In this Code, unless the context otherwise requires,—
(a) "appellate authority" means an authority appointed by the appropriate Government to exercise such functions in such area as may be specified by that Government by notification in the Official Gazette;
(b) "appropriate Government" means,- (i) in relation to any industrial establishment or undertaking carried on by or under the authority of the Central Government or concerning any such controlled industry as may be specified in this behalf by the Central Government or the establishment of railways including metro railways, mines, oil fields, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or a central public sector undertaking, subsidiary companies set up by the principal undertakings or autonomous bodies owned or controlled by the Central Government including establishments of the contractors for the purposes of such establishment, corporation, other authority, public sector undertakings or any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, as the case may be, the Central Government.
Explanation. - For the purposes of this clause, the Central Government shall continue to be the appropriate Government for central public sector undertakings even if the holding of the Central Government reduces to less than fifty per cent. equity in that public sector undertaking after the commencement of this Code; (ii) in relation to any other industrial establishment, including State public sector undertakings, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government: Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment;
(c) "arbitrator" includes an umpire;
(d) "average pay" means the average of the wages payable to a worker,- (i) in the case of monthly paid worker, in three complete calendar months; (ii) in the case of weekly paid worker, in four complete weeks; (iii) in the case of daily paid worker, in twelve full working days, preceding the date on which the average pay becomes payable, if the worker had worked for three complete calendar months or four complete weeks or twelve full working days, as the case may be, and where such calculation cannot be made, the average pay shall be calculated as the average of the wages payable to a worker during the period he actually worked;
(e) "award" means an interim or a final determination of any industrial dispute or of any question relating thereto by any Industrial Tribunal referred to in section 44 or National Industrial Tribunal referred to in section 46 and includes an arbitration award made under section 42;
(f) "banking company" means a banking company as defined in section 5 of the Banking Regulation Act, 1949 ( 10 of 1949 ) and includes the Export-Import Bank of India, the Industrial Reconstruction Bank of India, the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989 ( 39 of 1989 ), the Reserve Bank of India, the State Bank of India, a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 ( 5 of 1970 ), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 ( 40 of 1980 );
(g) "certifying officer" means any officer appointed by the appropriate Government, by notification, to perform the functions of a certifying officer under the provisions of Chapter IV;
(h) "closure" means the permanent closing down of a place of employment or part thereof;
(i) "conciliation officer" means a conciliation officer appointed under section 43;
(j) "conciliation proceeding" means any proceeding held by a conciliation officer under this Code;
(k) "controlled industry" means any industry the control of which by the Union has been declared by any Central Act to be expedient in the public interest;
(l) "employee" means any person (other than an apprentice engaged under the Apprentices Act, 1961) (52 of 1961) employed by an industrial establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union;
(m) "employer" means a person who employs, whether directly or through any person, or on his behalf or on behalf of any person, one or more employee or worker in his establishment and where the establishment is carried on by any department of the Central Government or the State Government, the authority specified by the head of the department in this behalf or where no authority is so specified, the head of the department, and in relation to an establishment carried on by a local authority, the chief executive of that authority, and includes,- (i) in relation to an establishment which is a factory, the occupier of the factory as defined in clause (n) of section 2 of the Factories Act, 1948 ( 63 of 1948 ) and, where a person has been named as a manager of the factory under clause (f) of sub-section (1) of section 7 of the said Act, the person so named; (ii) in relation to any other establishment, the person who, or the authority which has ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager or managing director, such manager or managing director; (iii) contractor; and (iv) legal representative of a deceased employer;
(n) "executive" , in relation to a Trade Union, means the body by whatever name called, to which the management of the affairs of a Trade Union is entrusted;
(o) "fixed term employment" means the engagement of a worker on the basis of a written contract of employment for a fixed period: Provided that- (a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent worker doing the same work or work of similar nature; (b) he shall be eligible for all statutory benefits available to a permanent worker proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute; and (c) he shall be eligible for gratuity if he renders service under the contract for a period of one year;
(p) "industry" means any systematic activity carried on by co-operation between an employer and worker (whether such worker is employed by such employer directly or by 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,- (i) any capital has been invested for the purpose of carrying on such activity; or (i) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service; or (ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or (iii) any domestic service; or (iv) any other activity as may be notified by the Central Government; (ii) such activity is carried on with a motive to make any gain or profit, but does not include-
(q) "industrial dispute" means any dispute or difference between employers and employers or between employers and workers or between workers and workers which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person and includes any dispute or difference between an individual worker and an employer connected with, or arising out of discharge, dismissal, retrenchment or termination of such worker;
(r) "industrial establishment or undertaking" means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then,- (i) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking which is not carrying on or aiding the carrying on of any such activity, such unit shall be deemed to be a separate industrial establishment or undertaking; (ii) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking;
(s) "insurance company" means a company as defined in section 2 of the Insurance Act, 1938 ( 4 of 1938 );
(t) "lay-off" (with its grammatical variations and cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other connected reason, to give employment to a worker whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.
Explanation. - Every worker whose name is borne on the muster rolls of the industrial establishment and who presents himself for work at the establishment at the time appointed for the purpose during normal working hours on any day and is not given employment by the employer within two hours of his so presenting himself shall be deemed to have been laid-off for that day within the meaning of this clause: Provided that if the worker, instead of being given employment at the commencement of any shift for any day is asked to present himself for the purpose during the second half of the shift for the day and is given employment then, he shall be deemed to have been laid-off only for one-half of that day:
Provided further that if he is not given any such employment even after so presenting himself, he shall not be deemed to have been laid-off for the second half of the shift for the day and shall be entitled to full basic wages and dearness allowance for that part of the day;
(u) "lock-out" means the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him;
(v) "major port" means a major port as defined in clause (8) of section 3 of the Indian Ports Act, 1908 ( 15 of 1908 );
(w) "metro railway" means the metro railway as defined in sub-clause (i) of clause (1) of section 2 of the Metro Railways (Operation and Maintenance) Act, 2002 ( 60 of 2002 );
(x) "mine" means a mine as defined in clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 ( 35 of 1952 );
(y) "National Industrial Tribunal" means a National Industrial Tribunal constituted under section 46;
(z) "negotiating union or negotiating council" means the negotiating union or negotiating council referred to in section 14;
(za) "notification" means a notification published in the Official Gazette of India or the Official Gazette of a State, as the case may be, and the expression "notify" with its grammatical variation and cognate expressions shall be construed accordingly;
(zb) "office-bearer" , in relation to a Trade Union, includes any member of the executive thereof, but does not include an auditor;
(zc) "prescribed" means prescribed by rules made under this Code;
(zd) "railway" means the railway as defined in clause (31) of section 2 of the Railways Act, 1989 ( 24 of 1989 );
(ze) "registered office" means that office of a Trade Union which is registered under this Code as the head office thereof;
(zf) "registered Trade Union" means a Trade Union registered under this Code;
(zg) "Registrar" means a Registrar of Trade Unions appointed by the State Government under section 5;
(zh) "retrenchment" means the termination by the employer of the service of a worker for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (i) voluntary retirement of the worker; or (ii) retirement of the worker on reaching the age of superannuation; or (iii) termination of the service of the worker as a result of the non-renewal of the contract of employment between the employer and the worker concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (iv) termination of service of the worker as a result of completion of tenure of fixed term employment; or (v) termination of the service of a worker on the ground of continued ill-health;
(zi) "settlement" means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and worker arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and to the conciliation officer;
(zj) "standing orders" means orders relating to matters set-out in the First Schedule;
(zk) "strike" means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal, under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment and includes the concerted casual leave on a given day by fifty per cent. or more workers employed in an industry;
(zl) "Trade Union" means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers or between workers and workers, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions: Provided that the provisions of Chapter III of this Code shall not affect - (i) any agreement between partners as to their own business; or (ii) any agreement between an employer and those employed by him as to such employment; or (iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft;
(zm) "Trade Union dispute" means any dispute relating to Trade Union arising between two or more Trade Unions or between the members of a Trade Union inter se;
(zn) "Tribunal" means an Industrial Tribunal constituted under section 44;
(zo) "unfair labour practice" means any of the practices specified in the Second Schedule;
(zp) "unorganised sector" shall have the same meaning as assigned to it in clause (l) of section 2 of the Unorganised Workers' Social Security Act, 2008 ( 33 of 2008 );
(zq) "wages" means all remuneration, whether by way of salary, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes, - (i) basic pay; (ii) dearness allowance; (iii) retaining allowance, if any, but does not include- (a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment; (b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government; (c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon; (d) any conveyance allowance or the value of any travelling concession; (e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; (f) house rent allowance; (g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal; (h) any overtime allowance; (i) any commission payable to the employee; (j) any gratuity payable on the termination of employment; or (k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment: Provided that, for calculating the wage under this clause, if any payments made by the employer to the employee under sub-clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the Central Government, of all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed to be remuneration and shall be accordingly added in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages the emoluments specified in sub-clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Explanation. - Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen per cent. of the total wages payable to him, shall be deemed to form part of the wages of such employee;
(zr) "worker" means any person (except an apprentice as defined under clause (aa) of section 2 of the Apprentices Act, 1961) (52 of 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and includes working journalists as defined in clause (f) of section 2 of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 ( 45 of 1955 ) and sales promotion employees as defined in clause (d) of section 2 of the Sales Promotion Employees (Conditions of Service) Act, 1976 ( 11 of 1976 ), and for the purposes of any proceeding under this Code in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person- (i) who is subject to the Air Force Act, 1950 ( 45 of 1950 ), or the Army Act, 1950 ( 46 of 1950 ), or the Navy Act, 1957 ( 62 of 1957 ); or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who is employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees per month or an amount as may be notified by the Central Government from time to time: Provided that for the purposes of Chapter III, "worker"- (a) means all persons employed in trade or industry; and (b) includes the worker as defined in clause (m) of section 2 of the Unorganised Workers' Social Security Act, 2008 ( 33 of 2008 ).
Legal Commentary & Landmark Judgments: Section 2
Section 2 of the Industrial Relations Code, 2020 constitutes the master statutory interpretation clause, defining crucial terms including 'industry' [clause (p)], 'industrial dispute' [clause (q)], 'worker' [clause (zr)], 'employer' [clause (m)], 'strike' [clause (zk)], 'retrenchment' [clause (zh)], 'lay-off' [clause (t)], 'lock-out' [clause (u)], 'unfair labour practice' [clause (zs)], 'fixed term employment' [clause (o)], and 'employee' [clause (l)], thereby determining the jurisdictional boundaries of labor courts, conciliation authorities, and industrial tribunals.
In industrial tribunal litigation and drafting employment contracts, employers must clearly delineate job descriptions. For supervisory personnel, wage structures must reflect whether monthly remuneration exceeds the Rs. 18,000 threshold to assert managerial exemption. To prevent wrongful retrenchment claims under Section 70, employers engaging fixed term personnel must strictly execute written contracts under Section 2(o) with defined tenures, ensuring service termination upon expiry invokes Section 2(zh)(c) rather than retrenchment compensation liabilities.