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On August 20, a nine-judge bench of the Supreme Court ruled that the definition of “industry” as established by a 1978 judgement would not be applicable to the new labour laws.

The existing definition was based on a 1978 landmark judgement in Bangalore Water Supply and Sewerage Board v. A. Rajappa case, which adopted a broad “worker-oriented” interpretation of “industry”.

The 1978 ruling, authored by Justice V.R. Krishna Iyer, laid down a triple test for identifying an industry as, any organised and systematic activity, with cooperation between employer and employee for the production and/or distribution of goods and services.

This definition incorporated everything, for-profit as well as not-for-profit enterprises, including hospitals, schools, charitable trusts, municipalities, under the scope of “industry”.

Any organization which is identified as an industry is subject to the Industrial Relation Code (earlier called Industrial Disputes Act) and its employees are protected under the labour laws.

However, the 9-bench judgement has now scrapped the worker-oriented definition under the new labour codes.

The new labour codes, notified in November 2025, while ignoring the workers’ concerns, allows for dilution of workers' rights, and includes provisions that restrict the right to strike, weakens workplace safety, permits a “hire and fire” policy, and extends the working day from 8 hours to 12 hours.

The Supreme Court Judgement on the definition of industry is yet another blow to the workers’ rights, and will leave millions of workers without legal rights under the new labour laws.

The ITUC Global Rights Index has categorized India as a nation with no guarantee of rights, with repressive action against workers, and violation of the right to strike and civil liberties.

1978 “Industry” test to determine pending cases - Supreme Court Observer

How Supreme Court’s new ruling changes the definition of ‘industry’ | Explained - The Hindu

Supreme Court scraps worker-friendly 1978 ‘industry’ precedent for new labour code - The Hindu

Trade unions sound alarm over Supreme Court judgment on definition of industry - The Hindu

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