Analysis: Occupational Safety, Health and Working Conditions Code, 2019

Introduction

In India, labour falls under the Concurrent List of the Constitution.  Therefore, both Parliament and State Legislatures can make laws on the subject of labour.  Currently, there are over 100 state and 40 central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security and wages. The Second National Commission on Labour (2002) found existing legislations to be complex, with archaic provisions and inconsistent definitions.

The Ministry of State for Labour and Employment pursuant to the report of Second National Commission on Labour, introduced The Code on Occupational Safety, Health and Working Conditions Bill, 2019 in Lok Sabha on July 23, 2019, to amend the laws regulating the occupational Safety, health and working Conditions of the persons employed in an establishment. The proposed bill was introduced after wide consultations with Trade Unions, employers and all the other stakeholders. Following this, it was referred to the Standing Committee on Labour and Employment, on October 9, 2019. 

The Code seeks to regulate health and safety conditions of workers in establishments with 10 or more workers in any industry, trade, business, manufacture or occupation is carried on, including, IT establishments or establishments of service sector. Further the varying threshold of applicability has been made uniform at 10 workers for all establishments except mines and dock where the Code would be applicable even with 1 worker.

The Code has been drafted after amalgamation, simplification and rationalisation of the relevant provisions of the 13 Central Labour Acts. After the enactment of the Code, all these Acts being subsumed in the Code will be repealed:

  1. The Factories Act, 1948
  2. The Mines Act, 1952
  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
  5. The Plantations Labour Act, 1951
  6. The Contract Labour (Regulation and Abolition) Act, 1970
  7. The Inter-State Migrant workmen (Regulation of Employment and Conditions of Service) Act, 1979
  8. The Working Journalist and other News Paper Employees (Conditions of Service and Misc. Provision) Act, 1955
  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
  12. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  13. The Cine Workers and Cinema Theatre Workers Act, 1981.

Salient features of Code

  1. Enhanced Coverage: It would be applicable to all establishments employing 10 or more workers, where any industry, trade, business, manufacture or occupation is carried on, including, IT establishments or establishments of service sector. The applicability of code rules has been made uniform at 10 workers for all establishments except mines and dock where the Code would be applicable even with 1 worker. Definition of Working Journalists and Cine worker have also been modified to include workers employed in electronic media and all forms of audio visual production.
  2. National Occupational Safety and Health Advisory Board (NOSHAB): It mandates for the establishment of NOSHAB which will be of tripartite nature, having the representation from trade unions, employer associations, and State governments. This will ultimately lead to reduction in multiplicity of committees under various Acts and  would ensure simplified and coordinated policy-making.
  3. Single Registration Mechanism: It proposes one registration for an establishment instead of multiple registrations. This will create a centralized data base and promote ease of doing business. At present, separate registration is required to be obtained under 6 Acts.
  4. Duties of Employers: These duties will majorly include:
  5. Providing a workplace that is free from hazards that may cause injury or diseases,
  6. Providing free annual health examinations to employees in notified establishments,
  7. issuing appointment letters to employees,
  8. informing relevant authorities in case an accident at the workplace leads to death or serious bodily injury of an employee.
  9. Rights and duties of Employees: The rights and duties of employees will include-
  10. Taking care of their own health and safety
  11. Complying with the specified safety and health standards
  12. Reporting unsafe situations to the inspector.
  13. Every employee will have the right to obtain from the employer information related to safety and health standards.
  14. Special Provisions for Factories: Government can declare any place wherein manufacturing process is being carried out as a factory, and for any persons working at such premises to be classified as workers.
  15. Special Provisions for Women Employees: Women permitted to work beyond 7 PM and before 6 AM subject to the safety, holidays, working hours or any other condition as prescribed by appropriate government in respect of prescribed establishments, only after taking their consent for night work.
  16. Special Provisions for Contract Labour:
  17. The Code has introduced the concept of ‘work specific license’ for contractors, if they do not meet the criteria to be prescribed by the Government for grant of license for supply of contract labour or for execution of work through contract labour. This work specific license will serve the needs of project – specific contract labour deployment..
  18. If a principal employer engages any contract labour through an unlicensed contractor, then such contract labour shall be deemed employees of the principal employer.
  19. The Government is entitled to notify certain operations for which contract labour cannot be deployed, and some factors that could influence this determination include whether or not it would be sufficient to employ considerable number of whole-time workers, or whether similar work is done by regular workers of the Establishment, etc.
  20.  Offences and Penalties:
  21. An offence that leads to the death of an employee will be punishable with imprisonment of up to two years, or a fine up to five lakh rupees, or both.
  22. For any other violation where the penalty is not specified, the employer will be penalised with a fine between two and three lakh rupees.
  23. If an employee violates the provisions of the code, he will be subject to fine of up to Rupees 10,000/.

Objectives and Purpose of Occupational Safety, Health and Working Conditions Code, 2019

According to the statement of object of the Code, the primary objective of Occupational Safety, Health and Working Conditions Code, 2019 is to consolidate and amend the labour laws related to  occupational safety, health and working conditions of the persons employed in an establishment and the matters connected therewith or incidental thereto. Different numerous legislations are present in the country related to labour laws drafted by both Union and State, due to which the uniformity of the provisions gets frustrated. Hence, this code was introduced as one of the four codes that are part of the Centre’s labour reform agenda.

Further this code seeks to regulate health and safety conditions of workers in establishments industry, trade, business, manufacture or occupation is carried on, including, IT establishments or establishments of service sector.

Critical Analysis

The Objectives and Purpose of Occupational Safety, Health and Working Conditions Code, 2019, suffers from some limitations and disadvantages, they are:

  1. Certain workers not covered under the Code: The Code covers establishments with 10 or more workers.  It excludes establishments with less than 10 workers except factories and mines.  This raises the question of whether workers in smaller establishments should be covered by health and safety laws.  It has been argued that application of labour laws based on the number of employees is desirable to reduce the compliance burden on infant industries and to promote their economic growth. On the other hand, it has also been argued that such low numeric thresholds may create adverse incentives for establishment sizes to remain small, in order to avoid complying with labour regulation. Also, some have argued that a law on health and safety should cover workers in all establishments, to protect their basic rights against unsafe work practices.
  2. Civil Court barred from hearing matters under the Code: The Code bars civil courts from hearing any matters under the Code. Under the existing 13 health and safety laws, claims which affect the rights of workers such as wages, work hours, and leave, are heard by labour courts and industrial tribunals.  However, the Code bars the jurisdiction of civil courts, and does not specify that such disputes arising under it may be heard by these labour courts and tribunals.  In some matters where persons are aggrieved by the orders of authorities such as, by the order of the Inspector-cum-facilitator in the case of factories, or by the revocation of a license for contractors, the Code provides for an administrative appellate authority to be notified.  As a result, employers who are aggrieved by the orders of the Inspector and by the notified administrative appellate authority will not be able to challenge it in a civil court.  The only recourse available to them would be to directly file a writ petition before the relevant High Court. 
  3. Wages not defined in the Code: The Code refers to “wages” in provisions relating to overtime work and calculation of leave.  However, it does not define the term.  Different laws contain varying definitions of the term ‘wages’.  For instance, the Code on Wages, 2019 defines ‘wages’ to include basic pay, dearness allowance and retaining allowance, whereas the definition of wages in the Payment of Gratuity Act, 1972 does not include retaining allowance.  It is unclear as to which definition of ‘wages’ will apply to the Code.  This may lead to uncertainty in the interpretation of the term for the purpose of calculating overtime wages and earned leave.

Scope for Improvement

Safety, Health, welfare and improved working conditions are pre-requisite for well-being of the worker and also for economic growth of the country as healthy workforce of the country would be more productive and occurrence of less accidents and unforeseen incidents would be economically beneficial to the employers also.

Codification is necessary to rationalise proximate labour laws, but this should not lead to bundling together of diverse and unique laws concerning disparately positioned categories of workers, which are yet to mature into meaningful pieces of legislation (for example, the law on building and construction workers) in their own right and hence need respective suitable amendments.

In view of widespread criticism against the Code, the government should address the concerns raised by various organisations  and must ensure that the Code provides safer and healthier conditions of work to worker, instead exposingthem to greater risks.

Conclusion

From the above salient features of the Code, it is evident that the occupational safety, health and working conditions have some unique new initiatives for both workers and employers. It promotes health, safety, welfare and better working conditions of workforce by enhancing the ambit of a dynamic legislation as compared to the existing sectoral approach limited to few sectors.

The Code allows consolidation of activities commonly carried out prior to and during the operation of factories, such as building, construction or expansion of factories, etc., which is expected to help manufacturing companies as they can obtain a common registration and comply with the safety and welfare requirements of the Code, as opposed to duplicity of provisions under the Current Laws. More stringent obligations are imposed on principal employers for sourcing contract labour from unregistered contractors, hence, adequate due diligence checks should be implemented in such arrangements. Companies are encouraged to ensure that appropriate due diligence measures are implemented in their manufacturing or service operations, as existence of such measures can help employers avail exemption from statutory liability.

Besides, it also drastically rationalises the compliance mechanism with one license, one registration and one return for the establishments under the ambit of the Code thereby saving resources and efforts of the employers. Thus it balances the requirements of worker and employer and is beneficial to both the constituents of the world of work.

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