Case Study

When a peak crew outgrew the contractor's licence

A Tamil Nadu electronics plant's festive ramp took its contractor past the headcount on its licence. How it was found, fixed in a week, and kept fixed.

Two hands fitting a metal bracket to a green circuit board with a screwdriver on a brushed steel workbench.

An electronics assembly plant in Tamil Nadu brought us in to supply part of its festive ramp alongside its existing contractor. Our onboarding checks include every contractor licence on the site, and the existing contractor's licence covered fewer contract labour than it already had at this one gate. The licence was amended in under a week, and the site changed how it plans a ramp. This is a representative composite; no single client is described.

The situation

120contract labour covered by the existing contractor's licence [VERIFY: composite figure]
165of that contractor's workers on the plant's gate register at the peak of the ramp [VERIFY: composite figure]
45workers above the licensed number, at this site alone [VERIFY: composite figure]
8days from the gap being found to the amended licence [VERIFY: composite figure]

The plant assembled consumer electronics on two shifts and ramped its contract crews every year from September for the festive season [VERIFY: composite]. Its existing contractor had held a licence for years, and the plant had a copy on file. Nobody had compared the number on it with the number of people coming through the gate, because the licence had been checked once, at engagement, and the crew had grown every season since.

The licence sets a ceiling, not a formality. Section 48(3) of the OSH Code 2020 makes a contractor's licence valid for five years "in respect of the number of contract labour specified therein", and requires a contractor that wants more to apply for an amendment and deposit the additional security. Rule 89(2)(ii) of the OSH (Central) Rules 2026 makes it a condition of every licence that the number of contract labour employed by the contractor "shall not, on any day, exceed the maximum number specified in the licence". That number counts the contractor's whole workforce, not one site's, so the gap was at least 45 and possibly larger.

What was at stake

The contractor's licence, and possibly the site's own position. A contractor that breaches a licence condition can have the licence suspended or revoked after a fifteen-day show-cause notice (OSH Code s.51; Central Rules r.95). Section 54 deems it a contravention of the Code where a principal employer engages contract labour through a contractor who needs a licence and has not obtained one.

What we did

  • Told the site the same day, with the numbers. The licence maximum from the Shram Suvidha portal against the contractor's names on that day's gate register.
  • The contractor applied to amend. An application in Form XXI on the Shram Suvidha portal, with the additional bank guarantee at ₹1,000 a worker for the increase (Central Rules r.90(1), r.96). The rules require an amended licence within seven days of a complete application, failing which it is deemed amended (r.96(5)); here it issued on the eighth day after the gap was found, because the application took a day to complete [VERIFY: composite].
  • The ramp did not wait, and it did not run over the cap either. Until the amendment issued, the contractor held its crew at the licensed number and the rest of the ramp's positions were staffed from our own bench under our licence, which we had checked had room before we deployed anyone [VERIFY: composite].
  • The work-order intimation was updated. Rule 93(5) requires the contractor to notify any change in the number of contract labour on the portal, and rule 94 requires the work order itself to be reported with its headcount.

What changed

MeasureBeforeAfterNotes
Licence maximum in the contractor fileA copy, never compared with anythingThe licensed number and expiry date on the contractor summaryFor every contractor on site [VERIFY: composite]
Headcount against the licenceNot checked after engagementChecked weekly during a ramp, monthly otherwiseGate register against the licensed number
Ramp planningHeadcount agreed with the contractor by phoneRamp plan includes the contractor's licence headroom across all its sitesContractor confirms in writing [VERIFY: composite]
Work-order clauseNone on the licenceContractor must hold an amended licence before deploying above its licensed numberAnd must report its total deployed count on request
RenewalNot diarisedReminders at 90 and 30 days before expiryRenewal application window under Central Rules r.91

The headroom question was the one that changed planning most. Because the licence counts a contractor's whole workforce, a contractor that is well inside its licence at this site can still be over it in total. The plant now asks each contractor, before a ramp, for its licensed number and its current total deployment, and builds the ramp around the gap.

The lesson carries to any site that ramps through a contractor. A licence checked once at engagement says nothing about the crew three seasons later, and the number on it is a ceiling the contractor carries everywhere it works. How a particular over-cap deployment affects a site is a question for that site's own counsel. This composite describes a method, not an outcome.

How Velura Services helps

Before we deploy anyone, we check our own licence has room for the crew across all our sites, and we look at every other contractor licence on the site against its gate count. When a site plans a ramp, we confirm our licensed headroom in writing and amend the licence before the extra crew arrives, not after.

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Sources

Frequently asked questions

Can a contractor deploy more workers than its licence allows?

No. Rule 89(2)(ii) of the OSH (Central) Rules 2026 makes it a licence condition that the number of contract labour employed by the contractor shall not, on any day, exceed the maximum specified in the licence. Section 48(3) of the OSH Code requires a contractor that wants more to apply for an amendment and deposit additional security before the number rises.

How does a contractor increase the number on its licence?

By applying for an amendment in Form XXI on the Shram Suvidha portal, with the additional bank guarantee of ₹1,000 for each extra worker. Under rule 96 of the OSH (Central) Rules 2026 the amended licence is issued within seven days of a complete application, or is deemed amended and auto-generated on the portal if it is not.

Does the licence number count only the workers at one site?

No. The condition in the licence counts the number of contract labour employed by the contractor, which covers its whole workforce under that licence, not one establishment. A contractor comfortably inside its number at one site can be over it in total, so a site planning a ramp should ask for the contractor's total deployment as well as the licensed number.

What can happen if a contractor exceeds its licence?

Breaching a licence condition allows the licensing authority to suspend or revoke the licence after a fifteen-day show-cause notice, under section 51 of the OSH Code and rule 95 of the Central Rules. Whether the site is also exposed, under section 54 on engaging a contractor without a required licence, is a question of law for the site's own counsel.