DON’T COMPROMISE

Industrial Relations
and Labour Law
OCCUPATIONAL SAFETY, HEALTH AND
WORKING CONDITIONS CODE, 2020
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OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020
The Occupational Safety, Health and Working Conditions Code, 2020 subsumes the
following 13 legislation, which will stand repealed once the OSH Code is
implemented:
1. The Factories Act, 1948 (Factories Act);
2. The Mines Act, 1952 (Mines Act);
3. The Dock Workers (Safety, Health and Welfare) Act, 1986;
4. The Building and Other Construction Workers (Regulation of Employment and
Conditions of Service) Act, 1996 (BOCW Act);
5. The Plantations Labour Act, 1951 (Plantation Act);
6. The Contract Labour (Regulation and Abolition) Act, 1970 (CLRA);
7. The Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979 (ISMW Act);
8. The Working Journalist and other Newspaper Employees (Conditions of Service
and Miscellaneous Provisions) Act, 1955 (Journalists Act);
9. The Working Journalist (Fixation of Rates of Wages) Act, 1958;
10. The Motor Transport Workers Act, 1961;
11. Sales Promotion Employees (Condition of Service) Act, 1976 (Sales Promotion
Act);
12. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; and
13. The Cine Workers and Cinema Theatre Workers (Regulation of Employment)
Act, 1981 (Cine Workers Act).
Objective: To consolidate and amend the laws regulating occupational safety, health
and working conditions
The key aspects of the OSH Code:
A. Definitions:
i. ‘Employee’ and ‘worker’
The definition of ‘employee’ under the OSH Code, includes
any person employed on wages by an establishment, either directly or
through a contractor, to do any skilled, semi-skilled or unskilled, manual,
operational, supervisory, managerial, administrative, technical or clerical or
any other work, as well as those persons declared to be an employee by the
appropriate Government.

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 Working journalists and sales promotion employees have also specifically
been brought within the scope of the definition of ‘worker’.
It also introduces the concept of ‘worker’ but excludes:
(i) persons employed in a supervisory capacity whose monthly salary is
INR 18,000 or more; and
(ii) persons who are employed mainly in managerial and administrative
capacity.
It makes it mandatory on the employer to issue a written form of an appointment
letter to all employees, which was earlier mandated under very limited
circumstances.
The Central Government can also prescribe rules governing health, safety and
working conditions for all employees.
ii. ‘Contract labour’ vis-à-vis ‘Contractor’ and ‘Employer’
Contract labour means a worker who is hired through a contractor whether with
the knowledge of the principal employer or not. The definition of contract labour
brings within its ambit inter-state migrant workers.
The definition of ‘contract labour’ specifically excludes.
A worker (other than a part-time worker), who is regularly employed by the
contractor for any activity of his establishment on mutually accepted standards of
conditions of employment on a permanent basis, and gets periodical increments in
pay, social security coverage and other welfare benefits in accordance with the
law.
The OSH Code defines a contractor to mean a person who:
• undertakes to produce a given result for the establishment, other than a mere
supply of goods or articles of manufacture to such establishment, through
contract labour, or
• supplies contract labour for any work of the establishment as a mere human
resource and includes a sub-contractor.
The definition clarifies that the head of the department, occupier/ manager of a
factory, or person having ultimate control over the affairs of the establishment
(where such affairs are entrusted to a manager or managing director, such
manager or managing director) are all covered within the ambit of the term
employer.
iii. ‘Factory’ and ‘Establishment’

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The OSH Code will apply to all establishments where 10 or more workers are
employed.
This would also bring within its fold commercial establishments such as IT/ITeS
establishments, which would also be required to comply with the provisions of the
OSH Code.
Even factories, which employ 10 or more workers, are, for the purposes of obtaining
a registration under the OSH Code, considered as establishments.
However, the threshold for a premise to be considered as a factory under the OSH
Code has been increased from the existing threshold under the Factories Act from 10
or more to 20 or more workers, if manufacturing process is undertaken with the aid
of power; and from 20 or more to 40 or more workers if manufacturing process is
undertaken without the aid of power.
iv. ‘Occupier’
Person having ultimate control of a factory is called occupier. In case of a company,
any one of the directors can be designated as the occupier, except an independent
director within the meaning of sub- section (6) of Section 149 of the Companies Act,
2013.
v. ‘Wages’
The wages include all including
• basic wages,
• dearness allowance and
• retaining allowance.
It excludes:
a. Statutory Bonus,
b. Provident Fund,
c. Pension,
d. House rent allowance,
e. Value of house accommodation and utilities,
f. Conveyance allowance,
g. Sum paid to defray special expenses due to the nature of work,
h. Any overtime allowance,
i. Any commission,
j. Any retrenchment compensation, and
k. Gratuity.

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vi. ‘Appropriate Government’
Central • central public sector undertakings (PSU) even if
government its shareholding in the PSU falls below 50% post
the commencement of the OSH Code.
• any industry controlled by the Central
Government or so notified in this regard.
• railways, mines, oil, field, major ports, etc
State • Other cases
government • factory situated in that State.

B. Registration of Establishments and Closure Requirements

i. Registration of Establishments
At national level, all establishments (whether a factory or a commercial
establishment such as IT/ITeS establishments) have to obtain a single registration
within 60 days from the date of applicability of the OSH Code.
Any subsequent change in the ownership or management etc is required to be
electronically intimated to the registering officer within 30 days of such change.
In case of closure of establishments, the OSH Code requires a simple post-facto
intimation of closure of the establishment to be electronically provided within 30
days of the closure, accompanied with a certification that all dues to workers
employed in the establishment have been paid.
It would be relevant to note that the failure to obtain registration will disbar an
employer from employing any employee in the establishment.
ii. Licencing of Factories
Establishment can opt for and obtain a common licence in respect of a factory,
industrial premises for beedi and cigar work, and for engaging contract labour,
or any combination thereof (Common License), with an alternative option for a
single licence for any one of them.
iii. Licencing of contractors
The OSH Code has also introduced the concept of ‘work-specific licence’ for project
based work orders and a ‘national’ license for undertaking work in more than one
State.

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C. Hours of Work, Annual Leave, Overtime Provisions
i. Daily and weekly working hours
Reduced the daily working hour limit from 9 hours. The appropriate Government
can prescribe rules to limit the hours of overtime that an employer can engage its
workers for, and also requires obtaining the worker’s consent to work overtime.
The OSH Code has also empowered the appropriate Government to prescribe daily
working hours, intervals of rest and spread over, such that the maximum daily
hours do not exceed 8, and also to prescribe the total number of hours of overtime.
Employer can fix weekly off for its workers so long as they are not made to work
continuously for more than 6 days.
ii. Annual leave with wages
The qualifying period for entitling worker leave is reduced to 180 days from 240
days and now they can avail leave earned in the same calendar year. Earlier they
could avail them in the next year.
D. Special Provisions on Employment of Women
Removed the restrictions imposed on employers for employing women under the
Factories Act and the Plantation Act.
At present, the Factories Act mandates a specific notification to be issued by State
Governments to provide an exemption for women to work more than 9 hours in a
day and to work beyond the hours of 6 a.m. to 7 p.m., subject to the condition that
women will not be permitted to work between 10 p.m. and 5 a.m.
In contrast, the OSH Code sets out a general enabling provision for women to be
employed in any establishment for any work before 6 a.m. and after 7 p.m., the only
condition being that the consent of the woman is obtained before employing her and
compliance with additional safeguards relating to their safety, holidays, working
hours, etc., to be prescribed by the appropriate Government.
Appropriate government can make additional requirements to ensure their health
and safety.

E. Provisions Relating to Contract Labour

i. Employment of contract labour ( 50 or more contract labour)

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Provisions of this chapter applies to establishments in which 50 or more contract
labour are employed or were employed on any day in the preceding 12 months
through contract, and to every manpower supply contractor who has employed 50
or more contract labour on any day of the preceding 12 months.
ii. Core sector prohibition
In core activities of the establishment, contract labours cannot be employed.
iii. Obligations on principal employers
Earlier, principal employers had secondary obligation to provide welfare facilities and
amenities to contract labour, ONLY IF contractor fails to do so. Now, principal
employers are specifically made responsible for providing the prescribed welfare
facilities and meeting the prescribed standards for occupational health and safety at
their establishment, to the contract labour engaged at such establishment, and does
not provide for a statutory right to claim reimbursement from the contractor
for such facilities.
iv. Other important provisions
A contractor has the primary responsibility to make payment of wages to contract
labour within the prescribed time periods, failing which the principal employer is
required to make such shortfall payment and may subsequently recover these costs
from the contractor. The appropriate Government may also recover these
amounts from the security deposit paid to it by the contractors.
Payment has to be made through bank transfer or electronic mode and intimate such
mode of payment to the principal employers electronically.
F. Inter-State Migrant Workers
Earlier ‘inter-state migrant workmen’ were to be recruited by or through
a contractor in one State for employment in an establishment in another State.
The OSH Code has significantly increased the ambit of the meaning of ‘inter-state
migrant worker’ and has included persons who have come from one State and
obtained employment in an establishment in another State (termed as the
‘destination State’) or has subsequently obtained employment in a different
establishment in that destination State.
It would also include persons who have been directly recruited by an employer for
its establishments.

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However, it excludes from its purview those individuals whose monthly wages are in
excess of INR 18,000 or such other amount as may be notified by the Central
Government.
Application of welfare provision in regard to inter-state migrant workers-
to every establishment in which 10 or more inter-state migrant workers are
employed or were employed in the preceding 12 months.
The OSH Code provides for extension of benefits that are available to workers of
the establishment, to inter-state migrant workers, under the Employees’ State
Insurance Act, 1948 (ESI Act), Employees’ Provident Fund and Miscellaneous
Provisions Act, 1952 (EPF Act), or any other law in force and to provide medical
check-up facility as provided to workers.
The OSH Code empowers the appropriate Government to make schemes to:
(a) provide inter-state migrant workers an option to avail benefits of public
distribution system either in his native State or his destination State, and
(b) to provide for portability of benefits of inter-state migrant workers working for
building and other construction work, out of the building and other construction
work cess fund in the destination State.

G. Other Workers
i. Audio-visual workers
The OSH Code has introduced the concept of an ‘audio- visual worker’, which is
substantially wider than that of a cine-worker, covered under the Cine Workers
Act.
An audio-visual worker, under the OSH Code, refers to a person employed directly
or indirectly, in connection with audio-video production as an artist of various
descriptions, and whose remuneration does not exceed the threshold to be
prescribed by the Central Government.
Audio-video production includes animation, audio-visual advertisement, digital
production, feature and non-feature films, television, web-based serials, talk shows,
reality shows and even sports shows.
Therefore covers a wide variety of workers in the entertainment industry and will
require employers of these establishments to ensure compliance with the provisions

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on the standards for occupational safety, health, working conditions and welfare
facilities.
ii. Working journalists and sales promotion employees
The ambit of ‘working journalists’ has been broadened under the OSH Code from the
existing definition under the Journalists Act to also include persons employed
(whole-time or part-time) in establishments relating to electronic and digital
media, radio or other media.
H. Duties of Employer and Employee
i. providing a working environment that is safe and without risk to the health of
the employees, to providing adequate welfare facilities such as separate shelter-
rooms, rest-rooms, etc.
Central Government is empowered to declare, by notification, standards on
occupational safety and health for work places relating to factories, mines, dock
work, building and other construction work and other establishments as opposed
to the current regime where State Governments are empowered to make rules
for certain occupational health, safety and welfare conditions, resulting in differing
standards across states and in some cases, across industries.
ii. The OSH Code recognises the rights and needs of transgender employees and
imposes an obligation on the employer to ensure that adequate and separate
bathing places, locker rooms, rest-rooms and bathrooms are provided to
transgender employees.
iii. The threshold of employees for the provision of welfare facilities has been
reduced from the current thresholds under the Factories Act. For example:
a. canteen facilities are required in all
establishments for employees, wherein 100 or more workers, including contract
labourers, are ordinarily employed, as against the current threshold of 250 workers
under the Factories Act;
b. adequate, suitable and separate shelters or restrooms for male, female and
transgender employees and a lunch room in every factory and mine where more
than 50 workers are ordinarily employed, as against the current threshold of 150
workers;
c. the appointment of a welfare officer in every factory, mine or plantation
where 250 or more workers are ordinarily employed, as against the current
threshold of 500 workers.

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v. Provision of an ambulance room in every factory, mine, building or other
construction work where more than 500 workers are ordinarily employed is a new
welfare facility prescribed under the OSH Code for which the Central Government is
empowered to notify rules.
vi. Another new mandatory facility introduced under the OSH Code is free
temporary living accommodation within, or as close to, the work site as possible
to be provided by an employer to all building workers employed, and for causing
removal or demolition of the temporary accommodation.
vii. Safety Committee and safety officers: The OSH Code empowers the
appropriate Government to require any establishment or class of establishments
to constitute in the prescribed manner a Safety Committee consisting of equal
number of representatives of employers and workers engaged in such
establishment. Further, the OSH Code mandates appointment of safety officers with
such qualifications and perform such duties, as may be prescribed by appropriate
Government in:
(i) every factory which employs 500 workers; or
(ii) a factory carrying on hazardous process, which employs 250 workers;
or
(iii) building or other construction work where 250 workers are employed;
or
(iv) mine where 100 or more workers are ordinarily employed.

xiii. The OSH Code also imposes certain responsibilities on the employees, such
as:
(i) co-operating with employers in meeting the provisions of the OSH Code;
(ii) reporting of any unhealthy or unsafe working situation to the employer;
(iii) taking reasonable care for the health and safety of himself and of other
persons who may be affected by his acts or omissions at the workplace; and
(iv) bringing to the attention of the employer, events in
the workplace which may cause serious bodily injury or death or are an
imminent danger to health of the employees.

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H. Penalties
The OSH Code enhances the penalties for offences committed thereunder, adding to
their deterrence value.
Under the OSH Code, penalties by way of imprisonment is reserved for serious
infractions (such as those leading to death or serious bodily injury or obstruction
of authorities in performing their duties).
The decriminalisation of various offences is in stark contrast with the extant laws
which prescribe imprisonment even for general minor non-compliances.

G. Other Salient Features

i. Emphasis on ensuring compliance rather than penalising an employer
Various measures have been introduced to achieve this objective:
a. Inspector-cum-Facilitator
The OSH Code provides for the appointment of an Inspector-cum-Facilitator, whose
role is enlarged to encompass not just inspection, but also to supply information and
sensitise employers and workers of the provisions of the OSH Code and compliance
therewith.
b. Inspection
The appropriate Government is empowered to frame an inspection scheme that
may provision for web-based information and calling for information
electronically as well as assign duties to carry out such inspections based on a
random selection.
c. Prior opportunity to rectify
The OSH Code permits the employer to rectify any non-compliances under certain
circumstances, and further restricts the Inspector-cum-Facilitator from initiating
action unless the employer has been given such an opportunity to rectify the non-
compliance within a period of 30 days from the date of notice giving such
opportunity. However, the employer would be disqualified from availing such an
opportunity if it subsequently indulges in similar violation within a period of 3 years.

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d. Compounding of first offence
OSH Code provides for compounding of certain offences either before or after an
enquiry is held or prosecution is initiated in a prescribed manner, by paying 50% of
the maximum penalty in case of a penalty, and 75% of the maximum fine in case of
an offence.
However, the option of compounding is not available for the offence committed the
second or subsequent time within a period of 3 years from the date of either: (i)
commission of a similar offence which was earlier compounded; or (ii) commission
of a similar offence for which conviction order has been passed.
ii. Maintenance of registers and records electronically
Returns may also be filed electronically.
OSH Code recognises the issuance of wage slips in electronic format to employees.

iii. Social Security Fund

Establishment of a social security fund by the appropriate Government for the
welfare of unorganised workers as defined under the Unorganised Workers Social
Security Act, 2008.
The amounts collected as penalties for certain non- compliances under the OSH
Code and the amounts collected through compounding of offences under the OSH
Code will be utilised for this fund. Appropriate government can prescribe other
sources also.
It is pertinent to note that the Code on Social Security, 2020, also provides for
establishment of a social security fund for unorganised workers.
iv. Power to exempt
Appropriate Government has power to exempt establishments or class of
establishments from any provisions of the OSH Code, rules or regulations.
In addition, State Governments have been vested with the discretionary power to
exempt a “new factory” or “class or description of new factories” from all or any
provisions of the OSH Code, if deemed necessary in public interest to create more
economic activities and employment opportunities for a specified period from the
date commercial production starts.

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An additional discretionary power is vested with the appropriate Government to
exempt any workshop or workplace where manufacturing process is carried on
and attached to a public institution maintained for the
purposes of education, training, research or information, from provisions of the
OSH Code.
However, such exemption cannot be granted in relation to hours of work and
holidays without obtaining approval of the appropriate Government of a scheme
regulating the hours of work, intervals of rest and holidays of persons employed at
the institution.
v. Powers during an epidemic, pandemic or disaster
Drawing from the experience of the COVID-19 pandemic, the OSH Code provides the
appropriate Government the power to exempt any workplace, work activity or
class thereof from provisions of the OSH Code in the event of any public emergency,
disaster or pandemic in the whole or part of the country, for a period of up to one
year at a time.
vi. Exclusion of jurisdiction of civil courts
In respect of any matter to which the OSH Code applies, leaving employers and
employees with recourse only to authorities prescribed under the OSH Code.

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