In Brief
BHEL engaged workers through contractors to perform various duties in its Haridwar facility. The workers were terminated and claimed direct employment by BHEL. The Labour Court held they were BHEL's direct employees under the extended definition of 'employer' and ordered reinstatement without backwages. The High Court affirmed, deeming the contractor arrangement a 'sham'. The Supreme Court set aside both orders, holding that gate passes issued for security purposes and alleged concessions by counsel do not establish direct employment. Multiple recognised tests—payment of wages by contractors, contractor's control over employment, absence of appointment letters or BHEL wage slips, and contractor determination of work conditions—confirmed the workers were contractors' employees. The extended definition required evidence that the work was ordinarily part of BHEL's industry, which was absent. The arrangement was not a sham but a genuine contract labour engagement.
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