The Occupational Safety, Health and Working Conditions Code, 2019 (OSH Code) should aim at facilitating the MSME sector, said the Confederation of Indian Industry (CII). Ease of doing business and simplification and rationalization of provisions will help smaller enterprises to scale up and create more jobs, CII stressed.
The Code proposes lower employee limits for applicability to enterprises for various welfare measures. “Extending the OSH Code’s provisions to smaller enterprises will add to their costs and impact their margins. It would also adversely affect expansion, which is seen to have a strong relationship to the creation of new jobs,” said Mr Chandrajit Banerjee, Director General, CII.
As per the Factories Act, establishments must appoint welfare officers if they employ manpower of more than 500 persons. The Code cuts this to 250 employees, which would impose a high cost burden on MSMEs now coming in this ambit. Other provisions too, such as canteen, face reduction in applicable employee limits.
As an alternative to lowering applicability criteria, CII suggests that common facilities can be set up for establishments in a locality to avail of on cost basis.
Similarly, CII suggested to revisit the penalties for contraventions so that the focus is on compliance and deterrence and not through punishments that include incarceration of the employer. Irrespective of the person nominated for and entrusted by a company with the responsibility of compliance, all contraventions / non-conformities which are non-compoundable should be handled by Labour courts and not criminal courts.
The definition of ‘occupier’ is proposed as the ‘person who has ultimate control over the affairs of the factory’ including partners of firms and, in the case of a company, any one of the directors. CII has suggested to revise the definition for private sector companies and bring it on par with that for Central/State Government units, PSUs, autonomous government units etc. This would essentially mean that the responsibilities for compliance with requirements under the new Unified Code may be appropriately assigned by the employer to person or persons who have full operational control and accountability for the units they run in different parts of the country.
The Code is one of four labour codes amalgamating 44 Central laws on labour and welfare. It was introduced in Parliament in July 2019 and is currently referred to Parliamentary Standing Committee for consideration. It codifies 13 labour laws regarding occupational health and safety into a single code.
CII welcomes the Code which would enhance safety and health provisions to establishments employing ten or more workers in all sectors, including services sectors. The provision for National Occupational Safety and Health Advisory Board for implementation of the Code is beneficial as it will work out rules and regulations and ensure monitoring of their functioning, said CII.
CII has submitted detailed recommendations relating to the duties of manufacturers, importers and suppliers, weekly working hours, and notice period, among others. For example, overtime could be calculated on quarterly basis rather than weekly basis, since working hours in many service sector firms in software development, finance, etc. may be need-based.
The new Codes should aim at simplification and rationalisation, universal definitions of most terms, and ease of doing business. They should bring in changes to boost the confidence and trust of employers and employees.
12 November 2019