Ambiguities in OSH Code Spark Jurisdictional Vacuum for Workers

In a move that has ignited debates among legal scholars, labour experts, and practitioners, the Occupational Safety, Health and Working Conditions (OSH) Code, 2020, has come under scrutiny for its ambiguous definition of "appropriate Government." Enacted as part of India's sweeping labour law reforms, the OSH Code aimed to consolidate fragmented regulations into a unified framework. However, a drafting oversight in its core definition clause risks leaving vast swathes of the workforce in a regulatory no-man's-land, excluding modern service sectors and small establishments from essential safety and health oversight. This issue, coupled with broader criticisms of the four Labour Codes for diluting workers' rights, underscores the tension between simplification and substantive protection in India's evolving labour jurisprudence.

As the Codes—comprising the OSH Code, Code on Wages 2019, Industrial Relations Code 2020, and Code on Social Security 2020—take effect following notifications in late 2025, legal professionals are grappling with implementation challenges. The absence of a clear residuary clause in the OSH Code's definition of "appropriate Government" not only creates interpretive dilemmas but also amplifies concerns over the Codes' overall efficacy in safeguarding workers amid economic shifts toward gig and service economies.

Historical Context: From Fragmentation to Consolidation

India's pre-reform labour regime was a labyrinth of over 40 central and more than 100 state laws, leading to overlapping jurisdictions, compliance burdens, and jurisdictional disputes. The Second National Commission on Labour (NCL), established in 1999, recommended streamlining these into four comprehensive Codes to foster uniformity, particularly in defining key terms like "appropriate Government." The NCL emphasized a single definition across all labour laws to curb ambiguity and litigation, envisioning a modern framework attuned to India's changing economy.

Parliament responded by enacting the four Codes between 2019 and 2020, repealing 29 older statutes. The objective was clear: enhance ease of doing business while protecting workers. Yet, as implementation unfolds, discrepancies emerge. While the Industrial Relations Code, Code on Wages, and Code on Social Security incorporate a residuary clause assigning unspecified establishments to state governments, the OSH Code deviates conspicuously. This inconsistency, critics argue, undermines the very uniformity the NCL championed.

The OSH Code's definition, under Section 2(1)(d), delineates:

• Clause (i): Central Government jurisdiction over establishments under its authority, such as railways, mines, major ports, and central public sector undertakings (CPSUs), including their contractors.

• Clause (ii): State Government jurisdiction over factories, motor transport undertakings, plantations, newspaper establishments, and "establishments relating to beedi and cigar including the establishments not specified in clause (i)."

An Explanation clarifies state authority for factories, but the phrase "including the establishments not specified in clause (i)"—tacked onto "beedi and cigar" without commas or separation—fuels ambiguity. Legal analysts invoke the Rule of the Last Antecedent, suggesting the phrase modifies only beedi and cigar establishments, not serving as a broad residuary provision.

Decoding the Drafting Flaw: Grammatical and Structural Analysis

At first glance, clause (ii) appears to encompass all non-central establishments under state purview. However, a rigorous grammatical parse reveals otherwise. The qualifying phrase attaches narrowly to the immediate antecedent—"establishment relating to beedi and cigar"—due to absent punctuation and conventional drafting norms. Legislative drafters could have averted confusion with simple tools: a comma before "including," brackets around the phrase, or an explicit residuary sub-clause like "or any other establishment not covered under clause (i)."

This narrow reading excludes a plethora of contemporary establishments: IT firms, BPOs, startups, private hospitals, educational institutions, retail malls, warehousing facilities, and non-factory units in SEZs. For these, no "appropriate Government" exists under the OSH Code, engendering a jurisdictional vacuum. As one analysis notes, "The syntactic placement of the phrase 'including the establishments not specified in clause (i)' immediately after 'beedi and cigar' bolsters the narrow construction that this phrase modifies only beedi and cigar establishments, rather than acting as a general residuary limb."

The practical fallout is stark. India's service sector, employing millions, operates without mandated safety inspections, welfare provisions, or working condition regulations. This vacuum not only heightens workplace risks but invites litigation over enforcement voids. Courts may resort to purposive interpretation or harmonious construction—aligning the OSH Code with its sibling statutes—to expand state jurisdiction. Yet, judicial intervention to supply a "casus omissus" (omitted case) is fraught; precedents caution against rewriting statutes.

Section 132 of the OSH Code empowers the Central Government to resolve implementation difficulties via gazette orders within two years of enforcement, provided they align with the Code's text. However, expanding clause (ii)'s scope would impermissibly amend the provision, straying into legislative territory. The interpretive flexibility in "unless the context otherwise requires" (Section 2(1)) offers slim solace, as doctrines like purposive reading prioritize avoiding absurdity but cannot fabricate absent text.

Broader Critiques: Dilution of Workers' Protections Across the Codes

The OSH Code's flaw is symptomatic of wider apprehensions that the Labour Codes prioritize employer flexibility over worker safeguards. Critics, including central trade unions, decry the Codes as a "burial of 75 years of labour jurisprudence," rammed through without adequate consultation despite union opposition.

Key concerns include threshold hikes excluding micro-enterprises:

• OSH Code doubles factory applicability: 20 workers (with power) from 10, and 40 (without) from 20. Per 2017-18 Annual Survey of Industries data, over 47% of registered factories fall below 20 workers, stripping them of safety, health, and welfare rights.

• Industrial Relations Code raises standing orders threshold to 300 workers (from 100), and layoff/retrenchment approvals to 300 (from 100).

• Contract labour protections now apply from 50 workers (from 20), erasing amenities and wage payment liabilities for smaller sites.

These exclusions push lakhs into a "legal no-man's land," where rights to latrines, timely wages, and principal employer liability evaporate. Fixed-term employment, legalized across Codes, formalizes precarity; workers on successive short contracts forfeit permanency benefits, despite pro-rata gratuity after one year.

Strike rights—pivotal to historical gains like permanent status for pourakarmikas—are curtailed. The Industrial Relations Code mandates 14 days' notice for all strikes (previously only public utilities), with "illegal" actions attracting up to one month's imprisonment and fines up to Rs. 50,000. Union registration faces arbitrary cancellation on "information received," sans inquiry.

Social security under the Code on Social Security promises coverage for gig and platform workers but delivers registration rights without guaranteed benefits like ESI or PF. Existing entitlements dilute: ESI/EPF thresholds persist, consigning 93% informal workers to discretionary schemes. The narrowed "wages" definition—excluding HRA, bonuses, and allowances (capping at 50% of CTC)—erodes calculations for maternity benefits and equal pay, enabling gender disparities. For instance, employers can equalize "basic wages" while skewing allowances, undermining the repealed Equal Remuneration Act, 1976.

Minimum wages suffer too. The Code's "floor wage" (Rs. 178/day nationally) undercuts state minima (e.g., Rs. 707 in Karnataka), with a revised formula slashing housing costs to 10% of food/clothing—defying Supreme Court benchmarks in Reptakos Brett. Safety provisions weaken: Annual health check-ups for over-40s are "prescribed" vaguely, unlike the Factories Act's mandatory exams in hazardous units. Safety committees, once obligatory for hazardous factories, now hinge on state notifications.

Women face codified risks: Night shifts and hazardous work "permissions" ignore unequal dynamics, compelling acceptance amid job threats. Creche mandates dilute, excluding construction sites and small factories, with erased standards for sanitation and staffing. Tokenism plagues boards, mandating "at least one woman" amid 16 members.

From an HR lens, positives emerge: The 50% CTC-as-wages rule boosts PF/gratuity bases, enhancing long-term security. Flexible hours within 48-week caps enable compressed weeks, and women’s night shifts require safety transport. Yet, these pale against rights erosions, with enforcement shifting to "facilitator-inspectors" diluting punitive powers and surprise checks.

Legal Implications and Pathways Forward

For legal practitioners, the OSH ambiguity portends a surge in interpretive disputes. Establishments in the vacuum may seek declaratory relief, invoking Article 300A's property deprivation protections or ILO conventions on occupational safety. Trade unions could challenge via writs under Article 32/226, arguing arbitrary exclusions violate equality (Article 14) and right to life (Article 21).

Harmonious construction might align the OSH with other Codes' residuary clauses, but rigidity in statutory definitions limits this. Legislative amendment remains ideal, though politically contentious post-2025 enforcement. Section 132's window closes soon, foreclosing executive fixes.

Sectorally, MSMEs, IT/ITeS, textiles, and exports bear brunt: Excluded factories lose amenities; gig workers gain illusory registration; contract labourers in "non-core" roles (now encompassing sanitation, canteens) entrench precarity. Youth and women, locked into fixed terms, face insecure futures, contravening constitutional living wage mandates.

The Codes' "simplification" reduces compliance but hollows enforcement, risking accidents like recent industrial tragedies from negligence. As one critique asserts, "A right that does not apply to you is not a right at all." HR must audit contracts for 50% wages compliance, update HRIS for pro-rata gratuities, and craft FAQs demystifying changes—yet without robust rights, these are bandaids.

Conclusion: Reassessing the Reform Narrative

The Labour Codes promised a protected, empowered workforce, but realities reveal exclusion, precarity, and diluted safeguards. The OSH definition's flaw epitomizes this: Intended to modernize, it instead orphans sectors from oversight. Legal professionals must navigate this terrain vigilantly, advocating amendments to fulfill NCL's vision. As debates rage, the central query endures: In streamlining for capital, have we sidelined labour's dignity? With implementation nascent, judicial and legislative scrutiny will shape whether these Codes herald progress or perpetuate inequality.