Why Is the Industrial Relations Code in the News?

According to reports dated 29 October 2026 described in the supplied article, the Supreme Court agreed to examine a petition challenging the statutory definition of "industry" in the Industrial Relations Code, 2020.

The petition was reportedly filed by the Tamil Nadu unit of AITUC, a trade-union federation.

The dispute concerns the legal boundaries of industrial relations and the categories of establishments that may come within the statutory framework.

What Is the Industrial Relations Code, 2020?

The Industrial Relations Code, 2020 forms part of India's labour-law consolidation framework.

It brings together legal provisions concerning trade unions, industrial disputes and standing orders.

Its subject matter includes the relationship between workers, employers and the institutional mechanisms used to address industrial disagreements.

Three Important Areas

• Trade unions and their recognition within the statutory framework.
• Industrial disputes and mechanisms for their settlement.
• Standing orders governing conditions of employment in covered establishments.

The precise application of any particular protection depends on the definitions, coverage provisions and other requirements of the relevant law.

Why Does the Definition of "Industry" Matter?

A statutory definition is not merely a matter of terminology. It can determine which institutions and activities fall within the scope of particular legal obligations and remedies.

Section 2(p) of the Industrial Relations Code, 2020 defines "industry" for the purposes of the Code.

The supplied article identifies exclusions relating to sovereign functions and certain charitable or philanthropic activities as central to the reported dispute.

Practical Importance

Where an establishment falls outside a statutory definition, the applicability of industrial-relations provisions may be affected.

This may influence the legal pathways available for disputes and the obligations imposed on covered institutions.

However, exclusion from one statutory framework does not necessarily eliminate every employment right or remedy available under other applicable laws.

Bangalore Water Supply Judgment, 1978

A major judicial development in Indian labour jurisprudence was the Supreme Court's decision in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978).

A seven-judge Bench adopted a functional approach to the meaning of "industry" under the earlier statutory framework.

The Triple Test

The judgment is widely associated with three important elements:

• Systematic activity.
• Cooperation between employer and employee.
• Production or distribution of goods or services calculated to satisfy human wants or wishes, subject to the judgment's qualifications.

The approach focused on the nature of the activity rather than relying solely on the legal identity or profit motive of the organisation.

Why the Precedent Matters

The 1978 decision provides an important historical reference for understanding how courts have approached industrial coverage.

However, a judicial interpretation of an earlier statute and the wording of a later legislative definition must be analysed separately.

What Is the AITUC Challenge?

The petitioners reportedly question whether the definition and its exclusions could narrow the scope of protection for workers engaged in certain establishments.

Concerns Raised by the Petitioners

• Potential exclusion of workers from industrial-relations protections.
• Uncertainty about the classification of social-service institutions.
• The possibility that broad exclusions could weaken access to statutory remedies.
• The need to examine the compatibility of the classification with constitutional principles.

Arguments Supporting a Narrower Definition

A different policy perspective may emphasise that genuine sovereign functions and certain non-commercial activities should not automatically be regulated in the same manner as ordinary industrial establishments.

Supporters of such distinctions may argue that Parliament has legislative discretion to design appropriate rules for different categories of activities.

Constitutional Dimensions of the Dispute

Equality and Reasonable Classification

Article 14 does not prohibit every legislative distinction. The constitutional validity of a classification depends on the applicable standards of equality review.

In labour legislation, courts may examine whether distinctions between categories of establishments are constitutionally justifiable.

Freedom of Association

Article 19(1)(c) protects the freedom to form associations or unions.

This constitutional freedom should not be confused with an automatic entitlement to every particular statutory benefit or bargaining arrangement.

Directive Principles

The Directive Principles reflect constitutional commitments to social and economic justice.

They guide public policy and legal interpretation but are not directly enforceable in the same manner as Fundamental Rights.

Potential Implications for Workers and Employers

For Workers

A clear definition can help workers understand whether particular industrial dispute mechanisms apply to their employment.

Ambiguous exclusions may create uncertainty and increase the cost of pursuing legal remedies.

For Employers

Legal certainty helps organisations assess their obligations and manage industrial relations consistently.

Clear classification rules can also reduce avoidable litigation.

For Social-Service Institutions

Institutions involved in charitable, philanthropic or public-service activities may face difficult classification questions.

The legal treatment of an establishment should be assessed under the actual statutory text and applicable judgments, not merely by its name.

For Labour Governance

The controversy highlights the importance of precise legislative drafting and accessible dispute-resolution institutions.

Way Forward: Balancing Worker Protection and Legal Clarity

• Clarify the scope of statutory exclusions through precise legal language.
• Ensure that workers can obtain timely decisions on disputed classification questions.
• Study how exclusions affect different types of establishments.
• Maintain an appropriate distinction between genuine sovereign functions and other economic or service activities.
• Strengthen accessible industrial dispute resolution.
• Ensure that any legislative response is consistent with constitutional equality and social justice.
• Promote awareness of applicable labour rights among workers and employers.

An effective labour-law framework should provide predictable obligations for employers while ensuring that statutory protections remain meaningful and accessible to eligible workers.

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