The definition of 'industry' in the Industrial Relations Code, 2020 marks a legislative departure from the judicially evolved 'triple test'. Critically examine.

In Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978), a seven-judge Constitution Bench, in a judgment written by Justice V.R. Krishna Iyer, laid down the 'triple test' for 'industry'. Its three elements are systematic activity, employer–worker co-operation, and the production or distribution of goods and services [1]. Section 2(p) of the Industrial Relations Code (IRC), 2020 keeps this test but adds exclusions. The departure is therefore partial, not total.

Continuity with the triple test

• Section 2(p) reproduces all three elements of the test [2].
• It declares capital investment and profit motive irrelevant, as the 1978 reading did [2].

Where the Code departs

• It excludes institutions "wholly or substantially" engaged in charitable, social or philanthropic service [2].
• It excludes government activity "relatable to sovereign functions" [2].
• It lets the Centre exclude "any other activity" by notification [1].

Merits of the departure

• Legislative competence: the triple test interpreted the Industrial Disputes Act, 1947, not the Constitution. Parliament may legitimately redraw a statute.
• Judicial unease: the broad reading was itself sent to a nine-judge Bench. In State of U.P. v. Jai Bir Singh (2026), that Bench retained it for pending ID Act disputes but left the meaning of Section 2(p) to future litigation [4].
• Policy aim: the government presents the Code as promoting harmony and ease of doing business [5].

Concerns

• Vagueness: the Code does not define "substantially" or "sovereign functions". The Standing Committee on Labour (2019-20) wanted charitable institutions, including trust-run educational bodies, brought back in [3].
• Excessive delegation: the Committee asked for the grounds for exclusion to be listed in the Code itself [3]. The enacted text still contains an open-ended notification power [1].
• Excluding by activity, not by job: ILO Convention 98 allows only the armed forces, police and public servants in State administration to be excluded [6]. Under the IRC, a clerk or driver can lose cover simply because of the department they work in.
• Loss of coverage: workers in hospitals, NGOs and educational trusts may lose dispute-resolution protections. This sits uneasily with Article 14 and Articles 38 and 43.

The IRC thus keeps the core of the triple test but narrows its reach through exclusions. That is a legitimate policy choice, weakened by imprecise drafting. Three steps would reconcile ease of doing business with the Constitution's promise of social and economic justice (Article 38):

• define sovereign functions along ILO lines;
• test charities by size or fee income rather than legal form;
• list the notification grounds in the statute, as the Standing Committee urged [3].