Section 46 of the Code on Wages, 2019: Reference of Disputes under the Code
Section 46 deals specifically with disputes between an employer and employees concerning bonus. It creates a statutory deeming rule for disputes about fixation or eligibility of bonus and for disputes about the application of the bonus provisions to a public-sector establishment.
Text of Section 46
46. Reference of disputes under this Code. Notwithstanding anything contained in this Code, where any dispute arises between an employer and his employees with respect to—
(a) fixation of bonus or eligibility for payment of bonus under the provisions of this Code; or
(b) the application of this Code, in respect of bonus, to an establishment in public sector,
then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947.
The wording above follows the enacted text of Section 46. The reference to the Industrial Disputes Act, 1947 is retained because it forms part of the statutory text.
Meaning and scope of Section 46
The opening words, "Notwithstanding anything contained in this Code", give Section 46 an overriding operation within the Code on Wages for the particular bonus disputes identified in clauses (a) and (b). When such a dispute arises, the provision does not treat it merely as an ordinary wage claim; it applies the statutory consequence stated in the section.
| Issue | Effect under Section 46 |
|---|---|
| Fixation of bonus | A dispute between employer and employees concerning how bonus is fixed falls within clause (a). |
| Eligibility for bonus | A dispute about whether employees are eligible for payment of bonus under the Code also falls within clause (a). |
| Public-sector establishment | A dispute concerning application of the Code's bonus provisions to a public-sector establishment falls within clause (b). |
| Legal character of dispute | The section deems the specified bonus dispute to be an industrial dispute. |
What does "industrial dispute" mean now?
The Industrial Relations Code, 2020 defines an industrial dispute broadly as a dispute or difference between employers and employers, employers and workers, or workers and workers connected with employment, non-employment, terms of employment or conditions of labour, and it also includes specified individual disputes arising from discharge, dismissal, retrenchment or termination.
For present-day procedure, a Section 46 bonus dispute should therefore be examined with the Industrial Relations Code, 2020, the applicable rules, the identity of the "appropriate Government", and the transition arrangements governing tribunals and statutory authorities.
Bonus provisions connected with Section 46
Section 46 is part of Chapter VI of the Code on Wages, but the disputes covered by it arise from the bonus framework in Chapter IV. Relevant provisions include eligibility for bonus, proportionate reduction, computation of working days, disqualification, allocable surplus, available surplus, set-on and set-off, adjustment and deductions, the time limit for payment of bonus, and application of the bonus chapter to certain public-sector establishments.
Public-sector establishments
Clause (b) is important where there is a dispute about whether the Code's bonus provisions apply to an establishment in the public sector. The question should be considered together with Section 40, which deals with application of the bonus chapter to public-sector establishments in specified circumstances.
Section 46 compared with a claim under Section 45
Section 45 provides the claims mechanism under the Code and empowers the notified authority to hear and determine claims arising under it. Section 46 separately identifies the specified bonus disputes and gives them the legal character of an industrial dispute. The correct route in an actual case depends on the nature of the controversy, the relief sought and the applicable procedural framework.
Official legal references
For the current statutory and procedural position, refer to the official Ministry of Labour and Employment materials: the Code on Wages, 2019, the 21 November 2025 commencement notification for the Code on Wages, the 21 November 2025 commencement notification for the Industrial Relations Code, and the Industrial Relations (Central) Rules, 2026.
Updated: 16 September 2026. This page is an informational summary of the statutory provision and should be read with the latest Gazette notifications and the rules applicable to the establishment concerned.