How Supreme Court’s new ruling changes the definition of ‘industry’ | Explained
Justices B.V. Nagarathna, Dipankar Datta, and Ujjal Bhuyan formed the minority view on the Bench that a re-evaluation of the 1978 judgment was “unwarranted”; Justice Nagarathna cautioned that altering the definition could create uncertainty and disrupt industrial peace.
In a landmark decision, India's Supreme Court ruled that the 1978 interpretation of the term 'industry' will not automatically apply to the new Industrial Relations Code (IRC) of 2020. The court, led by Chief Justice Surya Kant, held that the IRC must define 'industry' based on its own text and context, unencumbered by the 1978 precedent.
This decision effectively separates the new labour regime from the expansive, worker-friendly definition established in the 1978 ruling. The 1978 ruling, authored by Justice V.R. Krishna Iyer, broadened the definition of 'industry' under the 1947 Act, including sectors such as hospitals, educational institutions, and municipalities.
The nine-judge Bench unanimously agreed that 'industry' under the 2020 Code would be interpreted independently, reflecting contemporary industrial dynamics. Pending cases under the 1947 Act will continue to be governed by the 1978 precedent, while future disputes under the IRC will be decided afresh. The ruling sets the stage for a new chapter in Indian labour law, allowing future courts to determine the balance between employer authority and worker protections.
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