Labour Rights Beyond BWSSB: Workers, Welfare and Justice

LABOUR RIGHTS BEYOND THE SHADOW OF BWSSB

Why in the News?

• On August 20, 2026, the Supreme Court delivered its judgment on the Reference concerning the interpretation of “industry” under Section 2(j) of the Industrial Disputes Act, 1947, arising from Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978).
• The seven-judge Bench judgment in BWSSB was referred for reconsideration in State of U.P. v. Jai Bir Singh (2005). The matter was subsequently placed before a nine-judge Constitution Bench in 2017.
• The nine-judge Bench examined the correctness of the “Triple Test” laid down in BWSSB, its relevance after the 1982 amendment, the status of government welfare activities, and the scope of sovereign functions.
• By the time the Reference was heard, the Industrial Relations Code (IRC), 2020 had come into force on November 21, 2025, repealing the Industrial Disputes Act, 1947.
• The repeal technically rendered the Reference otiose (without practical legal effect), since the provision under consideration no longer governed future disputes. Nevertheless, the nine-judge Bench proceeded to examine the issues, making the judgment significant for understanding the future interpretation of “industry” under the new labour-law framework.

Judicial Opinions & Observations

• Reference considered academic: Justice D. Datta and Justice U. Bhuyan held that the Reference “requires no answer”, while Justice B.V. Nagarathna termed the exercise “unnecessary and only academic”.
• Repeal of the ID Act: Justice P.S. Narasimha observed that although an authoritative interpretation of “industry” was necessary when the Reference was made, it had become unnecessary following the repeal of the ID Act, 1947.
• Reformulated Triple Test — only hypothetical: The CJI, writing for four judges, nevertheless reformulated the BWSSB Triple Test. However, the opinion described this reformulation as “hypothetical” and clarified that it would not apply to pending cases.
• No future application under the ID Act: Since the ID Act has been repealed, the reformulated test would have no practical application to future disputes under that legislation.
• IRC was not directly examined: The four questions framed by the nine-judge Bench concerned Section 2(j) of the ID Act. The interpretation of Section 2(p) of the Industrial Relations Code (IRC), 2020 was not directly before the Court.
• IRC to be interpreted independently: The CJI’s opinion emphasised that the IRC is an independent legislation and must be interpreted according to its own text, scheme and object.
• Limited relevance of BWSSB: The CJI’s opinion stated that BWSSB should not be treated as the “sheet anchor” for interpreting the definition of “industry” under the IRC in future cases.
• Justice Narasimha’s approach: Justice P.S. Narasimha stressed that the interpretation of “industry” under the IRC should not be burdened by existing interpretations under the repealed ID Act.
• Justice Nagarathna’s distinction: Justice B.V. Nagarathna, while affirming BWSSB, observed that whether its reasoning applies under the IRC must be determined by comparing the actual text of the two statutory provisions.
• Future interpretation remains open: Therefore, the meaning of “industry” under the IRC cannot be determined in the abstract and will ultimately have to evolve through cases arising under the new legislation, informed by the jurisprudence developed under BWSSB and subsequent judgments.

The Significance of BWSSB

• Core concern behind the Reference: The reconsideration of BWSSB reflects a longstanding concern that its interpretation was excessively “worker-oriented” and allegedly overlooked the interests of employers. This criticism was explicitly raised by the five-judge Bench in Jai Bir Singh (2005).
• Perceived “burden” of BWSSB: The CJI’s opinion echoes this concern by suggesting that moving away from BWSSB would remove a “burden” and allow labour law to “move forward unencumbered”.
• Moving beyond BWSSB: Justice P.S. Narasimha similarly observed that the interpretation of “industry” under the IRC, 2020 should be “freed of the bondage of ratio” in BWSSB.
• Underlying employer–worker asymmetry: The debate must, however, be viewed against the fundamental imbalance in bargaining power between capital and labour. Workers generally enter employment negotiations from a weaker position and therefore cannot be treated as equal bargaining participants.
• Constitutional basis for labour protection: The Constitution reflects this concern through Article 42, which directs the State to secure just and humane conditions of work, and Article 23, which prohibits trafficking, begar and forced labour.
• Purpose of labour legislation: Labour laws were enacted to provide workers with a minimum level of protection against this structural imbalance. Such protection should not automatically be characterised as “pro-worker”; rather, it seeks to prevent the bargaining imbalance from overwhelmingly favouring employers.
• Protection versus “burden”: Requirements such as providing justification for dismissal may be portrayed as restrictions on employers, but they represent basic safeguards for workers who lack comparable bargaining power.
• Ambedkar’s warning: B.R. Ambedkar’s concern about liberty from state control becoming “the dictatorship of the private employer” remains relevant to the contemporary debate over deregulation and labour protection.
• Social justice as a constitutional commitment: The Kesavananda Bharati (1973) judgment recognised social, economic and political justice as part of the Constitution’s basic structure. Labour rights therefore cannot be viewed solely through the lens of economic efficiency.
• Contemporary relevance: With policies emphasising “ease of doing business”, the tension between labour flexibility and worker protection has become sharper. The constitutional commitment to social justice arguably requires that labour reforms provide adequate protection for workers rather than merely reducing regulatory burdens on employers.

The Issue of Labour Rights

• Purpose of the ID Act, 1947: The Industrial Disputes Act was designed to maintain industrial peace by providing workers with basic protections and mechanisms for resolving industrial disputes through labour courts and tribunals.
• Importance of the definition of “industry”: The scope of the term “industry” determined who could access these statutory protections and remedies. Exclusion from this definition effectively meant exclusion from the legal safeguards provided by the Act.
• Significance of BWSSB: The BWSSB judgment adopted a broad interpretation of “industry”, thereby ensuring that the Act’s protections extended to a wider range of workers and establishments, rather than leaving them without an effective statutory remedy.
• Protection, not a regulatory burden: From the perspective of industrial peace, BWSSB can be viewed not as an unnecessary burden on employers, but as an interpretation consistent with the fundamental purpose of the ID Act — balancing competing interests and preventing industrial conflict.
• Underlying concern: The criticism of BWSSB reflects a broader tension between labour protection and employer flexibility, with concerns that narrowing the definition of “industry” could leave more workers outside the protective framework of labour legislation.
• Transition to the IRC, 2020: With the repeal of the ID Act and its replacement by the Industrial Relations Code, 2020, the debate has shifted to the scope of protection available under the new framework.
• Constitutional mandate: The new labour framework must ultimately be tested against the Constitution’s commitment to social and economic justice, ensuring that labour reforms do not leave vulnerable workers without meaningful legal protection.

Way Forward

• Balance flexibility with protection: Labour reforms should promote ease of doing business without compromising decent work, job security and minimum labour standards.
• Interpret the IRC independently: Courts should interpret the Industrial Relations Code, 2020 on the basis of its own text, scheme and objectives, while drawing appropriately from established labour jurisprudence.
• Ensure effective remedies: Workers must have accessible, affordable and timely mechanisms for resolving industrial disputes, particularly in cases of unfair dismissal, retrenchment and victimisation.
• Avoid exclusionary definitions: The scope of labour protection should not be narrowed so substantially that large categories of workers are left without meaningful statutory safeguards.
• Strengthen collective bargaining: Trade unions and workers should have adequate institutional space for collective bargaining and peaceful dispute resolution, consistent with industrial peace.
• Protect vulnerable workers: Special attention should be given to contractual, informal, gig and other precarious workers, whose bargaining power is often significantly weaker than that of employers.
• Maintain tripartite consultation: Major labour reforms should involve meaningful consultation among government, employers and workers, strengthening legitimacy and reducing industrial conflict.
• Use technology for compliance: Digital registration, transparent dispute-resolution systems and risk-based inspections can reduce compliance costs for businesses without weakening worker protection.
• Constitutional test: Ultimately, labour-law reforms should be assessed against the constitutional commitment to social and economic justice, ensuring that economic efficiency and worker dignity advance together.

Source: https://www.thehindu.com/opinion/lead/labour-rights-beyond-the-shadow-of-bwssb/article71385565.ece

Mains question

The evolution of India’s labour jurisprudence reflects a persistent tension between ease of doing business and workers’ rights. Examine how the Industrial Relations Code, 2020 can balance economic flexibility with constitutional commitments to social justice.