A food processing plant in Tamil Nadu ran its packing floor through one contractor and its maintenance and material handling through us. The packing contractor's licence was suspended for failing to report its work orders, and the site found out only when the order had already been passed. Its counsel advised moving the crew, and the crew came across to us without a lost shift. This is a representative composite; no single client is described.
The situation
The ground was the one the Code treats most directly. Section 50(1) of the OSH Code 2020 requires a contractor that receives a work order to intimate it to the licensing authority. Section 50(2) lets the authority suspend or cancel the licence, after a show-cause notice, if it does not. The contractor had taken on two new sites elsewhere without intimating either [VERIFY: composite]. It received the show-cause notice, replied late, and the licensing authority passed a speaking order suspending the licence (Tamil Nadu draft OSH rules, r.52) [VERIFY: whether Tamil Nadu has since notified final rules].
What the site had to decide
Whether it could keep the crew on site while the contractor appealed. Section 54 deems it a contravention of the Code where a principal employer employs contract labour through a contractor who is required to hold a licence and "has not obtained such licence". The Code does not say in so many words how a suspended licence is treated, and the contractor had thirty days to appeal and the appellate authority thirty more to decide (s.52).
How the crew moved
| Day | Step | Basis |
|---|---|---|
| 0 | Site receives the suspension order from the contractor; counsel briefed; we confirm our own licence has headroom for ~90 more across all our sites [VERIFY: composite] | Licence number applies across all sites (Central Rules r.89(2)(ii); TN draft r.46(2)(ii)) |
| 1–2 | Crew briefed in Tamil and Hindi; each worker's UAN and ESIC number collected from the outgoing contractor's last ECR and challan [VERIFY: composite] | The same numbers carry across employers |
| 2–4 | New appointment letters issued by us as the new employer, and the work-order intimation filed for the site [VERIFY: composite] | OSH Code s.6(1)(f), s.50(1) |
| 4–6 | Crew moves across shift by shift, so the packing line never runs without a full team [VERIFY: composite] | — |
| Next payday | The outgoing contractor pays the crew for the days worked up to the transfer; the site holds its last invoice until the wage intimation and PF and ESI returns for those days are in [VERIFY: composite] | s.55(1); the site's fallback under s.55(3) |
The outgoing contractor's appeal was still pending when the changeover finished, and the site did not return the work to it [VERIFY: composite]. Its security deposit with the licensing authority, and any question of unpaid dues against it, sat with that authority and the contractor (s.55(4)).
What changed
| Measure | Before | After |
|---|---|---|
| Licence status | A copy filed at engagement | Licence number, expiry and status confirmed every quarter for every contractor [VERIFY: composite] |
| Notices on a licence | Nothing in the contract | Contractor must tell the site of any show-cause notice on its licence as soon as it is served, with a copy |
| Work-order intimation | Not asked for | Contractor gives the site a copy of the intimation for this site's work order |
| Contingency | None | A second licensed contractor already onboarded for another function, with headroom confirmed in writing |
The lesson carries to any site that depends on one contractor for a whole floor. The licence is the contractor's, but section 54 makes its status the site's concern. A show-cause notice the site never hears about takes away most of the time it would have had to plan. How any particular suspension should be handled is a matter for that site's own counsel. This composite describes a method, not an outcome.
How Velura Services helps
We check every contractor licence on a site when we start there, and before we take on a crew we confirm our own licence has the headroom across all our sites. When a site moves a crew to us after another contractor's licence is suspended, we take the workers across on their existing UAN and ESIC numbers, issue new appointment letters and file the work-order intimation for the site.
Sources
- Figures are a representative composite drawn from our own deployments; no single client is described. Founder to confirm or replace before publish.
- Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), Gazette text hosted by DGFASLI. Sections cited: s.6(1)(f) (appointment letter), s.50 (work-order intimation; suspension or cancellation for failing to give it), s.52 (appeal; thirty days; decided within thirty days), s.54 (employment through an unlicensed contractor), s.55(1), (3) and (4) (wages; principal employer's fallback; payment from the security deposit). 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 89(2)(ii) (number not to exceed the licence on any day). Opened and read [VERIFY: against the e-Gazette original].
- 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.46(2)(ii) (number not to exceed the licence), r.52 (suspension or cancellation for failing to intimate a work order). Opened and read.