Section 63: Past liabilities of migrant workers

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

Legal Commentary & Landmark Judgments: Section 63

Section 63 of the Code provides that any debt, advance, or loan incurred by an inter-State migrant worker to a recruiter, contractor, or employer prior to employment shall not be recoverable through deductions from wages or forced service, extinguishing debt bondage mechanisms.

  • Statutory Extinguishment of Pre-Employment Debt Claims: Prohibits the enforcement of past loans, recruitment advances, or ancestral debts through forced labor, wage deductions, or restrictions on mobility.
  • Prohibition of Wage Attachments for Prior Advances: Renders null and void any contract clause authorizing the employer to withhold wages on account of pre-employment loans disbursed by recruitment agents in the source State.
  • Synergy with Bonded Labour Abolition Laws: Reinforces the statutory mandate of the Bonded Labour System (Abolition) Act, 1976, classifying forced retention of labor for debt repayment as a non-bailable criminal offense.
Key Landmark Precedents:
  • Bandhua Mukti Morcha v. Union of India (1984) 3 SCC 161: Constitution Bench held that wherever a worker provides labor for nominal wages or under restrictions on mobility due to prior advances, the presumption of bonded labor under Article 23 immediately arises.
  • People's Union for Democratic Rights v. Union of India (1982) 3 SCC 235: Supreme Court held that forced labor includes labor compelled by economic distress and debt traps engineered by labor contractors (jamadars).
  • Sanjit Roy v. State of Rajasthan (1983) 1 SCC 525: Affirmed that payment of less than statutory minimum wages under the guise of loan recovery or famine relief constitutes forced labor.
Courtroom Practice & Strategic Litigation Guidance:

Corporate procurement contracts must require labor contractors to execute a statutory affidavit confirming that no advances or recruitment fees were charged to workers. Any deduction from monthly payroll purporting to repay recruitment loans constitutes an immediate criminal violation under Section 84.