Sections 95 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 95 lets the appropriate Government send a doubtful clause of an award or settlement to a Tribunal, whose decision binds everyone concerned. Section 96 lets the appropriate Government exempt an establishment, or a class of establishments, from provisions of the Code by notification. Despite the plan heading used for these two sections, section 96 is about exemption, not about referring questions.
If the appropriate Government thinks there is difficulty or doubt about the interpretation of a provision of an award or settlement, it may refer the question to a Tribunal or National Industrial Tribunal, which decides after hearing the parties; the decision is final and binding on all the parties (s.95). Under s.96(1) the Government may exempt, conditionally or unconditionally, an establishment or class where adequate provisions exist to fulfil the objects of a provision. Under s.96(2) new establishments may be exempted from all or any provisions for a period set in the notification, if it is necessary in the public interest.
Sections 95 and 96 at a glance
| Provision | What it does | Who acts |
|---|---|---|
| s.95(1) | Refers a doubt on an award or settlement to a Tribunal or National Industrial Tribunal | Appropriate Government |
| s.95(2) | Decision after hearing; final and binding on the parties | Tribunal or NIT |
| s.96(1) | Exemption where adequate provisions already exist | Appropriate Government, by notification |
| s.96(2) | Exemption of new establishments in the public interest | Appropriate Government, by notification |
| s.96(2) proviso | Earlier State notifications under the Industrial Disputes Act, 1947 continue for their remaining period | State Government notifications |
| s.96(2) Explanation | Defines "new" by a period set in the notification | Notification |
Section 95: a doubt about an award or settlement
Section 95(1) applies when, "in the opinion of the appropriate Government, any difficulty or doubt arises as to the interpretation of any provision of an award or settlement". The Government "may refer the question to such Tribunal or National Industrial Tribunal as it may think fit". The power is the Government's. The section does not give a worker or employer a right to demand a reference, although either side can ask the Government to consider one.
Section 95(2) fixes the next steps. The Tribunal "shall, after giving the parties an opportunity of being heard, decide such question and its decision shall be final and binding on all such parties". Two points follow. The hearing is mandatory, and the section contains no time limit for the decision. The Code is silent on any appeal against the Tribunal's answer, so read it with section 55 on the form of an award and section 49 on Tribunal procedure.
Why it matters in practice: a settlement or award binds the parties (see sections 56 and 57), and an unclear clause on, say, how an allowance is calculated can produce competing readings. Section 95 gives a formal route to one authoritative reading, instead of each side acting on its own view. If you run payroll, that route may decide what you pay from the next cycle, so our legal consultation team can help you read the clause and prepare a submission before the hearing.
Section 96(1): exemption where adequate provisions exist
Under s.96(1), where the appropriate Government "is satisfied in relation to any industrial establishment or undertaking or any class of industrial establishments or undertakings that adequate provisions exist to fulfil the objects of any provision of this Code", it may by notification exempt that establishment, undertaking or class from "that provision of this Code". The exemption may be conditional or unconditional.
Note the limits in the wording:
- The test is whether adequate provisions exist to fulfil the objects of the provision. It is not a general concession for convenience.
- The exemption is from that provision, not from the whole Code.
- It is done by notification, so an establishment cannot assume an exemption without one.
- The appropriate Government decides. For a Central-sphere establishment that is the Central Government; otherwise it is the State Government (see section 2 on the appropriate Government).
Section 96(2): new establishments
Section 96(2) operates "notwithstanding anything contained in sub-section (1)". Where the appropriate Government is satisfied that it is "necessary in the public interest", it may by notification exempt, conditionally or unconditionally, a new industrial establishment, a new undertaking, or a class of them "from all or any of the provisions of this Code". The exemption runs "for such period from the date of establishment" as the notification specifies.
The Explanation explains "new": it means an establishment or undertaking, or a class of them, "which are established within a period as may be specified in the notification". So the notification itself draws the line that decides which establishments count as new.
The proviso on State notifications
A proviso protects earlier State notifications. A State Government notification issued under the Industrial Disputes Act, 1947 before the commencement of this Code, to achieve the purpose described in s.96(2), "shall remain in force after such commencement for its remaining period as if the provisions of this Code have not been brought into force to the extent they defeat any purpose to be achieved by such notification". Whether any such notification still applies to your establishment depends on its own terms and remaining period, so check the State's notification rather than assuming.
Practical examples
Example (invented) on s.95. A settlement says bonus will be "paid on the same basis as last year". The union reads this as a fixed percentage; the employer reads it as a formula linked to profit. The appropriate Government, forming the opinion that a doubt exists, refers the question to the Tribunal. After hearing both sides, the Tribunal's answer binds both.
Example (invented) on s.96. A State Government, satisfied that a class of newly established units is covered by adequate arrangements and that exemption is in the public interest, issues a notification exempting them from named provisions for a stated period. A unit set up within the period named in the notification is "new" for that notification; a unit set up after it is not.
Need help with interpretation or exemption questions?
If a clause in an award or settlement is being read two ways, or you are not sure whether an exemption notification covers your unit, the wording of the order is what decides the outcome. Our legal consultation team can help you read the text and plan the next step.
Key takeaways
- Only the appropriate Government refers a doubt about an award or settlement to a Tribunal or National Industrial Tribunal (s.95(1)).
- The Tribunal must hear the parties; its decision is final and binding on all of them (s.95(2)).
- Section 96(1) exempts an establishment or class from a provision where adequate provisions already fulfil its objects, by notification, conditionally or unconditionally.
- Section 96(2) allows exemption of new establishments from all or any provisions, in the public interest, for a period specified in the notification.
- Pre-Code State notifications under the Industrial Disputes Act, 1947 continue for their remaining period to the extent stated in the proviso.
- The Code gives no appeal route or time limit in s.95; it is silent on both.
Read next
- Section 97-98: jurisdiction of civil courts and protection of action in good faith
- Section 99: power to make rules
- Section 58: period of operation of settlements and awards
- Industrial disputes under the new labour codes: IR Code 2020
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.