'Workman' Under the Code: Worker, Employee and Employer

Some words this chapter uses

Hire or reward means payment, in whatever form. It excludes a volunteer.

Express or implied terms means it does not matter whether there is a written contract. A person taken on without any document may still be a worker.

Supervisory capacity means work whose substance is overseeing the work of others, as distinct from doing the work oneself.

Managerial or administrative capacity means work whose substance is running the business or a part of it: hiring, dismissing, sanctioning, deciding.

Apprentice, for this definition, means an apprentice as defined under clause (aa) of section 2 of the Apprentices Act 1961.

Independent contractor is a person who agrees to produce a result but is not subject to the employer's control as to the manner of doing the work. He is not a worker.

Fixed term employment, section 2(o), is engagement on a written contract for a fixed period, with the three protections the definition itself attaches.

Section 2(zr): the definition of 'worker'

The positive part

A worker is any person 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.

Notice that supervisory work is in the list. A supervisor is a worker, and is taken out again only by the wage ceiling in exclusion (iv). That is a two-stage structure and students collapse it.

Who is expressly included

• working journalists, as defined in section 2(f) of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955;
• sales promotion employees, as defined in section 2(d) of the Sales Promotion Employees (Conditions of Service) Act 1976;
• for the purposes of any proceeding under the Code in relation to an industrial dispute, any 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.

That third inclusion is indispensable and it is worth pausing on. Without it, an employer could defeat every dismissal case by a circular argument: you are no longer employed, so you are not a worker, so you cannot raise an industrial dispute about the dismissal that ended your employment. The inclusion cuts that off. It is also why the second limb of section 2(q), the individual dispute, works at all.

Who is excluded

• (i) a person subject to the Air Force Act 1950, the Army Act 1950, or the Navy Act 1957;
• (ii) a person employed in the police service or as an officer or other employee of a prison;
• (iii) a person employed mainly in a managerial or administrative capacity;
• (iv) a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees per month, or such amount as the Central Government may notify from time to time.

Exclusion (iii) turns on the word "mainly". A person who does some administrative work among other things is not excluded; the question is what the substance of his employment is.

Exclusion (iv) is the one with a number in it, so it is the one that gets asked. Two conditions must both be satisfied: the capacity must be supervisory, and the wages must exceed eighteen thousand rupees a month. A supervisor paid less is a worker. A person doing manual or clerical work is a worker however much he is paid, because exclusion (iv) applies only to supervisory capacity.

And the figure moves. The Central Government may notify a different amount from time to time, so a student should quote eighteen thousand as the figure in the section and add that it is subject to notification.

The proviso: a different meaning for Chapter III

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.

This proviso is easy to miss and it changes Module I. Chapter III is the Trade Unions chapter. For that chapter only, "worker" is not the narrow definition above: it means all persons employed in trade or industry, and it takes in unorganised workers as defined by the 2008 Act.

Two consequences follow, and both are worth stating in an answer. The membership arithmetic in section 6, ten per cent. of the workers or one hundred whichever is less, is calculated on that wider class. And a person excluded from the narrow definition, for example a well-paid supervisor, may nonetheless be a member of a registered Trade Union.

Section 2(l): 'employee', and why it is wider

"employee" means any person (other than an apprentice engaged under the Apprentices Act, 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.

Read the two lists side by side and the difference jumps out.

So every worker is an employee, but not every employee is a worker. The Code uses "employee" where it wants the whole workforce, for instance in the definition of "employer" in section 2(m), and "worker" where it is conferring the protections that exist to correct unequal bargaining power.

Do not memorise this as "employee is the wider word" and stop there. The exclusions differ too: police and prison staff are outside "worker" but are not excluded from "employee".

Section 2(m): 'employer'

An employer is 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. Where the establishment is carried on by a department of the Central or State Government, it is the authority specified by the head of the department, or where none is specified, the head of the department; and in relation to an establishment carried on by a local authority, the chief executive of that authority. It includes:

• (i) in relation to a factory, the occupier as defined in the Factories Act 1948, and where a person has been named as manager under that Act, the person so named;
• (ii) in relation to any other establishment, the person or authority which has ultimate control over the affairs of the establishment, and where those affairs are entrusted to a manager or managing director, that manager or managing director;
• (iii) a contractor; and
• (iv) the legal representative of a deceased employer.

Two of those four repay attention. Clause (iii) makes a contractor an employer in his own right, which matters wherever labour is supplied through an intermediary. Clause (iv) means the death of the employer does not extinguish the obligations; his legal representative stands in his place.

Section 2(o): fixed term employment

Fixed term employment is the engagement of a worker on the basis of a written contract of employment for a fixed period. The definition carries three protections in its own proviso, and they are what make it examinable:

• (a) his hours of work, wages, allowances and other benefits shall not be less than those of a permanent worker doing the same work or work of a similar nature;
• (b) he shall be eligible for all statutory benefits available to a permanent worker proportionately according to the period of service rendered, even if his period of employment does not extend to the qualifying period;
• (c) he shall be eligible for gratuity if he renders service under the contract for a period of one year.

Clause (c) is a real change and the number is the point: one year, not five. A fixed term worker qualifies for gratuity after a single year of service under the contract.

The case that answers "is he employed at all?"

Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264, (1957) SCR 152.

Facts. The appellants held a licence to manufacture salt on leased land. The salt was made by professional labourers called agarias from rain water mixed with saline matter in the soil. The work was seasonal, running from October after the rains until June, after which the agarias returned to their villages to cultivate. The land was divided into plots called pattas, allotted to the agarias with four hundred rupees each to meet initial expenses, and generally the same patta went to the same agaria every year. They were paid by the maund, and accounts were settled at the end of each season. They worked with their families and were free to engage extra labour on their own account, with which the appellants had no concern. No hours of work were prescribed, no muster rolls were maintained, working hours were not controlled, there were no rules about leave or holidays, and the agarias were free to leave the factory after making arrangements for the manufacture of salt. The question was whether such persons were workmen under section 2(s) or independent contractors.

Held. They were workmen, and the reference was competent. The real test is whether the person has been employed by the employer and whether a relationship of employer and employee, or master and servant, subsists between them. The prima facie test of that relationship is the existence of a right in the employer not merely to direct what work is to be done but also to control the manner in which it is to be done, the nature or extent of such control varying in different industries and being by its nature incapable of being precisely defined. The correct approach is therefore to consider whether, having regard to the nature of the work, there was due control and supervision by the employer. And whether the relation is one of employer and employee is a pure question of fact; a finding of the Tribunal on it is not open to question under Article 226 unless shown to be wholly unwarranted by the evidence.

Why it matters. It is the foundation of every question that asks whether a particular person is a worker. It gives the control test, it makes the test flexible rather than mechanical, and it answers the employer's standard argument that a piece-rate worker who sets his own hours must be an independent contractor. The facts are the strongest part of it: almost every indicator of independence was present, and the workers still won.

How to cite it now. Decided under section 2(s) of the Industrial Disputes Act 1947, repealed on 21 November 2025. Section 2(zr) of the Code still defines a worker as a person EMPLOYED in an industry, so whether a person is employed at all remains the threshold question and is still answered by the control test. What the Code has changed is the exclusions, not the test.

A worked example

The facts. A packaging plant in Wada. Consider seven people.

(a) Meera, a machine operator on the shop floor, paid twelve thousand a month. A worker. Operational and manual work for hire or reward, and no exclusion applies.

(b) Rakesh, a clerk in the stores, paid twenty-six thousand a month. A worker. Exclusion (iv) applies only to a person employed in a supervisory capacity. Clerical work is in the positive list and carries no wage ceiling at all.

(c) Sunita, a shift supervisor, paid sixteen thousand a month. A worker. Supervisory work is in the positive list, and the ceiling in exclusion (iv) is not crossed.

(d) Faisal, a shift supervisor, paid twenty-two thousand a month. Not a worker. Both conditions of exclusion (iv) are satisfied: supervisory capacity and wages exceeding eighteen thousand a month. He is, however, an employee under section 2(l), which has no ceiling.

(e) Anjali, the plant's Human Resources head, who hires, disciplines and dismisses. Not a worker: exclusion (iii), employed mainly in a managerial or administrative capacity. She is an employee under section 2(l), which expressly includes managerial and administrative work.

(f) A crew of loaders engaged through a labour contractor, paid by the tonne, who set their own pace and bring their own helpers. Start with Dharangadhara. The question is not how they are paid or whether their hours are fixed but whether, having regard to the nature of the work, there is due control and supervision, including a right to control the manner of doing it. In Dharangadhara the agarias had far more independence than this and were still workmen. If they are employed, they are workers, because section 2(zr) covers a person employed in an industry whether directly or otherwise, and section 2(p) expressly contemplates workers engaged through a contractor. And the contractor himself is an employer, by section 2(m)(iii).

(g) An apprentice engaged under the Apprentices Act 1961. Not a worker, and not an employee either; both definitions exclude an apprentice.

Now the question that ties it to Module I. Faisal, the supervisor paid twenty-two thousand, wants to join the plant's registered Trade Union, and the employer says he cannot because he is not a worker. He is wrong. The proviso to section 2(zr) provides that for the purposes of Chapter III, the Trade Unions chapter, "worker" means all persons employed in trade or industry. Faisal is employed in an industry, so for union purposes he is a worker, may be a member, and counts towards the section 6 membership arithmetic.

What this does NOT mean

It does not mean the Code uses the word "workman". It does not use it at all. Answer MU's question in the Code's vocabulary, and say why the word changed.

It does not mean a supervisor is excluded. Supervisory work is in the positive list. A supervisor is excluded only if his wages exceed eighteen thousand rupees a month, or the notified amount.

It does not mean a highly paid person is excluded. The ceiling applies to supervisory capacity alone. A clerk or a technician on a large salary is still a worker.

It does not mean "employee" is just another word for "worker". Employee is wider on the kind of work, including managerial and administrative, and narrower on nothing except that it too excludes the armed forces and apprentices; and it does not exclude police or prison staff.

It does not mean a dismissed person stops being a worker. For proceedings in relation to an industrial dispute the definition expressly includes a person dismissed, discharged, retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal led to it.

It does not mean the control test asks whether the employer actually supervised. It asks whether he had the right to control the manner of the work, and Dharangadhara says the extent of that control varies with the industry and cannot be precisely defined.

Limits, criticism and amendments

The wage ceiling is the most criticised feature. Eighteen thousand rupees a month is a modest salary, and a supervisor just above it loses retrenchment compensation, the lay-off provisions and access to the Tribunal in a single step. The Code softens this only by leaving the figure to notification, so it can be raised without an amendment; it has correspondingly not been indexed to anything.

Two definitions doing similar work invite confusion, and the Code compounds it by using both. A student's safest course is to check which word the section in front of him uses.

The exclusion of police and prison staff from "worker" is defensible on the same ground as the sovereign-functions exclusion in section 2(p), but it is worth noticing that they are not excluded from "employee".

And the control test is old. It was framed for salt pans and factories, and it fits awkwardly over platform work and other modern arrangements where the "control" is exercised by an application rather than a foreman. Dharangadhara's own answer, that the nature and extent of control vary with the industry and cannot be precisely defined, is the sentence that keeps the test usable.

Quick revision

• The Code has no "workman". It has worker, section 2(zr), and employee, section 2(l).
• Worker: any person, except an apprentice, employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, terms express or implied.
• Includes: working journalists; sales promotion employees; and, for a proceeding in relation to an industrial dispute, a person dismissed, discharged, retrenched or otherwise terminated in connection with or as a consequence of that dispute, or whose dismissal led to it.
• Excludes: armed forces; police and prison staff; a person employed mainly in a managerial or administrative capacity; a person in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month or the notified amount.
• Proviso: for Chapter III only, worker means all persons employed in trade or industry, and includes an unorganised worker under the 2008 Act.
• Employee, section 2(l), is wider on the work: it includes managerial and administrative, adds semi-skilled, has no wage ceiling, and does not exclude police or prison staff; it excludes apprentices and the armed forces.
• Employer, section 2(m): employs directly or through any person; for a factory the occupier or the named manager; otherwise the person with ultimate control; and includes a contractor and the legal representative of a deceased employer.
• Fixed term employment, section 2(o): written contract for a fixed period; hours, wages, allowances and benefits not less than a permanent worker doing the same or similar work; statutory benefits proportionately; gratuity after one year.
• Dharangadhara, AIR 1957 SC 264: the test is master and servant; prima facie, a right not merely to direct what work is done but to control the manner of doing it; the extent of control varies by industry and cannot be precisely defined; it is a pure question of fact. The agarias were workmen despite piece rates, no fixed hours, no muster rolls and freedom to hire their own helpers.

Test yourself

1. Define "worker" under the Code and list the exclusions. Section 2(zr) defines a worker as any person, except an apprentice as defined under the Apprentices Act 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. The exclusions are a person subject to the Air Force Act 1950, the Army Act 1950 or the Navy Act 1957; a person employed in the police service or as an officer or other employee of a prison; a person employed mainly in a managerial or administrative capacity; and a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month or such amount as the Central Government notifies.

2. Distinguish "worker" from "employee". "Employee" in section 2(l) is the wider expression so far as the kind of work goes: it covers skilled, semi-skilled and unskilled, manual, operational, supervisory, managerial, administrative, technical and clerical work, with no wage ceiling, and it includes a person declared to be an employee by the appropriate Government. "Worker" in section 2(zr) excludes managerial and administrative work altogether and excludes a supervisor paid above the ceiling. Both exclude apprentices and the armed forces, but only "worker" excludes police and prison staff. Every worker is an employee; not every employee is a worker.

3. A supervisor is paid twenty thousand rupees a month. Is he a worker? Would your answer differ if he were a clerk on the same pay? He is not a worker: exclusion (iv) in section 2(zr) requires both that the capacity be supervisory and that the wages exceed eighteen thousand rupees a month, and both are satisfied. A clerk on the same pay would be a worker, because the ceiling applies only to a person employed in a supervisory capacity, and clerical work carries no wage limit.

4. State the test for deciding whether a person is employed at all, with authority. On Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264, the real test is whether the person has been employed and whether a relationship of employer and employee, or master and servant, subsists. The prima facie test of that relationship is the existence of a right in the employer not merely to direct what work is to be done but also to control the manner in which it is to be done, the nature or extent of that control varying in different industries and being incapable of precise definition. The correct approach is to consider whether, having regard to the nature of the work, there was due control and supervision by the employer. Whether the relation exists is a pure question of fact, and a Tribunal's finding on it is not open to challenge under Article 226 unless wholly unwarranted by the evidence. On those principles the agarias, who were paid by the maund, kept no fixed hours, appeared on no muster roll and could hire their own helpers, were held to be workmen.

5. What is the effect of the proviso to section 2(zr)? For the purposes of Chapter III, the Trade Unions chapter, "worker" means all persons employed in trade or industry and includes a worker as defined in section 2(m) of the Unorganised Workers' Social Security Act 2008. So the narrow exclusions do not apply to union membership: a person employed mainly in a managerial capacity, or a supervisor above the wage ceiling, may be a member of a registered Trade Union, and the membership arithmetic in section 6 is calculated on that wider class.

6. What protections attach to fixed term employment? Section 2(o) defines it as the engagement of a worker on a written contract of employment for a fixed period, and its proviso attaches three protections: his hours of work, wages, allowances and other benefits shall not be less than those of a permanent worker doing the same work or work of a similar nature; he shall be eligible for all statutory benefits available to a permanent worker proportionately according to the period of service rendered, even if his period of employment does not extend to the qualifying period; and he shall be eligible for gratuity if he renders service under the contract for a period of one year.