Supreme Court: AITUC Challenges IR Code Industry Definition

• The All India Trade Union Congress (AITUC) has filed a petition in the Supreme Court challenging the definition of 'industry' under the Industrial Relations Code, 2020.
• The petition specifically contests the exclusion of charitable institutions, sovereign functions, and government-notified activities from this definition.
• Senior Advocate Gopal Sankaranarayanan argued that a previous nine-judge Constitution Bench left this definitional issue open and that the current exclusions constitute a "vires challenge."
• The Supreme Court bench, including Chief Justice of India Surya Kant, heard the arguments and indicated a review of the matter.

This Supreme Court challenge to the Industrial Relations Code 2020 definition of industry is pivotal for the future of labor law in India.

The Supreme Court of India is currently considering a significant challenge to the Industrial Relations Code, 2020, specifically concerning its definition of 'industry'. A petition, lodged by the Tamil Nadu unit of the All India Trade Union Congress (AITUC), contests the exclusion of several key areas from this definition. These contested exclusions include charitable institutions, activities directly related to sovereign functions of the state, and any other activities that the government may choose to notify for exclusion.

The matter recently came before a Supreme Court bench comprising Chief Justice of India Surya Kant, alongside Justices Joymalya Bagchi and V Mohana. Representing the petitioner, Senior Advocate Gopal Sankaranarayanan presented the arguments, emphasizing the critical nature of the definitional scope. The AITUC's petition seeks to re-evaluate these exclusions, arguing they fundamentally alter the intended reach of labor legislation.

During the hearing, Senior Advocate Gopal Sankaranarayanan highlighted that a nine-judge Constitution Bench had previously delivered a judgment on August 20, but this ruling did not specifically address or examine the definition of 'industry' as laid out in the Industrial Relations Code, 2020. He asserted that the Constitution Bench had explicitly left this particular issue open for future consideration, making the current petition a direct and appropriate challenge to the new Code's provisions.

Sankaranarayanan further elaborated on the petitioner's concerns, pointing out that the new definition deviates from established legal precedents, particularly in its omission of charitable and sovereign activities. He referenced a "triple test" that had been endorsed by eight out of nine judges in a prior ruling, suggesting the current exclusions undermine this judicial standard. The Senior Advocate characterized the petition as a "vires challenge," directly questioning the legal authority and constitutional validity of these specific exclusions within the Code. Chief Justice Kant acknowledged the submission, indicating his intention to review the matter, noting the Industrial Relations Code 2020 was enacted in September.

The outcome of this Supreme Court challenge holds substantial implications for the landscape of labor relations across various sectors in India. By excluding charitable institutions and sovereign functions from the purview of 'industry,' the Industrial Relations Code, 2020 potentially removes a significant segment of the workforce from the protections and dispute resolution mechanisms afforded by the Code. This could affect employees in non-profit organizations, government departments performing essential public services, and other entities that might be designated for exclusion by future government notifications.

The AITUC's petition, therefore, aims to ensure that a broader scope of employment relationships falls under the regulatory framework of the IR Code, thereby safeguarding workers' rights in these currently excluded domains. A ruling in favor of the petitioner could compel a re-evaluation of the Code's definitional boundaries, potentially expanding its applicability and ensuring a more uniform approach to industrial relations across diverse organizational structures. This Supreme Court challenge to the Industrial Relations Code 2020 definition of industry is pivotal for the future of labor law in India.

Lawyers advising charitable institutions, government entities, or trade unions on labor relations must closely monitor this Supreme Court challenge, as the ruling will determine the scope and applicability of the Industrial Relations Code 2020 to these sectors, potentially altering compliance obligations and dispute resolution frameworks.

Source: Original reporting via legal news outlet