Section 125: Power to exempt new factories

The Occupational Safety, Health and Working Conditions Code, 2020 (Act No. 37 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter XIV: Miscellaneous
Competent Labour Forum
Act No. 37 of 2020

Legal Commentary & Landmark Judgments: Section 125

Section 125 of the Code provides for conditional exemptions for new factories, empowering the State Government to exempt newly established manufacturing units from specified provisions to encourage industrial investment, subject to preserving core safety and health standards.

  • Investment Incentive Exemption Architecture: Authorizes temporary exemptions for greenfield manufacturing enterprises to foster industrial expansion and employment generation.
  • Non-Derogable Core Safety & Health Protections: Explicitly bars exemptions from fundamental safety provisions, hazardous process controls, fire suppression standards, and accident reporting requirements.
  • Strict Sunset Clause on Greenfield Concessions: Caps the duration of new factory exemptions to prescribed initial operational windows, after which full statutory compliance becomes mandatory.
Key Landmark Precedents:
  • Gujarat Mazdoor Sabha v. State of Gujarat (2020) 10 SCC 459: Supreme Court reiterated that industrial development cannot be pursued by trading away the basic health, safety, and dignity of the working class.
  • J.K. Industries Ltd. v. Chief Inspector of Factories (1996) 6 SCC 665: Affirmed that core statutory safety provisions are absolute and cannot be waived through discretionary executive dispensations.
  • Gammon India Ltd. v. Union of India (1974) 4 SCC 396: Affirmed that statutory welfare standards apply equally across seasoned and new industrial undertakings.
Courtroom Practice & Strategic Litigation Guidance:

Greenfield project developers must ensure that any incentive exemption obtained from state investment boards does not purport to waive machine guarding, ventilation, or hazardous process approvals, as such waivers are void ab initio under Section 125.