory protection and access to legal remedies.
• A restrictive definition could exclude workers from the very framework designed to protect them.
• BWSSB’s broad approach therefore sought to ensure that workers were not denied protection merely because their employment did not fit a narrow conception of industry.

Constitutional Social Justice and Labour Reform

• The Constitution places social and economic justice at the heart of governance.
• Article 42 of the Indian Constitution requires the State to secure just and humane working conditions, while Article 23 protects against forced labour and exploitation.
• The unequal relationship between capital and labour remains relevant amid privatisation, contractualisation, informal employment and ease-of-doing-business reforms.
• Labour reform must therefore balance economic flexibility with worker dignity and fair working conditions.
• Economic liberty without bargaining equality can enable private domination. Labour protections are consequently not merely pro-worker; they are safeguards against structural inequality.

The Industrial Relations Code and the Way Forward

• The IRC must ultimately be interpreted through its own text, scheme and purpose.
• Earlier BWSSB jurisprudence cannot simply be erased, but its relevance must be assessed carefully in future litigation.
• The crucial question is whether the new framework promotes industrial peace and effective dispute resolution without creating exclusionary gaps in worker protection.

Conclusion

• The 2026 judgment raises important questions about judicial restraint, statutory repeal and labour justice.
• Once the ID Act was repealed, there was a strong basis for leaving Section 2(j) questions unanswered.
• Future courts should interpret the IRC through its own statutory language while remaining conscious of the constitutional commitment to social justice.
• India’s labour reforms must therefore seek a balance between economic growth, industrial flexibility, worker dignity, social justice and meaningful legal remedies.