Overview
- A nine-judge Constitution Bench delivered a divided decision on Thursday, August 20, 2026, holding that the 1978 Bangalore Water Supply 'triple test' will not automatically determine what counts as an 'industry' under the Industrial Relations Code, 2020.
- The court preserved the 1978 triple test for all pending proceedings under the repealed Industrial Disputes Act, 1947 so ongoing cases and settlements remain governed by that precedent.
- The majority said it has refined or reformulated aspects of the 1978 test for prospective use but made clear that the new formulation cannot change decided or pending matters under the old law.
- The bench issued multiple separate opinions and recorded formal dissents by three judges who argued the reference to revisit the 1978 ruling was unwarranted, leaving the judgment doctrinally split.
- The 1978 triple test treated systematic activity with employer-employee cooperation that produces goods or services as an industry and for decades brought hospitals, schools, clubs and many state bodies under labour law, so tribunals and employers must now apply a bifurcated rule for old and new cases.