Navigating Legal Risks: How Can Employers Prevent Prosecution After Workplace Accidents?

We are a wholly owned Indian subsidiary of our foreign counterpart, running our manufacturing unit in India. Recently, after the Bhopal Gas Disaster conclusion, some questions came to our mind, which are mentioned herein. It will be very helpful to us if you kindly help us to find answers to these questions:

1. What are the provisions that an employer needs to obey so they will not be prosecuted in case of any accidents like the Bhopal Gas Disaster or the death of any employee due to a snake bite inside the plant?

2. In the case of such an accident, can our Directors, Non-Executive Directors, MD, Chairman, and our holding company's/foreign counterpart's Directors be prosecuted?

3. What are the liabilities of the Indian Executives and also the foreign Executives of our parent company?

I request you to kindly help me sort out these questions. It will be very helpful to me.

1. You shall comply with the provisions of the Factories Act as well as Factory Rules to avoid prosecution.

2. In the case of prosecution, the Executive in charge of Operations will be the only one prosecuted, and no Executive Directors will face prosecution. Please refer to the judgment on SMS Pharmaceuticals by the Supreme Court.

3. I did not understand the term "liabilities." Could you please clarify if it refers to punishment or compensation?

Regards,
Ravi

Dear Abhijit,

Paragraph-wise replies to your questions are as below:

1. Provisions Employers Must Adhere to Avoid Prosecution in Accidents

Employers have to conduct safety audits frequently, maintain records of these audits, conduct fire, safety, and emergency training regularly, and take action against any unsafe actions by employees or unsafe conditions. In the post-independence era, a large number of accidents have already occurred. Your management can learn lessons from them.

2. Liability of Directors and Executives in Case of Accidents

If "criminal negligence amounting to death" or "negligence amounting to death" is proven, the company management is liable for prosecution. If it is proven that employees were trained on unsafe practices but still ignored instructions from management, then management is not liable for prosecution.

The Bhopal gas tragedy occurred because management and other staff in authority ignored the unsafe conditions existing in the plant. A journalist, Mr. Keshwani, had written a series of articles in the local newspaper about how the Union Carbide plant was not only unsafe for workers but also for the local population. However, the management ignored all warnings.

The management of British Petroleum is no different. One of their engineers had warned their top executives about an impending disaster on April 20, 2010. A week later, there was an explosion in the oil well.

The Carlton fire tragedy in Bangalore was entirely avoidable. It is the greed of management that led to the loss of innocent lives.

What management is required to do is to "listen to their inner conscience or to what their employees say, rather than perfunctorily implementing any law."

3. Liabilities of Indian and Foreign Executives

Liabilities are under the provisions of the Indian Penal Code.

Regards,
Dinesh V Divekar

"Limit of your words is the limit of your world"

Dear all,

In case of accidents like the Bhopal Gas tragedy, the penal action can fall under the Factories Act 1948 as well as the Indian Penal Code. Both actions are independent of each other.

Penal Action under the Factories Act

Concerning the Factories Act, the prosecution will primarily be against the Occupier and Manager of the Factory. It is important to note that these officials are responsible for the unsafe conditions existing in the factory. While the nature of your operations is not entirely clear from the limited details provided, it can generally be said that the provisions are explicit in the Factories Act and Rules. In addition to the Factories Inspector who is responsible for inspecting and certifying the premises, you can also seek the services of known experts in the field of audit under the Factories Act. Consider engaging OHSAS and ISO 18000 experts for this purpose. If your principals abroad are not named as the factory Occupier, they cannot be prosecuted under the Factories Act 1948.

Liability under the Indian Penal Code (IPC)

Regarding the Indian Penal Code (IPC), it represents the law of the land, and all top officials, including your principals abroad, could be charged for criminal negligence not amounting to murder (Section 304A). Foreign principals could be held vicariously responsible for any defaults in design or unsafe working methods. In such cases, liability would exist even in fatal accidents.

While there is no foolproof method to exempt foreign principals in such cases, apart from statutory compliances, a safe working culture and a high level of safety consciousness must be maintained.

Regards,
KK