Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 2 of the Industrial Relations Code, 2020 has forty-four clauses. Earlier articles in this cluster cover the authorities, the people, industry and dispute terms, wages and the five work-stoppage terms. This article finishes the list: the Trade Union terms, settlement, award, standing orders, arbitrator, the sector references and the terms "notification" and "prescribed".
A Trade Union is any temporary or permanent combination formed primarily to regulate relations between workers and employers, workers and workers or employers and employers, including a federation (s.2(zl)). A settlement is an agreement reached in conciliation, or a written agreement signed in the prescribed manner and copied to the authorised officer and the conciliation officer (s.2(zi)). An award is an interim or final determination by a Tribunal or National Industrial Tribunal, and includes an arbitration award under s.42 (s.2(e)). Standing orders are orders on the matters in the First Schedule (s.2(zj)).
Trade Union terms
| Clause | Term | Meaning |
|---|---|---|
| 2(n) | Executive | The body, by whatever name called, to which the management of the affairs of a Trade Union is entrusted |
| 2(zb) | Office-bearer | Includes any member of the executive, but does not include an auditor |
| 2(ze) | Registered office | The office of a Trade Union registered under the Code as its head office |
| 2(zf) | Registered Trade Union | A Trade Union registered under this Code |
| 2(zg) | Registrar | A Registrar of Trade Unions appointed by the State Government under section 5 |
| 2(z) | Negotiating union or negotiating council | The body referred to in section 14 |
| 2(zm) | Trade Union dispute | A dispute relating to a Trade Union arising between two or more Trade Unions, or between the members of a Trade Union inter se |
Trade Union (s.2(zl))
"Trade Union" means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers, or workers and workers, or employers and employers, or for imposing restrictive conditions on the conduct of any trade or business. It includes any federation of two or more Trade Unions.
The proviso says Chapter III does not affect:
- any agreement between partners as to their own business;
- any agreement between an employer and those employed by him as to such employment; or
- any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft.
Because the definition covers employers' combinations as well as workers', an employers' association can fall within it. For a view on whether a particular body qualifies, our legal consultation team can help. Registration and recognition rules in the Code are mainly drafted for Trade Unions of workers; see the criteria for registration.
Two points on the Registrar: the definition refers to the State Government's appointment under s.5, so Trade Union registration is administered by State authorities, not the Central Rules. The Central Rules, 2026 (G.S.R. 342(E), 8 May 2026) set rules for matters like recognition of negotiating unions in Central-sphere establishments.
Office-bearer and the auditor carve-out
An auditor is not an office-bearer even if he is on the executive list. This matters for the disqualification and proportion rules in later sections (for example, s.21 and s.23), where "office-bearer" is used.
Settlement (s.2(zi)) and award (s.2(e))
Settlement
A settlement means:
- a settlement arrived at in the course of a conciliation proceeding; and
- a written agreement between the employer and worker arrived at otherwise than in the course of conciliation, where the agreement has been signed by the parties in such manner as may be prescribed and a copy has been sent to an officer authorised by the appropriate Government and to the conciliation officer.
So a private bilateral agreement only becomes a "settlement" if it meets those conditions. Rule 4 of the Central Rules, 2026 prescribes Form I for the memorandum and lists who signs on the employer's and workers' side, and requires the parties to send a copy electronically or by speed post to the concerned Deputy Chief Labour Commissioner (Central) and the conciliation officer. For a State-sphere establishment, look at the State's rules. The effect of a settlement is dealt with in sections 56 and 57.
Award
An award is an interim or final determination of any industrial dispute, or of any question relating to it, by:
- an Industrial Tribunal referred to in section 44;
- a National Industrial Tribunal referred to in section 46; and it includes
- an arbitration award made under section 42.
The definition makes clear that an interim order on a question in a dispute can be an award. See the form of award.
Arbitrator (s.2(c))
"Arbitrator" includes an umpire. It is used in the voluntary arbitration chapter, s.42.
Standing orders, notification and prescribed
| Clause | Term | Meaning |
|---|---|---|
| 2(zj) | Standing orders | Orders relating to matters set out in the First Schedule |
| 2(za) | Notification | A notification published in the Official Gazette of India or the Official Gazette of a State, as the case may be; "notify" is read accordingly |
| 2(zc) | Prescribed | Prescribed by rules made under this Code |
"Prescribed" is the link to the rules: wherever the Code says "in such manner as may be prescribed", it points to rules under s.99. For Central-sphere establishments that is the Industrial Relations (Central) Rules, 2026; for State-sphere establishments, the State's rules. Rule 2 of the Central Rules adds that "electronically" means any information submitted by email, by uploading on the official portal, or by digital payment in any mode. The Rules' definition of "Form" points to the Schedule to the Rules.
Sector references
Several definitions simply borrow from other statutes so that the list of Central-sphere establishments in s.2(b) has a fixed meaning:
| Clause | Term | Borrowed from |
|---|---|---|
| 2(f) | Banking company | Section 5 of the Banking Regulation Act, 1949, and includes the Export-Import Bank of India, the Industrial Reconstruction Bank of India, the Small Industries Development Bank of India, the Reserve Bank of India, the State Bank of India and corresponding new banks under the 1970 and 1980 Acts |
| 2(s) | Insurance company | A company as defined in section 2 of the Insurance Act, 1938 |
| 2(v) | Major port | Clause (8) of section 3 of the Indian Ports Act, 1908 |
| 2(w) | Metro railway | Sub-clause (i) of clause (1) of section 2 of the Metro Railways (Operation and Maintenance) Act, 2002 |
| 2(x) | Mine | Clause (j) of sub-section (1) of section 2 of the Mines Act, 1952 |
| 2(zd) | Railway | Clause (31) of section 2 of the Railways Act, 1989 |
| 2(zp) | Unorganised sector | Clause (l) of section 2 of the Unorganised Workers' Social Security Act, 2008 |
The Code quotes those Acts as they stand in the text; if an older Act has since been replaced, check the current law before relying on a cross-reference. The sector terms matter mostly for deciding the appropriate Government.
Example. A company's employees form an association to negotiate pay. Whether it is a "Trade Union" turns on its primary purpose; whether it is a "registered Trade Union" turns on registration under the Code. Only a registered Trade Union gets the body corporate status in s.12 and can be part of recognition under s.14.
Need help with Trade Union or settlement documents?
If you are drafting a settlement, checking whether an association qualifies as a Trade Union, or updating records after the Code's commencement, our legal consultation team can help you match the documents to these definitions. Bring the draft agreement or the association's rules.
Key takeaways
- A Trade Union can be temporary or permanent, can include employers' combinations, and includes federations.
- An office-bearer includes any member of the executive but not an auditor.
- A private agreement is a "settlement" only if signed in the prescribed manner and copied to the authorised officer and the conciliation officer.
- An award includes interim determinations and arbitration awards under s.42.
- "Prescribed" means prescribed by rules under the Code; Central Rules for Central-sphere establishments, State rules otherwise.
Read next
- Section 2: appropriate Government and the authorities
- Section 3: the Works Committee
- Section 14: negotiating union and negotiating council
- First Schedule: matters to be provided in standing orders
Disclaimer: Based on the Industrial Relations Code, 2020 (as enacted) and, where noted, the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.