A nine-judge Constitution Bench led by Chief Justice Surya Kant has revisited the 'triple test' for what constitutes an 'industry' under labour law, first laid down by the seven-judge Bench in Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978) — a test that has governed decades of disputes over whether hospitals, educational bodies, government welfare departments and clubs qualify as an 'industry' for labour-dispute purposes.
The Bench held that the 1978 triple test continues to govern industrial disputes still pending under the now-repealed Industrial Disputes Act, 1947, while refining certain aspects of the test itself — but held that the 1978 ruling will no longer serve as the governing precedent, or 'sheet anchor,' for disputes arising under the successor Industrial Relations Code.
The ruling ends decades of uncertainty for establishments that have long sat in a grey zone under the expansive 1978 test, while narrowing that test's reach for the future: employers historically exposed under Bangalore Water Supply should reassess their position specifically under the new Industrial Relations Code regime, since the same expansive reading will no longer automatically carry over.