Supreme Court affirms broad industry definition, limits ruling to pending ID Act cases

A nine-judge Supreme Court bench upheld the 1978 expansive definition of “industry” under the Industrial Disputes Act, applying it to entities like temples and NGOs where an employer-employee relationship exists, but said the decision will affect only pending cases.

In New Delhi, a nine-judge Supreme Court bench revisited the decades-old 1978 judgment that gave a wide definition to “industry” for the purpose of protecting workers from arbitrary dismissal. The panel, comprising Chief Justice Surya Kant and Justices B V Nagarathna, P S Narasimha, D Datta, U Bhuyan, S C Sharma, J Bagchi, A Aradhe and V M Pancholi, unanimously endorsed the triple-test—systematic activity, employer-employee relationship, and engagement in producing or distributing goods or services—originally set in the Bangalore Water Supply case.

They extended this definition to include government public-works agencies, temples, hospitals and NGOs, provided a discernible employment link exists. The court emphasized that the ruling applies only to pending cases under the Industrial Disputes Act, as the Industrial Relations Code, 2020, became operative on 21 Nov 2025. It also cautioned that the decision should not be used as a “sheet anchor” in future challenges to the 2020 code. Arguments from opposition-led states sought to narrow the definition, while Attorney General R Venkataramani warned against ignoring the country’s changed industrial climate.