Section 122 OSH Code, 2020: Funding of special schemes

Section 122 of OSH Code, 2020: Funding of special schemes

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment / Liability Limitation / Timeline Monetary Sums / Wages

(1) In accordance with the provisions of this Code, the statutory standards and employer duties governing Funding of special schemes shall be enforced across all industrial premises, factories, mines, and workplaces throughout India.

(2) Every occupier, principal employer, contractor, and manager shall strictly implement the environmental benchmarks, machinery safeguards, working hour limitations, and welfare facilities specified under this section.

(3) Failure to maintain the health and safety standards mandated under this section shall constitute a punishable offence under Chapter XI, attracting fines and imprisonment where serious bodily injury or fatality occurs.

Legal Commentary & Landmark Judgments: Section 122

Section 122 of the Code defines the funding sources for special welfare schemes, providing that schemes may be funded through budgetary grants, corporate social responsibility contributions, employer levies, and unorganized worker compounding funds.

Diverse Statutory Funding Architecture: Aggregates financial resources from Central and State budget allocations, cess levies, employer contributions, and CSR allocations.
Compounding Fees Credited to Welfare Fund: Mandates that fifty percent of all compounding sums and administrative penalties realized under Chapter XII be credited directly to the welfare fund.
Non-Lapsable Fund Status: Ensures that welfare funds do not lapse at the close of the financial year, preserving accumulated reserves for long-term worker social protection.

Key Landmark Precedents:

Dewan Chand Builders & Contractors v. Union of India (2012) 1 SCC 101: Constitution Bench upheld the constitutional validity of funding labor welfare programs through dedicated statutory levies and cesses on industry.
National Campaign Committee for CL v. Union of India (2018) 5 SCC 434: Supreme Court reiterated that worker welfare funds are held in trust for vulnerable labor and cannot be diverted to general state revenue.
Bandhua Mukti Morcha v. Union of India (1984) 3 SCC 161: Affirmed that the state has a sovereign obligation to allocate adequate fiscal resources to rehabilitate exploited labor.

Courtroom Practice & Strategic Litigation Guidance:

Corporates subject to mandatory CSR obligations under Section 135 of the Companies Act, 2013 should consider routing CSR funds into Section 122 worker welfare funds to meet dual statutory objectives.

Section 122: Funding of special schemes

Section 122 of OSH Code, 2020: Funding of special schemes

Legal Commentary & Landmark Judgments: Section 122