In this article, Adv. Gaurav Puri and Adv. Uday Singh Rathore of GLS Law Offices examine the Supreme Court’s recent nine-judge Constitution Bench decision revisiting the meaning of “Industry” under Indian labour law. The article traces the journey of the concept from the landmark Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) decision and its celebrated “Triple Test” to the Supreme Court’s latest refinement, while also explaining the distinction between the law applicable to pending disputes under the erstwhile Industrial Disputes Act, 1947 and the new statutory framework under the Industrial Relations Code, 2020. Written for both legal practitioners and non-specialist readers, the article seeks to unpack a deceptively simple word whose interpretation has, for decades, shaped the rights of employers, employees, institutions and public bodies alike.

When One Word Keeps the Courts Busy for Half a Century

Few words in Indian labour law have generated as much litigation, disagreement and interpretive anxiety as “industry.”

At first glance, the word appears almost self-explanatory. An industry is a factory, a business, a commercial enterprise—something with workers, machinery and, presumably, a balance sheet. But Indian labour law has never been quite so accommodating to common sense.

Can a hospital be an industry? What about a university? A charitable institution? A government department? A social-welfare project? Does an organisation stop being an industry merely because it does not make a profit?

These questions have occupied the Supreme Court for decades. The landmark answer came in Bangalore Water Supply and Sewerage Board v. A. Rajappa, decided by a seven-judge Bench in 1978. Nearly five decades later, a nine-judge Constitution Bench has revisited that answer in State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897.

And here is where the headline needs a little unpacking: the Supreme Court has proposed a refinement of the 1978 test, particularly by bringing the idea of a discernible commercial character back into the inquiry. But that refinement does not displace the 1978 test for pending proceedings under the repealed Industrial Disputes Act, 1947. Nor has the Court decided what “industry” means under the new Industrial Relations Code, 2020.

In other words, the law has changed, without quite changing for the cases already in the queue.

The 1978 Revolution: Making “Industry” Bigger Than a Factory

To understand the 2026 judgment, one must first go back to 1978.

Section 2(j) of the Industrial Disputes Act, 1947 defined “industry” in broad terms, referring to business, trade, undertaking, manufacture or calling of employers and, from the workmen’s perspective, calling, service, employment, handicraft or industrial occupation.

The seven-judge Bench in Bangalore Water Supply adopted an expansive interpretation of this provision. The judgment effectively shifted the focus away from whether an organisation looked like a conventional business and towards the character of the activity and the relationship between those who organised it and those who worked in it.

The famous “Triple Test” emerged from this exercise. Broadly stated, an activity would fall within “industry” where there existed:

1. a systematic activity;

2. co-operation between employer and employee; and

3. the production or distribution of goods or services calculated to satisfy human wants and wishes.

The absence of a profit motive was not, by itself, enough to take an undertaking outside the definition.

The consequence was significant. The concept of “industry” was no longer confined to enterprises whose business cards proudly announced themselves as businesses.

Hospitals, educational institutions, welfare bodies and even certain governmental activities could potentially come within labour legislation, depending upon the nature of the activity and the employer-employee relationship. The Court's reasoning was rooted in the character of the activity rather than simply the label attached to the organisation.

That was the 1978 position. But almost immediately, the breadth of the definition became both its strength and its controversy.

Forty-Eight Years Later: Why Reopen the Question?

The controversy eventually reached State of Uttar Pradesh v. Jai Bir Singh, arising from disputes involving, among other matters, the Social Forestry Department of the State of Uttar Pradesh.

The reference was first made to a larger Bench in 2005 and ultimately came before a nine-judge Constitution Bench. By then, however, the legal landscape had changed dramatically. The Industrial Disputes Act had been repealed with effect from 21 November 2025, and the Industrial Relations Code, 2020 had come into force with its own definition of “industry”.

The Supreme Court nevertheless considered the reference important enough to answer for the sake of pending disputes and legal certainty.

The Bench ultimately held, unanimously on the practical question concerning pending proceedings, that cases under the old Industrial Disputes Act would continue to be decided on the basis of the Bangalore Water Supply test.

So why did the Court bother revisiting the 1978 formulation?

Because the real question was not whether the Triple Test had become obsolete. It was whether its breadth had, over time, become capable of drawing activities into the definition of “industry” merely because they were organised and involved employees—even where the underlying activity had little resemblance to trade, business or an economic enterprise.

The 2026 Refinement: Put the “Commercial” Back in the Conversation

This is the most important conceptual development in the new judgment.

The lead opinion of Chief Justice Surya Kant, speaking for himself and three other judges, reasoned that the original Triple Test could be refined by recognizing commercial character as a relevant consideration. The Court described this not as a reconstruction of the law, but as a calibration of its boundaries.

The proposed formulation retains the familiar architecture—systematic activity, employer-employee cooperation and production, distribution or provision of goods or services—but adds that such goods or services should possess a discernible commercial character analogous to trade or business and should satisfy material human wants and wishes.

This requires an important clarification.

Commercial character is not the same thing as profit motive.

The judgment expressly retains the proposition that the absence of a profit motive does not automatically remove an undertaking from the definition. The question is instead directed towards the nature and character of the activity. An activity can have an economic or commercial character even when its objective is not the maximization of profit.

That distinction matters enormously.

A hospital may charge for services and operate through a highly organized employer-employee structure even if its underlying objective is not simply profit maximization. Conversely, an activity may be organized and staffed but still fall outside the conception of “industry” if it has no meaningful analogy to trade, business or an economic enterprise.

The Court's proposed refinement therefore attempts to draw a line between “organised activity” and “organised economic activity.”

Then What Exactly Is an “Industry” Today?

For a reader encountering this area for the first time, the simplest way to understand the transformation is to look at the three stages.

Stage One: The Narrower Commercial Intuition

The ordinary understanding of an industry was associated with business, trade, commerce and production.

The difficulty with that approach was that modern employment does not fit neatly into factory-shaped boxes. Hospitals, universities, public bodies and social institutions can have large workforces, structured administration and sophisticated systems of employment despite not being conventional profit-making businesses.

Stage Two: Bangalore Water Supply — The Triple Test

The 1978 judgment widened the lens.

Instead of asking simply, “Is this a business?”, the Court asked:

Is there a systematic activity? Is there employer-employee cooperation? And are goods or services being produced or distributed to satisfy human wants and wishes?

If the answer was yes, the organisation could potentially fall within “industry”, even without a profit motive.

This was a profoundly worker-oriented interpretation because it focused on the substance of organised employment rather than the corporate or institutional identity of the employer.

Stage Three: The 2026 Calibration

The latest judgment retains that architecture but, in the lead opinion, proposes an additional filter: commercial or economic character analogous to trade or business.

The result is not a return to a purely profit-based test. Rather, it asks a more nuanced question:

Is the organised activity sufficiently akin to an economic or commercial enterprise to fall within the statutory conception of “industry”?

That is a considerably more sophisticated question than merely asking whether the organization earns a profit.

The Catch: The New Test Does Not Decide Old Cases

Here lies the most practically important part of the judgment.

The Constitution Bench made clear that the reformulated test would not unsettle pending proceedings under the repealed Industrial Disputes Act. Those matters may continue to be adjudicated under the Bangalore Water Supply Triple Test. Proceedings that have already attained finality remain undisturbed.

There is also a deeper constitutional-law nuance here.

Although contemporary reporting initially described the decision as a 5:4 modification of the 1978 test, the nine opinions do not amount to a simple nine-member majority adopting the CJI's reformulation. The lead reformulation itself was supported by the CJI and three other judges; Justice P.S. Narasimha took a distinct approach, while Justices B.V. Nagarathna, Dipankar Datta and Joymalya Bagchi did not agree that the Bangalore Water Supply test required the same reformulation.

That distinction is not academic nit-picking. It tells us precisely what the judgment accomplishes.

The 1978 test remains the governing test for pending Industrial Disputes Act matters, while the CJI-led opinion provides the proposed doctrinal refinement going forward under the old statutory framework. The Court's operative directions therefore need to be read more carefully than the headline “Supreme Court modifies the Triple Test” might suggest.

And What About the Industrial Relations Code, 2020?

Another common misconception would be to read the 2026 judgment as the Supreme Court's definitive interpretation of the new labour regime. It is not. Section 2(p) of the Industrial Relations Code, 2020 now contains its own statutory definition of “industry”. The provision expressly addresses matters such as systematic activity, cooperation between employer and worker, production or distribution of goods or services, and the relevance of capital investment and profit motive. It also specifies exclusions, including certain charitable, social or philanthropic institutions, sovereign governmental functions, domestic service and activities that may subsequently be notified.

The Supreme Court deliberately refrained from deciding the meaning of Section 2(p) through the prism of Section 2(j) of the repealed Industrial Disputes Act. The new Code is to be interpreted according to its own text, context and statutory scheme.

For employers and employees, this distinction is vital.

A dispute under the old Act and a dispute under the new Code cannot simply be placed on the same statutory shelf.

Why This Matters Beyond Labour Lawyers

The word “industry” decides much more than whether an organization qualifies for an interesting legal definition.

It determines whether the statutory machinery of industrial dispute resolution applies to an establishment and, consequently, whether workers and employers enter a particular regime of statutory rights, obligations and remedies.

For businesses, the classification can affect compliance strategy and employee relations.

For workers, it can determine whether a dispute falls within industrial adjudication rather than being left to ordinary contractual or civil remedies.

For public institutions, charities, hospitals and educational bodies, the distinction can become even more consequential because the organization’s public, charitable or welfare-facing character does not automatically answer the legal question.

The real question is always: what is the nature of the activity, how is it organised, and what statutory framework governs the dispute?

Conclusion: The Definition Has Evolved. The Question Has Not.

The story of “industry” in Indian labour law is really the story of Indian employment itself.

In 1978, the Supreme Court recognized that the modern workplace could not be confined to the traditional factory floor. It developed the Triple Test to look beyond labels and towards organized activity, employer-employee cooperation and the provision of goods or services.

In 2026, the Supreme Court has taken another look at that framework and, in the lead opinion, suggested that one further question deserves attention: does the activity bear the character of a commercial or economic enterprise?

But the Court has simultaneously preserved the 1978 test for pending disputes under the old Industrial Disputes Act and expressly left the new Industrial Relations Code to speak for itself.

That makes the latest development less of a clean rewrite and more of a carefully drawn legal boundary.

After nearly half a century, “industry” is still not merely a noun.

It is a jurisdictional gateway, a labour-law classification and, increasingly, a lesson in statutory interpretation: sometimes the most important question is not what an organisation calls itself, but what it actually does.

Key Authorities

Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 213 — foundational seven-judge Bench decision laying down the Triple Test under Section 2(j) of the Industrial Disputes Act, 1947.

State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897 — nine-judge Constitution Bench judgment dated 20 August 2026 concerning the reference on the meaning of “industry” under Section 2(j) of the Industrial Disputes Act, 1947.

Industrial Relations Code, 2020, Section 2(p) — current statutory definition of “industry” under the new labour-law framework.