Overview of the labour code on OSHWC, 2020

Article6 mins read2.0K views | Posted on August 1, 2023 | By Christopher

The Ministry of Labour and Employment has proposed 4 labour codes to simplify the compliance landscape around labour laws in India. The code on Occupational Safety, Health, and Working Conditions (OSHWC) is one of those four codes.


Introduction to the code on Occupational Safety, Health, and Working Conditions, 2020

The code was introduced with a vision to consolidate and standardize the workplace laws that govern occupational safety, working conditions, and health across all the work sectors in India. If the OSHW bill is enacted, numerous regulations that are now covered through 13 different laws will be replaced by one regulation, simplifying business compliance for employers. In this article, we will learn about the latest regulations that were passed as part of the 2020 bill, important definitions included in the code, along with employer responsibilities and liabilities.

Getting to know the code

The primary goal of the code on occupational safety and health of workers is to ensure that employers across all sectors are treated equally, and have safe working conditions. The code aims to bring uniformity in labour laws and streamline regulations that govern the way organizations function. It allows employers to stay compliant with fewer registration formalities and promotes ease of doing businesses in India.

The OHSW code will be applicable to every organisation that employs more than 10 employees across various industry sectors and businesses. The labour department has proposed a broad framework that has room to include rules and their corresponding by-laws, thereby bringing down the 622 sections of the previous code to only 134 sections covering all scenarios. This simplified framework ensures that employers need not register for multiple regulations for their single organisation like they are doing now. Instead, there will just be one registration for each license, and one return submission that will keep them compliant. This way, the newly proposed bill ensures the health and safety of the workplace, improves working conditions, and also makes it easy for businesses to stay compliant.

Key definitions under the code

Defining the employment threshold for different categories

For factories

Currently the rules for factories are governed by the Factories Act, 1948, which is being replaced by this bill. The definition of a factory remains the same: any place where manufacturing takes place. The employee threshold for compliance with the law is based on the work being done.

If the manufacturing process happens using power, then the employee limit is 20. If the manufacturing process happens without using power, then the employee limit is 40. This rule benefits employers by raising the thresholds from the previous levels of 10 and 20 employees respectively.

For contractors

The occupational safety and health code raises the threshold from 20 contractors in an organisation to 50. So until employers have 50 or more contractors, they do not have to get into the complications of contract labour law. This new regulation on contract labour is also applicable to the offices of the central and state Governments that use the services of contractors. According to the latest OSHW bill submitted in 2020, contractors can be employed under the following categories of work:

  • If the normal functioning of the establishment itself is such that the activity is usually done through a contractor.
  • If the activities are such that they do not require full-time workers for the major portion of the day.
  • If there is a sudden increase in the volume of work in the core activity which needs to be completed in a specified time (the Government will decide which work comes under the core activity and which doesn't)

What's changing from the 2019 bill to the 2020 bill?

Employment termsProposal under 2019 billProposal under 2020 bill
Contract employee

An employee cannot be considered a contract employee if:

  • The work is perennial.
  • The work performed by contract workers is essential for everyday business.
  • The same work is also done by regular employees of the organisation.

An employee cannot be considered a contract employee if:

  • The work is perennial but it is usually done by contractors and not regular employees.
  • The work performed by contract workers is essential for everyday business, but does not require a full day of effort like the regular employees' work.
  • There's an increase in regular work, and the work has to be completed within a deadline.
Employment for womenWomen cannot undertake work in hazardous and dangerous operations
  • Women can be employed for all kinds of work across all establishments, following all the safety measurements instructed by the Government while working under hazardous conditions.
  • Permits women to work at night (between 7 PM and 6 AM), subject to the individual's consent.
Working hoursNo clearly defined working hoursFixed at 8 hours flat, for everyone.
Inter-state migrant workers
  • If the employee has been hired by an employer or contractor to work in another state.
  • If the employee draws wages within the maximum amount notified by the central government.
  • Any person who moves to another state and starts working there will also be considered an inter-state migrant worker.
  • The worker's maximum salary should be less than Rs. 18,000, or the maximum amount that will be established by the central government.

Employer responsibilities

  • Careful operations at high-risk workplaces

For employees working in factories, mines, docks, plantations and construction, the employer must facilitate a risk-free workplace and provide their employees with robust instructions on safety guidelines.

  • Support for inter-state workers

For inter-state migrant workers, employers have to ensure suitable working conditions, extend medical check-ups, and offer benefits like PF or ESI as applicable for the organisation. They must also notify the authorities of both states in case of a mishap.

  • Letter of appointment

The letter of appointment is a mandatory document that all employers have to share with employees in their company. It formalises employment to prevent the exploitation of employees.

  • License registration

All organisations with more than 10 employees, and workplaces that are classified under the "Hazardous" category, should register with the appropriate governing bodies.

  • Work hours and leaves

The latest code establishes a maximum of eight hours of work each day. For working journalists, the work hours cannot exceed more than 144 hours for 4 weeks put-together.

  • Age of employees

In general, no workers below the age of 14 are allowed to work. Moreover, for mines in particular, nobody below the age of 16 is allowed to work.

  • Displacement allowance

Employers or contractors do not have to pay a displacement allowance anymore at the time of recruitment. Under the 2019 bill, employers had to pay 50% of the worker's monthly wages as a displacement allowance.

  • Concerned authorities

All the multiple committees formed under the six labour acts have been replaced by the National Occupational Safety and Health Advisory Board. This national board will consist of three parts containing representatives from trade unions, employer associations and various state Governments. This will decrease the number of local and government bodies/committees operating under various acts, thereby enabling effective policy-making. Local inspectors or facilitators may inquire into accidents and conduct inspections, among other actions.

Impact of non-compliance

Obstructing inspector officers in performing their dutiesImprisonment of up to 3 months and fine up to Rs. 1 lakh
Non-compliance with the code that leads to death of an employeeImprisonment of up to 2 years, or fine up to Rs. 5 lakhs or both

List of acts that are getting replaced under this code

  1. The Mines Act, 1952
  2. The Factories Act, 1948
  3. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
  4. The Dock Workers (Safety, Health and Welfare) Act, 1986
  5. The Cine Workers and Cinema Theatre Workers Act, 1981
  6. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  7. Sales Promotion Employees (Condition of Service) Act, 1976
  8. The Motor Transport Workers Act, 1961
  9. The Working Journalists (Fixation of Rates of Wages) Act, 1958
  10. The Working Journalists and other News Paper Employees (Conditions of Service and Misc. Provision) Act, 1955
  11. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  12. The Contract Labour (Regulation and Abolition) Act, 1970
  13. The Plantations Labour Act, 1951

Official document


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