'Industry': The Conceptual Analysis

In one line

An industry is any organised activity in which an employer and workers cooperate to produce or supply goods or services for people's wants, whether or not anybody put capital in and whether or not anybody makes a profit, but the Code now shuts four things out of it by name.

In exam wording: section 2(p) of the Industrial Relations Code 2020 defines "industry" as any systematic activity carried on by co-operation between an employer and worker, whether the worker is employed directly or through any agency including a contractor, for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes, not being wants or wishes which are merely spiritual or religious in nature, whether or not any capital has been invested for the purpose of carrying on such activity and whether or not the activity is carried on with a motive to make any gain or profit; but it does not include institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service, any activity of the appropriate Government relatable to its sovereign functions including all activities of the departments of the Central Government dealing with defence research, atomic energy and space, any domestic service, or any other activity notified by the Central Government.

Why the law has this at all

This one word decides whether the Code applies to you at all.

Every operative provision of the Code hangs off it. A "worker" under section 2(zr) is a person employed in any industry. An "industrial establishment or undertaking" under section 2(r) is one in which any industry is carried on. An "industrial dispute" is a dispute in the industrial context. So an employer who can show that what he does is not an industry escapes the Tribunals, the standing orders, the retrenchment provisions, the whole of it. That is what the Bangalore Water Supply Board argued, and it is what every employer in a marginal case argues.

And the problem the courts faced was that the old definition had no natural edge. Section 2(j) of the Industrial Disputes Act 1947 defined industry as "any business, trade, undertaking, manufacture or calling of employers" and included "any calling, service, employment, handicraft, or industrial occupation or avocation of workmen". Read literally, "undertaking", "service" and "calling" cover almost every organised human activity: a hospital, a university, a club, a solicitor's office, a temple, a charity, a research institute.

For twenty years the Supreme Court decided such cases one at a time and produced a body of law that could not be reconciled. That is why the question went to seven Judges.