THE ESCAPE CLAUSE: UNGUIDED DELEGATION, EXECUTIVE DISCRETION AND THE CONSTITUTIONAL LIMITS OF SECTION 2(P) OF THE INDUSTRIAL RELATIONS CODE, 2020
AUTHOR – PURVESH KOTHEKAR, STUDENT AT NALSAR UNIVERSITY OF LAW
BEST CITATION – PURVESH KOTHEKAR, THE ESCAPE CLAUSE: UNGUIDED DELEGATION, EXECUTIVE DISCRETION AND THE CONSTITUTIONAL LIMITS OF SECTION 2(P) OF THE INDUSTRIAL RELATIONS CODE, 2020, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (10) OF 2026, PG. 181-187, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I1023
abstract
Section 2(p)(iv) of the Industrial Relations Code, 2020 permits the Central Government to notify any activity out of the statutory definition of “industry,” removing the workforce engaged in that activity from every protection the Code provides, including trade union recognition, collective bargaining, dispute resolution, standing orders, and retrenchment compensation. This paper argues that the provision is unconstitutional on three cumulative grounds. First, it violates the doctrine against unguided delegation. Parliament codified the Triple Test from Bangalore Water Supply & Sewerage Board v. A. Rajappa as the governing definition of “industry,” then delegated to the executive an unqualified power to override that definition for any activity, without criteria, standards, or procedural preconditions. Applying In Re Delhi Laws Act, Hamdard Dawakhana v. Union of India, and Vasu Dev Singh v. Union of India, the paper shows that this exceeds the constitutional limits on delegated legislation. Second, the provision violates Articles 14, 19(1)(c), and 21. It is manifestly arbitrary under the Shayara Bano standard, destroys the collective bargaining infrastructure that gives effect to Article 19(1)(c), and removes the statutory conditions that make the Article 21 right to livelihood operative. Third, the provision subverts the Directive Principles-based welfare state mandate under Articles 38, 39, and 43A by enabling deregulation through executive notification rather than legislative amendment, bypassing the parliamentary accountability that the constitutional scheme requires. The paper concludes that Section 2(p)(iv) delegates the declaration of legislative policy rather than its implementation, and proposes reforms including criteria-governed exclusions, time-bound notification powers subject to parliamentary approval, and mandatory statements of reasons.