DRDO, Atomic Energy and ISRO Are ‘Industry’ as per Supreme Court; Labour Codes Cannot Snatch Workers’ Rights: AIDEF

The All India Defence Employees Federation (AIDEF) has strongly objected to the exclusion of institutions under the Defence Research and Development Organisation (DRDO), Department of Atomic Energy and the Indian Space Research Organisation (ISRO) from the definition of “Industry” under the Industrial Relations (IR) Code, 2020, terming it a violation of long-settled Supreme Court judgments and an attempt to curtail established labour rights.

Despite sustained opposition from trade unions and opposition parties, the NDA government passed four Labour Codes, which were notified for implementation with effect from November 21, 2025. While their enforcement was initially kept on hold pending framing of rules, the government notified the draft rules on December 30, 2025, placing them in the public domain and inviting stakeholder feedback within 30 days.

Trade Unions Allege Dilution of Workers’ Protections

Trade unions have consistently argued that the repeal of 29 existing labour laws and their consolidation into four labour codes is aimed at diluting worker protections to benefit corporate employers. To counter this, unions have been organising seminars, conventions and awareness campaigns highlighting provisions they say are detrimental to workers’ interests.

One such contentious issue is the redefinition of “Industry” under the IR Code, 2020, which excludes departments of the Central Government engaged in Defence Research, Atomic Energy and Space. This exclusion effectively removes a large number of Central Government employees—who were hitherto recognised as “workmen” under the Industrial Disputes Act (ID Act), 1947—from the ambit of labour law protections.

AIDEF Cites Landmark Supreme Court Judgment

Reacting sharply, AIDEF, which represents Defence Civilian Employees in DRDO, has written to the Ministry of Labour, drawing attention to the landmark Bangalore Water Supply and Sewerage Board vs A. Rajappa judgment of the Supreme Court.

The judgment laid down a triple test to determine whether an organisation qualifies as an “Industry”:

• The organisation must carry out a systematic activity;

• The activity must be organised through cooperation between employer and employee;

• The activity must be directed towards production and/or distribution of goods or services to satisfy human wants and wishes (excluding purely spiritual or religious functions).

According to AIDEF, all DRDO laboratories fully satisfy this triple test and have therefore been treated as “Industry” under the ID Act, 1947 for decades. Consequently, workers in these establishments have enjoyed statutory rights such as formation of trade unions, constitution of works committees and access to labour courts.

AIDEF further maintains that accrued and vested rights cannot be taken away through subsequent legislative amendments, a principle repeatedly upheld by the Supreme Court. The federation has urged the Labour Ministry to instruct the Ministry of Defence to continue all existing labour protections and service-related rights for DRDO employees.

‘Sovereign Function’ Argument Misapplied: AIDEF

Speaking to www.indianpsu.com – C Srikumar, General Secretary, AIDEF, said the government has sought to justify the exclusion by categorising these institutions under “sovereign functions” of the State.

“Sovereign functions traditionally cover core state activities such as defence, war, law-making and justice. The term ‘defence’ is now being loosely extended to defence manufacturing and research units, which is legally untenable,” Srikumar said.

He pointed out that in DRDO, scientists and officers engaged in core research are already excluded from the definition of ‘workman’ under the ID Act, 1947. However, a large number of other employees perform roles that clearly fall under the definition of “workman” as per both the ID Act, 1947 and the Factories Act, 1948. The same applies to institutions under Atomic Energy and ISRO.

Opening Strategic Sectors to Private Players Weakens Sovereignty Argument

Srikumar further questioned the government’s sovereignty argument in light of increasing private sector participation in strategic sectors. “The government has opened DRDO, Atomic Energy and Space sectors to private participation. The recently enacted SHANTI Act has opened Atomic Energy to private players. Once private industry is involved, how can these activities be termed sovereign functions?” he asked.

While the government maintains that sovereignty will remain with the State despite private participation, AIDEF argues that employee rights to organise, represent service matters and seek legal remedies cannot be sacrificed under the guise of labour reforms.

AIDEF Vows to Resist Dilution of Rights

Reiterating AIDEF’s stand, Srikumar said: “The Government of India, as a model employer, cannot arbitrarily withdraw rights that employees have enjoyed for decades. AIDEF will fight against any injustice inflicted on Defence Civilian Employees of DRDO, Atomic Energy and ISRO.”