Critically analyse whether institutional status (charitable/sovereign) should determine the industrial character of employment, in the context of rising privatisation.

Section 2(j) of the Industrial Disputes Act, 1947 defines "industry" by the nature of the activity — systematic work, employer-worker cooperation, production of goods or services — not by who the employer is [1]. Section 2(p) of the Industrial Relations Code, 2020 reverses this emphasis by excluding sovereign functions and charitable, social or philanthropic institutions [2]. The case for such an institution-based filter is real but limited; work-substance must remain the primary test.

The case for institutional status

• Sovereign functions — defence, policing, revenue and justice are inalienable constitutional duties, not bargainable services; excluding them prevents dispute machinery from intruding into core statecraft [2].
• Predictability and compliance relief: the expansive triple test drew hospitals, clubs, universities and trusts into industrial adjudication, producing case-by-case uncertainty. A status-based rule gives small charitable bodies a clear, low-cost answer [3].
• Ease of doing business: the Code consolidates three labour laws through uniform definitions, a stated aim of the labour-code reform [3][4].

Why institutional status cannot be decisive

• Privatisation and outsourcing make the employer's label unstable: a contract nurse or sanitation worker performs identical work in a "charitable" trust hospital and a corporate one, yet would hold unequal rights [5].
• Label-shopping risk: institutional form can be restructured; the substance of work cannot. Status-based tests invite avoidance rather than compliance [5].
• Equity and Directive Principles: Article 43's living-wage mandate and collective bargaining lose meaning if protection turns on the employer's registration category — a concern trade unions raised as a "structural tilt" toward management [5].
• The Supreme Court's nine-judge Bench (2026), while refining the triple test prospectively, retained its essential activity-centred framework and left Section 2(p) open [6].

Institutional status is best treated as a narrow, function-specific exception confined to genuinely sovereign and non-commercial work, rather than a threshold classifier of employment. Clarifying the Code's exclusions through rules and reasoned adjudication would preserve both industrial harmony and the constitutional promise of dignified labour.