With the introduction of the Labour Codes, the focus has seemingly shifted from the courts to the legislature. This is because the codes have uniformly adopted the definitions of “employee” and "worker," with the only exception being the Social Security Code, which does not contain the definition of "worker." Under the Code, an employee has been defined as a person working in an establishment, other than an apprentice, employed on wages to do skilled, semi-skilled, and unskilled work, whether terms of employment are implicit or express. Instead of a single definition of worker, the SS Code differentiates between different types of workers (unorganised worker, gig worker, etc.) and defines them separately.

The term “wages” must be attributed explicitly to employees as well, and the provisions need to use “worker” instead of “employee” to avoid ambiguities.

It can be inferred that the bases for the distinction between an employee and a workman have been retained in the new labour codes. This retention provides a sense of continuity and reassurance to the legal framework, with the higher emphasis being laid on the remuneration received by an employee as a factor.

In this context, the definition of “wages” under the Codes becomes relevant. According to this definition, wages mean all remunerations, including salary, allowances, etc., expressed in monetary terms or capable of being described as such and paid to a person upon fulfilment of the necessary conditions in his employment, whether such conditions are expressed or implied. Wages also include basic pay, dearness allowance, and retaining allowance but do not include, among other things, bonuses, conveyance allowance, etc.

Although the above definition per se is not problematic, the provisions to the same create confusion regarding the applicability of wages. This is because both the clauses to the subsections of the provision and the provisos dealing with the calculation of wages, equal remuneration to genders, etc., mention only the wages paid by an employer to an employee. This clarification about the complexities of the law is crucial for a better understanding of the legal framework.

It is recommended that the current basis for distinguishing between the two terms be shifted to a sectoral basis, viz., based on whether the person is employed in the organised or unorganised sector. The reasons for this proposition have been elaborated in the subsequent sections of this article when dealing with the provisions of the SS Code that deal with the unorganised sector.

In this regard, the laws of the United Kingdom can be used as a reference point to incorporate separate definitions of employees and workers. Under the UK labour law regime, there are four definitions of who is covered: worker, employee, jobholder, and apprentice. The laws also define an “employment relationship," and this definition covers a separate set of rights. Thus, under UK laws, there is a clear distinction between various types of workers and employees, and each type's rights have been safeguarded and provided for through legislative enactments. Under this regime, workers are recognised as the more vulnerable class who require higher degrees of protection than employees. Thus, the provisions about workers have more weight than those relating to employees or the other two types above, as recognised in Lawrie-Blum v. Land Baden-Württemberg.

Notably, the differentiation incorporated under the UK regime is also based on the themes recognised by the ILO for comparing labour law regimes of different countries.

Given the commonalities between Indian and UK laws, there is very little doubt that modifying the definitions under the Indian labour laws to make them like those under the UK laws would benefit all stakeholders involved. Such a step would also lead to the Legislature finally providing an express differentiation between employees and workers. This move has been long pending since the Amendment above Act passed in 2009.