Outsourcing Under India’s Labour Codes: Redrawing The Core Activity Boundary

Outsourcing in India has traditionally been structured around commercial considerations such as operational flexibility, scalability, and cost efficiency, leading businesses across sectors to rely extensively on contract labour rather than direct employment on the principal employer’s payroll.

With the transition from the Contract Labour (Regulation and Abolition) Act, 1970 (“CLRA”) to the Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”), the legal analysis has become significantly more nuanced. The question is no longer limited to whether a function can be outsourced for business convenience; it now extends to whether the relevant activity is legally permissible to be performed through contract labour at all.