The Occupational Safety, Health and Working Conditions Code, 2020 - When exemptions become the norm

In the last Parliament session, three consolidated labor codes were passed by both Houses. The three labor codes that were passed are – (i) The Industrial Relations Code, 2020; (ii) The Social Security Code, 2020; and (iii) The Occupational Safety, Health and Working Conditions Code, 2020. Each of the three labor codes consolidated all labor laws relating to social security, industrial relations, and occupational health and safety of the workers.

In this post, we shall limit our focus to the Occupational Safety, Health and Working Conditions Code, 2020 (‘Occupational Health and Safety Code’). We shall discuss the provisions of this Code which allow the Central and State Governments to exempt an industrial establishment/factory from complying with the provisions of the statute. We shall also discuss on how wide-ranging these powers are, and how they effectively allow the Government to nullify the protections conferred to the workers.

The Occupational Health and Safety Code

The Occupational Health and Safety Code consolidates all existing labor laws that previously governed aspects relating to the health, safety and working conditions of the employees. Some of the pre-existing laws that have been consolidated into this Code are the Factories Act, 1948, the Mines Act, 1952, and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service), Act, 1979. The Code mandates various obligations which an industrial establishment or a factory has to fulfill, for protecting the health and well-being of the workers.

Some important provisions which confer rights and protections relating to health, safety and working conditions are as follows:

• Section 6 – it mandates the employer to ensure disposal of hazardous and toxic waste, and provide government-prescribed free tests and annual health examinations to the employees.
• Section 24 – it mandates the employer to adhere to all guidelines prescribed by the government relating to separate bathing places and locker rooms for male, female and transgender employees; periodic medical examinations for employees working in mines; and provision of adequate medical facilities such as first-aid equipment and ambulance rooms.
• Section 25 and 26 – It imposes a mandate on the employer to ensure that no worker works for more than 8 hours in a day, and for more than 6 days in a week.

These provisions are intended to address the power imbalance that exists between the employer and the workers, by conferring the workers with essential rights and protections. These rights aim to safeguard the dignity of the workers – by ensuring that the conditions at the workplace are just and humane. The statute also aims to mitigate the health risks that workers may face in certain hazardous industries, such as chemicals and mining.

While the enactment of the Occupational Health and Safety Code is a step in the right direction, the Code confers the Government with wide-ranging powers to exempt one or more industrial establishments from complying with its provisions.

The power to grant exemptions

Section 127, Section 128 and Section 129 of the Code lay down the conditions under which the Central Government can exempt an industrial establishment/factory/workplace from complying with one or more provisions of the Code. Let us discuss each of these provisions below.

Section 127

Under clause (1) of Section 127, the Central Government can issue a notification exempting a single industrial establishment, or a class of such industries from complying with one or more provisions of the Code. This exemption can be given for any period that the Government specifies, and can be made subject to any condition that it may prescribe. Clause (1) confers the Government with a general discretionary power to exempt establishments from complying with one or more provisions of the Code.

But, this general power has an extremely wide ambit, as the Government can, based on its subjective discretion, effectively exempt one or more establishments from complying with the entire Code.

Under clause (2) of Section 127, the State Government can through a notification exempt a new factory or a class of new factories from complying with all or any of the provisions of the Code – if it is satisfied in public interest that it such an exemption is necessary to create more employment opportunities and economic activity. Such an exemption can be granted for any period that the State Government deems fit. Any and every exemption that the State Government grants can easily be justified on the ground that it aims to increase employment and economic activity – as these are among the primary functions of a Government.

Using such broadly worded parameters, the State Government effectively has the power to exempt any new factory from meeting the obligations prescribed by the Code.

Section 128

Section 128 prescribes that during a public emergency, disaster or pandemic, the Central or State Government can issue a notification exempting any workplace or type of work activity from complying with all or any of the provisions of the Code. The term ‘public emergency’ has been defined as a situation where the security of any part of India is under threat – due to war, external aggression or an internal disturbance. While granting an exemption from compliance on the ground of a ‘public emergency’ was also present in the Factories Act, 1948, the other two grounds (disaster and pandemic) have been introduced for the first time by the Code.

During a pandemic, employers should have a greater obligation to protect the health of their workers. Ironically, the prevalence of a pandemic can now be used as a justification to reduce the employers’ obligation to protect the health and safety of the workers. Also, akin to Section 127, even Section 128 can be invoked to nullify compliance with all the obligations prescribed by the Code.

Section 129

Section 129 allows the Central Government to exempt a public institution that is maintained for the purpose of education, training or research from complying with all or any of the provisions of the Code. However, unlike Section 127 and Section 128, this provision has a limited safeguard. An exemption relating to working hours and holidays can only be granted if the Government is satisfied that the institution that receives the exemption has implemented a scheme that has equally beneficial provisions. But, this safeguard shall not be applicable for all other protections conferred by the Code.

If we now read Section 127, 128 and 129 jointly – it is clear that the Government has wide-ranging powers to allow certain industrial establishments to not comply with the entire Code. The Government now effectively has the power to exempt establishments from even the most basic obligations, be it safe disposal of hazardous waste, separate washrooms for male, female and transgender employees, access to safe drinking water, medical facilities etc.

It is likely that Trade Unions may challenge any such exemption notification that the Government may issue in future, if it significantly dilutes the employer’s obligations under the Code. To determine the tests that Courts may use to examine such a challenge, a recent judgment of the Supreme Court in Gujarat Mazdoor Sabha v. State of Gujarat assumes relevance.

The relevance of the Gujarat Mazdoor Sabha decision

In Gujarat Mazdoor Sabha, Justice Chandrachud struck down an exemption notification issued by the Gujarat Government under Section 5 of the Factories Act, 1948 (the Factories Act has now been subsumed into the Occupational Health and Safety Code). This notification exempted all establishments in the State from complying with multiple provisions of the Factories Act. It diluted the protections granted to workers by increasing the working hour limits from 9 to 12 hours, and also reduced the extent of overtime wages that had to be paid.

The Gujarat Government defended this Notification by contending that this was necessary in light of the financial urgency brought about by the Covid-19 pandemic – which was a ‘public emergency’ within the meaning of Section 5 of the Factories Act. Under Section 5, ‘public emergency’ was defined as a situation where the security of any part of India is under threat – due to war, external aggression or an internal disturbance. (This definition is the same as the definition given in Section 128 of the new Occupational Health and Safety Code).

The Court held that the Covid-19 pandemic cannot be considered as an ‘internal disturbance’ within the meaning of the term ‘public emergency’. In light of this, the exemption notification went beyond the ambit of Section 5, and had to be struck down. But, the outcome of a similar litigation under the new Occupational Health and Safety Code may be different, as Section 128 of the Code specifically allows the Government to exempt establishments from complying with its provisions – during a pandemic.

If a similar notification is passed today, the Government can directly contend that it is necessary in light of the pandemic, and need not even refer to the ‘public emergency’ provision. Hence, as long as the pandemic exists, Governments can take benefit of Section 128 to dilute the employers’ obligation to protect the health and well-being of his workers.

At this juncture, it is significant to note that Justice Chandrachud had also observed that the Gujarat Government’s notification was blanket in nature, and applied to all establishments irrespective of the nature of their business. If this observation is taken forward - it implies that the exemption granted should be narrowly tailored in accordance with the doctrine of proportionality. There should be some link between the objective behind the exemption and the establishments who are receiving benefit from the same. Only those establishments that fall within the stated objective of the Government should be entitled to receive the exemption.

If the exemption goes beyond its stated objective, the Court can strike it down for violating the doctrine of proportionality. Also, if the exemption significantly dilutes the employers’ obligations relating to the health and safety of the workers, it can also be challenged for violation of the right to health and dignity, under Article 21. There is hence sufficient scope for a legal challenge, if the State were to dilute workers’ rights by using the pandemic as a justification.

 Irrespective of the outcome of future legal challenges, the larger issue here is that the new Occupational Health and Safety Code is a rare example of a legislation which confers the Government with the power to effectively nullify the applicability of all its provisions. This, in a nutshell, has left workers’ health and safety rights at the whims of the Executive.