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Labour Laws and Practice · Industrial and Labour Laws Audit

Third Party Audit and Certification under OSH Code Section 37

Updated 11 October 2026 · Fact-checked

Section 37 of the OSH Code, 2020 lets the appropriate Government notify a scheme to empanel experts for third party audit and certification of specified start-up establishments or classes of establishments. Experts are assigned randomly through a web-based scheme, audit as the scheme says, and report to the employer and the Inspector-cum-Facilitator.

Understand Third Party Audit and Certification under OSH Code

Normally, compliance with labour law is checked by the Government's own inspectors. Section 37 adds a second route. It lets the Government bring in outside experts to audit and certify certain establishments.

The section does not apply to every establishment. The appropriate Government must first notify a scheme. The scheme empanels experts with the prescribed qualifications and experience. It is meant for start-up establishments or a class of establishments that the notification specifies. If an establishment is not covered by the notification, section 37 does not reach it.

The design aims at independence. The empanelled experts are not picked by the employer. Under sub-section (2)(a), the appropriate Government assigns the audit and certification in a randomised manner through a web-based scheme. This reduces the chance that an employer shops for a friendly auditor.

Once assigned, the expert carries out the audit and certification in the manner and for the purpose the scheme specifies, and performs the duties listed in the scheme. The expert then submits a report to both the concerned employer and the Inspector-cum-Facilitator. So the report goes to the establishment and to the enforcement authority at the same time.

For a company secretary, the practical point is this. The details (qualifications, fees, checklists, timelines) sit in the notified scheme and rules, not in the section. Always read the scheme for the establishment in question.

Key rules to remember

Empanelment power (s. 37(1))
Appropriate Government + notification → scheme to empanel experts for specified start-up establishments or classes of establishments
Experts must have the qualifications and experience that are prescribed. Coverage depends on the notification.
Assignment (s. 37(2)(a))
Audit and certification assigned randomly, by the appropriate Government, through a web-based scheme
The employer does not choose the auditor.
Conduct (s. 37(2)(b))
Audit and certification done in the manner and for the purpose specified in the scheme
The scheme governs the method and purpose.
Reporting (s. 37(2)(c))
Report → concerned employer AND Inspector-cum-Facilitator
Two recipients. Duties are those specified in the scheme.

How to solve Third Party Audit and Certification under OSH Code questions

Use this order for any problem or case question on third party audit and certification under the OSH Code.

  1. 1State the provision: section 37 of the OSH Code, 2020, on third party audit and certification.
  2. 2Check coverage: has the appropriate Government notified a scheme, and does the establishment fall within the specified start-up establishments or class of establishments?
  3. 3Check the expert: is the person empanelled under the scheme and does the person have the prescribed qualifications and experience?
  4. 4Check assignment: was the audit assigned by the appropriate Government in a randomised manner through the web-based scheme, rather than chosen by the employer?
  5. 5Check conduct and duties: did the expert follow the manner, purpose and duties specified in the scheme?
  6. 6Check reporting: was the report submitted to the employer and to the Inspector-cum-Facilitator?
  7. 7Conclude clearly on compliance, and add the practical point, such as reading the notified scheme and keeping records ready.

Quickest way: Four-point section 37 check

When to use it: Use when a short-answer or case question gives a scenario and asks whether the third party audit was valid or what the process is.

  1. Scheme: notified by the appropriate Government?
  2. Scope: start-up or specified class of establishment?
  3. Selection: empanelled expert, assigned randomly via web-based scheme?
  4. Submission: report to employer and Inspector-cum-Facilitator?
  5. If any point fails, say the process does not match section 37 and explain which one.

Common mistakes in Third Party Audit and Certification under OSH Code

  • Saying every establishment must get a third party audit.

    Students read the section as a general rule.

    Fix: Write that it applies only to start-up establishments or classes of establishments specified in the notification under a scheme.

  • Saying the employer appoints the auditor.

    Confusion with company statutory audit, where the company appoints the auditor.

    Fix: State that the appropriate Government assigns the expert in a randomised manner through a web-based scheme.

  • Saying the report goes only to the Government or only to the employer.

    Students remember one recipient.

    Fix: Write that the report goes to the concerned employer and to the Inspector-cum-Facilitator.

  • Giving the power to the Central Government alone.

    Other sections, such as section 18, name the Central Government specifically.

    Fix: Section 37 says the appropriate Government. Use that phrase.

  • Quoting section 37 of the Code on Wages, 2019, for this topic.

    Both Codes have a section 37. The Wages Code one deals with adjustment of customary or interim bonus.

    Fix: Always name the Code with the section number. Here it is the OSH Code, 2020.

  • Inventing details of qualifications, fees or timelines.

    Students try to add detail to fill the answer.

    Fix: Say these are as prescribed or as specified in the scheme, and do not state figures.

Worked examples

Example 1

Explain the provisions of section 37 of the OSH Code, 2020 on third party audit and certification. Who selects the auditor, and to whom is the report submitted?

Show the solution
  1. Provision: section 37 allows the appropriate Government, by notification, to formulate a scheme to empanel experts with prescribed qualifications and experience, for start-up establishments or classes of establishments specified in the notification.
  2. Selection: the empanelled experts are assigned the third party audit and certification by the appropriate Government in a randomised manner through a web-based scheme. The employer does not select.
  3. Conduct: the expert carries out the audit and certification in the manner and for the purpose specified in the scheme and performs the duties specified in it.
  4. Reporting: the expert submits the report to the concerned employer and to the Inspector-cum-Facilitator.
  5. Conclusion: the section brings independent expert checking into compliance verification, but only where a scheme has been notified for the establishment.

Answer: The appropriate Government assigns the empanelled expert randomly through a web-based scheme. The expert audits as the scheme specifies and submits the report to the concerned employer and to the Inspector-cum-Facilitator.

Example 2

Nova Tech Solutions Pvt. Ltd. is a start-up that falls within a class of establishments specified in a notification under section 37 of the OSH Code. Its director, Mr. Rao, wants to hire a consultant of his choice from the empanelled list to carry out the audit and send the report only to him. Advise him.

Show the solution
  1. Coverage: the establishment is within the class specified in the notification, so a third party audit under the scheme can apply to it.
  2. Selection: under section 37(2)(a), the appropriate Government assigns the audit in a randomised manner through a web-based scheme. Mr. Rao cannot choose the expert, even from the empanelled list.
  3. Reporting: under section 37(2)(c), the expert submits the report to the employer and also to the Inspector-cum-Facilitator. It cannot go only to Mr. Rao.
  4. Practical step: Nova Tech should read the notified scheme, keep its records ready, and cooperate with the assigned expert.
  5. Conclusion: Mr. Rao's plan does not match section 37 on both selection and reporting.

Answer: Mr. Rao cannot pick the auditor, because the appropriate Government assigns the expert randomly through a web-based scheme. The report must go to both the company and the Inspector-cum-Facilitator, not to him alone.

Exam tips

  • Write the full name, OSH Code, 2020, with section 37. The Wages Code also has a section 37 on a different subject.
  • Learn the four anchors: notified scheme, empanelled experts, randomised web-based assignment, report to employer and Inspector-cum-Facilitator.
  • In case questions, use the sequence provision, facts, conclusion, then add a practical compliance point such as checking the notified scheme.
  • Do not state qualifications, fees or deadlines. Say they are as prescribed or as specified in the scheme.
  • Link the topic to the audit chapter: say that third party certification is an external check that sits alongside the Inspector-cum-Facilitator's role.

Practice questions from Industrial and Labour Laws Audit

Third Party Audit and Certification under OSH Code in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Third Party Audit and Certification under OSH Code: frequently asked questions

What does section 37 of the OSH Code, 2020 provide?

It lets the appropriate Government notify a scheme to empanel experts for third party audit and certification of specified start-up establishments or classes of establishments. The experts are assigned randomly through a web-based scheme and report to the employer and the Inspector-cum-Facilitator.

Can an employer choose its own third party auditor under the OSH Code?

No. Section 37(2)(a) says the appropriate Government assigns the audit and certification in a randomised manner through a web-based scheme. This keeps the process independent.

Who gets the third party audit report?

The expert submits the report to the concerned employer and to the Inspector-cum-Facilitator. Both must receive it.

Does third party audit apply to all establishments?

No. It applies to start-up establishments or classes of establishments specified in the Government's notification under the scheme. Check the notification for the establishment in question.