If your employer has taken the objection that it is not an industry, the answer now depends on which law your dispute falls under. For a dispute that arose and is pending under the Industrial Disputes Act, 1947, the Supreme Court held on 20 August 2026 in State of U.P. v Jai Bir Singh that the wide test laid down in Bangalore Water Supply and Sewerage Board v A. Rajappa continues to govern, so hospitals, schools, clubs, cooperatives and charitable projects remain within the net. For a dispute governed by the Industrial Relations Code, 2020, which commenced on 21 November 2025, the position is different and considerably worse for the worker, because the Code itself writes charitable, social and philanthropic institutions out of the definition of industry.
Part of the employment and labour law practice at S Jain & Attorneys, Bangalore.
This is for a person who has been dismissed or retrenched by an employer that does not look like a factory: a trust hospital, a school or college, a residents welfare association, a club, a cooperative society, a research body, a religious institution or a government welfare department. It does not deal with whether you are a worker, which is a separate objection usually taken in the same breath.
Why your employer is running this argument at all
The whole of industrial law hangs on one word. A Tribunal can only decide an industrial dispute, an industrial dispute can only exist in relation to an industry, and a worker is defined as a person employed in an industry. If the employer persuades the forum that it is not an industry, the case does not fail on the merits. It fails for want of jurisdiction, which means the evidence about your service, your dismissal and your innocence is never reached at all.
That is why the objection is so often taken first and argued hardest. It is also why it is worth understanding properly rather than leaving it entirely to the hearing. A worker who knows what the test is can put the right material on record at the evidence stage, which is usually years before the objection is decided.
Key takeaway. This objection is about jurisdiction, not about merits. Winning it ends the case without anyone examining whether your dismissal was lawful.
What the Supreme Court decided on 20 August 2026
In State of U.P. v Jai Bir Singh, reported as 2026 INSC 897, a nine-judge bench of the Supreme Court answered a reference that had been pending for over two decades. The immediate question was whether the Social Forestry Department of the State of Uttar Pradesh, created as a welfare initiative for environmental improvement, was an industry under Section 2(j) of the Industrial Disputes Act, 1947. Behind it sat the much larger question of whether the seven-judge decision in Bangalore Water Supply, decided in 1978, had cast the net too wide.
There are five separate opinions and no opinion is labelled the majority. Surya Kant, CJI, wrote for himself and three other judges. Nagarathna J wrote alone, Narasimha J wrote alone, Dipankar Datta J wrote for himself and Bhuyan J, and Bagchi J wrote alone. Anyone citing this judgment has to read all five, because the four judges who would recast the test are met by four who say it needs no change at all, with the ninth declining to decide the point.
One thing the bench did not do is answer the question it was assembled to answer. Whether the Social Forestry Department is an industry is not decided in any of the five opinions. What the judgment gives instead is a direction about which test applies to whom, and that direction is unanimous.
The reformulated test, and why it does not apply to your pending case
The four judges in the Chief Justice's opinion took the view that parts of the Triple Test could have been better articulated, and set out how they would have structured it, requiring that the goods or services possess a discernible commercial character analogous to trade or business, as distinguished from activities purely spiritual or religious in nature. That is a narrower idea than the 1978 formulation.
Then they pulled the punch, deliberately and repeatedly. The reformulation is described in the judgment itself as hypothetical, as no more than those judges' considered opinion on the proper interpretation of Section 2(j), and as not intended to displace the governing legal position in respect of pending proceedings. The direction is that all matters presently pending before courts, tribunals, labour authorities or other fora under the Industrial Disputes Act may be adjudicated in accordance with the Triple Test laid down in Bangalore Water Supply. The clarification operates prospectively and does not reopen or disturb awards, settlements and determinations that have attained finality.
Two things follow, and both are worth being precise about. Bangalore Water Supply was not overruled, and it was not formally modified either. Four judges would have recast it, four held that it is correct and needs no reconsideration at all, and the ninth declined to decide because the Act it construes has been repealed. A reformulation carrying four of nine votes, disclaimed by its own authors, and excluded from pending cases, from concluded cases and from the new Code is persuasive commentary rather than binding law.
So if your reference is pending before a Labour Court or Industrial Tribunal under the old Act, nothing about your case got harder on 20 August 2026. The test your Tribunal applies is the test it would have applied a month earlier.
Common mistake. Reading newspaper coverage of a reformulated test and assuming it now governs your pending reference. The judgment says the opposite in terms.
The sting is in the last two conclusions
Two further conclusions change the ground under everything filed after the Code came in. The Chief Justice's opinion records that those judges refrained from examining the definition of industry as it presently exists under the Industrial Relations Code, and directs that Bangalore Water Supply shall not be regarded as the sheet anchor for the interpretation of the Code or any of its provisions should such a question arise in future. Any issue under the Code, it says, falls to be determined on its own text, scheme, object and legislative framework. The judgment closes by confirming that it is confined to disputes under the Industrial Disputes Act and the interpretation of Section 2(j).
That direction is not unanimous, and a worker should know it is contested. Narasimha J agreed in substance, saying the future interpretation of Section 2(p) should not be burdened by interpretations of the repealed Section 2(j). Bagchi J agreed that the new Code shall be independently interpreted. Nagarathna J disagreed squarely, taking the view that where the two provisions carry similar language the earlier construction remains relevant and may be highly persuasive. So the proposition has the support of six judges in substance, with one against it and two who simply did not address it.
Even so, those lines matter more to a worker dismissed today than the reformulated test does. Five decades of case law holding that a hospital, a university, a club or a charity is an industry was built on Bangalore Water Supply. Six of nine judges have now said that decision is not the starting point for reading the Code that replaced the Act.
| Your situation | Which test applies | Practical effect |
|---|---|---|
| Dispute pending under the Industrial Disputes Act, 1947 | Bangalore Water Supply Triple Test, expressly preserved | The wide definition. Charities, hospitals, schools and clubs remain covered |
| Award or settlement that has attained finality | Untouched. The clarification is prospective | Cannot be reopened on the strength of the new judgment |
| Dispute governed by the Industrial Relations Code, 2020 | Section 2(p) of the Code, read without Bangalore Water Supply as the anchor | The Code carries its own exclusions, and the older case law is no longer the starting point |
The three points below are the ones that decide which column you are in.
The date is everything
The labour codes commenced on 21 November 2025. Whether your dispute arose before or after that date decides which definition of industry is applied to it.
Pending cases are protected
The Supreme Court directed that matters pending under the Industrial Disputes Act may be decided on the Bangalore Water Supply Triple Test as it stood.
The anchor has been cut
For the Industrial Relations Code, the Court said Bangalore Water Supply is not to be treated as the sheet anchor of interpretation. The old authorities no longer arrive automatically.
What the Industrial Relations Code actually says about industry
Section 2(p) of the Code defines industry as any systematic activity carried on by co-operation between an employer and worker, whether directly or through an agency including a contractor, for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes, not being wants or wishes which are merely spiritual or religious in nature. It applies whether or not capital has been invested and whether or not the activity is carried on with a motive to make gain or profit.
Then come the exclusions, and this is the part to read twice. The definition does not include institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service. It does not include any activity of the appropriate Government relatable to its sovereign functions, including all activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space. It does not include any domestic service. And it does not include any other activity that the Central Government may notify.
The first of those exclusions is the one that will decide thousands of cases. Under Bangalore Water Supply, philanthropy did not save an employer, because the absence of a profit motive was irrelevant. Under the Code, an institution owned or managed by an organisation wholly or substantially engaged in charitable, social or philanthropic service is carved out by the statute itself.
Charitable trusts, NGOs and mission hospitals
This is where the change bites hardest. A great many hospitals, schools, colleges, orphanages, old age homes and development organisations in India are run by charitable trusts or societies. Under the old law their staff were within the industrial law net, and a dismissed nurse, teacher or field officer could raise an industrial dispute. Under Section 2(p) of the Code, the employer now has a statutory argument that it falls in the excluded category.
Notice how the exclusion is worded, because that is where such cases will be fought. It speaks of institutions owned or managed by organisations wholly or substantially engaged in charitable, social or philanthropic service. The words wholly or substantially do real work. A trust that runs a commercial hospital charging market rates alongside a small free ward is not obviously an organisation substantially engaged in charitable service, and that will be a question of evidence about what the institution actually does rather than what its trust deed says it does.
What about a temple, a math or a purely religious body
The Code approaches this from a different direction. The definition covers activity aimed at satisfying human wants or wishes, and then qualifies that phrase by excluding wants or wishes which are merely spiritual or religious in nature. The word merely is important. A religious institution that also runs a school, a hospital, a printing press or a marriage hall is carrying on activity that is not merely spiritual, and the exclusion does not obviously reach those wings.
The reformulated test discussed in the Chief Justice's opinion in Jai Bir Singh makes the same distinction in its own words, treating purely spiritual or religious activity as outside the idea of a commercial character while not excluding the provision of material goods or services merely because they are associated with a religious objective.
The fullest treatment of institutional categories in the judgment comes in the separate opinion of Bagchi J, and while it is the view of one judge it is the most practical passage a worker will find. On temples he asks why employees engaged in preparing sweets should be treated differently according to whether the sweets are sold for profit or offered as prasadam, and points out that cooks, sweepers and watchmen engaged by a temple administration get little comfort from being told the closure provisions do not apply. On clubs he distinguishes a casual association of persons engaging a marginal number of employees from a large club organised on corporate lines with a substantial establishment. On professions he says a solicitors firm, a medical polyclinic or an architects office displays every feature of an industry, while a single practitioner working alone or with one assistant does not, because the organisational structure the concept presupposes is absent.
Apartment owners associations and resident welfare associations
This question reached a High Court within a fortnight of the Supreme Court judgment, and the answer was not good for the workers concerned. In a decision of 1 September 2026 the Punjab and Haryana High Court quashed six awards that had directed an apartment owners welfare association in Gurugram to reinstate maintenance staff with continuity of service and half their back wages. The Tribunal had held the association to be an industry, relying on Bangalore Water Supply and on the fact that the bye-laws permitted engagement of watchmen, gardeners, sanitary workers, electricians and plumbers, with a list showing about fifty such persons engaged.
The High Court held that the association was constituted by apartment owners for the maintenance and upkeep of their own residential complex, that the engagement of maintenance staff was incidental to that object, and that the scale of engagement does not alter the character of the activity. Applying the dominant nature test and an earlier Supreme Court decision on a housing society on materially identical facts, it held the association was not an industry, the reference was therefore not maintainable, and the Tribunal had no jurisdiction to order reinstatement.
That judgment also records how one High Court is already reading Jai Bir Singh, and the reading repays attention. It states that Bangalore Water Supply including the Triple Test continues to govern disputes pending under the repealed Act, which is right and is unanimous. It then adds that the reformulation requiring a discernible commercial character is to apply only to matters arising under the Industrial Relations Code.
That second half does not match what the Supreme Court said. The Chief Justice's opinion directs that any issue under the Code is to be determined on the Code's own text, scheme, object and legislative framework, uninfluenced by the reformulation of the Triple Test undertaken in that judgment. In other words the reformulation was not handed to the Code. It was withheld from pending cases, withheld from concluded cases, and expressly withheld from the Code as well.
Expect that gloss to be quoted at you anyway. If an employer cites it for the proposition that a commercial character test now governs your case under the Code, the answer is to take the court to the actual conclusions, where the reformulation is called hypothetical and the Code is left to its own words.
Deadline warning. A conciliation officer cannot hold proceedings on an industrial dispute after two years from the date the dispute arose, and an application to the Tribunal in a matter not settled must be made within ninety days of receiving the failure report. A jurisdictional objection does not pause either clock.
Does the change in law disturb a case I filed years ago
No, and there are two separate reasons for that. The first is the Supreme Court's own direction that the clarification operates prospectively and does not reopen or disturb proceedings that have attained finality, and that pending matters under the Industrial Disputes Act may be adjudicated on the Bangalore Water Supply test.
The second is statutory. Section 104 of the Code repeals the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947 from the notified date, and then applies Section 6 of the General Clauses Act, 1897 to that repeal. Section 6 provides that unless a different intention appears, a repeal does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment, nor any legal proceeding or remedy in respect of it, and that such a proceeding may be continued and enforced as if the repealing Act had not been passed.
So a reference filed in 2019 and still pending is decided on the law as it stood. What you cannot do is assume the same about a termination that happened after 21 November 2025.
One caution on dates. The Code was brought into force on 21 November 2025, and that is the date recited in the very question referred to the nine judges. The opinions in the judgment are not consistent about when the Industrial Disputes Act itself stood formally repealed, with February 2026 mentioned in two of them. If your termination falls in that window, treat the date as something to be established from the commencement notification rather than assumed.
There is a middle category that will cause trouble. A dismissal that occurred before the commencement date but where nothing was filed until afterwards raises the question whether a right had accrued under the old Act at all, and Section 104 also deems anything done under the repealed enactments to have been done under the corresponding provisions of the Code, to the extent it is not contrary to the Code. If your termination sits anywhere near the commencement date, that is the first thing to settle with your advocate, because it decides which definition of industry your employer gets to argue.
What to do when the objection is taken against you
The objection is usually raised in the written statement and then pressed as a preliminary issue. The worst response is to treat it as a technicality to be answered at final arguments, because by then the evidence that would have answered it has not been led.
- Fix the date your dispute arose and check it against 21 November 2025. That single fact decides which definition of industry is applied to you.
- Read the employer's written statement and identify which limb it is relying on: no systematic activity, no commercial character, a charitable or philanthropic institution, a sovereign function, or domestic service.
- Collect what the institution actually does, not what it says it does. Fee schedules, rate cards, tariff lists, audited accounts, service contracts, tender documents, advertisements and GST registration all speak to commercial character.
- Collect the employment material in the same breath: appointment letter, identity card, salary slips, attendance and muster records, provident fund and insurance records, and the list of other staff doing similar work.
- Put that material on record during your own evidence rather than saving it. A jurisdictional finding is made on the record as it stands.
- If the activity is mixed, plead severability. Section 2(r) of the Code treats a severable unit carrying on an industry as a separate industrial establishment, and applies a predominant activity test where units are not severable.
- Keep the limitation dates independently. Jurisdictional arguments run for years and the two year conciliation limit and the ninety day application period do not wait for them.
How a worker actually proves the point
The dominant nature test asks what the employer predominantly does. That is answered by documents far more convincingly than by assertion. If a trust hospital charges commercial rates, employs several hundred staff, advertises specialist departments and runs a pharmacy, those facts do more work than any amount of argument that charity is a pretence. If a school collects capitation and runs transport and hostel operations at a profit, the same is true.
The mirror image is also worth knowing, because it is what defeated the workers in the apartment association case. Evidence that the employer engaged many people, supervised them and controlled their work goes to the employment relationship. It does not by itself establish that the employer is an industry. Those are two different questions and the second one is not answered by piling up proof of the first.
What this looks like in practice
In our experience the jurisdictional objection is decided on how the file was built three or four years before it is argued. Workers who lose this point usually lost it at the evidence stage, when nobody asked the institution's own witness what the fees were, how many paid patients or students there were, what the annual receipts looked like, or what commercial contracts the body had entered into. Those answers cannot be supplied from the bar later. The other recurring error is treating the employer's registration as a trust or a society as the end of the enquiry. It is the beginning of it. What an organisation is registered as tells you very little. What it charges, what it earns, who it employs and how it holds itself out tells you almost everything, and all of that is obtainable through documents the employer itself has to produce.
The failures below account for most of the cases that end on jurisdiction rather than merits.
Registration treated as proof
A trust deed or society registration is taken as conclusive that the employer is charitable, when the statutory words ask what the organisation is wholly or substantially engaged in.
Evidence on the wrong issue
Extensive proof of supervision and control establishes the employment relationship but does not establish that the employer is an industry at all.
Severability never pleaded
Mixed institutions are treated as a single unit, when the Code itself provides for a severable unit carrying on an industry to be treated as a separate industrial establishment.
Frequently Asked Questions
Did the Supreme Court overrule Bangalore Water Supply on 20 August 2026?
No. Four judges set out how they would have structured the Triple Test differently and expressly called that reformulation hypothetical. Four others held the 1978 decision correct and in need of no reconsideration, and the ninth declined to decide. All nine agreed that pending matters under the Industrial Disputes Act are to be decided on the Bangalore Water Supply test.
Is a charitable hospital still an industry?
For a dispute pending under the Industrial Disputes Act, the older position preserved by the judgment continues to apply. For a dispute under the Industrial Relations Code, the employer can point to the statutory exclusion of institutions owned or managed by organisations wholly or substantially engaged in charitable, social or philanthropic service, and the question becomes what that institution substantially does.
My apartment association sacked me after fifteen years. Do I have a case?
On the reasoning of the Punjab and Haryana High Court decision of 1 September 2026, an association constituted by apartment owners to maintain their own complex is not an industry, and the number of staff engaged does not change that. Whether the same reasoning applies to your association depends on what it actually does beyond maintaining the complex.
Does it matter that my employer makes no profit?
Under Section 2(p) of the Code the definition applies whether or not the activity is carried on with a motive to make gain or profit, so absence of profit is not by itself an answer. The charitable exclusion operates separately and is about what the organisation is engaged in, not about whether it makes money.
What is the dominant nature test?
Where an establishment carries on several activities, the test looks at the predominant purpose and essential nature of what it does rather than at any one incidental activity. The Code puts a version of this in Section 2(r), which also allows a severable unit that carries on an industry to be treated as a separate industrial establishment.
Are government departments industries?
The Code excludes activity of the appropriate Government relatable to its sovereign functions, including the departments of the Central Government dealing with defence research, atomic energy and space. Welfare and commercial activities of government are a different matter, and the dispute in Jai Bir Singh itself concerned a State welfare department.
Can I go to the civil court instead if the Tribunal has no jurisdiction?
Section 97 of the Code bars the jurisdiction of civil courts in respect of matters the Code provides for, so this is not a simple alternative. Where the employer is genuinely outside the Code, the available routes are usually contractual or, for public bodies, a writ petition, and that choice should be made with advice at the outset.
How long do I have to raise an industrial dispute?
A conciliation officer cannot hold conciliation proceedings on a dispute after two years from the date on which the dispute arose, and where conciliation fails, an application to the Tribunal must be made within ninety days of the failure report reaching you.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
