Labour Codes: #10 Working Hours And Overtime Under New Labour Codes

With the introduction of the Occupational Safety, Health and Working Conditions Code, 2020 ("OSH Code"), working hours and overtime are set for reform for establishments.

For establishments (including factories and other industrial establishments), Section 25 of the Occupational Safety, Health and Working Conditions Code, 2020, read with Draft Rules 28 and 56, lays out the framework for daily/weekly hours, spread over, and overtime, replacing the corresponding provisions of the Factories Act, 1948

However, for non-factory establishments such as offices, shops, and commercial entities, the position continues to be governed by respective state-specific Shops and Establishment Acts, pending the finalisation and notification of the new rules under the OSH Code.

Key Provisions

A. Daily Hours, Spread Over & Weekly Limits

1. Position for factories: Under the Factories Act, the daily cap was 9 hours, with a 10-hour spread-over (including rest). The OSH Code proposes reducing daily working hours to 8 and increasing the spread-over to 12 hours through section 25. This aims to support flexible scheduling and longer breaks, balancing productivity and employee well-being.
2. Position for establishment other than factories: State-specific Shops and Establishment Acts continue to apply, prescribing a 48-hour weekly cap and varying daily/spread-over limits. As such, implementing a 4-day workweek with 3 holidays remains uncertain, because extended spread-over hours are subject to state-specific rules that would clarify the interplay of the OSH Code vis-a vis State-wise Shops and Establishment Acts.

B. Overtime:

1. Position for factories: For factories, the OSH Code increases the quarterly overtime cap from 50 to 125 hours, while retaining the entitlement to double wages.
2. Position for establishment other than factories: For establishments other than factories, overtime remains governed by state-specific Shops and Establishments Acts, for e.g., Maharashtra permits 125 hours per quarter, whereas Karnataka limits it to 50. Ambiguity continues until there is clarity on whether the OSH Code will override these state-level provisions.

C. Removing Restrictions on Women's Working Hours

Section 43 of the OSH Code allows women to work night shifts (before 6 a.m. and after 7 p.m.) across all establishments, subject to their consent and prescribed safety conditions under Draft Rule 67. However, it is to be noted that even before the Code's enforcement, several states such as Gujarat, Haryana, and Uttar Pradesh (for factories), and Rajasthan (for shops and establishments) have issued conditional exemptions allowing night shift work for women. These remain valid but state-specific until the rules for the Code are fully implemented.

Key Business Impacts

1. Compliance: Factories must align with centralised working hour and overtime norms, while non-factory establishments must still follow varying state laws.
2. HR Practices: Increased overtime limits and flexible spread-over hours will require shift restructuring. Night shift employment of women will need safeguards like transport, consent, and safety compliance.
3. Policy Implementation: Workplace policies on hours, leave, and gender inclusion must be updated, balancing current state laws with anticipated Code-led central uniformity.