Occupational Safety, Health & Working Conditions Code, 2020: Strengthening Workplace Protections

Policy Update
Anamitra Sinha

Background

The Occupational Safety, Health, and Working Conditions (OSHWC) Code, 2020, is a significant reform in India’s labour laws, aiming to simplify and consolidate workplace regulations. Passed by the Lok Sabha on 22nd September 2020, Rajya Sabha on 23rd September 2020, and receiving Presidential assent on 28th September 2020, the code merges 13 existing laws, including the Factories Act, 1948, Mines Act, 1952, and Building and Other Construction Workers Act, 1996. From a constitutional perspective, labour is a subject in the Concurrent List (List III) under the Constitution of India, allowing both the Centre and States to legislate on matters related to workers’ safety, health, and conditions.

The need for the OSHWC Code stemmed from the complexity and inefficiency of managing fragmented labour regulations, many of which were outdated and difficult to enforce uniformly across states and industries. As identified by the Second National Commission on Labour (2002), India’s labour laws needed consolidation to improve compliance and ensure consistency in how worker rights were enforced.

The OSHWC Code specifically addresses the working conditions of the following beneficiaries, including:

• Formal and informal labourers: With the informal sector making up a large part of India’s workforce, the code expands protections to workers who previously may not have been covered under older laws.
• Contract workers: The code extends safeguards for contract workers, ensuring they receive similar health, safety, and welfare provisions as regular employees.
• Workers in hazardous industries: Sectors like mining, construction, and manufacturing are prioritized in the code, with specific provisions to minimize occupational hazards in these high-risk industries.
• Inter-state migrant workers: Migrant workers often face difficulties in accessing social and health benefits, and the code aims to provide clear, uniform protections, including health and safety standards across states.

Objectives

• Unified regulation of workplace safety, health, and welfare.
• Protecting the socio-economic rights of all workers, including gig and migrant workers.
• Standardizing working hours, safety guidelines, and leave policies to ensure consistent working conditions across sectors.

The OSHWC Code also extends protections to informal and contract workers, improving their safety and welfare standards, particularly in industries prone to accidents and unsafe working environments. By doing so, the code creates a more inclusive framework that benefits a wider array of workers in India’s rapidly changing labour market.

Functioning

The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC) is a comprehensive overhaul of India’s labour laws, amalgamating provisions from 13 distinct enactments. This code aims to enhance worker welfare by expanding its scope across various industries, including factories, mines, construction sites, and motor transport undertakings, covering establishments with 10 or more workers. By simplifying compliance and broadening worker protections, the OSHWC seeks to create safer and healthier workplaces.

One of the key features of the OSHWC Code is its streamlined registration process, replacing the multiple registration requirements under older laws such as the Factories Act and the Mines Act. Through the Shram Suvidha Portal, businesses can register electronically, making compliance faster and less cumbersome. This shift from manual, establishment-specific registrations to a unified digital system represents a significant administrative improvement, particularly for businesses operating across multiple states.

The OSHWC has further expanded key definitions within labour law. The code broadens the definition of “employer” to include those indirectly responsible for workers and introduces clearer categories for employees. It also distinguishes between managerial and non-managerial roles, excluding supervisory employees earning above a certain threshold from certain worker protections. This ensures more comprehensive coverage for workers across different job functions. The code has also enhanced workplace safety protocols, mandating employers to maintain hygienic working environments and conduct annual health checks, particularly in industries involving hazardous processes. This includes provisions carried over from the Factories Act, further underscoring the importance of safety in high-risk sectors.

Moreover, the code modernizes working conditions by reducing the maximum workday to 8 hours, aligning with global standards, and making overtime contingent on worker consent. Workers are now entitled to double wages for overtime, which marks a significant improvement in worker rights. Additionally, the OSHWC allows women to work night shifts with their consent, provided the employer ensures safety measures and transport, thus expanding opportunities for women in sectors with 24/7 operations. Inter-state migrant workers are also covered, with the OSHWC mandating that employers provide travel allowances, thereby extending protections to previously vulnerable groups.

Enforcement is facilitated by Inspector-cum-Facilitators, who play a dual role in ensuring compliance and helping businesses meet the code’s requirements. The introduction of stringent penalties for non-compliance, including fines up to INR 3,00,000 and potential imprisonment in cases of serious injury or death, underscores the code’s focus on worker safety and accountability.

Performance

Since its introduction, the performance of the OSHWC Code has been mixed, with improvements noted in formal sectors but continued challenges in informal industries. Workplace safety audits have increased by 20% since 2021, with over 300,000 inspections conducted across various industries, signalling a proactive approach to ensuring safety compliance (Ministry of Labour, 2023). This increase has contributed to a 12% reduction in fatal accidents in high-risk sectors such as construction and mining, indicating that the code has had a positive impact in these industries.

Although the compliance rate remains problematically at only 60% of registered establishments fully compliant with the OSHWC’s provisions, with enforcement lagging in smaller and informal industries where regulatory oversight is less rigorous. These sectors continue to grapple with poor implementation of safety standards and welfare provisions.

The budget for workplace safety has seen a 15% increase from FY 2020-21 to FY 2022-23. However, this funding has been largely concentrated in high-risk industries like construction and mining, leaving sectors such as manufacturing and services underfunded. The uneven allocation of resources has meant that while larger establishments have successfully implemented the OSHWC’s mandates, smaller firms and informal workers still face challenges.

While the OSHWC has prompted large establishments to adopt better safety practices, its performance in the informal sector remains a concern. Smaller industries, which account for a significant portion of the workforce, often lack the resources or enforcement oversight to comply with the code’s provisions.

Impact Evaluation of the OSHWC Code

One of the major changes introduced by the OSHWC is the expanded coverage of contract labourers, including inter-state migrant workers and supervisory staff. This is significant because 80 million workers are now covered by labour protections, up from 60 million under the previous legal framework (ILO, 2022). The inclusion of these workers ensures they benefit from welfare facilities such as canteens and restrooms, which were previously out of reach for many.

The simplified licensing system introduced by the OSHWC has reduced compliance costs for businesses. By centralizing registration and allowing contractors to obtain pan-India licenses, businesses, particularly those operating across multiple states, have seen a 40% reduction in licensing costs (FICCI, 2023). This reform has streamlined operations in sectors like IT and infrastructure, where contractors often supply labour across state lines.

A notable improvement under the OSHWC is the requirement for principal employers to provide welfare facilities, unlike the Contract Labour (Regulation and Abolition) Act, which placed the burden on contractors. This change is expected to improve access to basic amenities for around 80% of contract labourers, a significant rise from the previous 25% (Labour Bureau, 2022). The shift in responsibility ensures that workers in establishments where contractors may not have the means to provide welfare services now have access to necessary facilities.

Gig economy workers and a substantial portion of the informal sector remain outside the purview of the OSHWC, and migrant workers continue to struggle with accessing the benefits due to identification and enforcement gaps at the local level. Furthermore, some companies have found ways to bypass the prohibition of contract labour in core activities, highlighting the need for stricter enforcement and clearer definitions in the code.

In conclusion, while the OSHWC Code represents a significant step forward in protecting worker rights and improving safety standards, especially in formal and high-risk sectors, its impact is limited by enforcement challenges in smaller establishments and the informal sector. Continuous monitoring, targeted funding, and better enforcement mechanisms will be essential to fully realizing the potential of these reforms for India’s labour force.

Emerging Issues

The Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code) represents a comprehensive effort to consolidate and streamline various labour laws into a unified framework. While the code aims to modernize and simplify regulations, several emerging issues and areas of concern have surfaced.

The OSHWC Code includes general provisions applicable to all workers, such as safety protocols and duties of employers. However, it also introduces specific provisions for distinct worker categories and hazardous industries, such as audio-visual workers, sales promotion employees, and construction workers. The rationale behind these targeted regulations is not always clear. For instance, why are there specific safety rules for workers in construction but not for all workers exposed to similar hazards?

Similarly, provisions like special leave entitlements for sales promotion employees and restricted work hours for journalists seem arbitrary when compared to the broader provisions applicable to other worker categories.

A significant issue with the OSHWC Code is its restriction on civil courts from adjudicating matters related to the code. Under previous labour laws, disputes affecting workers’ rights, such as wage issues or safety violations could be brought before labour courts or industrial tribunals. The OSHWC Code eliminates this avenue, potentially restricting access to justice for employers and workers alike. Instead, disputes must be resolved through administrative appeals or writ petitions directly to higher courts, which may be less accessible or practical for many individuals (PRS Legislative Research).

The differentiation in regulations for specific sectors and worker categories introduces complexity. For example, while the code mandates certain safety measures for factories and mines, it provides limited general safety requirements applicable across all establishments. This selective approach might lead to inconsistencies in worker protection, particularly in less regulated or informal sectors.

Comparison of General and Specific Provisions

Way Forward

To maximize the impact of the Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code), targeted measures are crucial. First, strengthening enforcement is essential; this involves enhancing the capacity of state labour departments and local authorities to ensure consistent application of the code across regions. Second, the inclusion of gig workers in the safety net must be addressed. As gig and platform workers are often excluded from traditional labour protections, specific reforms are needed to integrate them into the formal sector’s safety framework.

Public awareness campaigns are also vital. These should educate both employers and employees about their rights and responsibilities under the code, fostering a culture of safety and compliance. Additionally, incentivizing regular worker training programs is crucial, especially in hazardous industries, to ensure workers are well-informed about safety protocols and risk management.

Finally, leveraging technology for real-time monitoring and grievance redressal can significantly enhance compliance and accountability. Digital platforms can streamline reporting and oversight, leading to more effective safety management. By addressing these areas—enforcement, inclusion, awareness, training, and technology—the OSHWC Code can better achieve its objectives of improving workplace safety and conditions.

References and Bibliography

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12. Report No. 4: Occupational Safety, Health and Working Conditions Code, 2019, Standing Committee on Labour, Lok Sabha, February 11, 2020.
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About the Contributor: Anamitra Sinha, Policy Research Intern at IMPRI Institute and Master’s student in Development, Policy Planning, and Practice at Tata Institute of Social Science, School of Rural Development, Tuljapur (Off-Campus).

Acknowledgment: This article was reviewed by IMPRI experts and other collaborators.

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