Important Contract Labour Case Laws

1) An industrial dispute can be raised for abolition of contract labour system even by the workman of principal employer and for appropriate service conditions by the workman of the contractor.

 Gujarat Electricity Board, Thermal Power Station, Ukai, Gujarat vs. Hind Mazdoor Sabha, AIR 1995 SC 1893: 1995 LIC 2207 :( 1995) 71 FLR 102 :( 1995) 5 SCC 27:1995 LLR 552:199511 LLI 790 (SC).


2) Only the appropriate government can abolish the contract labour system and its decision can be challenged before Industrial Tribunal.

 Gujarat Electricity Board, Thermal Power Station, Ukai, Gujarat vs. Hind Mazdoor Sabha, AIR 1995 SC 1893: 1995 LIC 2207: (1995) 71 FLR 102: (1995) 5 SCC 27: 1995 LLR 552: 1995・ II LLI 790 (SC).


3) Industrial Tribunal can also direct the principal employer for absorption of the contract labour on abolition of the system.

 Gujarat Electricity Board, Thermal Power Station, Ukai, Gujarat vs. Hind Mazdoor Sabha, AIR 1995 SC 1893: 1995 L1C 2207: (1995) 71 FLR 102: (1995) 5 SCC 27: 1995 LLR 552: 1995II LLI 790 (SC).


4) Abolition of contract under Contract Labour (Regulation & Abolition) Act will be only after consultation with the Advisory Board.

 Gujarat Working Class Union vs. State of Gujarat, 1995 LLR 839 (Guj HC).


5) A principal employer must compensate underpaid contract labour.

 Hindustan Steel Works Construction Ltd. vs. Commissioner of Labour, (1996) 74 FLR 2151: (1996) 10 SCC 599: (1996) 2 LLN 1068: 1996 L1C 2250: 1996 LLR 865 (SC).


6) Formation of a co‐operative society by contractual workmen will not change their status of contract labour.

Kerala Food Corporation of India Labourers Federation, vs. Union of India, 1996 LLR 783: 1996 Lab IC 1006:(1998) III LLI 474 (Supp) (Ker HC).


7) Employees engaged by a Trust, working in the canteen of a factory, will lie employees of the principal employer.

 Management of Swatantra Bharat Mills vs. Workmen of Swatantra Bharat Mills, 1996 LLR 73: 1996‐1I LLI 67 (Del HC).


8) Principal employer is liable to pay wages in case the contractor defaults and the term  ‘wages’ includes balance or arrears thereof.

Senior Regional Manager, Food Corporation of India, Calcutta vs. Tulsi Das Bauri, (1997) 90 FJR 494: 1997 LIC2352: AIR 1997 SC 2446: (1997) 5 SCC 51: 1997 LLR 601 (SC).


9) Regularization of the workers employed through contractor in staff colony of Air India will be with consultation of the Board under Contract Labour (Regulation & Abolition) Act.

International Airports Authority Employees Union, vs. Airport Authority of India, (1997) 10 SCC 754: (1997) 2 LLI 361: (1997) 4 SLR 24: 1997 LLR 602 (SC).


10) Continuation of contract labour can be abolished by the appropriate government and not by the Labour Court.

 Harf Shankar Sharma v. M/s. Artificial Limbs Manufacturing Corporation of India, 1997 LLR 909 (All HC).


11) Agreement for engaging labour through contractor is sham or genuine can be decided by the Labour Court.

 State Bank of Travancore, Punch Operators Association vs. Presiding Officer, Industrial Tribunal, Madras, 1999 LLR 475: 1999 (81) FLR 737 (Mad HC).


12) Employees having completed 240 days of service and engaged through unlicensed/unregistered contractors will be deemed as employees of principal employer when the contract labour system was a sham and the contractor was only a name lender.

 Secretary, Haryana State Electricity Board vs. Suresh, 1999 LIC 1323: (1999) 94 FJR 554: (1999) 1 LLJ 1086: 1999 LLR 433 (SC): 1999‐1 CLR 959: 1999 (81) FLR 1016.


13) High Court cannot decide the nature of jobs which are prohibited under Contract Labour (Regulation and Abolition) Act.

 Prabhakar Rao vs. Oil and Natural Gas Commission, Chennai, (2000) 3 LLN 568: (2004) 4 ALT 17: (2000) 3 CLR 48: (2000) 86 FLR 743: 2000 LLR 1019 (AP Hc).


14) High Court will not interfere in Government’s decision to abolish the contract labour system.

 Tata Engineering & Locomotive Company Ltd. vs.Singhbhum the Keaar Mazdoor Sangh, Jamshedpur, 2000 LIC 376: (2000) 86 FLR 922: 2000 LLR 1065 (Pat HC).


15) Engagement of contract labour when prohibited will be illegal.

PoIa Satyanarayana vs. Secretary, Government of India, Ministry of Labour, (2000) II LLJ 1278: (2000) 4 Andh LT 274: 2000 LLR 1114 (AP HC).


16) Reference of a dispute by contract labour for their regularization to the Industrial Tribunal cannot be set aside.

Rashtriya Mazdoor Union vs. Union of India, 2000 LLR 1185 (Guj HC).


17) Complaint for unfair labour practice will not lie for continuation of contract labour system.

Cipla Ltd. vs. Maharashtra General Ramgar Union, AIR 1999 SC 1635: 1999 LIC 1648: (1999) 82 FLR 225: (1999) 2 LLN 1032: 2001 LLR 305 (SC).


18) Contract workers will get wages at par with direct workers.

 Hindustan Lever Ltd. vs. Hindustan Lever Employees Union, (2001) 1 CLR 432: (2001) 3 Mah LJ 81: 2001 LLR 446 (Bom HC).


19) No relief for absorption of contract workers can be granted when they failed to establish their employer.

Workmen (Rep. by Andhra Pradesh Struggle Committee of Delhi Transport Corporation Workers Union Comprising United Electricity Employee Union v. P. O. Industrial Tribunal‐I, 2001 LLR 913 (AP HC).


20) Only appropriate Government can abolish contract labour and not the High Court.

Cipla Ltd. v. Maharashtra General Ramgar Union, (2001) 3 SCC 101: AIR 2001 SC 1165: 2001 UC 1108: 2001 LLR 305 (SC).


21) Regularization of contract labour will not be interfered when there is a direct relationship of employees and employer.

 Employers in relation to the Management of Balmari Colliery of M/s. RECL. vs. Presiding Officer, 2002 LLR 177 (Har HC).


22) Contract employees can approach the High Court for enforcement of their rights when the Government fails to do so.

 All India Food & Allied Workers Union vs. Delhi State Civil Supplies Corporation Ltd., (2002) II CLR 919: (2002) 4 LLN 154: (2002) 95 FLR 478: 2002 LLR 404 (Del HC).


23) Only Industrial Tribunal is to decide whether a contract labour agreement is sham or camouflage.

 Municipal Corporation of Greater Mumbai vs. K. V. Shramik Sangh, 2002 LIC 1672: (2002) III SLJ 469: (2002) 3 LLN 29: 2002 LLR 966 (SC).


24) Employees, as alleged to have been engaged by the contractor, will be entitled to regularization when the contract has been found to be sham and camouflage,

 Central Mine Planning & Design Institute Ltd. vs. Presiding Officer Central Government, Industrial Tribunal No.1, 2003 LLR 368 (Jhar HC).


25) The gardeners engaged by a Government company through a contractor for upkeep of the parks inside the factory premises and its residential colony will be deemed as employees of the company and the High Court has rightly concurred with the findings of the Labour Court directing to initiate prosecution proceedings against the company.

Bharat Heavy Electricals Ltd. vs. State of Uttar Pradesh, (2003) 6 SCC 528, AIR 2003 SC 3024, 2003 LLR 817, 2003 (III) LLJ 215, 2003 (98) FLR 826 (SC).


26) Fifty four persons working in a factory through the contractors are entitled for their regularization when the principal employer is under statutory obligation to maintain a canteen hence the Supreme Court will not interfere with the order of the Division Bench of the High Court.

National Thermal Power Corporallon Ltd. v. Karrl Pothuraju, (2003) 7 SCC 384, AIR 2003 SC 3647, 2003 LLR 1006, 2003 (III) LLj 567, 2003 (99) FLR 8 (SC).


27) When the contractors’ workers were working for 8 to 9 years for the work of perennial nature that too when the contract labour system was also abolished, their regularization will be justified.

 Employees in Relation to The Management of Kuju Pundi Project of M/s. CCL, Dhanbad vs. Presiding Officer, Central Government Industrial Tribunal No.1, (2004) 102 FLR 117: (2004) IV LLJ Supp (NOC) 335: 2004 LLR 775 (Jhar HC)


28) Reinstatement and regularization of 55 contract workers will not be interfered when the contract has been sham.

Employees in Relation’ to The Management of Kuju Pundi Project of M/s. CCL, Dhanbad vs. Presiding Officer, Central Government Industrial Tribunal No.1, (2004) 102 FLR 117: (2004) IV LLJ Supp (NOC) 335: 2004 LLR 775 (Jhar HC).


29) High Court will not interfere in the findings of the Labour Court directing regularization of the workers when the contracts were only a paper arrangement.

 Employees in Relation to The Management of Kuju Pundi Project of M/s. CCL, Dhanbad vs. Presiding Officer, (2004) 102 FLR 117: (2004) IV LLJ Supp (NOC) 335: 2004 LLR 775 (Jhar HC).


30) A Security Guard engaged through a Security Agency, surrendered to the Security Agency, cannot claim to be an employee of the principal employer.

 Deccan Chronicle (Rep. by its Managing Partner T. Venkatram Reddy) vs. G. Pedda ReddYI 2004 LLR 809 (AP HC).


31) Reinstatement of the contract workers will be appropriate when the agreement was sham, camouflage and paper work.

 Employers in Relation to The Management of Dugda Coal Washery of M/s. B.C.C. Ltd. vs. Presiding Officer, Central Government Industrial Tribunal No.1, Dhanbad, 2004 LLR 911 (Jhar HC).


32) When the canteen contractor has been made responsible for maintenance of registers and records, his employees will not to be absorbed by the principal employer.

 Haldia Refinery Canteen Employees Union vs. M/s. Indian Oil Corporation Ltd, (2005) 5 SCC 51: 2005 SCC (L&S) 593: AIR 2005 SC 2412: (2004) 2 LLN 971: (2005) 105 FLR 1051: 2005 LLR 529 (SC).


33) If a contractor fails to make payment to its workers, the principal employer would be liable to make payment. .

 Uttaranchal Vidyut Nigam Ltd. vs. Presiding Officer Labour Court, Dehradun, (2004) III LLJ 533: 2004 LLR 1084 (UCr HC).


34) Workers, engaged from material suppliers/transport contractors on casual basis for several years, will be entitled to their regularization.

Paradip Port Trust vs. Their Workmen, 2005 LLR 47 (Ori HC).