New Delhi, The Centre on Thursday told the Supreme Court that it is “certainly not anti-labour” and will do everything to protect the interests of workers as a nine-judge Constitution Bench reserved its verdict on the correctness of 1978 ruling that gave expansive interpretation of term “industry”.
The Constitution bench led by Chief Justice Surya Kant would decide on the pleas questioning the correctness of the landmark verdict that broadened the term “industry” in the Industrial Disputes Act of 1947 bringing millions of workers under the protective umbrella of the law.
On the third day of the hearing, Attorney General R Venkataramani said, “I have consulted the government. The government is certainly not anti-labour. Labour welfare will be taken care of. We are moving towards a globalised economy and we need to take a call on how to manage the affairs.”
The attorney general, however, sounded an alarm and said that departments like forest should be declared as an industry as such an interpretation will adversely impact various governmental activities.
Besides the CJI, the bench also comprised justices B V Nagarathna, P S Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe and Vipul M Pancholi.
The judgement, keenly awaited across labour and industrial sectors, is expected to have far-reaching consequences on the rights of workers and the applicability of labour protection under the now-repealed Industrial Disputes Act, 1947, even as the bench clarified that its ruling will govern pending and existing disputes under the old regime.
On February 21, 1978, a seven-judge bench delivered a verdict on the definition of the term “industry” while deciding the plea of Bangalore Water Supply and Sewerage Board and expanded the definition which brought millions of employees in hospitals, educational institutions, clubs and government welfare departments under the protection of the Industrial Disputes (ID) Act, 1947.
The CJI-led bench, which is examining the correctness of the verdict delivered almost 48 years ago, heard the submissions of various lawyers including the attorney general, Additional Solicitor General K M Nataraj and others such as senior advocates Shekhar Naphade, Indira Jaising, C U Singh and Sanjay Hegde during the three-day-long hearing.
The bench would examine whether the “triple test” evolved by Justice V.R. Krishna Iyer in the 1978 judgment correctly defines “industry” under Section 2(j) of the Act.
The test broadly holds that any systematic activity involving employer-employee cooperation for production or distribution of goods and services would qualify as an “industry”, and hence, the statutory protection would be extended to the workers in a wide array of sectors.
Senior advocate CU Singh defended the breadth of the definition given in the 1978 verdict.
Singh criticised attempts by state governments to narrow the definition, contending that the Act itself provides “safety valves” enabling exemptions in public interest through statutory mechanisms.
“States cannot seek to shift the burden onto the court to dilute worker protections,” he said.
On the other side, lawyers sought a narrower interpretation, particularly to exclude sovereign functions, charitable activities and certain government operations.
Senior advocate and amicus curiae J Cama challenged the wide sweep of the 1978 ruling, particularly questioning the “triple test” and the inclusion of charitable and non-profit activities within the definition of “industry”.
“Social welfare cannot override clear statutory language,” he said.
The bench, however, raised concerns about the consequences of a restrictive interpretation, particularly the potential exclusion of large sections of workers from the protective framework of labour law.
Justice Bagchi highlighted that the core objective of the legislation is the resolution of industrial disputes and maintenance of industrial peace, rather than favouring either employers or employees.
The bench also expressed concern over situations where workers’ access to remedies might depend on whether an activity is carried out by the government directly or through private contractors.
During the hearing, it granted relief in an individual case involving a worker from the Punjab irrigation department.
Exercising powers under Article 142 of the Constitution, the bench ordered a lump sum compensation of RS 10 lakh to the legal heirs of the deceased employee, directing payment within six weeks.
On February 16, the top court had formulated the broad issues to be adjudicated by the nine-judge bench.
“Whether the test laid down in paragraphs 140 to 144 in the opinion rendered by Justice V R Krishna Iyer in Bangalore Water Supply and Sewerage Board’s case (of 1978) to determine if an undertaking or enterprise falls within the definition of ‘industry’ lays down correct law?
“And whether the Industrial Disputes (Amendment) Act, 1982 (which seemingly did not come into force), and the Industrial Relations Code, 2020 (with effect from November 21, 2025), have any legal impact on the interpretation of the expression ‘industry’ as contained in the principal Act,” the bench had asked.
It had said one of the issues to be adjudicated by the nine-judge bench would be whether social welfare activities and schemes or other enterprises undertaken by government departments or their instrumentalities can be construed to be “industrial activities” for the purpose of Section 2(j) of the ID Act.
