You are a worker under the Industrial Relations Code, 2020 if you are employed in an industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, and you do not fall into one of the exclusions in Section 2(zr). The three exclusions that matter to office employees are these: a person employed mainly in a managerial or administrative capacity is not a worker, a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month is not a worker, and members of the armed forces, the police service and prison staff are not workers.
Part of the employment and labour law practice at S Jain & Attorneys, Bangalore.
This single question decides which door you walk through after a termination. A worker gets conciliation, an Industrial Tribunal, retrenchment compensation and the possibility of reinstatement with back wages. A person who is not a worker gets a civil suit for damages, or in Karnataka the appeal under Section 39 of the Karnataka Shops and Commercial Establishments Act, 1961, which is a considerably narrower remedy. The Industrial Relations Code came into force on 21 November 2025 and repealed the Industrial Disputes Act, 1947 under Section 104, so the old word "workman" is gone and the analysis now runs on the Code.
Why the label decides your remedy, not your salary
Clients arrive assuming that a large salary puts them outside labour law and a small salary puts them inside it. That is not how the Code is drafted. Salary appears in Section 2(zr) only once, in the supervisory exclusion. A senior technical architect on thirty lakhs a year who writes code and manages nobody can be a worker. A team lead on nine lakhs who approves leave, allocates work and writes appraisals may not be. The Code cares about the nature of the work, not its price.
Getting this wrong is expensive. If you file as a worker and the Tribunal holds after three years that you were never one, the award goes against you on jurisdiction and the limitation period for a civil suit has usually run out. The status question has to be answered honestly at the start, on the documents, before anything is filed.
What Section 2(zr) actually says
The definition has three limbs. The first is inclusive: any person, other than an apprentice 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 are express or implied. The word "operational" is one of the additions the 2020 Code made, and it widens the net for people whose work is neither classically clerical nor classically technical.
The second limb adds two categories by force of statute: working journalists under the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955, and sales promotion employees under the Sales Promotion Employees (Conditions of Service) Act, 1976. It also brings in, for a proceeding relating to an industrial dispute, any person dismissed, discharged, retrenched or otherwise terminated in connection with that dispute. Without that clause a terminated employee could be told he is no longer employed and therefore no longer a worker, which would make the machinery useless.
The third limb is the exclusion list. A person is not a worker if he is subject to the Air Force Act, 1950, the Army Act, 1950 or the Navy Act, 1957; if he is employed in the police service or as an officer or other employee of a prison; if he is employed mainly in a managerial or administrative capacity; or if he is employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees per month or an amount notified by the Central Government from time to time.
The three exclusions that do the work
The armed forces, police and prison exclusions are mechanical and rarely argued. Almost every contested status case in a Bengaluru office turns on the other two, and they are separate tests with different structures.
The managerial or administrative exclusion has no salary component at all. If you are employed mainly in a managerial or administrative capacity you are outside the Code whether you earn twelve thousand rupees or twelve lakhs. The supervisory exclusion is different: supervisory work is expressly included in the opening limb, so a supervisor is a worker unless his wages cross the threshold. A shift supervisor on sixteen thousand rupees is a worker; the same supervisor after a raise to twenty thousand is not.
| Exclusion | Salary relevant? | What decides it | Typical Bengaluru example |
|---|---|---|---|
| Mainly managerial capacity | No | Power to hire, dismiss, sanction leave, bind the employer, control a budget | Delivery manager who signs off appraisals and approves headcount |
| Mainly administrative capacity | No | Running the administration of a unit as opposed to executing tasks within it | Office administrator running facilities, vendor contracts and payroll inputs |
| Supervisory capacity above the wage line | Yes | Whether wages exceed the figure in Section 2(zr) of the IR Code | Production or process supervisor whose monthly wages cross the threshold |
| Armed forces, police, prison | No | Statutory service, decided by the governing Act | Not applicable to private employment |
The dominant nature of duties test
The courts do not add up your duties and see which list is longer. They ask what the primary, basic or dominant nature of the employment was. In Arkal Govind Raj Rao v. Ciba Geigy of India Ltd., decided on 6 May 1985 and reported at AIR 1985 SC 985 and (1985) 3 SCC 371, the Supreme Court held that where an employee performs multifarious duties, the tribunal must ascertain the primary, basic or dominant nature of the duties, and incidental supervisory or administrative tasks do not convert a clerical employee into a manager. The employee there had joined as a stenographer cum accountant, was later designated an Assistant, and was held to remain a workman.
The other end of the spectrum is Burmah Shell Oil Storage and Distribution Co. of India Ltd. v. Burmah Shell Management Staff Association, decided on 12 November 1970 and reported at AIR 1971 SC 922 and (1970) 3 SCC 378. The Court there worked through ten categories of junior management staff one by one and reclassified six of them as non-workmen, holding that the classification turns on the main work a person is employed to do and not on incidental duties. That judgment is the reason a status dispute is fought category by category and role by role, not company by company.
H.R. Adyanthaya v. Sandoz (India) Ltd., decided on 11 August 1994 and reported at AIR 1994 SC 2608 and (1994) 5 SCC 737, held that medical representatives whose main work was canvassing sales were not workmen under the definition then in force. That case no longer bites the same way, because sales promotion employees are now written into Section 2(zr) by name.
What the employer will produce, and what you should produce
Status is proved on documents first and oral evidence second. The employer will bring the appointment letter, the organisation chart, the delegation of authority matrix, appraisal forms signed by you as a reviewer, and any email in which you sanctioned leave or recommended a termination. Those documents do not settle the question, but they set the starting point.
What answers them is evidence of what you actually did. Timesheets and ticketing records showing execution work. Emails in which you sought approval rather than gave it. Proof that you had no power to hire, dismiss or vary anybody's terms. A signature on an appraisal form is weaker than it looks if the form shows the rating was set by somebody above you.
Bengaluru IT and startup employees: where you actually land
Many individual contributors in IT and product companies satisfy the opening limb of Section 2(zr), because writing, testing, operating and supporting software is technical and operational work for hire or reward. Employers dispute it, and the dispute is genuine rather than frivolous, but the assumption that no software engineer can ever be a worker does not survive a reading of the definition.
Two structural points make the practical position different from a factory, though. First, Chapter X of the Code, which is the successor to the old Chapter V-B and requires prior government permission before retrenchment or lay off, applies only where Section 77 is satisfied, and Section 77(3) defines industrial establishment for that Chapter as a factory, a mine or a plantation. An IT office is none of those, so the permission requirement does not reach it however many people it employs. Second, the standing orders chapter is drafted differently: Section 28 applies to every industrial establishment with three hundred or more workers, without the factory, mine or plantation restriction, and Section 29 makes the Central Government's model standing orders apply until certified orders come into operation.
The provisions that do reach an ordinary Bengaluru office employee who is a worker are Sections 70 to 72. Section 70 says no worker with not less than one year of continuous service may be retrenched until he has been given one month's written notice stating the reasons, or wages in lieu, has been paid compensation equal to fifteen days' average pay for every completed year of continuous service or part in excess of six months, and notice has been served on the appropriate Government. Section 71 requires the employer, absent agreement, ordinarily to retrench the last person employed in that category unless reasons are recorded. Section 72 gives retrenched workers a preference if the employer hires again within a year.
The two remedy tracks, side by side
| Question | If you are a worker | If you are not a worker |
|---|---|---|
| Where you go | Conciliation officer, then the Industrial Tribunal under the IR Code | Appellate authority under Section 39 of the Karnataka Shops and Commercial Establishments Act, 1961, or a civil suit |
| Time limit to start | Conciliation is barred more than two years after the dispute arose, under the proviso to Section 53(1) | Governed by the Karnataka Act and its rules for the appeal, or the Limitation Act for a suit |
| Reinstatement possible? | Yes, the Tribunal can order reinstatement with back wages | Section 39(3) contemplates compensation where the employer does not agree to reinstate |
| Money on termination | Notice pay plus fifteen days' average pay per completed year under Section 70, plus the re-skilling credit under Section 83 | Compensation capped by Section 39(3) at one month's pay for every year of service |
| Unfair practices | Section 84 prohibits the unfair labour practices in the Second Schedule | No equivalent statutory list |
| Further challenge | Writ petition in the High Court against the award | Revision to the District Judge under Section 39(4) |
The two year clock, which is the change people miss
The proviso to Section 53(1) of the Code says that the conciliation officer shall not hold conciliation proceedings relating to an industrial dispute after two years from the date on which the dispute arose. Under the repealed Industrial Disputes Act the equivalent window for an individual dispute was three years. A year of protection disappeared quietly, and it disappeared for people who spend the first six months negotiating with HR and the next six hoping the company will call.
Section 53 also sets an internal timetable: the conciliation officer must send his report to the parties and the appropriate Government within forty-five days of the commencement of the proceedings, or within a shorter period fixed by the appropriate Government. Where conciliation fails, the application to the Tribunal has to be made within ninety days of the failure report. That ninety day window is the most common way a good case dies.
If you are not a worker: Section 39 of the Karnataka Shops Act
The Karnataka Shops and Commercial Establishments Act, 1961 does not appear in any of the four repeal lists, so Section 39 survives the codes intact. For most Bengaluru white collar terminations it is the practical remedy, and it does not depend on being a worker at all.
Section 39(1) says that no employer shall remove or dismiss an employee who has put in not less than six months of continuous service except for a reasonable cause, and unless one month's previous notice or pay in lieu has been given. The proviso removes the notice requirement where misconduct is brought on record with proof at an enquiry held for the purpose, which is why the quality of the domestic enquiry is usually the whole fight. Section 39(2) gives a right of appeal to the prescribed officer on the ground that there was no reasonable cause or that the employee was not guilty of the misconduct held against him. Section 39(3) provides compensation, capped at one month's pay for every year of service, where the employer does not agree to reinstate, and Section 39(4) allows a revision to the District Judge. Section 39(6) bars a civil suit on the same claim once compensation has been awarded, and Section 39(7) preserves any longer notice or better terms available under another law, an award, an agreement or the contract of service.
We have set out the wider set of options, including the writ remedy and the interaction with a contractual notice period, in our guide on wrongful termination and employee rights in India, and the drafting side of it in employment agreements in India.
Designation, the appointment letter, and what they cannot do
An employer cannot contract you out of the Code. A clause saying "the employee acknowledges that he is employed in a managerial capacity and is not a worker" is evidence of what the parties said, and nothing more. If the duties were clerical or technical in substance, the clause fails.
Designations have become almost useless as evidence in the Bengaluru market, because title inflation is universal. "Associate Vice President" in a forty person startup may mean an individual contributor with no reports. Tribunals know this, which is why the enquiry moves quickly from the title to the actual work.
How to build the record before you need it
- Keep the appointment letter and every amendment. Increment, promotion and transfer letters and any revised job description. Save them outside the company laptop and email account, because access ends with employment.
- Save a month of ordinary work. Not the highlights. A representative sample of what you actually did, which is what the dominant nature test is applied to.
- Record what you could not do. Emails in which you asked for approval for expenditure, hiring, leave or a release are worth more than emails in which you granted it.
- Note the reporting structure. Contract staff sitting under you does not make you their employer, so record whether those people were on your payroll or a vendor's.
- Keep the salary structure. The supervisory exclusion turns on wages as defined in the Code, and Section 2(y) of the Code on Wages, 2019 pulls excluded allowances back in once they cross one half of total remuneration.
- Diarise the two year date immediately. The clock under Section 53(1) starts when the dispute arises, not when you decide to act on it.
- Answer the status question before you file anything. An hour on the documents at the start is worth more than three years in the wrong forum.
Five mistakes that decide these cases
The first is arguing status on salary, which is wrong outside the supervisory limb. The second is treating a resignation as neutral: if you resigned, even under pressure, you must first establish that it was not voluntary, and that is a heavy burden. The third is waiting for a settlement that never comes while the limitation period runs. The fourth is signing a full and final release without reading what is being released. The fifth is failing to reply to a show cause notice, which turns a disputed allegation into an admitted one and hands the employer the proviso to Section 39(1).
If the termination came with an accusation attached, the reply to the show cause notice is the most important document you will write in the whole matter, and it is worth having drafted properly. The related question of whether a side project or a second job can lawfully be held against you is covered in our note on moonlighting and dual employment in India, and the restrictive covenant question in whether a non compete clause is enforceable in India.
Frequently Asked Questions
Is a software engineer a worker under the Industrial Relations Code?
Often yes. Section 2(zr) covers technical and operational work, and an individual contributor who writes, tests or supports software is doing exactly that. It turns on whether the person is mainly managerial or administrative, which is a question of actual duties and not of designation or salary.
What is the salary limit to be a worker?
There is no general salary limit. A wage figure appears only in the supervisory exclusion, and Section 2(zr) of the Industrial Relations Code, 2020 sets it at eighteen thousand rupees a month or an amount notified by the Central Government. The Code on Wages, 2019 uses a different figure of fifteen thousand rupees in Section 2(z), so check which Code you are invoking.
Does my designation decide whether I am a worker?
No. In Arkal Govind Raj Rao the Supreme Court applied the dominant nature of duties test, and in Burmah Shell it examined each category of staff on the work actually done. A clause in the appointment letter recording that you are not a worker is evidence, not a bar.
How long do I have to raise a dispute?
The proviso to Section 53(1) bars conciliation more than two years after the dispute arose, which is shorter than the three years available under the repealed Industrial Disputes Act. Where conciliation fails, the application to the Tribunal must follow within ninety days of the failure report.
Can my IT employer retrench without government permission?
Yes. The prior permission regime sits in Chapter X, and Section 77(3) confines that Chapter to a factory, a mine or a plantation. An IT office is outside it regardless of headcount. The employer still has to comply with Section 70 if the employee is a worker.
I am not a worker. What is my remedy in Bengaluru?
Section 39 of the Karnataka Shops and Commercial Establishments Act, 1961, which survives the four labour codes. It requires reasonable cause and one month's notice for an employee with six months of service, gives an appeal to the prescribed authority, and allows a revision to the District Judge.
Does a fixed term contract change my status?
Not by itself. Status still turns on the nature of the work. What a fixed term does change is gratuity, because Section 53 of the Code on Social Security, 2020 makes gratuity payable on the expiry of a fixed term without the usual five year qualifying period.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
Related Guides
- The Four Labour Codes: What Actually Changed for Employees
- Wrongful Termination and Employee Rights in India
- Employment Agreements in India
- Gratuity Rules, Eligibility and Calculation in India
- Moonlighting and Dual Employment in India
- Is a Non Compete Clause Enforceable in India?
- POSH Act Complaint Procedure in India
- Temporary Status, Casual Labourers and Pension
- Notice of Change: The Twenty One Days Before Your Terms Can Be Altered
- Your Case Is Pending: Can the Employer Still Transfer or Dismiss You?
- Unfair Labour Practices: The List of Things an Employer Cannot Do
