On 6 November 1996, a three-judge bench held that once the appropriate Government issues a Section 10 notification under the Contract Labour Act prohibiting contract labour in a process, the displaced workers stand automatically absorbed into the principal employer's establishment. The doctrine lived for five years before a Constitution Bench overruled it in SAIL.
The OSH Code consolidates thirteen statutes — Factories Act 1948, Mines Act 1952, Contract Labour 1970, Inter-State Migrant Workmen 1979, BOCW 1996, Plantation Labour 1951 and seven more — into a single occupational-safety frame. A practitioner's read on the new factory threshold, the migrant worker definition, the contract-labour line, and the June 2026 commencement gap.
On 30 August 2001, a five-judge Constitution Bench unanimously held that no automatic absorption flows from a Section 10 notification under the Contract Labour Act. Air India Statutory Corporation was prospectively overruled. The remedy for displaced contract workers is industrial adjudication — not direct constitutional absorption.
On 27 January 2026, a two-judge bench of Justices Pankaj Mithal and S.V.N. Bhatti held that disputes relating to the employment, termination, or alleged sham nature of contract labour arrangements must be adjudicated by a Labour Court or Industrial Tribunal under the Industrial Disputes Act, 1947 — and that the State's reference jurisdiction operates even on an apprehended dispute and is not foreclosed by the absence of a prior written demand on the employer. The judgment reaffirms the SAIL safeguards for contract labour and supplies a working architecture for contract-labour litigation.