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Court keeps 1978 industry test only for pending disputes
Times of India··21 Aug
On 20 August 2026, a nine-judge Supreme Court Bench said the 1978 Bangalore Water Supply triple test for industry remains valid for pending disputes under the Industrial Disputes Act, 1947. The Bench said the test covers organisations, including government public works, temples, hospitals and NGOs, where an employer-employee relationship exists. It will not anchor the Industrial Relations Code, 2020.
Prism
What It Means For You
- If your labour case was filed under the 1947 Act before 21 November 2025, the court said Bangalore Water Supply still decides whether your workplace is an industry.
- Anyone starting a dispute under the 2020 Code cannot treat the 1978 triple test as the controlling definition.
- If you work in a hospital, temple, school or NGO pulled in by the 1978 ruling, that coverage continues for legacy files only.
What's Happening
- The Constitution Bench unanimously retained the 1978 test for pending 1947 Act matters and said it applies wherever an employer-employee relationship exists.
- The majority held that Section 2(p) of the Industrial Relations Code must be interpreted independently of the old Section 2(j) reading.
- The court said the ruling is prospective for any reformulation and will not disturb concluded awards or settlements.
How Pending Files And The New Code Now Split
- Bangalore Water Supply versus A Rajappa, decided in 1978, widened industry so that many service bodies entered the Industrial Disputes Act.
- The 1982 amendment that tried to narrow the definition never came into force, which is why the 1978 test lasted until the Code commenced.
- This batch's Times of India report stresses the pending-case lock; the Code's own industry clause remains open for a later Bench.
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