The Supreme Court of India upheld the definition of ‘industry’ under the Industrial Relations Code, 2020 [1].
This ruling alters the legal landscape for labour disputes in India by narrowing who qualifies for protections under the law. By rejecting a broader interpretation used for decades, the court may limit the number of workers and entities subject to industrial relations regulations.
A nine-judge [1] Constitution bench in New Delhi delivered the decision in a six to three [1] vote. The court ruled that the definition provided in the Industrial Relations Code, 2020 [1] will govern new labour cases. This decision explicitly rejects the more expansive interpretation established in a landmark 1978 [2] judgment regarding the Bangalore Water Supply.
The 1978 [2] ruling had previously expanded the scope of what constituted an industry, allowing a wider range of workers to seek legal recourse and protections. The court's recent decision limits this scope for future disputes, effectively prioritizing the statutory language of the 2020 [1] Code over the previous judicial interpretation.
However, the court noted that the ruling does not apply retroactively to all matters. Pending disputes that were filed under the old definition will remain unaffected [1]. This ensures that existing legal battles are not suddenly invalidated by the change in definition.
The shift has drawn criticism from political figures. Members of the Congress party said the judgment risks weakening safeguards for workers [3]. They argue that the narrower definition could exclude various categories of employees from the protections afforded to those working in a recognized industry.
The court's decision serves to clarify the scope of the 2020 [1] Code, providing a more rigid framework for determining which organizations fall under the purview of industrial law. By moving away from the 1978 [2] precedent, the judiciary has aligned its interpretation with the current legislative intent of the government.
“The Supreme Court of India upheld the definition of ‘industry’ under the Industrial Relations Code, 2020.”
This ruling marks a significant shift from judicial activism toward legislative adherence. By overturning the expansive 1978 Bangalore Water Supply precedent for new cases, the court has reduced the legal umbrella that previously protected a diverse array of non-traditional workers. While this provides greater regulatory certainty for employers and the state, it creates a narrower path for labour rights claims under the 2020 Industrial Relations Code.
