Appropriate Government
“Appropriate Government” under Section 2 of the Four Labour Codes: A Comparative Analysis
1. What is “Appropriate Government”?
“Appropriate Government” is a gateway term in all four Labour Codes. It determines which government, Central or State, holds the authority to administer, regulate, and enforce obligations under each Code in relation to a given establishment. The term does not create any substantive right or duty on its own; rather, it assigns the correct regulatory authority before any other provision of the Code can operate.
The division between Central and State authority in labour law follows the structure of the Seventh Schedule to the Constitution of India. Under Article 246, Parliament has exclusive power to legislate on matters in List I (the Union List), the legislature of any State has exclusive power over matters in List II (the State List), and both may legislate on matters in List III (the Concurrent List). Labour falls primarily in the Concurrent List under Entries 22 (trade unions and industrial disputes), 23 (social security), and 24 (welfare of labour including conditions of work). However, specific industries such as railways, mines, oilfields, and major ports appear in the Union List under Entries 22, 27, 52, 53, 54, and 55. The definition of "Appropriate Government" in each Code reflects this constitutional architecture: it assigns Central Government authority over industries that are constitutionally central in character, and State Government authority over everything else.
2. Official Definition
2.1 As defined in legislation
2.1.1 Code on Wages, 2019
The definition appears in Section 2(d) of the Code on Wages, 2019. It states:
"appropriate Government" means,
(i) in relation to, an establishment carried on by or under the authority of the Central Government or the establishment of railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or a central public sector undertaking or subsidiary companies set up by central public sector undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, subsidiary companies or autonomous bodies, as the case may be, the Central Government;
(ii) in relation to any other establishment, the State Government.
2.1.2 Industrial Relations Code, 2020
The definition appears in Section 2(b) of the Industrial Relations Code, 2020. It states:
"appropriate Government" means,
(i) in relation to any industrial establishment or undertaking carried on by or under the authority of the Central Government or concerning any such controlled industry as may be specified in this behalf by the Central Government or the establishment of railways including metro railways, mines, oil fields, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or a central public sector undertaking, subsidiary companies set up by the principal undertakings or autonomous bodies owned or controlled by the Central Government including establishments of the contractors for the purposes of such establishment, corporation, other authority, public sector undertakings or any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government, as the case may be, the Central Government.
Explanation: For the purposes of this clause, the Central Government shall continue to be the appropriate Government for central public sector undertakings even if the holding of the Central Government reduces to less than fifty per cent. equity in that public sector undertaking after the commencement of this Code;
(ii) in relation to any other industrial establishment, including State public sector undertakings, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government, the State Government:
Provided that in case of a dispute between a contractor and the contract labour employed through the contractor in any industrial establishment where such dispute first arose, the appropriate Government shall be the Central Government or the State Government, as the case may be, which has control over such industrial establishment.
2.1.3 Code on Social Security, 2020
The definition appears in Section 2(3) of the Code on Social Security, 2020. It states:
"appropriate Government" means,
(a) in relation to, an establishment carried on by or under the authority of the Central Government or concerning any such controlled industry as may be specified by notification in this behalf, by the Central Government or the establishment of railways including metro railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company or a corporation or other authority established by a Central Act or the central public sector undertaking or subsidiary companies set up by the central public sector undertakings, subsidiary companies set up by the principal undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, subsidiary companies or autonomous bodies or any company in which not less than fifty-one per cent. of the paid up share capital is held by the Central Government, as the case may be, or in relation to an establishment having departments or branches in more than one State, as the case may be, the Central Government; and
(b) in relation to any other establishment, the State Government.
Explanation 1: For the purposes of this clause, the expression "metro railway" means the metro railway as defined in sub-clause (i) of clause (1) of section 2 of the Metro Railways (Operation and Maintenance) Act, 2002.
Explanation 2: For the purposes of this clause, the Central Government shall continue to be the appropriate Government for the central public sector undertakings even if the holding of the Central Government reduces to less than fifty per cent. equity in that public sector undertaking after the commencement of this Code.
2.1.4 Occupational Safety, Health and Working Conditions Code, 2020
The definition appears in Section 2(d) of the Occupational Safety, Health and Working Conditions Code, 2020. It states:
"appropriate Government" means,
(i) in relation to, establishments [other than those specified in sub-clause (ii)] carried on by or under the authority of the Central Government or concerning any such controlled industry as may be specified in this behalf by the Central Government or the establishment of railways including metro railways, mines, oil field, major ports, air transport service or telecommunication service, banking company or any insurance company (by whatever name called) established by a Central Act or a corporation or other authority established by a Central Act or a Central public sector undertaking or subsidiary companies set up by the Central public sector undertakings or autonomous bodies owned or controlled by the Central Government, including establishment of contractors for the purposes of such establishment, corporation or other authority, Central public sector undertakings, subsidiary companies or autonomous bodies, as the case may be, the Central Government:
Provided that in the case of Central Public Sector Undertakings the appropriate Government shall continue to be the Central Government even if the holding of the Central Government reduces to less than fifty per cent. equity of the Central Government in that Public Sector Undertakings after the commencement of this Code; and
(ii) in relation to a factory, motor transport undertaking, plantation, newspaper establishment and establishment relating to beedi and cigar including the establishments not specified in clause (i), the concerned State Government where it is situated.
Explanation: For the removal of doubts it is hereby clarified that State Government shall be the appropriate Government in respect of occupational safety, health and working conditions in a factory situated in that State.
3. Differences in Language
3.1 "Establishment" versus "Industrial Establishment or Undertaking"
Three of the four Codes, the Code on Wages, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code, use the word "establishment" as the basic unit to which the definition applies. The Industrial Relations Code is the only one that uses "any industrial establishment or undertaking." This is not a minor stylistic difference. By qualifying the noun with "industrial," the Industrial Relations Code limits its jurisdictional allocation to entities that are industrial in nature, which is consistent with the Code's overall subject matter of regulating industrial disputes, trade unions, and standing orders. The word "undertaking" further expands coverage to enterprises that may not fit neatly into the concept of an establishment but function as an industrial unit.
3.2 Telecom and Insurance Phrasing
Three Codes describe the relevant sectors as "telecommunication" and "insurance company." The Occupational Safety, Health and Working Conditions Code uses "telecommunication service" and "any insurance company (by whatever name called)." The phrase "by whatever name called" is a drafting technique used to prevent regulated entities from arguing that their formal corporate name or legal structure means they fall outside the definition. An entity providing insurance under a different commercial label cannot use nomenclature as a shield. Similarly, "telecommunication service" is wider than "telecommunication" as it captures service providers operating in the sector even where they may not be thought of as a standalone telecom enterprise.
3.3 Proviso versus Explanation for the PSU Continuity Clause
All three Codes from 2020 address a practical problem arising from disinvestment: what happens when the Central Government sells down its stake in a public sector undertaking below 50% after the Code has come into force? The Industrial Relations Code and the Code on Social Security resolve this through an Explanation appended to the definition. In statutory drafting, an Explanation interprets or clarifies meaning; it does not independently command. The Occupational Safety, Health and Working Conditions Code addresses the same question through a Proviso within the operative sub-clause itself. A Proviso carves out a mandatory exception from the main rule and has operative force. The Proviso is therefore a stronger and technically more precise form of expressing the same protection. The Code on Wages has no such clause, leaving open the question of what happens to wage jurisdiction following disinvestment.
3.4 Affirmative State Jurisdiction
Most Codes define Central Government jurisdiction and then leave "any other establishment" or "any other industrial establishment" as an undefined residual for State Governments. The Industrial Relations Code and the Occupational Safety, Health and Working Conditions Code go further by affirmatively naming what falls under the State. The Industrial Relations Code explicitly names "State public sector undertakings, subsidiary companies set up by the principal undertaking and autonomous bodies owned or controlled by the State Government" as part of the State Government's jurisdiction. The Occupational Safety, Health and Working Conditions Code names "a factory, motor transport undertaking, plantation, newspaper establishment and establishment relating to beedi and cigar" as State-governed, and reinforces this with an Explanation that removes any doubt about State authority over factory safety. Each Code reaches affirmative State jurisdiction by a different route and for different purposes, which is discussed further under legislative intent.
4. Differences in Scope
4.1 Controlled Industries
The Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code each extend Central Government jurisdiction to establishments in "any such controlled industry as may be specified by notification" by the Central Government. This is a delegation of power: by issuing an executive notification, the Central Government can bring an entire industry under its regulatory oversight for the purposes of the respective Code. This is grounded in Entry 52 of the Union List, which allows Parliament to declare control of certain industries to be in the public interest, as it has done through the Industries (Development and Regulation) Act, 1951.
The Code on Wages has no equivalent provision. Wage administration under that Code follows the establishment and its location, not the industry to which it belongs. A worker in a centrally controlled industry could still have their wages governed by the State Government if their employer does not otherwise fall within the Central Government list. This represents a conscious narrowing of Central reach in wage matters.
4.2 Metro Railways
The Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code include metro railways within Central Government jurisdiction. The Code on Social Security goes furthest by attaching a formal Explanation defining "metro railway" by reference to the Metro Railways (Operation and Maintenance) Act, 2002. The Industrial Relations Code and the Occupational Safety, Health and Working Conditions Code include metro railways in the operative text without a separate definitional Explanation.
The Code on Wages makes no reference to metro railways at all. This creates an asymmetry: the same metro railway worker's industrial relations, social security, and occupational safety all fall under the Central Government, but their wages may be governed by the State Government of whichever State the metro operates in.
The Industrial Relations Code and the Code on Social Security extend Central Government jurisdiction to "any company in which not less than fifty-one per cent. of the paid-up share capital is held by the Central Government." This captures entities that are structured as private companies under the Companies Act but are effectively controlled by the Central Government through equity ownership. Such a company may not have been established by a Central Act and may not technically qualify as a corporation, authority, or autonomous body in the traditional sense. Without this criterion, they would fall outside Central jurisdiction by default.
Neither the Code on Wages nor the Occupational Safety, Health and Working Conditions Code contains this criterion, which means that for wages and occupational safety, these companies are governed by the State where they operate unless they fall under another head.
4.4 Multi-State Establishments
The Code on Social Security alone provides that an establishment having departments or branches in more than one State falls under the Central Government. This addresses a genuine compliance and enforcement problem: where one employer operates across State lines, subjecting them to multiple State authorities for social security purposes creates the risk of conflicting obligations, forum shopping, and gaps in worker coverage. Consolidating such establishments under Central authority provides a single point of regulatory accountability.
No other Code includes this head. For industrial relations, wages, and occupational safety, the implication is that each unit of a multi-State employer is governed by whichever State it physically operates in, which may have been considered workable given how those laws are typically enforced at the workplace level.
The multi-state establishments head in the Code on Social Security did not originate with the 2020 Codes. It is a continuation of a principle already present in the Payment of Gratuity Act, 1972. Section 2(a)(i)(b) of that Act designates the Central Government as the appropriate government for any establishment having branches in more than one State. This position has been consistently upheld by courts: in a February 2026 decision, the Delhi High Court held that where a company operates offices in Delhi and Noida, a State-appointed Controlling Authority in Delhi had no inherent jurisdiction to adjudicate a gratuity dispute, since the establishment's multi-state character made the Central Government the appropriate government as a matter of statutory mandate, not a question of territorial or pecuniary jurisdiction that could be waived. The Code on Social Security therefore carries forward an established legal position, rather than breaking new ground.
The practical significance of this head becomes immediately apparent when applied to the platform economy. Almost every major aggregator operating in India o operates in multiple states. This means that under Section 2(3)(a) of the Code on Social Security, the Central Government is the appropriate government for social security administration in respect of all these aggregators. State governments have no residual authority over them under this Code. The consequence of this reading is that the obligation to notify social security schemes for gig and platform workers under Sections 113 and 114 rests entirely with the Central Governmen— and until the Central Government notifies those schemes, the entitlements created by the Code remain, in the words of Live Law, a "legislative mention, not a legislative shield." As of early 2026, those schemes remain unnotified.
[Sources: Payment of Gratuity Act, 1972, Section 2(a)(i)(b); Delhi High Court, M/s CSAT System (P) Ltd. v. Appellate Authority under the Payment of Gratuity Act & Ors. [2025 DHC 1036], February 2026 (reported in SCC Online, February 13, 2026, and Verdictum.in); Chief Labour Commissioner, Government of India, "Payment of Gratuity Act" overview, clc.gov.in; Live Law, "Logged In, Left Out: How Code on Social Security, 2020 Only Mentions About India's Gig Workers," 2026]
4.5 The Contractor Dispute Proviso
The Industrial Relations Code contains a Proviso that is unique among the four Codes. It provides that in a dispute between a contractor and contract labour employed through that contractor, the appropriate government is whichever government, Central or State, has control over the industrial establishment where the dispute first arose. This resolves an otherwise contested question about jurisdiction in contractual labour relationships, where the principal employer and the contractor may separately fall under different governments. No equivalent provision appears in any of the other three Codes.
4.6 The Implementation Gap: When Appropriate Government Does Not Act
The definition of "appropriate government" determines who has regulatory authority. But it says nothing about the consequences of that authority going unexercised. In the context of the Code on Social Security, this gap between authority and action has become the central implementation problem.
The Building and Other Construction Workers (BOCW) framework offers a direct cautionary parallel. Under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, employers are required to pay a cess of 1% of the cost of construction to the state government. State governments are in turn obligated to use these funds to provide welfare benefits to construction workers. In practice, the delivery mechanism was never built: workers were not systematically identified, no identity cards were issued at scale, and the benefit schemes were not operationalised. During the COVID-19 pandemic, it was reported that approximately ₹40,000 crore lay unspent across state government BOCW funds, inaccessible to the very migrant construction workers the cess had been collected to protect.
The Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 creates a structurally similar risk. Karnataka collects a welfare fee from aggregators between 1% and 5% of the payout to the gig worker per transaction, — but the Act does not independently specify what benefits will flow from those funds. The benefit schemes require the Welfare Board to be constituted and operational notifications to be issued, neither of which had happened as of late 2025. In the interim, many aggregators already provide limited accident and health insurance to their workers voluntarily. Once mandatory contributions begin, the incentive for voluntary provision disappea;r— platforms will not pay twice. If the scheme-delivery infrastructure is not in place by then, workers may end up worse off than under the status quo.
This is not merely a Karnataka problem. The Code on Social Security, under which the Central Government is the appropriate government for multi-state aggregators, has itself not notified the social security schemes under Sections 113 and 114 despite the Code having been enacted in 2020 and brought into force in November 2025. The pattern — has repeated across the history of Indian labour law, and the appropriate government definition, while it assigns authority clearly, cannot compel that authority to exercise it.
[Sources: Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025, Sections 6–7 and welfare fee provisions; Lexology / Khaitan & Co., "Karnataka Platform Based Gig Workers (Social Security and Welfare) Act 2025," November 28, 2025; TechCrunch, "India's gig workers win legal status, but access to social security remains elusive," November 2025; Live Law, "Logged In, Left Out: How Code on Social Security, 2020 Only Mentions About India's Gig Workers," 2026]
4.7 The Federalism Question: State Laws and Multi-State Aggregators
The proliferation of state-level gig worker legislation raises a direct question about the appropriate government framework that the Code on Social Security's definitions do not resolve. If a multi-state aggregator is subject to central appropriate government jurisdiction under Section 2(3)(a) of the Code on Social Security, what is the status of a state act — such as Karnataka's — that purports to impose its own welfare obligations on the same aggregator?
The constitutional answer lies in the Concurrent List. Since labour is a concurrent subject under Entries 22, 23, and 24 of List III, state legislatures have the power to enact their own laws on the subject. However, under Article 254 of the Constitution, if a state law is repugnant to a central law on the same subject, the central law prevails to the extent of the repugnancy — unless the state law has received Presidential assent, in which case it operates within that state notwithstanding the central law. The Karnataka Act received the Governor's assent, not Presidential assent, which means the repugnancy question is not insulated from constitutional challenge. Legal analysis of the Karnataka Act notes that it attempts to manage this tension by providing that the state welfare fee paid by aggregators will count towards the "total contribution payable" under Section 114 of the Code on Social Security, with yearly reconciliation permitted — an internal offset mechanism designed to avoid double contribution. Whether this reconciliation survives challenge depends on how central rules, once notified, frame the contribution obligation.
The practical dimension is equally significant. Consider an aggregator like Amazon, which is not headquartered in Karnataka but operates delivery services throughout the state. Under the Code on Social Security, the Central Government is the appropriate government for Amazon's social security obligations because it operates in more than one state. Yet the Karnataka Act imposes separate registration, welfare fee, and compliance obligations on the same aggregator. How does a multi-state aggregator register with multiple state welfare boards while simultaneously subject to central oversight? As more states follow Karnataka's approach, Telangana has proposed its own legislation, and Bihar has already enacted one — the compliance landscape fragments further, and the appropriate government question becomes not a clean two-way choice between Centre and State but a multi-authority problem without a coordinating mechanism.
[Sources: Constitution of India, Article 246 (Seventh Schedule, List III, Entries 22–24) and Article 254; Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 (Karnataka Act 72 of 2025); Lexology / Khaitan & Co., "Karnataka Platform Based Gig Workers (Social Security and Welfare) Act 2025," November 28, 2025 (on offset and reconciliation provisions); Taxguru.in, "Karnataka Platform Based Gig Workers (Social Security and Welfare) Act 2025," December 4, 2025; PRS Legislative Research, "The Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2025," prsindia.org]
5. Differences in Legislative Intent
5.1 Code on Wages, 2019: Wage Administration as a Location-Based Matter
The Code on Wages reflects the most conservative conception of Central authority among the four. By limiting Central jurisdiction to the constitutional minimum of establishments of or under the Central Government, and named Union List industries, the Code treats wages as a matter primarily between an employer and its workers at a specific workplace. The definition does not track industry classification, shareholding, or multi-State spread. This approach is consistent with the historical structure of wage legislation in India, where the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936 were administered by State Governments for most establishments. The Code on Wages consolidates those laws while preserving their state-administered character for the majority of workers.
5.2 Industrial Relations Code, 2020: Precision and Clarity in Industrial Dispute Jurisdiction
The Industrial Relations Code is calibrated to the specific regulatory purpose of governing industrial disputes, trade unions, and standing orders. Its definition is more targeted than that of the Code on Social Security: it uses "industrial establishment or undertaking" to limit its scope to entities of an industrial character, it explicitly names State public sector undertakings as falling under State Government jurisdiction rather than leaving them as an unnamed residual, and it provides a Proviso to resolve the contractor dispute jurisdiction question before it can arise in litigation. These choices reflect a concern with precision in dispute resolution: unclear jurisdiction in industrial relations can delay adjudication and prolong disputes. The Industrial Relations Code's definition is therefore less about expanding Central authority and more about drawing clear lines before a dispute escalates.
5.3 Code on Social Security, 2020: Broadest Central Reach for Administrative Coherence
The Code on Social Security has the widest Central Government jurisdiction of the four Codes. It combines controlled industries, metro railways, the 51% shareholding criterion, and the multi-State establishments head into a single comprehensive definition. The rationale is administrative. Social security obligations, covering provident fund, employees' state insurance, gratuity, and maternity benefit, involve ongoing contribution cycles, shared enforcement databases, and periodic compliance audits. Where the same employer operates across States or is partially owned by the Central Government, fragmentation of social security administration across multiple State authorities creates duplication and reduces the quality of worker protection. The Code on Social Security resolves this by drawing as many large and complex employment relationships as possible under Central administration. Its definition is accordingly the most expansive of the four.
A historical illustration of why administrative coherence in social security jurisdiction matters comes from the maternity benefit regime. Before the Code on Social Security absorbed it, maternity benefit was governed by the Maternity Benefit Act, 1961. Under that Act, the Central Government was the appropriate government only for mines and circuses; for all other establishments, the State Government was the appropriate government. When Parliament amended the Maternity Benefit Act in 2017 to insert Section 11A, which made it mandatory for every establishment with fifty or more employees to provide crèche facilities within a prescribed distance, the question immediately arose: which government was responsible for framing the rules specifying crèche standards? State governments deferred, pointing to the Central Government. The Central Government clarified that it was the appropriate government only for mines and circuses, and wrote to all State Governments requesting them to frame rules. The result was a prolonged delay: the crèche provision was notified for implementation from 1 July 2017, but state rules were slow to follow. Karnataka, for instance, only notified its crèche rules in August 2019 more than two years after the obligation came into force. Other states took even longer, or had not acted at all as of the time of the Codes' enactment.
Under the Code on Social Security, 2020, maternity benefit has been absorbed into the consolidated framework. For a multi-state establishment — ich, as discussed above, now includes virtually every major aggregator and most large employers — e appropriate government is the Central Government. The jurisdictional ambiguity that paralysed crèche implementation under the old Act is resolved for this category of employer. However, it also means that if the Central Government delays notifying rules or schemes, no state can act independently for those establishments, because the Code's architecture gives states no residual authority over multi-state employers' social security obligations.
[Sources: Maternity Benefit Act, 1961, Section 2 (definition of appropriate government); Maternity Benefit (Amendment) Act, 2017, Section 11A (crèche provision); PIB, Ministry of Labour and Employment, "Maternity Benefit (Amendment) Act, 2017 being implemented," pib.gov.in; NovoJuris, "Crèche rules notified in Karnataka for establishments with 50 or more employees," August 22, 2023; IndiaSpend, "Large Employers Are Required to Provide Crèches, But Most Don't," March 8, 2021]
5.4 Occupational Safety, Health and Working Conditions Code, 2020: Preserving State Regulatory History in Factory Safety
The Occupational Safety, Health and Working Conditions Code is the most constitutionally deliberate of the four. Occupational safety and factory regulation have been State-administered matters for the greater part of India's legislative history. The Factories Act, 1948, plantations legislation, and motor transport regulations were all implemented through State inspectorates. Entry 24 of the Concurrent List covers welfare of labour including conditions of work, but the Factories Act itself was a Concurrent List statute administered predominantly at the State level. The Occupational Safety, Health and Working Conditions Code acknowledges this by creating an affirmative, named sub-clause for State Government jurisdiction covering factories, motor transport undertakings, plantations, newspaper establishments, and beedi and cigar establishments, and then adding an Explanation to remove any interpretive doubt. The broader language for telecom and insurance, and the Proviso form for the PSU continuity clause, also suggest attention to constitutional boundaries and sectoral diversity that the other Codes do not replicate.
5.5 Surviving State Legislation and the Concurrent List: A Layer Beneath the Codes
A complete understanding of the appropriate government framework requires acknowledging what it does not displace. Because labour is a concurrent subject, a large body of state legislation continues to operate alongside the four Labour Codes, and the definition of "appropriate government" in the Codes does not affect the authority exercised under those state laws.
The most prominent examples are the Maharashtra Industrial Relations Act, 1946, and the Madhya Pradesh Industrial Relations Act, 1960, both of which continue to govern industrial disputes, trade unions, and standing orders in their respective states alongside the Industrial Relations Code, 2020. These state acts were not subsumed by the central Code. Under Article 254 of the Constitution, a state law on a concurrent subject prevails within that state unless repugnant to a central law — and these state acts were enacted before the Industrial Relations Code and address aspects of industrial relations that the Code does not fully override. As of April 2026, Maharashtra has published draft state rules under the Industrial Relations Code, 2020, signalling a gradual transition; but the existing Maharashtra Act has not been formally repealed. Similarly, Shops and Commercial Establishments Acts — enacted by each state to regulate conditions of employment in shops and offices, including leave entitlements, working hours, and establishment registration — continue in force in every state, with their own definitions of "appropriate government" (typically the state government) and their own enforcement machinery.
This creates a layered regulatory landscape in which the "appropriate government" under the Labour Codes is the central government for certain multi-state or centrally controlled establishments, but the "appropriate government" under state-specific acts for the same establishment may simultaneously be the state government. An IT company operating in multiple states, for example, falls under the Central Government for social security under the Code on Social Security, but under the state government for shops and establishments compliance in each state where it operates.
The OSH Code adds a further complexity here. Its definition of "worker", a person not primarily engaged in managerial or administrative workdiffers from the definition of "employee" used in state Shops and Establishments Acts. An establishment covered by the OSH Code is entitled to annual leave with wages at the rate of one day per every twenty days worked under Section 32 of the OSH Code. But the same establishment's non-worker employees may be entitled to earned leave, casual leave, and sick leave under the applicable state Shops Act leave entitlements governed by the state government as appropriate government under that Act, on a basis entirely different from the OSH Code. The appropriate government question, in short, is not answered once for each establishment; it is answered differently for each statute that applies to it, and the Codes have not replaced the statutes that generate those additional answers.
[Sources: Maharashtra Industrial Relations Act, 1946 (India Code, indiacode.nic.in); Maharashtra Cabinet approval of Maharashtra Code on Wages Rules, 2025, and Maharashtra Industrial Relations Code Rules, 2025 (Free Press Journal, April 22, 2025); Draft Maharashtra Industrial Relations Rules, 2026 (published April 28, 2026, SCC Online, April 30, 2026); Occupational Safety, Health and Working Conditions Code, 2020, Section 32 (annual leave with wages); Constitution of India, Article 254; PRS Legislative Research, summary of the Industrial Relations Code, 2020, prsindia.org]