THE NINE JUDGES BENCH of the Supreme Court of India has reserved its judgment on March 19, 2026, over the controversy as to the limits of content and contours of industry under Section 2(j) of the Industrial Disputes Act, 1947 (‘ID Act’).
Though the Court has explicated that any such judicial fencing, if any, arising out of revisiting the decision in Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978) shall only be in regard to earlier cases and, that too, within frontiers of the ID Act, it is open secret that the review verdict shall bear upon the scope and operation of the Industrial Relations Code 2020 (‘IR Code’) which is the successor of the ID Act.
Critics argue that the whole exercise of de novo review is too late and too little, given judicial legal normativism as enunciated in the Bangalore Water Supply case on ‘industry’ has already been incorporated under Section 2(p) of the IR Code with exceptions and exclusions in terms of sovereign function, social and welfare activities including domestic service. Moreover, the Bangalore water Supply judgment recognized legislative deficit and propounded legal theory of industry only to fill it till the matter is legislated.
I find this upcoming judgment of the nine-judge Bench is in the nick of the time for firstly, the structure of Section 2(p) leaves much to discretion of the Executive and further, categories that are locked out of the fold of Section 2(p) as exemptions have already triggered much confabulations as to the rationale and purpose behind such exclusion. Any judicial framework specifying and guiding operation of Section 2(p) shall be wholesome for the future of the Code.
Why is the legal fiction of industry so important?
In India, one is entitled to access legal and formal channels of employment grievances and dispute resolution if one’s workplace is ‘industry’ in the eyes of the law. Industry is the axial principle around which the system of labor justice rotates. Industry as a legal notion under labor law is where several labor rights crystallize and laissez faire practices of exploitative employers are minimised. Different benches of the Supreme Court in cases like D.N. Banerji (1952), Hospital Mazdoor Sabha (1960), Madras Gymkhana Club (1970), Safdarjung Hospital (1970) and finally the the seven-judge Constitution Bench decision in Bangalore Water Supply upheld that the ID Act is a mother statute whose primary purpose is to resolve industrial disputes keeping best interests and rights of workers in mind.
Secondly but more importantly in all the foregoing cases, the Court acknowledged that due to perennial changes in industrial life, varied and various forms of industries and newer forms of employment emerged. It necessitates that legislative intent and judicial thought keep pace with such changes so that the labor justice in the industrial world remains animated. It enjoins upon the legislature to come up with a specific and comprehensive statutory ideology of ‘industry’. Otherwise inherent conflict of capital and labor would disrupt the socio-economic order. The Court, in the aforementioned decisions including Bangalore Water Supply, urged industrial adjudication to abjure doctrinaire (a rigid and mechanical) approach towards labor justice and try to grasp its dynamic essence.
Triple Test – A framework for labor justice
It took several decades and multiple judgments and rival judgments to give the theory of ‘Triple Test’. Originally imported from Australian judicial thought, it captures realities of varied structures of industries erected upon employer and employee relationship. Indian judicial thought applied this doctrine to widen the reach of labor justice to as many workplaces as possible. It is interesting to note that this doctrine holds that the existence of capital is irrelevant to deem an activity as ‘industry’.
On the flip side, this principle recognizes that the existence of ‘organized labor’ is a pre-condition to keep systematic activity running and for an ‘industry’ to emerge. Another salient feature of this doctrine is that it applied a system approach that underlines how labor is pre-condition to produce objects that satisfy human needs or wants. Another crucial element is voluntary cooperation between employer and employee for productive relations. Though, in Hospital Mazdoor Sabha, the Supreme Court noted that profit motive is irrelevant in determining whether an establishment is an ‘industry’, it did not account for the consideration of the worker, and her expectation to be treated fairly with the minimum labour standards. The worker, at the very least, expects not to be treated like a beast of burden at the workplace and have assurances of her fundamental labor rights. If any labor rights are violated, the worker also expects a formal, effective and speedy mechanism of labour justice. The triple test essentially institutionalizes this idea and provides the framework for institutions that provide mandatory labor justice across different forms of industries.
What the ILO seeks
Labor justice is an essential part of the international labor framework. The International Labour Organisation’s (‘ILO’) Tripartite Technical Meeting on Access to Labor Justice for All (2025) considers access to labor justice as foundation to ‘good governance’ and considers it a ‘pillar of the rule of law’ in the world of work.
Legal instruments like the Examination of Grievances Recommendation, 1967 (No. 130) and the Employment Relationship Recommendation, 2006 legalize free, fair and universal access to statutory procedures of labor justice to all persons employed for wage (salary) income under employment contract. The ILO actively urges member-States to formulate and apply a national policy to guarantee effective protection of labor rights and speedy delivery of labor Justice. India is duty bound under such international commitments to ensure universal labor justice framework to all workers without any discrimination or disability.
Is a Paradigm Shift possible?
It might be extremely banal to reiterate that unless the Bench decides to think beyond the technical box, not much is expected from the nine-judge Bench verdict. If trapped in technicalities of Section 2(j) and blinded by statutory language of the impugned provisions in classifying managerial and non-managerial class of labor, the upcoming judgment would not do much to further the cause of universal labor justice to all those who are employed under employment contract .
The Lordships have the opportunity to turn their attention towards many emergent and amorphous forms of employment like FTE employees, young professionals, consultants, or contractual specialists that have blurred the boundaries between white collar and blue collar in the current world of work. It has created an acutely polarized workplace where absurd contrast is so visible between minority elite employees and middle to low range lumpen skilled and salaried ones.
Besides, there lies a vast segment of informal workers in MSMEs (contributing to 70 percent of employment of our workforce) who currently do not even have a modicum of labour safeguards against precarious employment and un-decent work. In Ajay Malik v. State of Uttarakhand (2025), the Supreme Court has conceded the demand of domestic workers for labor rights and justice; while it did not formulate any interim legal code for domestic workers, it has ‘reposed’ faith in the legislature “to take the imperative steps towards ensuring an equitable and dignified life for domestic workers.” Gig Workers have agitated and succeeded to bag several labor rights from various state governments. A proper mechanism to ensure enforcement of these hard earned rights awaits sanction of law.
Harnessing this opportunity, the judicial imagination may come up with exhortations for formulating a National Policy for Universal Labor Justice, Guidelines for Access to Labor Justice or an altogether new legal code, who knows. Such social realism and legislative void awaits the pronouncements of the nine-judge Bench’s verdict with bated breath.
As Justice Gajendragadkar, more or less, noted in the First National Commission on Labour Report (1969), and subsequently Hospital Mazdoor Sabha, the law cannot play hide and seek for ever. It is hoped that this review does not conclude with only the law triumphing, even as justice to all stays elusive.
