In Brief
BHEL (a government company) employed 64 workers through contractors for work at its Haridwar facility. The workers were terminated and sought reinstatement. The Labour Court held they were directly employed by BHEL, applying a notification from which BHEL was exempted. The High Court upheld this, characterizing the contractor arrangement as 'sham'. The Supreme Court allowed BHEL's appeal, holding that the Labour Court perversely applied an inapplicable notification, that gate passes issued for security did not establish direct employment, and that the alleged concession could not bind BHEL. Since contractors paid wages and retained disciplinary authority, the substantive indicators of direct employment were absent. The Court set aside both judgments and dismissed the workmen's claims.
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