Labour rights beyond the shadow of BWSSB

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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.

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 The ID Act has been repealed, and there can be no future cases under it either.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alter pending disputes, which would continue to be governed by the BWSSB framework, and since the ID Act, 1947 has been repealed, there can be no future cases under it.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”.