SC to Review ‘Industry’ Definition Under IR Code, 2020
Eduteria Insights · 3 Nov 2026
Why in the news?
Recently, the Supreme Court has agreed to hear a petition by AITUC challenging the definition of 'industry' under the Industrial Relations Code, 2020.
AITUC argues that the new definition, by excluding certain institutions, dilutes worker protection and changes the scope of industrial disputes.
About the Industrial Relations Code, 2020:
It merges 3 laws: the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; and the Industrial Disputes Act, 1947.
Definition: Industry = any systematic activity with cooperation between employer and workers for production, supply, or distribution of goods and services.
It excludes:
Institutions run by organizations substantially engaged in charitable, social, or philanthropic work.
Govt activities relating to sovereign functions.
Domestic services.
Any other activity notified by the Central Govt at its discretion.
Grounds of Challenge:
Violates Article 14: Exclusion is based on who runs the establishment, not what work is done. So, a nurse in a private hospital vs. a charitable hospital doing the same work gets different rights to go to the Industrial Tribunal for unequal treatment.
Excessive Delegation: The Centre can exclude any other activity by notification without clear criteria in the law, giving arbitrary, unchecked discretion.
Deviation from Bangalore Water Supply (1978): In Bangalore Water Supply vs. A. Rajappa, SC gave a triple test: systematic activity + employer-employee cooperation + production of goods/services, and held that the nature of the activity matters, not the motive or who owns it. The new code breaks that.
Jai Bir Singh Case (Aug 2026): SC said the triple test will still apply to pending cases under the ID Act, 1947, but the definition under Sec 2(p) of the IR Code, 2020, will be interpreted independently, so this challenge becomes crucial.
Impact: Workers in excluded sectors don't lose all rights but lose specific protections of the IR Code, retrenchment, layoff, closure safeguards, and access to conciliation/adjudication machinery.
- Industrial Relations Code 2020
- Definition of Industry
- Supreme Court of India
- AITUC Petition
- Trade Union Rights
- Industrial Disputes
Swipe up (or press ↓) for the next news












