Prohibition of Contract Labour in Core Activities

In one line

Contract labour may not be employed in the core activities of an establishment, unless the work is ordinarily done through a contractor, or does not need full time workers, or is a sudden surge; and even where the prohibition bites, the workers are not absorbed.

In exam wording: section 57(1) of the Occupational Safety, Health and Working Conditions Code 2020 prohibits, notwithstanding anything in Part I, the employment of contract labour in the core activities of any establishment, subject to three provisos permitting engagement where the activity is ordinarily done through a contractor, where it does not require full time workers for the major portion of the working hours, or where there is a sudden increase in the volume of work to be completed in a specified time; section 57(2) provides the machinery for deciding whether an activity is a core activity; and section 58 empowers the appropriate Government, in an emergency, to exempt an establishment or class of establishments or contractors from all or any provisions of the Code.

Why the law has this at all

The Contract Labour (Regulation and Abolition) Act 1970 had two limbs, and only one of them ever worked.

Regulation worked, after a fashion: establishments registered, contractors were licensed, and the principal employer was liable for wages and amenities. Abolition did not. Under section 10 of that Act the appropriate Government may, after consulting the Central or State Board, prohibit by notification the employment of contract labour in any process, operation or other work in any establishment; and in deciding, it was to have regard to whether the work was incidental to or necessary for the industry, whether it was of a perennial nature, whether it was ordinarily done through regular workmen, and whether it was sufficient to employ a considerable number of whole time workmen. The Explanation made the Government's decision on perennial nature final.

Every word of that turns on a discretionary notification. No notification, no abolition, however core the work. Litigation therefore ran for thirty years on two questions: could the workers force a notification, and if one issued, what happened to them?

The OSH Code answers the first question by removing the discretion. Section 57(1) prohibits contract labour in core activities by the statute itself. No notification, no Board, no application by a union. If the activity is a core activity and no proviso applies, contract labour may not be employed on it.

The second question the Code does not answer at all, and that silence is why the leading case still governs.

Some words this chapter uses

Core activity of an establishment, section 2(1)(p), is any activity for which the establishment is set up, and includes any activity essential or necessary to it, subject to an eleven item proviso listing what is not to be considered essential or necessary if the establishment is not set up for that activity: sanitation, security, canteen and catering, loading and unloading, hospitals and educational institutions of a support character, courier services of a support character, civil and constructional works including maintenance, gardening, housekeeping and laundry of a support character, transport including ambulance services, and any activity of intermittent nature even if that constitutes a core activity.