Comparison of Employee vs.

Worker in India’s New Labor

Codes
SUBMITTED BY:
SHIVAM GUPTA
ROLL NUMBER- 1882030
B.B.A. LL.B ‘A’
8 TH SEMESTER
 Introduction
 India’s new labor codes are by far the biggest change to our labor laws in Indian history.
Employers in India are quickly gearing up as the government prepares for the
implementation of the new labor codes in 2022.

 It is critical that the terms ‘employee’ and ‘worker’ as defined and used in the four new
labor codes - Code on Wages, 2019 (“Wages Code”), Code on Social Security, 2020 (“SS
Code”), Industrial Relations Code, 2020 (“IR Code”) and Occupational Safety, Health
and Working Conditions Code, 2020 (“OSH Code”), are well understood by employers
in respect of determining the application of provisions thereto to specific classes of
employed individuals.
Employee
 Employers must understand the terms "employee" and "worker" as defined and
used in the four new labour codes - Code on Wages, 2019 ("Wages Code"),
Code on Social Security, 2020 ("SS Code"), Industrial Relations Code, 2020
("IR Code"), and Occupational Safety, Health, and Working Conditions Code,
2020 ("OSH Code") - in order to determine the application of provisions to
specific classes of employed individuals.
 While the SS Code utilises the term "employee," the Wages Code, IR Code, and
OSH Code all use the phrases "employee" and "worker" in distinct
circumstances. The definitions of 'employee' in the four labour codes are
generally similar and fairly broad, encompassing people who are "employed on
wages by an 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."
Worker
 The IR Code, OSH Code, and Wages Code's gender-neutral definition of 'worker' is basically
comparable to the Industrial Disputes Act, 1947's definition of 'workman.' 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” with certain exceptions, and for the purposes of any proceeding under a labour code in
relation to an industrial dispute, the term ‘worker’ includes any person who has been dismissed,
discharged or retrenched in connection with, or as a consequence of such dispute, or whose
dismissal, discharge or retrenchment has led to such dispute.
 A worker, on the other hand, is defined as someone who works primarily in a managerial or
administrative capacity, or who works in a supervisory capacity and earns more than INR 15,000
(about US$ 200) each month. Under the IR Code and OSH Code, the INR 15,000 wage barrier
for exclusion of supervisors from the definition of 'worker' under the Wages Code has been raised
to INR 18,000 (about USD 240). For the purposes of applying the IR Code's trade union-related
rules, the definition of "worker" includes workers in the unorganised sector.
Recommendations of the Standing Committee and
Their Treatment
 The various parliamentary standing committee reports including recommendations on labour
codes such as the IR Code and the OSH Code have dealt with the variety of phrases used to refer
to different kinds of employed individuals to whom the codes' provisions apply.
 While the Indian Ministry of Labour and Employment ("MoLE") claims that the use of the terms
"employee" and "worker" in the labour codes is to maintain the limits of protection applicable
under the predecessor statutes to the labour codes, the Standing Committees for the labour codes
have consistently proposed uniform use of one term for employed individuals, thereby extending
labour law protections to employees beyond workers, especially in cases where employees are
not workers.
 The labour codes, as eventually notified by the Union administration, continue to use the terms
"employee" and "worker" separately.
Occupational Safety, Health, and Working
Conditions Code, 2019 (Bill)
 The Standing Committee on Occupational Safety, Health, and Working
Conditions Code thought it would be beneficial to apply the OSH Code's
protections to all employees, regardless of whether they were employees or
workers.
 While the MoLE stated in response to the OSH Code standing committee report
that the use of distinct terms "employee" and "worker" is to maintain consistency
with the provisions of the Factories Act, 1948 and their applicability, the OSH
Code also allows the federal government to prescribe health and safety
requirements for all employees (including workers) in establishments other than
factories.
2019 (Bill): Report of the Standing Committee
on the Industrial Relations Code
 The IR Code standing committee disagreed with the MoLE's rationale for
distinguishing between the terms employee and worker, stating:
 “As a matter of fact, every employee is a worker and vice-versa. Therefore, the
industrial dispute mechanism and other rights like forming of Trade Unions,
being office bearers of the Trade Unions, etc. should be made available to each
and every employee/ worker, notwithstanding the relevant provisions contained in
the Industrial Disputes Act, 1947 which was enacted as early as 1947.”
 Only those “empowered with exercise of administrative responsibilities like
granting service benefits to the workers, initiating disciplinary proceedings
against them etc.” should be excluded from the definition of worker, according to
the standing committee.
Differential Use of the Terms "Employee" and
"Worker" Implications
 The OSH Code makes a clear distinction between the terms "employee" and "worker." The OSH
Code contains requirements that apply to employees in all establishments, including working
hours, overtime compensation, and leave. Under state-specific shops and establishments statutes,
similar rules apply to commercial establishments. Only workers in commercial establishments
with at least 10 employees may be covered by OSH Code rules to the degree they are more
useful.
 The application of trade union-related rules under the IR Code to employees in unorganised
industries is a remarkable aspect of the IR Code in this context, with the concept of 'worker'
being stretched beyond the scope of the Trade Unions Act, 1923 ("TUA"). To that degree, under
the IR Code, a worker does not need to be employed in an organised trade or industry to benefit
from the protection and advantages provided by the IR Code, since TUA and unorganised sector
workers, such as self-employed workers, will also benefit.
Conclusion
 The most contentious component of Indian labour regulations is determining whether someone is
a worker. One of the key goals of the new labour regulations is to ensure that different labour
laws are in accordance with one another.
 In terms of knowing how the law is applied, this would significantly minimise litigation.
Unfortunately, labour rules, which are increasingly using the gender-neutral term 'worker' rather
than 'workman,' do not adequately resolve this uncertainty.
 It needs to be observed if the gaps in rights between the 'worker' and 'employee' classes of
employed individuals are bridged using legislative mechanisms or viewed as intended legislative
discretions pending notice of the labour laws' effective dates. Once the new labour regulations go
into effect, employers will need to stay on top of things.
THANK YOU