Dear Parmod_tvs,
It is all depends upon the PE whether to accept it or not. Generally in manufacturing / process industry or engineering industry or in small and medium scale industry, there is a regidity. The contractor is not permitted to sub-contract. And thereby the contractor can not give the labour compliance under the codes allotted to somebody else.
However in construction or in turnkey project, multi-tier system is well accepted. In multi-tier system, there are many sub-contractors, sub/sub-contractors under the main contractor. One contractor gives the contract to another, that another contractor gives it to somebody else. That somebody else gives the contract further to a person who actually execute the contract work. In such case the labour compliance is made by this person who actually execute the contract work with the help of labours engaged by him. PE has to accept the compliance by such person under his code, as a sub-contractor to the main contractor. He i.e. PE has no option.
However, in this case it is advised to take appropriate / suitable undertaking cum indemnity from main contractor by PE.