Triple Test, Adrift, Pg8

Key Highlights:

• A nine-judge Bench of the Supreme Court of India recently delivered a judgment on the correctness of the "Triple Test" for defining "industry".
• The "Triple Test" was laid down by Justice V.R. Krishna Iyer in the landmark 1978 case of Bangalore Water Supply and Sewerage Board vs A. Rajappa.
• This test defines an "industry" as a systematic activity involving employer-employee cooperation for the production or distribution of goods and services to satisfy human wants, excluding purely religious or spiritual activities.
• The Supreme Court ruled that the Triple Test will continue to apply to all pending disputes under the repealed Industrial Disputes Act, 1947.
• However, the majority opinion held that the Bangalore Water Supply and Sewerage Board judgment will not serve as a "sheet anchor" for interpreting Section 2(p) of the Industrial Relations Code, 2020.
• The Industrial Relations Code, 2020 came into force on November 21, 2025, replacing the Industrial Disputes Act, 1947.

Detailed Insights:

• The review of the Triple Test was initiated after a five-judge Bench in State of U.P. vs Jai Bir Singh (2005) raised doubts about its broad interpretation.
• Justice B.V. Nagarathna, in her dissenting opinion, argued that the reference was unnecessary and the Triple Test required no interference, a view shared by three other judges.
• The dissenting view emphasized that an expansive definition of "industry" is crucial for worker protection, especially given the shift towards the private sector post-1991 economic liberalization.
• Section 2(p) of the Industrial Relations Code, 2020 largely incorporates the essence of the Triple Test, defining "industry" similarly.
• The Triple Test not only provided protections but also imposed restrictions, such as regulated retrenchment and closure for employers, fostering industrial peace.
• The 1978 judgment had broadly included various activities like hospitals, educational institutions, and municipalities under "industry," excluding only core sovereign functions.
• Justice V.R. Krishna Iyer, who authored the 1978 judgment, was a pioneer of judicial activism and known for his commitment to social justice.

Key Concepts Involved:

• Triple Test: A judicial framework established in 1978 to determine if an activity qualifies as an "industry" under labor laws.
• Industrial Disputes Act, 1947: A pre-independence legislation providing a legal framework for the investigation and settlement of industrial disputes in India.
• Industrial Relations Code, 2020: One of the four labor codes enacted to consolidate and amend laws relating to trade unions, employment conditions, and industrial disputes.
• Sovereign Functions: Core, inalienable governmental activities like defense, justice administration, and law enforcement, typically excluded from the definition of "industry".