सुप्रीम कोर्ट ने नए उद्योग परिभाषा पर पुराने फैसलों का लागू होना सीमित किया

Supreme Court of India clarifies limits of applying legacy 'industry' rulings to the new labour code

At a glance

- The Supreme Court of India (Court) has confirmed that judicial interpretations of the repealed Industrial Disputes Act 1947 (ID Act) do not automatically govern the meaning of 'industry' under the Industrial Relations Code 2020 (Code).

- The Court declined to decide the scope of 'industry' under the Code, holding that its interpretation must be determined by the Code’s own language and legislative purpose in a future case.

- The judgment recognises that the Code introduces material changes, including specific exclusions relating to charitable, social, philanthropic, domestic service and certain activities notified by the Central government.

- Employers involved in disputes arising under the former ID Act will continue to be assessed using the established legal principles developed under that legislation.

- The decision signals that businesses should assess their status under the Code independently rather than assuming that classifications under the previous regime remain valid under the Code.

We would like to express gratitude to JSA for their contribution on this publication.

In a significant judgment in the case of State of Uttar Pradesh v Jai Bir Singh (Judgment), a nine-judge bench of the Court has addressed the longstanding debate surrounding the meaning of 'industry' while also providing important guidance on how courts should approach legal precedents when a statute has been repealed and replaced.

The case arose from conflicting judicial views on whether certain public welfare activities could be regarded as an 'industry' under the ID Act. Historically, the interpretation of the term was shaped by the Court's landmark decision in Bangalore Water Supply and Sewerage Board v A. Rajappa(Earlier Case), which had adopted a broad approach that brought a wide range of organisations, including some non-profit and public service entities, within the scope of industrial adjudication under the ID Act.

However, when the Earlier Case has now been revisited by the Court’s nine-judge bench, the Indian employment law landscape has changed substantially. The ID Act had been repealed and replaced by the Code, which came into force on 21 November 2025 and contains a new definition of 'industry'.

In its Judgment, the Court observed that the meaning of 'industry' under the Code cannot be determined simply by importing decades of judicial interpretation developed under the repealed ID Act. Instead, the Code must be interpreted as a separate legislative framework, with its provisions examined on its own terms, having regard to its text, scheme, and object. As a result, the Court left open the question of how the new definition should ultimately be construed, indicating that this issue will need to be resolved in a future litigation.

In reaching this conclusion, the Court noted that the Code contains meaningful drafting differences from the previous legislation, particularly regarding the treatment of charitable, philanthropic, educational, religious and government-related activities. The Judgment emphasises that reliance on the Earlier Case without carefully examining the wording of the new legislation could undermine Parliament’s efforts to modernise and clarify the law surrounding ‘industry’.

The Court also observed that the Code incorporates a number of exclusions that resemble reforms previously contemplated under the Industrial Disputes (Amendment) Act 1982, which was enacted but never brought into force. Under the Code, activities that are substantially charitable, social, philanthropic, religious in nature, or that involve governmental functions notified by the Central government, are expressly excluded from the definition of 'industry' in certain circumstances.

For employers, the practical impact is two-fold. First, disputes arising under the ID Act will continue to be governed by the established jurisprudence developed under that legislation. Secondly, organisations assessing their position under the Code should not assume that classifications reached under the old regime, ie, the ID Act, remain applicable. Until courts provide further guidance on the interpretation of the new definition, employers may wish to review their operations against the wording of the Code itself and exercise caution where their status is not clear.

The Judgment therefore marks an important transition point in Indian labour law, reinforcing that the interpretation of the Code must develop independently from the legal framework it replaced.

Powered by Nyaya 247 News