Contract Labour: Application and the Designated Authority

In one line

The contract labour Part applies to an establishment employing fifty or more contract labour, and to a manpower supply contractor who has employed fifty or more, but not where the work is only intermittent or casual.

In exam wording: section 45 of the Occupational Safety, Health and Working Conditions Code 2020 fixes the application of Part I of Chapter XI at fifty or more contract labour employed on any day of the preceding twelve months, whether in the establishment or by a manpower supply contractor, excludes establishments where work only of an intermittent or casual nature is performed, and by its Explanation deems work performed for more than one hundred and twenty days in the preceding twelve months, or seasonal work performed for more than sixty days in a year, not to be intermittent; and section 46 empowers the appropriate Government to appoint Gazetted officers as the designated authority for licensing.

Why the law has this at all

Contract labour is the oldest way of getting work done without becoming anybody's employer. The establishment gets the labour; the contractor carries the liabilities; and the worker, who does the same job beside a permanent workman, gets neither the wage nor the security.

Parliament first legislated on this in the Contract Labour (Regulation and Abolition) Act 1970, and the name of that Act states its two limbs exactly. Regulation meant registering the establishment, licensing the contractor and making the principal employer answerable for welfare and wages. Abolition meant the appropriate Government could, by notification under section 10, prohibit contract labour in a given process after consulting the advisory board.

The OSH Code repeals that Act by section 143(1)(h) and rebuilds both limbs, but it changes the balance between them. Regulation survives almost intact in sections 45 to 56. Abolition is no longer a notification at all: section 57 prohibits contract labour in core activities by the force of the statute itself, subject to three provisos. That is the single largest change in this Part and it is dealt with in its own chapter.

Section 45 is where the Part begins, and the number in it decides who is inside the scheme. Two things about that number are worth stating at once.

It went up. The 1970 Act applied at twenty contract labour. This Code applies at fifty. An establishment engaging thirty contract workers was regulated in 2020 and is not regulated now.

It reaches the supplier. The 1970 Act was addressed to the establishment where the labour worked. Section 45(1)(ii) adds the manpower supply contractor who has himself employed fifty or more contract labour, so a staffing agency is inside the Part on its own numbers, whoever its clients are and however small each client is.