Justice Nagarathna's dissent warns 'industry' ruling could weaken worker protections

The Supreme Court's nine-judge Bench has ruled on the meaning of 'industry' under the Industrial Relations Code, 2020, with Justice B.V. Nagarathna registering a strong dissent. She cautioned that the majority decision to set aside a 1978 judgment, which had expansively defined 'industry', could weaken the protective framework available to workers in industrial disputes.

The 1978 judgment in Bangalore Water Supply and Sewerage Board v. R. Rajappa had provided a broad definition of 'industry', covering a wide range of enterprises and establishments. This interpretation, Justice Nagarathna noted, served as a 'bulwark' against violations of labour rights for almost half a century. It was particularly significant during India's transition to liberalisation and privatisation, ensuring that the state could not easily evade its welfare obligations towards workers.

The meaning of 'industry' is central to resolving industrial disputes, as it decides which establishments and employees come under the umbrella of labour law. A broader definition extends the protective cover to more workers, while a narrower one limits it. Justice Nagarathna's dissent argues that by discarding the 1978 interpretation without a specific statutory change to that effect, the court has effectively undone a safeguard that was carefully built over decades.

In her 147-page dissent, Justice Nagarathna argued that earlier judicial interpretations of the corresponding provision in the Industrial Disputes Act, 1947, remain relevant and may even be binding while interpreting Section 2(p) of the new IRC. She cited the English case of Greaves v. Tofield (1880) to support the principle that when a new law replaces an old one with the same subject and purpose, well-established judicial pronouncements on the repealed statute carry persuasive value.

'Any pronouncement on the correctness or otherwise of the judgment of this court in the Bangalore Water Supply case would definitely cast its shadow on the definition of 'industry' under Section 2(p) of the IRC,' she wrote. She had urged the majority to dismiss the reference as not maintainable, but the bench proceeded with the hearing.

The majority, however, held that the 1978 judgment would not act as a precedent for future interpretations of 'industry' under the IRC. This conclusion, in Justice Nagarathna's view, disregards the continuity of legislative intent and could give free rein to the 'skewed bargaining power' wielded by corporates and private sector companies over workers.

Justice Nagarathna was the only woman judge on the nine-judge Bench. Her dissent underscores the enduring tension between the need for flexibility in business operations and the protection of labour rights. With the IRC consolidating several existing labour laws, this ruling will shape how industrial disputes are adjudicated in the years to come.