India’s Occupational Safety, Health and Working Conditions Code, 2020: What is it and How Should Companies Prepare?

Posted by Written by Melissa Cyrill Reading Time: 7 minutes
  • The Occupational Safety, Health and Working Conditions Code, 2020 amalgamates over 10 labor laws to consolidate into one comprehensive act.
  • It was passed by the Indian parliament and received the president’s assent in September 2020.
  • Rules to implement the Code are expected to be finalized in the next few weeks.

The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) is one of three new labor codes that will consolidate the bulk of labor legislation in India and streamline labor compliance besides expanding the social security net for workers.

More importantly, the new labor codes seek to bring uniformity to the way labor laws are implemented in the country. This has been a much promised reform by Prime Minister Narendra Modi’s government and finally appears to be at the last stretch before coming to fruition.

Since labor is a concurrent subject under the Indian constitution, it can be legislated upon by both federal and state governments, contributing to the existing framework of convoluted labor laws and notifications, many overlapping in their applicability and jurisdiction. Depending on the situation, this has removed safeguards for, both, employers and employees, due to ambiguous interpretation or limited scope of implementation.

The new labor codes will subsume several labor laws at various levels of government; they are grouped into four categories to ease classification and clearly delineate the types of legislation they will subsume and their legislative goal. The four codes cover industrial relations, wages, social security, and worker health, safety, and welfare. 

In this article, we briefly spotlight key features of the OSH Code, including use of legal terms, duties of employers, rights of employees, important regulatory directives, and compliance obligations.

Businesses should prepare their organizations for once the Code comes into effect or risk being found incompliant. Speaking to the media on January 12, the Labor and Employment Secretary Apurva Chandra stated that the labor ministry were looking to finalize the rules under the codes by January-end.

Key definitions under the Occupational Safety, Health and Working Conditions Code

The following terms have had their definitions amended under the new labor code:

Contract labor: Defined as a worker who is deemed to be employed in an establishment or connected to the work of an establishment upon being hired by a contractor for such purpose, regardless of the knowledge of the principal employer. The scope of this definition excludes workers (besides part-time employees) who are regularly employed by the contractor for any economic activity whereby such worker’s employment is governed by mutually accepted employment standards and benefits of periodical increment in pay and other welfare incentives.

Provisions of the Code that pertain to contract labor would only apply to establishments that hire 50 or more contract laborers.

Establishment: Defined as: (i) any place with 10 or more workers where any industry, trade, business, manufacturing, or occupation is undertaken; or (ii) a motor transport undertaking, newspaper establishment, audio-video production, building or other construction work, or plantation with 10 or more workers; or (iii) factory in which 10 or more workers are employed; or (iv) a mine or port or vicinity of port where dock work is carried out.

Employee: Defined as a person employed and paid wages by an establishment to do any skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical, clerical, or other work. The definition has been made consistent in all the four codes.

Employer: Defined as a person who employs (directly, or through any person, or on behalf of any person) one or more employees in their establishment, and includes, inter alia, the person or authority that has the final control over the affairs of the establishment (or contractor).

Factory: Definition is expanded to 20 workers for premises where the work process uses power and 40 workers where the work process uses no power.

Principal employer: Defined as: (i) any person responsible for the supervision and control of the establishment where contract labor is employed or engaged; or (ii) the owner of the factory/establishment and/or manager of the factory/establishment.

Hazardous process: Defined as any dangerous process or activity in relation to specific industries (Schedule I of the OSH Code) where special care must be taken so that handling or processing raw/intermediate/finished/bye-products, etc., could cause: (i) material impairment to the health of the employed persons; or (ii) pollution of the general environment.

Wages: Defined as consolidated remuneration, comprising salaries, allowances, or money payable to a person in return for their employment and includes basic pay, dearness allowance, and retaining allowance, if any. Wages do not include (i) bonus; (ii) value of accommodation or light, water, medical attendance; (iii) employer contribution towards any pension or provident fund; (iv) conveyance allowance; (v) sum paid to employed person to reimburse special expenses; (vi) house rent allowance; (vii) overtime allowance and (viii) gratuity, etc.

Worker: Defined as any person employed in any establishment to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be express or implied, and includes working journalists and sales promotion employees, but does not include the following: (i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or (ii) who is employed in the police service or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who is employed in a supervisory capacity drawing wage exceeding INR 18,000 per month or an amount as may be notified by the federal government from time to time

What are the duties of employers under the OSH Code?

New establishments covered by the OSH Code must register themselves (within 60 days of commencement of the Code) with registering officers appointed by the appropriate government. Establishments already registered under any other federal law will not be required to register again.

Every employer is directed to undertake the following obligations by the OSH Code:

  • Ensure that the workplace is free from hazards can cause injury or occupational disease to the employees and comply with the OSH Code and the government’s directions on the same;
  • Provide free annual health examination or testing, free of cost, to certain classes of employees;
  • Provide and maintain, as reasonably practical, a working environment that is safe and without risk to the health of the employees;
  • Issue letters of appointments to employees; and
  • Ensure that no charge is levied on any employee for maintenance of safety and health at workplace, including the conduct of medical examination and investigation for the purpose of detecting occupational diseases.

Further, the Code directs employers with respect to factories, mines, dock work, building and other construction work, or plantations to ensure: (i) safety arrangements in the workplace and absence of risk to health in connection with the use, storage, and transport of articles and substances; (ii) provision of such information, instruction, training, and supervision as are necessary to ensure the health and safety of all employees at work, etc.

Similarly, the Code lays out that it is the duty of the architect, project engineer, or designer responsible for any building or construction work or the design of any project relating to such building, to ensure that due consideration is given to the safety and health of the building workers and employees involved in the construction, operation, and execution of such projects – at the planning stage itself.

The employer must provide a hygienic work environment with adequate ventilation, sufficient space (to avoid overcrowding), potable drinking water, arrangements for separate washrooms, etc. The Code also provides a uniform threshold for welfare provisions to be available at all establishments, such as a canteen, crèche, first aid, welfare officer, etc.

The Code also directs the government to notify working hours for various classes of establishments and employees and for women workers. For overtime, the prior consent of workers is required along with the payment of overtime wage. No worker in an establishment will be allowed to work for more than six days a week, except as provided for by the Code. Every worker is entitled to one day of leave for every 20 days of work in a calendar year.

The Code also safeguards the rights of inter-state migrant workers by ensuring that they are also provided all the benefits available to a worker – by the contractor – under various labor laws. Further, the employer of every applicable establishment is required to pay to every inter-state migrant worker, a lump sum fare, to enable the journey to and from their native place and the place of their employment.

What are the duties of employees as prescribed by the OSH Code?

Every employee at the workplace shall:

(i) take reasonable care for the health and safety of themself and other persons who may be affected by their acts or omissions at the workplace;

(ii) comply with the safety and health requirements specified in the standards;

(iii) co-operate with the employer in meeting the statutory obligations of the employer under this Code;

(iv) if any situation which is unsafe or unhealthy comes to their attention, as soon as is practical, report such situation to their employer or to the health and safety representative;

(v) not willfully interfere with or misuse or neglect any appliance, convenience, or other thing provided at the workplace for the purpose of securing the health, safety, and welfare of workers;

(vi) not do anything, willfully and without reasonable cause, to endanger or potentially endanger themself or others; and

(vii) perform such other duties as may be prescribed by the appropriate government.

What are the rights of employees under the OSH Code?

The OSH Code provides every employee the following rights:

(i) Obtain from the employer, information relating to the employee’s health and safety at work and communicate to the employer any concern regarding inadequate provision for protection of the employees safety or health in connection with the work activity in the workplace, and if not satisfied, to the inspector-cum-facilitator;

(ii) If they have reasonable apprehension that there is a likelihood of imminent serious personal injury or death or imminent danger to health, they may bring this to the notice of the employer directly, and simultaneously bring the same to the notice of the inspector-cum-facilitator;

(iii) The employee should note that once the existence of such imminent danger is established, the employer is obliged to take immediate remedial action and send a report of the action taken in response to the inspector-cum-facilitator; and

(iv) Even if the imminent danger / apprehension about the same by the employee(s) is not accepted by the employer, the employer must refer the matter to the inspector-cum-facilitator whose decision on the question of the existence of such imminent danger shall be final.

What are the relevant authorities under the Occupational Safety, Health and Working Conditions Code?

National and state-level Occupational Safety and Health Advisory Board

The OSH Code directs authorities to set up a National Occupational Safety and Health Advisory Board that will advise the federal government on matters relating to (i) standards, rules, and regulations to be declared under the OSH Code; (ii) implementation of provisions of the OSH Code; and (iii) issue of policy relating to occupational safety and health; and any other matters referred to it. The OSH Code also provides for the constitution of a similar state-level advisory board.

Inspectors-cum-Facilitators

They are appointed by the appropriate government and can inquire into accidents and conduct health and safety inspections. They are conferred special powers with respect to factories, mines, dock-works, buildings or other construction works, and oversee the prohibition of work in hazardous environments.

Safety committees

These may be formed in certain establishments, and for certain classes of workers, by the appropriate government. These committees will aim to function as a liaison between employers and employees.

For specialist advice regarding doing business in India and/or training to ensure your organization is compliant under the upcoming labor codes, please feel free to contact our professional service advisors at india@dezshira.com.


About Us

India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to india@dezshira.com for business support in India.

Leave a Reply

Your email address will not be published. Required fields are marked *