Core activity is the work an establishment is set up to do, plus whatever is essential to it, and section 57 of the Occupational Safety, Health and Working Conditions Code 2020 prohibits contract labour in it unless one of three exceptions applies. Eleven support functions are carved out by definition. The prohibition is written into the Code itself, not left to a government notification as it was under the 1970 Act.
What the Code means by core activity
Section 2(1)(p) defines core activity as "any activity for which the establishment is set up and includes any activity which is essential or necessary to such activity". For a component plant that is machining, assembly, finishing and the quality work on the line. The proviso then lists eleven activities that are not treated as essential or necessary unless the establishment was set up for them, and those are where contract labour has always lived.
- Sanitation, including sweeping, cleaning, dusting and collection and disposal of all kinds of waste
- Watch and ward, including security services
- Canteen and catering
- Loading and unloading operations
- Running of hospitals, educational and training institutions, guest houses, clubs and the like, where they are support services
- Courier services that are support services
- Civil and other constructional works, including maintenance
- Gardening and maintenance of lawns and other like activities
- Housekeeping and laundry, and other like activities, where they are support services
- Transport services, including ambulance services
- Any activity of an intermittent nature, even if it would otherwise be a core activity
The list reads like a facility-management scope because that is what it is. The qualifier matters: a security agency is set up for watch and ward, so for the agency it is core; for a gearbox plant it is not. The eleventh item is the one that does the work on a shop floor. Intermittent work is outside core activity by definition, and section 45(2) supplies the test the Code uses elsewhere: work is not intermittent if it ran for more than 120 days in the preceding twelve months, or is seasonal and ran for more than 60 days in a year. A site that leans on the intermittent carve-out needs day counts that stay under those lines.
The three exceptions in section 57
A principal employer may put contract labour on a core activity in three cases, and only three. Section 57(1) opens with "notwithstanding anything contained in this Part", so nothing else in the contract-labour chapter, a licence included, overrides it.
| Exception | Text of s.57(1) | What it looks like on a site |
|---|---|---|
| (a) Ordinarily contracted | "the normal functioning of the establishment is such that the activity is ordinarily done through contractor" | A process the plant has always bought in, with a contract history to show it: specialist heat treatment, a packaging line run by a co-packer |
| (b) Not full-time work | "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" | Line changeovers, periodic calibration, a task that fills two hours of an eight-hour shift |
| (c) Sudden volume | "any sudden increase of volume of work in the core activity which needs to be accomplished in a specified time" | A festive-season order, a customer pull-forward, a recovery plan after a line stoppage, each with a start and an end date |
Two readings follow from the wording. Exception (c) is written around a deadline, so a surge crew that stays on after the specified time has run out is no longer inside it; the seasonal bench described elsewhere on this site is exactly the (c) case, and its exit date is part of the compliance, not just the budget. Exception (a) depends on what is normal for this establishment, so a plant that has run its own assembly for a decade cannot switch it to a contractor and call that ordinary. Whether a given arrangement fits any of the three is a question of fact, and on a contested site it is the designated authority's question, not the site's.
How this differs from the 1970 Act
Under the Contract Labour (Regulation and Abolition) Act 1970 there was no general prohibition. Section 10 let the appropriate government prohibit contract labour in a named process at a named class of establishment by notification, after consulting the advisory board, and the Supreme Court's constitution bench in Steel Authority of India v. National Union Waterfront Workers (2001) held that even such a notification did not make the contract workers employees of the principal employer [VERIFY: CLRA s.10 mechanism and the SAIL holding, from the repealed statute and general legal knowledge; the judgment was not re-read for this piece]. The Code inverts the default.
| Contract Labour (R&A) Act 1970 | OSH Code 2020 | |
|---|---|---|
| Default position | Contract labour permitted anywhere unless prohibited | Prohibited in core activity by s.57(1); permitted in the eleven support activities and under three exceptions |
| Who decides | Government, by notification for a process and class of establishment, after the advisory board [VERIFY: s.10 procedure] | The statute itself; the designated authority under s.57(2) only where a question is raised |
| Definition of the protected work | None; each notification described its own process | Statutory definition at s.2(1)(p) with a closed list of exclusions |
| Threshold | 20 contract labour | 50 contract labour, per s.45(1) |
| Seasonal and intermittent work | Excluded by s.1(5) with a 120-day and 60-day test [VERIFY: subsection] | Excluded by s.45(2) with the same 120-day and 60-day test, and intermittent work excluded from core activity by s.2(1)(p)(xi) |
For a Chennai-belt plant the practical change is where the analysis happens. Under the old Act a site could wait for a notification that usually never came. Under the Code every role staffed through a contractor needs an answer to the question "is this core, and if so which exception", and the site has to be the one holding that answer when an inspector-cum-facilitator or a union asks for it.
What a site does about roles on the line
Sort every contracted role into one of three buckets and write down the reason. The support bucket is the eleven listed activities, and needs no more than the list. The core bucket needs the exception relied on and the evidence for it: the contract history for (a), the hours profile for (b), the order and the end date for (c). The third bucket is the borderline, where the site is not sure, and that is what the reference procedure is for.
Section 57(2) lets the appropriate government appoint a designated authority and lets an aggrieved party, which the Rules read to include the principal employer, the contractor, a trade union or the workers, apply for a decision. For establishments in the central sphere the Ministry of Labour and Employment issued the procedure by an order dated 7 July 2026 under Rule 101 of the OSH (Central) Rules 2026: the application goes by email or Speed Post to the Under Secretary (Contract Labour), the designated authority reports within 60 days, and the Ministry decides within 30 days of the report [VERIFY: order number, rule number and both timelines, from a legal-press report of the order; the order itself was not opened]. The application asks for the licence number, the work order, the engagement period, the headcount of contract and permanent workers on the activity, and the dispute. A site that has done the three-bucket exercise has all of that already. For a private factory in Tamil Nadu the appropriate government is the State, and the equivalent procedure sits with the Tamil Nadu Labour Department under its own rules [VERIFY: whether Tamil Nadu has notified its OSH rules and a designated authority].
The exposure for getting it wrong sits with the principal employer. Section 94 makes the employer or principal employer liable for any contravention of the Code at a penalty of not less than ₹2 lakh and up to ₹3 lakh, with up to ₹2,000 a day if it continues after conviction. Section 57 has no penalty of its own, so that general provision is the one that applies [VERIFY: that no specific penalty for s.57 appears elsewhere in Chapter XII]. Whether a particular role at a particular plant is core, and whether an exception is available for it, turns on facts the Code hands to the designated authority, and a site that is unsure should take the question to its own counsel or to that authority rather than to this article.
Sources
- Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette of India Extraordinary, 29 September 2020, hosted by DGFASLI, Ministry of Labour and Employment — s.2(1)(p) (definition and the eleven exclusions), s.45 (applicability, 50 contract labour, the 120-day and 60-day intermittent test), s.57 (prohibition, three exceptions, designated authority), s.94 (general penalty). Opened and read.
- Ministry of Labour and Employment, FAQs on the OSH Code, 2020 (January 2026) — Q2 on the threshold moving from 20 to 50. Opened and read.
- Ministry of Labour and Employment, order dated 7 July 2026 under Rule 101 of the Occupational Safety, Health and Working Conditions (Central) Rules, 2026, on the procedure for determining core activity [VERIFY: order number and URL; read via SCC Online's report of 15 July 2026, used for the date and timelines only]
- Contract Labour (Regulation and Abolition) Act, 1970, s.1(5) and s.10, repealed on the Code's commencement [VERIFY: the repealed text was not re-read]; Steel Authority of India Ltd v. National Union Waterfront Workers, (2001) 7 SCC 1 [VERIFY: citation]