Industrial Relations Code, 2020: defining 'industry' and its exclusions
Why in news: On 28 October 2026 the Supreme Court agreed to hear AITUC Tamil Nadu's petition challenging Section 2(p) of the Industrial Relations Code, 2020.
Section 2(p) of the Industrial Relations Code, 2020 treats any systematic activity in which an employer and workers together produce or supply goods or services as an 'industry', with or without capital or profit. It excludes four classes. On 28 October 2026 the Supreme Court agreed to hear a trade union's challenge to this definition.
Syllabus: GS3 · Indian Economy & Growth; GS2 · Separation of Powers; GS2 · Government Policies
Why this matters for UPSC
GS3 labour and employment and GS2 government policies: Prelims can ask what Section 2(p) of the Industrial Relations Code, 2020 includes and excludes and the 1978 triple test; Mains, about worker protection and delegated exclusions.
In short
'Industry' is the gateway concept of Indian labour law: Section 2(p) of the Industrial Relations Code, 2020 decides which workplaces, and so which workers, receive the Code's protection.
The definition must stay clear and stable: exclusions should rest on criteria Parliament sets, so that worker protection does not shift with executive notifications.
Why it matters
A nurse in a trust-run hospital or a clerk in a government research department needs to know whether her workplace is an 'industry'. If it is, she counts as a worker and can raise a dispute before a conciliation officer or a tribunal, join a recognised union and receive the Code's protection on dismissal or retrenchment. If her employer falls in an excluded class, those routes close and she must look to service rules or ordinary courts. Because one of the exclusions can be widened by a government notification, the line can move without Parliament voting on it. The case therefore asks how far labour protection should depend on the type of employer and how much discretion the executive should hold over it.
Prelims pointers
- Section 2(p) of the Industrial Relations Code, 2020 covers an activity whether or not capital is invested or profit is sought.
- Excluded from 'industry': charitable, social or philanthropic institutions; sovereign functions including defence research, atomic energy and space; domestic service; activities notified by the Centre.
- Section 2(zr) of the Code includes working journalists and sales promotion employees, but excepts an apprentice under the Apprentices Act, 1961.
- Supervisory employees earning up to Rs 18,000 a month count as workers under the Industrial Relations Code, 2020, per a PIB factsheet.
- Section 2(zk) counts concerted casual leave by 50% or more workers on a given day as a strike.
- Section 62 bars a strike in an industrial establishment without notice given within sixty days before, and within fourteen days of the notice.
- The standing orders chapter applies to industrial establishments with 300 or more workers on any day of the preceding twelve months.
- The four Labour Codes are the Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working Conditions Code, 2020.
Practise a UPSC-style question
With reference to the definition of 'industry' in the Industrial Relations Code, 2020, consider the following statements:
1. An activity carried on without any motive of gain or profit falls outside the definition of 'industry'.
2. An activity can be an 'industry' even if no capital has been invested in carrying it on.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Show the answer
Answer: (b) 2 only
Answer: (b) 2 only. Section 2(p) makes both capital and profit motive irrelevant to whether an activity is an industry.
Statement 1: incorrect. Section 2(p) of the Industrial Relations Code, 2020 covers an activity whether or not it is carried on with a motive of gain or profit.
Statement 2: correct. The same clause covers an activity whether or not any capital has been invested in it.
Eliminate: statement 1 reverses the profit-motive rule, so it is false. Out: (a), (c).
Eliminate: statement 2 states the capital rule as the Code does. Out: (d).
Trap: Reversed direction. Statement 1 turns the Code's 'whether or not' profit rule into a requirement, which sounds natural for the word 'industry'.
Remember: Under Section 2(p), neither capital nor profit motive is needed for an 'industry'.
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