Before you can answer any question about terminating, disciplining or retrenching someone in India, you have to answer a prior one: is this person a "worker"?
Almost the entire architecture of Indian employment protection sits behind that gate. Statutory notice, retrenchment compensation, the requirement for a domestic inquiry, the right to raise an industrial dispute individually, the tribunal's power to review whether the penalty was proportionate — none of it applies to someone who falls outside the definition. All of it applies to someone who falls inside.
Employers get this wrong constantly, and almost always in the same direction: they assume that a senior-sounding title puts someone outside the definition. It does not.
| Governing provision | s.2(zr), Industrial Relations Code, 2020 |
| Managerial / administrative | Excluded — no wage threshold |
| Supervisory | Excluded only above ₹18,000 / month |
| Does the job title decide it? | No |
| What decides it | The dominant nature of duties actually performed |
Position stated as at July 2026. The ₹18,000 figure is subject to revision by the Central Government by notification.
What Section 2(zr) says
"Worker" means any person, except an apprentice under the Apprentices Act, 1961, employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment are express or implied.
| Expressly included | Expressly excluded |
|---|---|
|
Manual, unskilled, skilled, technical, operational, clerical or supervisory work Working journalists, as defined under the 1955 Act Sales promotion employees, as defined under the 1976 Act Any person dismissed, discharged, retrenched or otherwise terminated in connection with, or as a consequence of, the dispute |
Persons subject to the Air Force Act, 1950, Army Act, 1950 or Navy Act, 1957 Persons employed in the police service, or as an officer or employee of a prison Persons employed mainly in a managerial or administrative capacity Persons employed in a supervisory capacity drawing wages exceeding ₹18,000 a month, or such amount as may be notified |
Two features of this deserve attention.
First, the express inclusion of supervisory work in the main definition. Supervisors are workers by default; they only fall out if they cross the wage line. This was a deliberate expansion — the earlier statute set the equivalent threshold far lower, so the effect is to bring a broader band of supervisory staff inside the protection.
Second, the asymmetry between the two exclusion limbs. The managerial and administrative exclusion has no wage threshold at all — a genuinely managerial employee is outside the definition on any salary. The supervisory exclusion has a wage threshold and a functional test that must both be satisfied. These are frequently conflated, and the conflation runs in the employer's favour, which is precisely why tribunals scrutinise it.
Why the job title does not decide it
The Supreme Court returned to this question in Srinibas Goradia v Arvind Kumar Sahu (2025 INSC 1467), and the facts are almost a parody of the problem.
The employee had originally been appointed as a cashier. Management subsequently described him as a front office manager, and his identity card showed him as an executive. On termination he claimed workman status; the employer said his duties were supervisory and he was therefore outside the definition.
The Court applied the dominant nature of duties test. It held that the determinative factor is the essence and nature of the duties actually performed, not the designation or nomenclature given by the employer, and surveyed a long line of earlier authority — including Lloyds Bank v Panna Lal Gupta, National Engineering Industries v Kishan Bhageria and Ananda Bazar Patrika — to reaffirm that inflated titles cannot override the actual work.
On the facts, the employee had no independent authority to sanction leave, initiate disciplinary action or exercise control over staff. His principal duties were clerical and operational. The Court found the designation to be, in substance, an eyewash, and held him to be a workman.
What supervisory and managerial actually mean
The case law gives reasonably concrete markers. Supervisory work implies authority to direct work to its logical conclusion, to exercise disciplinary control, or to bind the employer through decisions. Mere checking, reporting, allocating minor tasks or incidental oversight does not amount to supervisory or managerial authority.
| Points towards managerial / supervisory | Points towards worker |
|---|---|
| Authority to hire, or to recommend hiring with weight | No say in who joins the team |
| Authority to initiate or impose discipline | Can raise a concern; cannot act on it |
| Authority to sanction leave | Forwards leave requests for someone else to approve |
| Authority to bind the company — sign contracts, commit spend | Executes decisions taken above them |
| Independent decision-making without sanction from above | Every decision of consequence needs approval |
| Assigning and directing the work of subordinates as the main job | Occasional coordination, incidental to their own delivery work |
| Participation in policy | Applies policy written by others |
The test is about the dominant nature of the work, not whether any supervisory element exists. Modern roles mix duties, and the question is which duties are the main employment for which the person was engaged.
Three worked examples
| Scenario | Likely status | Why |
|---|---|---|
| "Team Lead", software company, ₹95,000 a month. Writes code most of the day; reviews two colleagues' pull requests; no hiring, discipline or leave authority. | Probably a worker | Dominant duties are technical and operational. Review of colleagues' work is incidental. The wage level is irrelevant to the managerial limb, which turns on function, and the supervisory limb is not reached because supervision is not the dominant duty. |
| "Shift Supervisor", manufacturing, ₹16,000 a month. Genuinely directs a shift, allocates work, signs off attendance. | Worker | Supervisory work is expressly inside the main definition. The exclusion only bites above ₹18,000, and this person is below it. |
| "Regional Business Head", ₹22 lakh a year. Owns a P&L, hires and exits staff, negotiates and signs customer contracts, sets regional policy. | Not a worker | Dominant duties are managerial: independent authority, power to bind the company, control over subordinates. The exclusion applies on function, and salary corroborates the picture without deciding it. |
Who has to prove what
The burden of establishing that a person falls within the definition rests on the person claiming to be a worker. That sounds helpful to employers, and in a narrow sense it is — but it is a weaker shield than it appears, because the evidence that settles the question is almost entirely in the employer's possession: appointment letters, job descriptions, delegation of authority matrices, approval workflows, leave-approval records, appraisal forms showing who assessed whom.
If those documents show a person with a manager's title routing every decision upwards, they will do the employee's work for them. If they show genuine delegated authority, exercised in practice, they will support your position. Either way, the documents decide it — so the practical question is what your documents say.
An audit worth running before you need it
- List everyone with a supervisory or managerial title. Then, separately, list everyone who actually approves leave, initiates discipline, or signs anything binding. Compare the two lists. The gap is your exposure.
- Check your supervisory band against ₹18,000. Anyone in a genuinely supervisory role below that line is a worker, whatever their designation.
- Make job descriptions describe reality. A JD claiming authority the person does not have is evidence against you, not for you.
- Record delegated authority explicitly. Approval limits, disciplinary authority, hiring authority — written down, and reflected in who actually clicks approve in your systems.
- Do not fix this by re-titling people. Changing a title without changing duties achieves nothing, and a re-titling exercise conducted shortly before a termination is worse than doing nothing.
What follows once you know the answer
If the person is a worker, the requirements in How to legally terminate an employee in India apply in full: notice, retrenchment compensation, government notification, a domestic inquiry for any misconduct dismissal, and a penalty that can be reviewed for proportionality. If they are not a worker, the contract and the applicable state Shops and Establishments Act govern, and the remedy for a wrongful termination is generally damages rather than reinstatement.
The gap between those two positions — in cost, in timeline and in downside — is wide enough that it is worth deciding deliberately rather than by assumption.
Why this is easier to answer on one connected system
Worker status is answered by evidence about what a person actually did: their reporting line, whether anyone reported to them, whether they approved leave, whether they appraised anyone, what they were authorised to sign, and how all of that changed over the years of their service. That evidence is scattered across an HR system, an attendance tool, an approvals workflow, an appraisal spreadsheet and a payroll file — and reconstructing it two years after the fact, for a person who changed roles twice, is genuinely hard.
When the org structure, reporting lines, approval authority, leave approvals, appraisal history and compensation all sit on one database, the answer to "what did this person actually do, and who actually reported to them in March three years ago" is a query rather than an archaeology project. Helion holds hiring, HR, payroll and performance on a single schema, so an employee's authority and reporting history is one continuous record. On a question that is decided entirely on evidence of practice, having that evidence in one consistent place is most of the work.
Frequently asked questions
Who is a "worker" under the Industrial Relations Code, 2020?
Any person employed in an industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, including working journalists and sales promotion employees. Excluded are the armed forces, police and prison staff, those employed mainly in a managerial or administrative capacity, and supervisory staff drawing more than ₹18,000 a month.
What is the difference between a "workman" and a "worker"?
"Workman" was the term used in the Industrial Disputes Act, 1947, which was repealed on 21 November 2025. "Worker" is the equivalent term in Section 2(zr) of the Industrial Relations Code, 2020. The concept is substantially carried forward, with the supervisory wage threshold set at ₹18,000 and journalists and sales promotion employees expressly included.
Does a manager's designation exclude someone from being a worker?
No. The Supreme Court has repeatedly held that designation is not decisive and that the dominant nature of the duties actually performed determines status. In Srinibas Goradia v Arvind Kumar Sahu (2025) a cashier designated as a front office manager was held to be a workman, the designation being treated as an eyewash.
Are software engineers workers under Indian labour law?
There is no blanket answer, and the question turns on the individual's duties. An engineer whose dominant work is technical and operational, without independent managerial authority, has a strong argument for worker status regardless of salary — the managerial exclusion is functional, not financial. An engineering leader with genuine hiring, disciplinary and budgetary authority is in a different position.
Does the ₹18,000 threshold apply to managers as well?
No, and this is the most common misreading. The wage threshold attaches only to the supervisory exclusion. A person employed mainly in a managerial or administrative capacity is excluded at any wage level, and conversely a high salary does not by itself take a non-managerial employee outside the definition.
Who bears the burden of proving worker status?
The burden rests on the person claiming to be a worker. In practice the decisive evidence — appointment letters, job descriptions, delegation matrices, approval and appraisal records — is held by the employer, so the documents tend to determine the outcome regardless of where the formal burden sits.
Can we change someone's title to take them outside the definition?
Changing a title without changing the substance of the role achieves nothing, since the test looks at duties rather than nomenclature. Genuinely restructuring a role to carry real delegated authority can change the position going forward, but a re-designation carried out shortly before a termination is likely to be treated as evidence of intent rather than as a defence.