Section 45 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 45 of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code) decides who falls under Part I of Chapter XI (Contract Labour). It applies to establishments and to manpower supply contractors with fifty or more contract labour in the preceding twelve months, and leaves out establishments with work of only an intermittent or casual nature.
Part I of Chapter XI applies to (i) every establishment in which fifty or more contract labour are employed, or were employed on any day of the preceding twelve months, through contract, and (ii) every manpower supply contractor who has employed fifty or more contract labour on any day of the preceding twelve months (45(1)). It does not apply to an establishment where work is only of an intermittent or casual nature (45(2)), and work is not intermittent if performed for more than 120 days in the preceding twelve months, or, if seasonal, for more than 60 days in a year.
The two tests in section 45(1)
| Limb | Who | Threshold | Look-back |
|---|---|---|---|
| (i) | Every establishment | Fifty or more contract labour employed, or were employed | On any day of the preceding twelve months, through contract |
| (ii) | Every manpower supply contractor | Fifty or more contract labour employed | On any day of the preceding twelve months |
How the threshold works
- The count is of contract labour, not total workforce. Directly employed workers are not counted.
- The test is met if the number was reached on any single day in the preceding twelve months. A drop below fifty later does not take the establishment out of Part I until the twelve-month look-back clears.
- The threshold applies separately to the establishment (the principal employer side) and to the manpower supply contractor (the supplier side). Both can be covered by the same contract.
- "Contract labour" and "contractor" are defined in section 2; see our article on the definitions of contract labour, contractor and principal employer.
Companies that use contractors across several plants or sites can use our labour law compliance service to count contract labour day by day and decide whether Part I applies.
What Part I brings with it
If section 45 applies, the contractor needs a licence (section 47), must intimate work orders (section 50), must not charge workers any fee (section 49), and the principal employer has welfare and wage duties. These are covered in the next articles in this series on sections 46 and 47 and sections 48 and 49.
The intermittent or casual work exclusion (45(2))
Part I does not apply to an establishment in which work only of an intermittent or casual nature is performed.
Who decides a doubtful case: if a question arises whether work is intermittent or casual, the appropriate Government decides it after consultation with the National Board or a State Advisory Board, and its decision is final. The boards are covered in section 16 and section 17.
Explanation: when work is NOT intermittent. Work is not deemed intermittent if:
- it was performed for more than 120 days in the preceding twelve months; or
- it is of a seasonal character and is performed for more than 60 days in a year.
The Explanation only tells you when work is not intermittent. It does not define "casual", and it does not say that work performed for fewer days is automatically intermittent. A borderline case needs the appropriate Government's decision.
What the Central Rules, 2026 say
The Central Rules, 2026 (G.S.R. 345(E), 8 May 2026) do not restate the section 45 threshold. They do use it indirectly: Rule 90(4) gives the licence fee table and starts with "No license is required up to 49 contract labour" (Nil), followed by the fee for 50 to 100 contract labour and higher bands. That matches the section's "fifty or more" test. Where a State Government is the appropriate Government, its own rules apply. For the fee table, see Rules 89 and 90.
Practical points
- Count daily. Keep a daily headcount of contract labour by contractor. You need to show whether fifty was reached on any day in the last twelve months.
- Count both sides. A principal employer may be under 50 while a manpower supply contractor supplying it is over 50 across clients, and the reverse.
- Watch the look-back. After a peak, the twelve-month look-back keeps Part I alive.
- Seasonal units. Check your days: more than 60 days in a year for seasonal work, or more than 120 days in the preceding twelve months for other work, takes the work out of the "intermittent" category.
- Do not assume. If your work might be intermittent or casual, ask the appropriate Government to decide, since its decision is final.
- Link to the licence. Applicability leads to licensing under section 47 and the wider obligations under the Code.
Example. A plant used 52 contract workers on one day in March for a shutdown, and 30 on every other day. On the following January it checks the look-back: fifty or more were employed on a day in the preceding twelve months, so limb (i) of section 45(1) is met, and the contractor must hold a licence unless the intermittent or casual exclusion applies.
For the old-law comparison on the 20-worker threshold, see our post on applicability of the Contract Labour Act to 20 workers, and on what the new labour codes change for contract labour.
Need help deciding if the contract labour rules apply?
The daily count, the twelve-month look-back and the intermittent-work exclusion are where most applicability questions arise. Our labour law compliance team can review your contractor headcounts and contracts and tell you whether and from when Part I applies to you and your contractors.
Key takeaways
- Part I applies to establishments and manpower supply contractors with fifty or more contract labour on any day of the preceding twelve months.
- Part I does not apply where work is only intermittent or casual (45(2)).
- Work is not intermittent if performed for more than 120 days in twelve months, or seasonal work for more than 60 days a year.
- The appropriate Government decides doubtful cases after consulting the National or a State Advisory Board; its decision is final.
Read next
- Sections 43 and 44: employment of women and adequate safety
- Sections 46 and 47: designated authority and licensing of contractors
- Sections 48 and 49: licence procedure and no fees from contract labour
- Contract labour under the new labour codes
Disclaimer: Based on the Occupational Safety, Health and Working Conditions Code, 2020 (as enacted) and, where noted, the Occupational Safety, Health and Working Conditions (Central) Rules, 2026 (G.S.R. 345(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.