'Risks weakening worker safeguards': Congress on SC's ‘industry’ definition judgment
The August 2026 majority judgment is concerning because it injects uncertainty into labour relations at a time when clarity is essential for industrial peace, Jairam Ramesh said
On August 22, 2026, Congress leaders voiced their concerns regarding the Supreme Court's ruling on the interpretation of the term "industry" under the Industrial Relations Code of 2020. The ruling, delivered on August 20, 2026, in State of Uttar Pradesh versus Jai Bir Singh case, narrowed the scope of what constitutes an industry, which could weaken worker protections.
Congress general secretary Jairam Ramesh stated that the Modi government's code significantly weakens essential safeguards for workers. The Triple Test, established in the 1978 Supreme Court judgment, had previously characterized an industry as one with a systematic activity, employer-employee cooperation, and production or distribution of goods or services to satisfy human needs, excluding purely spiritual or religious services.
The ruling's narrow interpretation requires an activity to have a discernible commercial character, broadening the scope of sovereign functions, which could place more government activities outside the industry definition. This reformulation could create an interpretive vacuum, leading to uncertainty and litigation, especially in labor courts and tribunals.
The dissenting opinion by Justice B.V. Nagarathna highlighted the shifting industrial landscape from state-owned enterprises to privatization, liberalization, and globalization, emphasizing the need for clarity in labor relations.
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