10/01/2026

Contract Labour Under the Labour Codes: Why Reactive Compliance Can Become an IR Crisis

Why Reactive Compliance Can Become an IR Crisis
Contract labour compliance is no longer merely a legal exercise. It is a workforce architecture challenge.

For many organisations, Labour Codes implementation is still being treated primarily as a legal compliance project. That perspective may be obscuring one of the biggest Industrial Relations and business continuity risks hidden within Labour Codes implementation.

Particularly in manufacturing, infrastructure, logistics, mining, automotive, electronics and other large industrial ecosystems, contract labour is often deeply embedded in the operating model. If organisations wait until enforcement intensifies, regulatory scrutiny increases, a legal challenge emerges or an Industrial Relations flashpoint erupts before restructuring these arrangements, the consequences may extend far beyond non-compliance.

The real danger may not be the law itself. The greater danger could be sudden, unplanned workforce restructuring under pressure.

The Structural Shift Organisations Cannot Underestimate

Under the Occupational Safety, Health and Working Conditions Code, 2020 (OSHWC Code), engagement of contract labour in the core activities of an establishment...

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MG Govardhanan

is the Founder and Managing Partner of Dhanwathi Consulting LLP. With over four decades of leadership experience in Industrial Relations, Manufacturing HR and Workforce Governance, he advises organisations on Labour Codes implementation, Industrial Relations strategy and Workforce Governance and ESG.

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Author

MG Govardhanan

is the Founder and Managing Partner of Dhanwathi Consulting LLP. With over four decades of leadership experience in Industrial Relations, Manufacturing HR and Workforce Governance, he advises organisations on Labour Codes implementation, Industrial Relations strategy and Workforce Governance and ESG.

October 2026

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