The Constitution of India categorises labour and employment laws in the concurrent list, which means that both the Parliament and the individual state legislatures share equal powers in enacting labour and employment legislation. An essential characteristic of Indian employment laws is the distinction between white-collar and blue-collar workers and the greater legal protections afforded to blue-collar workers in India. 

Though the term blue-collar workers and white-collar workers has not been used in any laws, certain legislations like the Industrial Disputes Act, the Industrial Employment (Standing Orders) Act, etc., have demarcated workmen, i.e., blue-collar workers from non-workmen, i.e., white-collar employees, basis multiple factors such as the nature of work performed by them, the level of discretion or creativity in the work, salary, etc.

A workman or blue-collar worker in India is categorised as one who performs manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. A non-workman or white-collar worker is an individual who is employed in a managerial or administrative capacity. 

Indian employment laws afford additional benefits and protections to employees who qualify as ‘workmen’. Most of these legislations concern blue-collar employees or workmen owing to the historical emphasis on improving working conditions for these employees. The service conditions of white-collar employees are typically governed by their employment contracts and internal policies of their employer.

Determination of whether a particular employee is a workman or not has to be undertaken on a case-by-case basis.

Difference between Blue Collar Worker and White Collar Employee 

The Industrial Disputes Act (“ID Act”) is the key legislation that governs industrial relations in India and aims at securing industrial peace and harmony by providing the process for settlement of disputes between employers and employees. The ID Act categorises employees employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward as ‘workmen’. However, the definition excludes the employees: (a) mainly in a managerial or administrative capacity, who exercise, either by the nature of the duties attached to the office or by reason of the powers vested in them, functions mainly of a managerial nature, and (b) those who are employed in a supervisory capacity, and drawing salary more than a specified threshold.

The categorization of an employee as a workman depends on the exact nature of the job, responsibilities and duties and the context of his/ her role in the organization, rather than merely the compensation package or designation. Blue-collar workers have several rights under the ID Act - for instance, certain changes to their conditions of service, and any termination of employment can only be undertaken as per a specified process. Further, they can approach labour commissioners or the industrial tribunals in case of any unjustified termination and unfair labour practices.

The terms of service of white-collar employees are not regulated by the ID Act, but by state -specific shops and establishments legislations (“S&E Act”), their contracts of employment, and the internal policies of the employer.

Apart from the classification of employees into blue-collar workers and white-collar employees, the applicability of various employment laws (and eligibility for benefits) also depends on the nature of activity that the employees are engaged in as well as the place of work – for instance, different laws apply depending on whether the place of work is a factory, plantation, mine, shop, or commercial establishment. Certain legislations also take into account the number of employees engaged at a particular place of work, wages, and the position of the employee at the workplace.

Other Factors 

The various employment laws in India can be broadly categorized into 2 important themes, namely:

i. Employer-employee relations 

Enactments such as the ID Act, the Trade Unions Act, the Industrial Employment (Standing Orders) Act and Contract Labour (Regulation and Abolition) Act, are focused primarily on employer-employee relations; and

ii. Service or working conditions 

Enactments such as the Factories Act, the various S&E Acts, the Payment of Wages Act, the Minimum Wages Act and the Payment of Bonus Act are focused primarily on wages, social security and working hours of the employees. In addition, there are enactments such as the Employees Provident Fund and Miscellaneous Provisions Act, the Employees' State Insurance Act and the Payment of Gratuity Act which regulate certain social security benefits to employees.