Failure to obtain license by contractor does not confer employment rights on the contract labour against the principal employer

The petitioner workers claimed that they were directly employed by ONGC and later shifted to contract work through contractor continuing their work in ONGC. Their claim of direct employment was based on the fact that the contractor was unlicensed under the Contract Labour (Regulation & Abolition) Act, 1970 and argued that the shift from direct employment to contractor was a sham designed to hide their true employee-employer relation. The ONGC contended that the petitioners were always employed through contractor despite contractor obtaining license at a later date. The Guwahati High Court in this WP(C)/3871/2020 observed that no evidences were adduced to establish existence of direct employee- employer relationship, the absence of contractor’s license only attracts penal consequences and does not automatically render ONGC as employer.