A factory that runs contract crews needs two different licences held by two different people. The occupier holds the factory licence, which covers the premises, the installed power and the number of persons employed there. Each contractor with 50 or more contract labour holds its own licence under the OSH Code 2020, which caps how many workers it may supply across every site it serves. Neither licence stands in for the other.
The two licences side by side
They are issued to different holders for different things, under different parts of the same Code. For a factory in Tamil Nadu, the State's draft OSH rules of 11 April 2022 set the procedure for both [VERIFY: whether Tamil Nadu has since notified final rules].
| Factory licence | Contractor licence | |
|---|---|---|
| Held by | The occupier of the factory | The contractor |
| Needed when | Before any premises is used as a factory (TN draft r.73(1)) | Before supplying or engaging contract labour where the contract labour Part applies: an establishment with 50 or more contract labour, or a manpower supply contractor with 50 or more, on any day of the past twelve months (OSH Code s.45(1), s.47(1)) |
| What it limits | Installed horsepower and the number of persons employed, both written into the licence (r.74(1)) | The number of contract labour the contractor may supply or engage, across all its work (s.47(1); TN draft r.46(2)(ii)) |
| Applied for | Form XXI on the Directorate of Industrial Safety and Health portal, to the Deputy Chief Inspector-cum-Facilitator (r.73(2)) | Form XII on the same portal for factory work, to the licensing authority under s.119 (r.45) |
| Security | None | A deposit per worker before issue: ₹500 under the Tamil Nadu draft (r.47(1)), ₹1,000 under the Central Rules (r.90(1)) |
| Valid for | To 31 December of the licensed year; fees can be paid for up to fifteen years at once (r.73(5), (7)) | Five years for the number specified (s.48(3)) |
| Renewal | Applied for at least two months before expiry (r.75(2)) | At least thirty days before expiry under the Tamil Nadu draft (r.48(2)); thirty to ninety days under the Central Rules (r.91) |
Why one does not cover the other
Because the factory licence is about the place and the contractor licence is about the employer. A factory licence says the premises may be used for its process, with so much power and so many people. It says nothing about whether the contractor bringing those people in is licensed to do so. The contractor licence says the contractor may supply up to a stated number of workers. It says nothing about the premises those workers go into.
The Code puts the consequence of a missing contractor licence on the site as well as the contractor. Section 54 provides that where a principal employer employs contract labour through a contractor who needs a licence and has not obtained one, "such employment shall be deemed to be in contravention of the provision of this Code". A valid factory licence does not change that.
Where the two meet: headcount and facilities
On the floor, at two points. The first is the number of people. The factory licence fixes the persons employed, and Tamil Nadu's draft says those limits "shall not be altered" without an amendment (r.74(1)). A seasonal ramp through a contractor raises the number on the floor at the same moment as it raises the contractor's deployed count [VERIFY: that contract workers count toward the persons-employed limit on the factory licence]. A ramp that needs an amended contractor licence may need an amended factory licence too.
The second is the split of facilities. Rule 44(3) of the Tamil Nadu draft makes it a condition of the contractor's licence that, where its workers work at the principal employer's premises, the principal employer maintains health, safety and working conditions and provides the welfare facilities under sections 23 and 24 of the Code. "All other facilities and entitlements" are the contractor's. Section 53 of the Code puts the same welfare duty on the principal employer.
Can one application cover both?
The Code allows it. Section 119 lets "any person desirous of obtaining common licence in respect of a factory ... and for engaging contract workers or any combination thereof" apply once to the authority the appropriate Government designates. The authority must issue it electronically within forty-five days of the application, or it is deemed issued and auto-generated (s.119(4)). Licences obtained under the old central laws before the Code commenced remain valid for the period they were issued for, and must be taken afresh after that (s.119(5)).
A common licence still carries both sets of limits: the factory's power and persons, and the contract labour number. It does not merge the occupier's and the contractor's duties into one.
What a site should check
- Its own factory licence covers the current installed power and the number of persons on the floor at the peak, not just the permanent headcount.
- Each contractor's licence is in force, for a number that covers its total deployment across all its sites, issued by the right authority, State or central.
- Renewal dates for both are diarised: two months ahead for the factory licence, thirty days or more for the contractor's.
- A ramp plan checks both licences together before the extra crew arrives, and the work-order intimation is updated when the contractor's number changes.
- The facilities split in rule 44(3) is reflected in the contract, so the site provides the welfare facilities and the contractor the rest.
How Velura Services helps
Before we deploy, we give the site our contractor licence: the licensed number, the expiry date and the issuing authority, with our current total deployment across all sites. When a ramp is planned, we confirm our licensed headroom in writing and raise the headcount early, so the site can check its own factory licence limit while we amend ours.
Sources
- Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI. Sections cited: s.45(1) (contract labour Part at fifty), s.47 (contractor licence; number of contract labour and security; central licence for more than one State), s.48(3) (five-year validity), s.53 (welfare facilities by the principal employer), s.54 (employment through an unlicensed contractor), s.79(1) (rules for approval and licensing of factories), s.119 (common licence; forty-five days or deemed; old licences). Opened and read.
- Occupational Safety, Health and Working Conditions (Tamil Nadu) Rules, 2022 (draft), G.O. Ms. No. 38, 11 April 2022, Tamil Nadu Government Gazette Extraordinary No. 216. Rules cited: r.44(3) (facilities split as a licence condition), r.45 (contractor's application, Form XII), r.46(2) (licence conditions), r.47(1) (₹500 security per worker), r.48(2) (contractor's renewal), r.73 (factory licence, Forms XXI and XXII, validity), r.74(1) (amendment of power and persons limits), r.75(2) (factory renewal two months ahead). Opened and read.
- Occupational Safety, Health and Working Conditions (Central) Rules, 2026, G.S.R. 345(E) dated 8 May 2026, mirrored copy of the Gazette. Rule 90(1) (₹1,000 security per worker), r.91 (renewal window). Opened and read for earlier articles in this cluster [VERIFY: against the e-Gazette original].