Congress Criticizes SC’s Narrow Definition of ‘Industry’ Weakening Worker Protections
The Congress expressed concern over a Supreme Court ruling that limits the broad interpretation of the term “industry” under the Industrial Relations Code of 2020. The court’s decision, delivered on August 20, 2026, narrows the definition by adding requirements like a “discernible commercial character,” potentially excluding more workers from labor law protections.
Congress leader Jairam Ramesh criticized the Modi government’s Industrial Relations Code, calling it a significant rollback of worker safeguards. He highlighted that for nearly five decades, the Supreme Court’s 1978 “Triple Test” provided a clear framework to determine what constitutes an industry, ensuring broad protection for workers. However, the new ruling narrows this approach and expands exemptions for government activities, creating uncertainty in labor relations.
Ramesh noted Justice B.V. Nagarathna’s dissent, which argued against revisiting settled law under the old Industrial Disputes Act. She emphasized that established jurisprudence should guide interpretation of the new Code rather than reopening past decisions.
The court clarified that its new definition will not affect pending or concluded cases under the old Act but leaves ambiguity for future interpretations under the 2020 Code. This could lead to increased litigation and uncertainty, particularly in labor courts. Ramesh warned that narrowing the definition of “industry” risks weakening worker protections at a time when they are most needed.
In dissent, Justice Nagarathna stressed that India’s shift from state-owned enterprises to privatization and globalization should not undermine workers’ rights. She argued that liberalization was meant for the people’s welfare but must not come at the cost of worker protections.
The ruling has sparked debate over its impact on labor rights in an increasingly privatized economy, with some justices supporting the need to reconsider outdated definitions while others warn against unsettling settled legal frameworks.