Home  /  OSH Code, 2020  /  Section 45

Section 45: Application of Part I to contract labour

The Occupational Safety, Health and Working Conditions Code, 2020 (Act No. 37 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter IX: Contract Labour & Inter-State Migrant Workers
Competent Labour Forum
Act No. 37 of 2020
Section 44 All 143 Sections of OSH Code, 2020 Section 46

Legal Commentary & Landmark Judgments: Section 45

Section 45 of the OSH Code establishes the statutory licensing regime for contractors employing fifty or more contract labourers, mandating digital common licenses and holding principal employers responsible for worker welfare.

  • Core Legal Standard: Section 45 of the Occupational Safety, Health and Working Conditions Code establishes the statutory licensing regime for contractors employing contract labour.
  • Sub-Section (1): Chapter: Under sub-section (1), no contractor to whom this Chapter applies (employing fifty or more contract workers) shall undertake or execute any work through contract labour except under and in accordance with a licence issued by the licensing authority.
  • Digital Infrastructure Jurisdiction: The Code introduces a single digital common licence valid for five years across multiple states and establishments.
  • Operational Mechanism: Under Section 47, the contractor must satisfy prescribed criteria regarding capability, track record, and financial security.

This statutory framework establishes clear operational guidelines, balancing legal compliance with procedural safeguards.

Key Landmark Precedents:
  • Steel Authority of India Ltd. v. National Union Waterfront Workers (2001) 7 SCC 1: A Constitution Bench of the Supreme Court held that the regulation of contract labour does not lead to automatic absorption of contract workers into the permanent service of the principal employer, unless the contract is proved to be a sham, bogus, or artificial camouflage to deny statutory benefits.
  • Standard-Vacuum Refining Co. of India Ltd. v. Its Workmen (1960) 3 SCR 466: The Supreme Court established the classic tests governing contract labour, holding that where work is perennial and necessary for the core business of the enterprise, engaging contract labour instead of regular workmen constitutes an unfair practice.
Legal Commentary:

Section 45 balances contractor flexibility with worker protection. The unified pan-India digital contractor licence eliminates bureaucratic red tape while ensuring that unlicensed contractors cannot operate, and principal employers face statutory vicarious liability for contractor wage defaults.

Section 44 All 143 Sections of OSH Code, 2020 Section 46