Does labour law apply to State activities? 9-judge Supreme Court Constitution Bench to decide definition of "industry"

The Supreme Court on Monday said that it would constitute a nine-judge Constitution Bench to determine the definition of "industry" under the Industrial Relations Code, 2020 and its precursor - the Industrial Disputes Act, 1947.

A Bench of Chief Justice of India (CJI) Surya Kant and Justices Joymalya Bagchi and VM Pancholi indicated that the nine-judge Bench will start hearing the matter on March 17 and conclude the hearing on the following day.

The Constitution Bench will determine the correctness of Court's seven-judge Bench judgment in Bangalore Water Supply & Sewerage Board (BWSSB) v. R Rajappa & Others, pronounced in 1975. It will also answer the following issues:

1. Whether test laid down in para 140 to 144 by Justice V Krishna Iyer in BWSSB on whether enterprise falls within definition of Industry lays down correct law?

2. Whether the Industrial Disputes Amendment Act, 1982 had not seemingly come into force and industry code had any legal impact on the expression "industry"?

3. Whether social welfare activities or schemes by government department or instrumentalities can be construed to be industrial activities under the Industrial Disputes Act?

4. What are the State activities which will be covered and whether such activities will fall outside the purview of 2(j) of the Industrial Disputes Act?

In BWSSB, the Court had laid down a triple test to determine whether an enterprise falls under the definition of "industry" and is thus amenable to labour laws. The judgment, authored An organisation is an industry if it engages in systematic activity, organised cooperation between employer and employee androduction and/or distribution of goods and services to satisfy human wants and wishes

In effect, the judgment extended labour law protections, including unionisation and collective bargaining, to employees in clubs, hospitals and educational institutions, among others.

Today, the Bench said,

"A substantial part of case management for this case stands concluded. We grant further liberty to the parties to update their written submissions or submit additional fresh written submissions on or before Feb 28, 2026."

It further stated that nodal counsel of both sides shall submit a fresh set of compilations, pleadings, documents and evidence. The petitioners would get 3 hours to make submissions and an additional 1 hour for their rejoinder submissions.

"The nodal counsel in consultation with Senior or other counsels shall prepare an inter se arrangement to ensure arguments are completed within the stipulated timeline. The party shall follow the circular issued by registry," the Court said.