OSH Code: Inspection, Offences, Penalties and Compounding

Safety law is enforced by inspection, and its penalties matter most where a breach causes death or injury. The OSH Code reshapes enforcement in the same way as the other Codes, with Inspector-cum-Facilitators, randomised web-based inspection, and an opportunity to comply before prosecution. It also adds a distinctive feature: courts may direct that part of the fine be paid to the injured worker or the family of a worker who died. This note covers the enforcement machinery, the penalties and compounding.

1. The Enforcement Machinery

Figure 1: From inspection to prosecution

• Facilitation. Inspector-cum-Facilitators are expected to help employers comply, through advice and information, as well as to enforce.
• Chief Inspector-cum-Facilitator. Heads the inspectorate in the State, with powers across its territory.
• Medical officers. Appointed to examine workers and certify fitness in hazardous work.

2. Penalties

Figure 2: Main penalties under Chapter XII

• Compensation from fines. For contraventions resulting in death or serious bodily injury, the court may direct that at least 50% of the fine be paid to the heirs of the deceased or to the injured worker, in addition to compensation under the Social Security Code.
• Repeat offences. Enhanced penalties apply where the same contravention is repeated after conviction.
• Companies. Persons in charge of and responsible for the business are liable with the company; in a factory, the occupier is a director (J.K. Industries, 1996)
• Absolute liability. Criminal penalties sit alongside civil liability; for hazardous enterprises, liability for harm is absolute under M.C. Mehta v Union of India (1987)

3. Composition and the Social Security Fund

• Composition, s.114. Offences punishable with fine only may be compounded for 50% of the maximum fine, and offences punishable with imprisonment up to one year or fine for 75%, by a notified officer.
• Social Security Fund, s.115. Amounts received from composition are credited to the Social Security Fund for the welfare of unorganised workers.
• Comparison. The same 50% and 75% pattern appears in the IR Code; the Code on Wages uses 50% only (Topic 37)

4. Frequently Asked Questions

Can a fine under the OSH Code be paid to the victim?

Yes. Where a contravention results in death or serious bodily injury, the court imposing the fine may direct that not less than fifty per cent of it be paid as compensation to the heirs of the deceased or to the injured person. This is in addition to any compensation payable under the Social Security Code.

Can OSH Code offences be compounded?

Yes. Under section 114, offences punishable only with fine may be compounded for half of the maximum fine, and offences punishable with imprisonment up to one year or fine for three-fourths of the maximum fine. The amounts are credited to the Social Security Fund under section 115.

5. Related Topics

• Topic 29: Duties of Employers and Employees. The duties whose breach is punished.
• Topic 37: Decriminalisation and Compounding across the Codes. The enforcement models compared.