OSH Code – One Unified Health And Safety Framework

Introduction 

The Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”) consolidates 13 Central laws including key laws such as the Factories Act, 1948 and Contract Labour (Regulation and Abolition) Act, 1970. Further, the OSH Code, for the very first time, establishes a unified framework governing the working conditions of employees across all sectors that were previously subject to limited regulations. 

In this article, we analyze the changes introduced by the OSH Code, specifically in relation to establishments and provide practical steps to ensure quick compliance. 

What does the OSH Code change? 

Unlike the Factories Act , which covered only manufacturing establishments and provided for detailed safety and health standards, the OSH Code extends to all establishments such as offices, information technology parks, hotels, retail stores and other service sectors. This expansion brings 1000s of establishments within the ambit of the regulatory framework, and most provisions, such as working hours, overtime, and health and safety, now apply to them. 

Section 6 of the OSH Code is the most critical provisions for non-factory establishments as it shifts the burden on employers to ensure that the workplace is free from hazards which cause or are likely to cause injury or occupational diseases to the employees. For commercial establishments, the broad mandate translates into the following requirement: 

1. Annual Health Examination: The OSH Code introduces a new requirement for employers to provide free annual health examination to its employees. Presently, the draft OSH rules limit this requirement to specific sectors such as factories, mines, dock and construction workers. However, the Code allows “appropriate governments”, which is the State Government for most private establishments, to determine the scope of this requirement. Accordingly, State rules may expand the applicability of this requirement to other establishments.
2. Issuing Appointment Letters: While the Shops and Establishment Acts in certain states already provide for this, the OSH Code uniformly mandates the issuance for a formal appointment letter including certain terms (as provided in the OSH rules). 
3. Reporting Accidents and Diseases: The OSH Code expands the requirement to notify regarding accidents and diseases to authorities across all non-factory establishments. 
4. Overtime and Leave Rationalization: The OSH Code standardizes the rules relating to overtime and leaves, that were previously scattered across the Shops and Establishments Act of each State. It requires employee consent for overtime work and prescribes overtime wages at twice the normal rate of wages. The OSH Code also permits the carry-forward of annual leave up to 30 days and provides for encashment of any leave exceeding this limit. 

What are the universal coverage benefits provided? 

Further to the mandates above, the OSH Code standardizes welfare facilities across all establishments, regardless of whether they are a factory or a non-factory establishment. These mandates are triggered based on headcount as follows: 

1. Canteen Facilities: All establishments with 100 or more workers (including contract labour) are required to provide canteen facilities.
2. Washing and Locker Rooms: The OSH Code mandates separate and adequate washing and locker facilities for male, female and transgender employees. 
3. Safety Committee: The OSH Code expands the requirement to constitute safety committees to every establishment with 500 or more workers. For large establishments, this would translate into institutionalizing a internal forum for safety grievances, much like the internal committee dealing with sexual harassment complaints. 

How can these requirements be implemented ? 

To implement the requirements under the OSH Code, establishments should focus on the following: 

1. Policy Drafting/Revising: Establishments should draft and revise their internal policies and employee facing policies to cover the new mandates. For instance, the change in leave encashment mechanism should be captured in internal policies to operationalize the requirements and be included in employee facing policies to inform them of the statutory benefits provided under the OSH Code. 
2. Evaluating Infrastructure: Establishments should evaluate infrastructure provided to employees and provide facilities such as canteens and transgender-inclusive restrooms, as required. 
3. Vendor Compliance: Since the “principal employers” are liable for the welfare of contract labour, establishments should negotiate and review the agreements with their vendors. 

Why does this matter? 

The OSH Code represents a fundamental shift from a factory centric safety model approach to a universal duty of care. For non-factory establishments, this means that safety is no longer a HR concerns but a legal and financial risk. With the introduction of “Inspector-cum-facilitator” model, the cost of non-compliance has moved from minor fines to significant reputational exposure. Implementing these practical frameworks ensures that organizations are able to protect their valuable assets; people, whilst also remaining compliant with the new labour codes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.