Definitions under the OSH Code

1. subject to the Air Force Act 1950, the Army Act 1950 or the Navy Act 1957;
2. employed in the police service or as an officer or other employee of a prison;
3. employed mainly in a managerial or administrative capacity; or
4. employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month, or such amount as the Central Government notifies.

Learn the difference by what it excludes. "Employee" includes managerial and administrative work; "worker" does not. And a supervisor is a worker only while his wages stay at or below eighteen thousand rupees a month.

Why the difference matters. Every threshold in the Code is counted in workers, so a manager does not count towards the twenty that makes a factory. And the rights on hours of work, overtime, leave and night work attach to workers, while the duties in Chapter III are owed by the employer in respect of employees. Read each section for the word it uses.

2. Establishment and factory: the thresholds

"Establishment", section 2(1)(v), four limbs:

• (i) a place where any industry, trade, business, manufacturing or occupation is carried on in which ten or more workers are employed; or
• (ii) a motor transport undertaking, newspaper establishment, audio-video production, building and other construction work or plantation, in which ten or more workers are employed; or
• (iii) a factory, for the purpose of Chapter II, in which ten or more workers are employed, notwithstanding the threshold in clause (w); or
• (iv) a mine or port or vicinity of a port where dock work is carried out.

Notice limb (iv). A mine, port or dock is an establishment with no headcount at all. One worker in a mine is enough.

The first proviso removes the ten worker threshold in limbs (i) and (ii) altogether for establishments carrying on such hazardous or life threatening activity as the Central Government notifies. The second proviso provides that for Chapter II, registration, an establishment under limbs (i), (ii) or (iii) counts at ten or more employees notwithstanding the factory threshold.

"Factory", section 2(1)(w): premises including the precincts:

• (i) where twenty or more workers are working, or were working on any day of the preceding twelve months, and a manufacturing process is carried on with the aid of power, or is ordinarily so carried on; or
• (ii) where forty or more workers are so working and the manufacturing process is carried on without the aid of power,

but not including a mobile unit of the armed forces, a railway running shed, or a hotel, restaurant or eating place.

The proviso, and it is a real complication. Where a State law in force immediately before the commencement of this Code specified a number more or less than twenty or forty, that State number prevails in that State until amended by the competent legislature.

Explanation I. All workers in different groups and relays in a day are counted.

Note what the OSH definition does not exclude: a mine. The Social Security Code's definition excludes a mine; this one does not, because mines are governed by this Code itself under Chapter XI.

3. Core activity: the definition that decides section 57

"Core activity of an establishment", section 2(1)(p): any activity for which the establishment is set up, and includes any activity which is essential or necessary to such activity.

The proviso then lists eleven activities which shall NOT be considered essential or necessary, if the establishment is not set up for that activity:

1. sanitation works, including sweeping, cleaning, dusting and collection and disposal of all kinds of waste;
2. watch and ward services including security services;
3. canteen and catering services;
4. loading and unloading operations;
5. running of hospitals, educational and training institutions, guest houses, clubs and the like, where they are in the nature of support services;
6. courier services which are in the nature of support services;
7. civil and other constructional works, including maintenance;
8. gardening and maintenance of lawns and other like activities;
9. housekeeping and laundry services and other like activities, where in the nature of support services;
10. transport services including ambulance services;
11. any activity of intermittent nature even if that constitutes a core activity of an establishment.

This definition is the operative half of section 57, which prohibits contract labour in core activities. The eleven exclusions are therefore the list of things an establishment may still contract out, and the qualifying words matter: items 1 to 10 are excluded only if the establishment is not set up for that activity. A cleaning company is set up for sanitation work, so sanitation is its core activity.

Item 11 is different in kind from the other ten. It excludes any activity of intermittent nature even if that constitutes a core activity. That is a substantial hole in the prohibition and it is a fair point of criticism.

4. Contract labour and contractor

"Contract labour", section 2(1)(m). A worker deemed to be employed in or in connection with the work of an establishment when he is hired for that work by or through a contractor, with or without the knowledge of the principal employer, and it includes an inter-State migrant worker. It does not include a worker, other than a part time employee, who is regularly employed by the contractor for an activity of the contractor's own establishment, whose employment is governed by mutually accepted standards including engagement on a permanent basis, and who gets periodical increments, social security coverage and other welfare benefits.

"Contractor", section 2(1)(n). A person who either undertakes to produce a given result for the establishment through contract labour, other than by merely supplying goods or articles of manufacture, or supplies contract labour for any work of the establishment as mere human resource; and it includes a sub-contractor.

These are almost word for word the definitions in sections 2(19) and 2(20) of the Social Security Code, with one difference worth noticing: this Code says "a worker", the other says "a worker" too but the surrounding class differs, because "worker" is a defined term here and not there.

5. Inter-State migrant worker

Section 2(1)(zf). A person employed in an establishment who either:

• (i) has been recruited, directly by the employer or indirectly through a contractor, in one State for employment in an establishment in another State; or
• (ii) has come on his own from one State and obtained employment in an establishment of another State, called the destination State, or has subsequently changed establishment within that State, under an agreement or arrangement, and draws wages not exceeding eighteen thousand rupees per month or such higher amount as the Central Government notifies.

Note again that the wage limit attaches only to the second limb, the self-migrant. A worker recruited across State lines is an inter-State migrant worker whatever he earns. This is identical to section 2(41) of the other Code.

6. The other definitions worth knowing

"Appropriate Government", section 2(1)(d). The Central Government for establishments carried on by or under its authority, notified controlled industries, railways including metro railways, mines, oilfields, major ports, air transport service, telecommunication service, banking or insurance companies established by a Central Act, corporations or authorities established by a Central Act, Central public sector undertakings and their subsidiaries, autonomous bodies owned or controlled by the Central Government, and establishments of contractors for any of them. A proviso keeps the Central Government as the appropriate Government for a Central public sector undertaking even if the Central holding falls below fifty per cent after commencement. Otherwise, and expressly for a factory, motor transport undertaking, plantation, newspaper establishment and beedi and cigar establishment, it is the State Government, and an Explanation puts occupational safety, health and working conditions in a factory with the State.

"Occupier", section 2(1)(zs), of a factory: the person who has ultimate control over the affairs of the factory. The proviso deems to be the occupier: any one of the individual partners or members of a firm or association; in the case of a company, any one of the directors except an independent director within section 149(6) of the Companies Act 2013; and for a Government or local authority factory, the person appointed to manage it. A further proviso deals with a ship being repaired in a dry dock available for hire, where the owner of the dock is deemed the occupier for all purposes except prescribed matters relating to the ship's condition.

"Audio-visual worker", section 2(1)(f), and "audio-visual production", section 2(1)(e), replace the cine-worker definitions of the 1981 Act and now expressly reach web-based serials, talk shows, reality shows and sport shows and digital production.

"Working Journalist", section 2(1)(zzm), now covers a person employed in relation to electronic media or digital media as well as a newspaper establishment.

"Day", section 2(1)(q), means a period of twenty-four hours beginning at midnight.

A worked example

Meghna runs a printing works with eighteen workers on powered presses, two managers and one supervisor on 25,000 rupees a month. She contracts out the security and the canteen, and engages a contractor to print the covers, which is what the works exists to do.

Is her works an establishment? Yes. Section 2(1)(v)(i) needs ten or more workers and she has eighteen.

Is it a factory? No. Section 2(1)(w)(i) needs twenty or more workers with the aid of power. She has eighteen. Under the Social Security Code it would be a factory, because section 2(32)(a) needs only ten.

Do her two managers count towards the twenty? No. Section 2(1)(zzl)(iii) excludes a person employed mainly in a managerial or administrative capacity from "worker", and the factory threshold counts workers.

Does the supervisor count? No. He is in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month, so section 2(1)(zzl)(iv) excludes him too.

Are the managers "employees"? Yes. Section 2(1)(t) includes managerial and administrative work, so Chapter III duties are owed in respect of them even though they are not workers.

Is security a core activity? No. Item 2 of the proviso to section 2(1)(p) excludes watch and ward services including security services, provided the establishment is not set up for that activity, and a printing works is not.

And the canteen? Also excluded, item 3, on the same footing.

And printing the covers? That is a core activity. It is an activity for which the establishment is set up, and none of the eleven exclusions covers it. So section 57(1) prohibits contract labour on it, subject to that section's three provisos.

A security guard supplied by the contractor is hurt. Is he contract labour? Yes, unless the contractor's exclusion in section 2(1)(m) applies, that is unless he is regularly employed by the contractor for an activity of the contractor's own establishment on permanent terms with increments, social security and welfare benefits.

Who is the appropriate Government? A printing works is not in the Central list in section 2(1)(d)(i), so the State Government.

What this does NOT mean

"Worker" is not a synonym for "employee". The first excludes managerial and administrative staff and higher paid supervisors; the second includes them.

The factory numbers are not the Social Security Code's numbers. Twenty with power and forty without, not ten and twenty.

An establishment does not always need ten workers. A mine, port or dock under limb (iv) has no threshold, and the first proviso removes it for notified hazardous activity.

The core activity exclusions are not unconditional. Items 1 to 10 apply only if the establishment is not set up for that activity.

"Occupier" is not simply the owner. It is the person with ultimate control, with deeming provisions for firms, companies and Government factories.

Limits and criticism

The rise in the factory thresholds from ten and twenty to twenty and forty takes a large number of small manufacturing units outside the factory provisions, though they remain establishments.

The eighteen thousand rupee line for supervisors is fixed in the definition and will erode, moving supervisors out of the protected class by inflation alone.

Item 11 of the core activity proviso excludes any activity of intermittent nature even if that constitutes a core activity, which weakens section 57 considerably and is undefined.

The State proviso to the factory definition means "factory" may mean different things in different States until each legislature acts, in a Code whose purpose was uniformity.

Quick revision

• Employee 2(1)(t): wide, includes managerial, administrative and supervisory; excludes apprentices under the 1961 Act and the Armed Forces.
• Worker 2(1)(zzl): narrower; excludes the Armed Forces Acts, police and prison staff, those mainly managerial or administrative, and supervisors above eighteen thousand rupees a month; includes working journalists and sales promotion employees.
• Establishment 2(1)(v): ten or more workers for limbs (i) and (ii); a factory for Chapter II at ten or more; a mine, port or dock with no threshold; threshold removed for notified hazardous activity.
• Factory 2(1)(w): twenty with power, forty without, counting all groups and relays; excludes an armed forces mobile unit, a railway running shed and a hotel, restaurant or eating place; a State number in force before commencement prevails in that State.
• Core activity 2(1)(p): what the establishment is set up for, plus what is essential or necessary to it; eleven exclusions, of which ten apply only if the establishment is not set up for that activity, and the eleventh excludes any intermittent activity even if core.
• Contract labour 2(1)(m) and contractor 2(1)(n): as in the other Code; contract labour includes an inter-State migrant worker and excludes a contractor's own regularly employed, properly benefited staff.
• Inter-State migrant worker 2(1)(zf): recruited across States, or self-migrated and drawing not more than eighteen thousand rupees a month.
• Occupier 2(1)(zs): ultimate control; deemed to be a partner, a director other than an independent director, or the manager appointed for a Government factory; dry dock owner for a ship under repair.

Test yourself

1. Distinguish "worker" from "employee" under this Code, and say why it matters. An employee under section 2(1)(t) is any person employed on wages to do work of any kind, including supervisory, managerial and administrative work. A worker under section 2(1)(zzl) does manual, unskilled, skilled, technical, operational, clerical or supervisory work, and excludes persons under the Armed Forces Acts, police and prison staff, those employed mainly in a managerial or administrative capacity, and supervisors drawing more than eighteen thousand rupees a month. It matters because the Code's thresholds are counted in workers and the rights on hours, leave and overtime attach to workers, while the employer's duties are owed in respect of employees.

2. State the factory thresholds under this Code and under the Code on Social Security. Under the OSH Code, section 2(1)(w): twenty or more workers with the aid of power, forty or more without. Under the Code on Social Security, section 2(32): ten or more employees with the aid of power, twenty or more without.

3. An establishment is a mine employing four people. Is it an establishment under the Code? Yes. Section 2(1)(v)(iv) makes a mine, port or vicinity of a port where dock work is carried out an establishment with no headcount threshold at all.

4. Is running a canteen a core activity of a steel plant? No. Item 3 of the proviso to section 2(1)(p) excludes canteen and catering services from what is essential or necessary, provided the establishment is not set up for that activity. A steel plant is not.

5. Would the answer differ for a catering company? Yes. The exclusions apply only if the establishment is not set up for such activity. A catering company is set up for catering, so catering is its core activity.

6. Who is the occupier of a factory owned by a company? The person who has ultimate control over the affairs of the factory, and by the proviso to section 2(1)(zs), in the case of a company, any one of the directors except an independent director within the meaning of section 149(6) of the Companies Act 2013 is deemed to be the occupier.

7. Is a supervisor earning twenty thousand rupees a month a worker? No. Section 2(1)(zzl)(iv) excludes a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month, or such higher amount as the Central Government notifies. He remains an employee under section 2(1)(t).