Business Laws and Ethics · Factories Act, 1948

OSH Code 2020: Definitions and Factory Coverage

Updated 10 October 2026

The Occupational Safety, Health and Working Conditions Code, 2020 is meant to subsume the Factories Act, 1948 once in force, and it defines key terms such as factory, worker, occupier, employer and manufacturing process. To answer, state the definition, apply its worker-count and power test to the facts, and name who is responsible. Compare with the 1948 Act where asked.

Understand OSH Code 2020: Definitions and Factory Coverage

The OSH Code, 2020 is a single Code on safety, health and working conditions. It brings together several older laws, including the Factories Act, 1948, and subsumes them once it is brought into force. Questions may refer to the 1948 Act, the Code, or both, so you must know the old Act and how the Code treats the same ideas.

A note on sources. The provisions supplied for this page cover Sections 16, 20, 81, 82 and 135 of the Code and Section 91A of the 1948 Act. The Code's definitions clause is not among them. The definitions below (factory thresholds, the Government's power to change them, exclusions, worker, occupier, employer, manufacturing process) are stated from the usual reading of that clause, without a section number. Confirm the exact wording in the bare Code before the exam.

Start with coverage. A place is a factory only if it passes a test. There must be a manufacturing process, and the number of workers must reach a threshold. The threshold depends on whether power is used. Under the Code the basic figures are usually stated as 20 workers with power and 40 without. Under the 1948 Act they were 10 and 20. The Code also lets the appropriate Government change these limits by notification. The exact ceiling is not in the supplied text, so confirm it in the bare Code. So 20 and 40 are the starting figures, not always the final ones. Check whether a notification is mentioned in the question. Also check how the Code counts workers, for example whether it looks at a single day or a period. The 1948 Act looked at any day of the preceding twelve months, but the Code's wording on this is not confirmed here. The Code's definition is also usually read as excluding mines, mobile units of the armed forces, railway running sheds, hotels, restaurants and eating places.

Coverage can also be extended. Under Section 81, the appropriate Government may declare by notification that the provisions of the factory Part apply to any place where a manufacturing process is carried on, with or without power, irrespective of the number of workers. Once declared, the place is deemed a factory, the owner is deemed the occupier, and any person working there is a worker. "Owner" includes a lessee or mortgagee with possession of the premises.

Next, the people. A worker is a person employed in a manufacturing process or other work connected with the establishment. This is so whether the person is employed directly or through an agency such as a contractor, and whether for pay or not. The occupier is the person with ultimate control over the affairs of the establishment. For a company, it is usually any one of the directors. For a firm or association, it is any one of the partners or members. For a Government-owned factory, it is the person appointed to manage its affairs. The employer is the wider term. It covers the person who employs workers directly or through others, and includes the occupier and the contractor. Verify these definitions in the Code's definitions clause.

Finally, manufacturing process is defined broadly. It covers making, altering, repairing, finishing, packing, cleaning, breaking up or otherwise treating or adapting any article or substance for use, sale, transport, delivery or disposal. It also covers pumping oil, water or sewage, generating or transmitting power, printing, ship-building and cold storage of articles. The supplied provisions show how the Code is administered. The National OSH Advisory Board (Section 16) advises the Central Government. The State Government makes rules (Section 135). The appropriate Government can make rules on dangerous operations (Section 82). Surveys are covered by Section 20.

Key rules to remember

Factory test (OSH Code): Manufacturing process + (20 or more workers with power, or 40 or more without power); The 1948 Act used 10 and 20. The appropriate Government may notify different limits by notification. Mines, hotels, restaurants and eating places are usually read as outside the definition. The 1948 Act counted workers on any day of the preceding twelve months; do not assume the Code uses the same wording. These points come from the Code's definitions clause, which is not in the supplied text, so confirm the thresholds, the ceiling and the counting rule in the bare Code.
Extension of coverage: Section 81: Government notification → place deemed a factory, owner deemed occupier, person working there deemed a worker; Applies irrespective of the number of workers. Owner includes a lessee or mortgagee with possession.
Occupier: Person with ultimate control over affairs; company: any one director; firm or association: any one partner or member; Government-owned factory: the person appointed to manage its affairs. Not in the supplied provisions; verify in the Code's definitions clause.
Worker: Person employed directly or through an agency (including a contractor), with or without pay, in a manufacturing process or related work; Contract labour is included. The definition is usually read as excluding members of the armed forces; verify in the Code's definitions clause.
Safety and occupational health survey: Section 20: Authorised officer + written notice to employer → survey; employer affords all facilities; worker must undergo medical examination and give information; Time spent by the worker counts as working hours for wages and overtime. The Factories Act equivalent is Section 91A, which covers factories only.
Dangerous operations: Section 82: Rules can declare a process dangerous, restrict employment of pregnant women, require periodic medical examination at the occupier's cost, and set welfare and protective equipment requirements; Applies to processes exposing persons to a serious risk of bodily injury, poisoning or disease.

How to solve OSH Code 2020: Definitions and Factory Coverage questions

Use this order for any question on definitions or coverage under the OSH Code.

1Identify what is asked: a definition, a coverage test on facts, a person's responsibility, or a comparison with the Factories Act, 1948.
2Write the relevant definition in your own words, using the statutory terms.
3For a coverage question, check the manufacturing process first, then the worker count, then the power condition.
4Check the facts for exclusions (such as a hotel or restaurant) and for a Section 81 notification, which removes the worker-count test.
5Identify who is the occupier or employer on the facts, such as a director, partner or appointed manager.
6State the legal result in one clear line, with the section number only if you are sure of it.
7If asked for a comparison, give two or three points: the worker threshold, the terms used (occupier, Chief Inspector-cum-Facilitator) and the single-Code structure.

Quickest way: Three-check factory test

When to use it: Use for MCQs and short case questions asking whether a premises is a factory.

Check 1: Is a manufacturing process carried on? If not, it is not a factory, unless a Section 81 declaration applies.
Check 2: Take the worker count as the question gives it. Compare with 20 (with power) or 40 (without power), unless the question mentions a different notified limit.
Check 3: Look for an excluded place or a Government declaration. Then name the occupier.

Common mistakes in OSH Code 2020: Definitions and Factory Coverage

Using the old 10 and 20 worker limits for the OSH Code.
Textbooks on the Factories Act, 1948 are more familiar and the old figures stick in memory.
Fix: Learn them as a pair: 1948 Act is 10 and 20, OSH Code is 20 and 40 (the Government may notify different limits). Check which law the question names.
Counting only the workers present on the day of inspection.
Students read 'employed' as a current headcount.
Fix: Use the counting basis the question gives. The 1948 Act looked at any day of the preceding twelve months. Whether the Code uses the same wording is not in the supplied text, so confirm it in the bare Code.
Treating occupier and employer as the same word.
Both seem to mean the person running the business.
Fix: The occupier has ultimate control of the affairs. The employer is the wider term and includes the occupier and the contractor.
Excluding contract labour from workers.
Students assume a worker must be on the company's own payroll.
Fix: A worker includes persons employed through an agency or contractor, and even those not paid for the work.
Saying a small unit can never be a factory.
Students forget the extension power.
Fix: Under Section 81 the appropriate Government can notify a place as a factory irrespective of the number of workers.
Writing that a surveying officer needs no notice, or that a worker's survey time is unpaid.
Section 20 is skipped as minor.
Fix: Remember written notice to the employer is required, and time spent on medical examination or giving information counts as working hours.

Worked examples

Example 1

Sundaram Textiles Pvt. Ltd. runs a unit that weaves cloth using power looms. It employs 25 workers on every working day. Is the unit a factory under the OSH Code, 2020? (Use the Code's basic thresholds of 20 workers with power and 40 without, as usually stated. Assume no different limit has been notified. These figures are not in the supplied text, so confirm them in the Code's definitions clause.)

Show the solution

Manufacturing process: weaving cloth is making or finishing an article for sale, so a manufacturing process is carried on.
Power: the looms are power-driven, so the threshold is 20 workers.
Workers: the unit employs 25 workers every working day, and 25 is at least 20, so the threshold is met. Because the count is the same every day, the exact counting period does not change the result.
Exclusions: it is not a mine, hotel, restaurant or eating place.
Notification: if the Government had notified a different limit, the answer could change. The question states none, so the basic limit of 20 applies.
Comparison: under the 1948 Act the power threshold was 10 workers, so the unit would also have been a factory under that Act.

Answer: Yes. Assuming no different limit has been notified, the premises is a factory under the OSH Code, because a manufacturing process with power is carried on and 25 workers are employed every working day, which meets the 20-worker threshold for power-driven units.

Example 2

Explain what a Chief Inspector-cum-Facilitator or other authorised officer can do under Section 20 of the OSH Code, 2020, and compare briefly with Section 91A of the Factories Act, 1948.

Show the solution

Power: during normal working hours, or at any other time the officer considers necessary, the authorised officer can survey the factory, mine or other establishment after giving written notice to the employer.
Employer's duty: the employer, which the Explanation defines to include the manager for a factory or, for other establishments, the person responsible for safety and occupational health, must afford all facilities, including testing plant and machinery and collecting samples and data.
Worker's duty: if required, every worker must undergo a medical examination and give all relevant information.
Pay: time spent on this is deemed a working hour for calculating wages and overtime.
Report: the report submitted to the appropriate Government is deemed to be a report of an Inspector-cum-Facilitator under the Code.
Comparison, scope: Section 20 covers factories, mines and other establishments or classes of establishments. Section 91A of the 1948 Act covers factories only.
Comparison, officers: under the Code these are the Chief Inspector-cum-Facilitator (factory or mine), the Director General of Factory Advice Service and Labour Institute (factory), the Director General of Mines Safety (mine), the Director General of Health Services (factory or mine), and any officer authorised by the appropriate Government for other establishments. Section 91A names the Chief Inspector, the Director General of Factory Advice Service and Labour Institutes and the Director General of Health Services, or an officer authorised by the State Government or those authorities. It does not name the Director General of Mines Safety.
Comparison, notice and report: under Section 91A notice goes to the occupier, manager or other person in charge of the factory, and any report goes to the State Government and is deemed to be a report of an Inspector under the Act. Under the Code, 'occupier or manager' is replaced by 'employer' (which includes the manager or the person responsible for safety and health), and 'State Government' is replaced by 'appropriate Government'. The report is deemed to be a report of an Inspector-cum-Facilitator.

Answer: Section 20 allows surveys on written notice, requires the employer's facilities, the worker's medical examination and information, and counts that time as working hours. It follows the pattern of Section 91A of the Factories Act, 1948 but changes and extends it: it covers mines and other establishments, uses Chief Inspector-cum-Facilitator in place of Chief Inspector, adds the Director General of Mines Safety for mines, replaces 'occupier or manager' with 'employer' (defined to include the manager or the person responsible for safety and health), and replaces 'State Government' with 'appropriate Government'.

Exam tips

Write the worker thresholds as a pair and name the law each belongs to. Examiners like the 1948 versus Code comparison.
In case questions, apply the facts in order: manufacturing process, workers, power, exclusions. This gives step marks even if the final call is close.
For MCQs, watch for options using the old numbers (10 and 20) as distractors, and read carefully how the question counts the workers.
Always identify the occupier by entity type: company means a director, firm means a partner.
Quote Section 81, 82 or 20 only when the question matches it. Do not invent other section numbers.

Practice questions from Factories Act, 1948

OSH Code 2020: Definitions and Factory Coverage: frequently asked questions

Does the OSH Code, 2020 replace the Factories Act, 1948?

The Code brings several labour safety laws, including the Factories Act, 1948, into one Code, and it subsumes the Act once it is brought into force. Check the commencement position and your syllabus wording for the term you appear in. Learn the Code's rules and know the old Act for comparison.

Who is an occupier under the OSH Code, 2020?

The occupier is the person with ultimate control over the affairs of the establishment. In a company it is usually any one of the directors, and in a firm or association any one of the partners or members. For a Government-owned factory it is the person appointed to manage its affairs. Verify the wording in the Code's definitions clause.

What is the difference between the Factories Act, 1948 and the OSH Code on the definition of factory?

Both need a manufacturing process and a minimum number of workers. The 1948 Act set the limit at 10 workers with power and 20 without. The Code is usually stated as 20 with power and 40 without, and its definition is usually read as excluding places like hotels and restaurants. The Government may notify different limits. These points are not in the provisions supplied for this page, so confirm the figures and the counting rule in the bare Code.

Can a place with fewer workers still be treated as a factory?

Yes. Under Section 81 of the Code, the appropriate Government can declare by notification that the factory provisions apply to a place where a manufacturing process is carried on, irrespective of the number of workers. The place is then deemed a factory.