On August 20, 2026, the Supreme Court of India delivered its judgment on the Reference made on the correctness of the judgment in Bangalore Water Supply and Sewerage Board vs A. Rajappa (BWSSB), 1978, particularly the test for determining whether an activity falls within the definition of “industry” under Section 2(j) of the Industrial Disputes (ID) Act, 1947. A brief history of the Reference. In State of U.P. vs Jai Bir Singh (2005), 5 SCC 1, a five-judge Bench referred the seven-judge Bench decision in BWSSB for reconsideration. A seven-judge Bench was constituted and, by order dated January 2, 2017, referred the matter to a nine-judge Bench. By order dated February 16 2026, the nine-Judge Bench framed four questions concerning the correctness of the test in BWSSB, the impact of the 1982 Amendment and the Industrial Relations Code (IRC), 2020, whether government welfare activities count as “industrial activities,” and the scope of “sovereign functions” under Section 2(j).

By the time the questions were framed, the IRC, 2020 had been brought into force from November 21, 2025, also repealing the ID Act, 1947. By virtue of this repeal, the Reference had effectively been rendered otiose. Even so, the nine-judge Bench proceeded to hear the matter.

Judges and reactions

Of the nine judges, Justice D. Datta and Justice U. Bhuyan held that “the reference requires no answer”. Justice B.V. Nagarathna found the exercise “unnecessary and only academic in nature”. Justice P.S. Narasimha held that “an authoritative interpretation of the definition industry’ was compelling at the time of the Reference”, but “such a determination has now become unnecessary, with the repeal of the said provision.”.

Importantly, even the opinion written by the Chief Justice of India (CJI) for four judges acknowledges this. Even as it sought to re-formulate the Triple Test laid down by BWSSB, it describes its reformulation of the Triple Test as merely “hypothetical”, and expressly states that it will not apply to any pending case. The ID Act has been repealed, and there can be no future cases under it either. Even the reformulated test framed by four judges was prospective and would not alter pending disputes, which would continue to be governed by the BWSSB framework, and since the ID Act, 1947 has been repealed, there can be no future cases under it.

The four questions framed on February 16, 2026 concern only Section 2(j) of the ID Act. The interpretation of Section 2(p) of the IRC was not before the Court.

The CJI, writing for four judges, recognises that the IRC “is an independent legislative enactment and must be interpreted on its own terms, having regard to its text, scheme, and object”. At the same time, the same opinion says, in view of the reformulated Triple Test in their opinion, the principles laid down in BWSSB shall not be regarded as the “sheet anchor for the interpretation of the IRC should such a question arise in the future”. While on the one hand it refuses to construe a provision, in the same breath it rules on how BWSSB, as a precedent, may not be used to construe it. This in itself is a form of construing it, and is an attempt to police the tools available for a future interpretive exercise.

Justice Narasimha also says that it is important to ensure that the interpretation of the definition of “Industry” under the IRC “is not burdened by the existing interpretations” under the ID Act, 1947. Justice Nagarathna’s opinion on this issue is important. While affirming the judgment in BWSSB, she recognised that the extent to which its reasoning carries over to the interpretation of “industry” under the IRC is to be tested by comparing the actual text of the two provisions. Such a comparison can be meaningfully undertaken only in a case arising under Section 2(p), and not in the abstract.

The interpretation of the definition of industry under the IRC cannot be seen in abstract and would have to be understood in light of the rich jurisprudence that has developed with BWSSB and after.

The importance of BWSSB

There is a deeper thread — an anxiety about the judgment in BWSSB, which needs to be addressed. This anxiety is what gave rise to the Reference itself. The five-Judge Bench in Jai Bir Singh (2005) questioned the correctness of BWSSB, observing that its “worker-oriented approach” was “unmindful of the interests of the employer or owner of the industry”.

This finds an echo in the CJI’s opinion. Having hypothetically reformulated the tests in BWSSB, and having stated that BWSSB shall not be regarded as the sheet anchor for the interpretation of the IRC, the opinion of the CJI, for four judges, speaks of the judgment finally lifting a “burden” and permitting the law to “move forward unencumbered”.

This again finds echo in the judgment of Justice Narasimha, who states that the interpretation of the definition of “industry” under the IRC, 2020 “must be freed of the bondage of ratio” in BWSSB. In this light, it is essential to recognise what “burden” of BWSSB causes such anxiety.

There can be no dispute about the asymmetry between capital and labour, or the imbalance in their respective bargaining power. Justice Bagchi recognises this when he reminds us that one must always “bear in mind that a workman seldom enters the field of negotiation as an equal….” The Constitution recognises this, with Article 42 requiring the state to secure “just and humane conditions of work,” while Article 23 prohibits “traffic in human beings”, “begar, and other forms of forced labour”. The conditions that necessitated these protections have simply changed form.

Labour legislation recognised this extreme imbalance and sought to ensure a modicum of bare protection. This is not a “pro-worker” understanding of the law, but just a check against the imbalance tilting toward the employer. The fact that such bare protection is described as “pro-worker” says less about the protection than about where the baseline has been unfortunately naturalised. While the freedom to dismiss without explanation is part of the ordinary run of business, a requirement to explain is called a burden. The warning of Dr. B.R. Ambedkar rings true — liberty from the control of the state is another name for “the dictatorship of the private employer”.

The 13-judge Bench decision in Kesavananda Bharati (1973) recognised that justice, social, economic and political, formed part of the Constitution’s basic structure. The underlying inequality between employer and workman has not narrowed since 1947. In fact, the policy of “ease of doing business” has widened it. This is exactly why the social justice vision of Part IV of the Constitution calls for more protection now, not less.

The issue of labour rights

The ID Act, 1947 — to maintain industrial peace — provided basic protections and a forum for adjudicating disputes, where the labour courts and tribunals have been given wide powers to adjudicate on the same. To be excluded from its definition of “industry” is to be excluded from that bare minimum protection, and from the remedy available under it. The significance of BWSSB’s definition of “industry” lay in ensuring that this protection reached everyone the Act was meant to cover, rather than excluding workers from the one recourse the law offered them.

Given the overarching objective of industrial peace, there was never a reason to treat BWSSB’s interpretation as a burden rather than as the Act doing precisely what it was designed to do. The anxiety surrounding it has always rested on the same premise: an eagerness to remove workers from the protection of the law.

As the ID Act stands repealed and the IRC takes its place, it is necessary to return to the promise of social justice in the Constitution. The labour codes that have replaced the ID Act, including the IRC, are built on a premise of exclusion — narrowing who falls within the protection of the law — and will have to answer to that mandate.

V. Gopala Gowda is a former Judge of the Supreme Court of India. Maitreyi Krishnan is a practising advocate