Supreme Court to Review Industrial Relations Code Definition of Industry

The Supreme Court of India has agreed to hear a legal challenge against the definition of 'industry' as outlined in the Industrial Relations Code (IRC) of 2020. A Bench led by Chief Justice of India Surya Kant accepted the petition filed by the All India Trade Union Congress (AITUC) Tamil Nadu, which contends that the current legal language is overly broad and potentially detrimental to worker protections.

India News Field Visual

At the heart of the petition is Section 2(p) of the IRC, which defines an industry as any systematic activity involving cooperation between an employer and worker for the production or distribution of goods and services. The AITUC argues that the definition is "deliciously vague," particularly because the new law provides exemptions for a wide range of institutions. These exemptions cover entities engaged in charitable or philanthropic services, as well as activities related to the sovereign functions of the government.

Legal counsel for the trade union, senior advocate Gopal Sankaranarayanan, argued that the current definition fails to meet the requirements of the 'triple test.' This benchmark was established in the 1978 Bangalore Water Supply and Sewerage Board v. A. Rajappa case, where a seven-judge Constitution Bench led by Justice V.R. Krishna Iyer defined the conditions for an activity to be considered an industry. The petitioners suggest that the new code deviates from these established judicial standards, potentially stripping employees in various sectors of their legal rights.

During the hearing on October 28, 2026, Chief Justice Surya Kant questioned the specific grievances regarding the definition, asking, "Is there a problem with the definition of ‘industry’?" The court is now set to examine whether the exemptions listed in the IRC—which include any activity the Central government may notify—undermine the protections afforded to workers under existing labor laws.