Contract Labour & Labour Codes - Whether permissible or not permisible - what are Core Activities

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 Contract Labour – Distinction between the Core & non-core Activity

CLRA /OSH Code


A) OSH Code

A blanket prohibition has been imposed by section 57 of the Occupational Safety. Health and Working Conditions Code,2020 ("OSH Code", hereinafter) on the engagement of contract labour in the core activities of the establishment of the principal employer. 


• The Code, under section 2(1)(p) defines a "core activity" as any activity for which the establishment is set up. 


Core Activities

• This would further include any activity which is essential or necessary to any activity for which the establishment of the principal employer is set up. 


• The definition of core activity is very wide and sweeping in its ambit. However, 

even if certain activities are essential or necessary to the establishment of the principal employer, they would not be considered as core activities. 

      Non-Core Activities

• Illustrations: 


(i) sanitation works, including sweeping, cleaning, dusting and collection and disposal of all kinds of waste; 

(ii) watch and ward services including security services; 

(iii) canteen and catering services; 

(iv) loading and unloading operations; 

(v) running of hospitals, educational and training Institutions, guest houses, clubs and the like where they are in the nature of support services of an establishment; 

(vi) courier services which are in nature of support services of an establishment;

(vii) civil and other constructional works, including maintenance; 

(viii) (viii) gardening and maintenance of lawns and other like activities; 

(ix) housekeeping and laundry services, and other like activities, where these are in nature of support services of an establishment; 

(x) transport services including, ambulance services; 

(xi) any activity of intermittent nature even if that constitutes a core activity of an establishment.


Exceptions (even considered core)

As per the proviso to section 57(1) of the Code lays following are exceptions, wherein the principal employer would be under liberty to engage contract labour for core activities. These exceptions are:

 (a) the normal functioning of the establishment is such that the activity is ordinarily done through contractor; or 

(b) the activities are such that they do not require full time workers for the major portion of the working hours in a day or for longer periods, as the case may be; 

(c) any sudden increase of volume of work in the core activity which needs to be accomplished in a specified time.

‘Contract Labour’ – Modified definiton

 Also, the definition of "contract labour" has been modified by the Codes to such extent that the workers who fulfil the following criteria would not come under its ambit.

i) The worker (other than part time employee) is regularly employed by the contractor for any activity of his establishment. 


ii) His employment is governed by mutually accepted standards of the conditions of employment (including engagement on permanent basis)


iii) The worker gets periodical increment in the pay, 


This is just a summary and for specific advisory, it would be prrudent to analyse and review any system hollistic with the industry specific business, practive and future goals and get a clear picture with reorientation.   

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