In Brief
The Steel Authority of India Limited (SAIL), a government undertaking, engaged contract labour through contractors at its limestone mines. After a prohibition notification issued under the Contract Labour Act in 1993, workers were permitted to continue under their existing agreements until termination in 1996. The Tribunal found the original contracts genuine; the High Court reversed this, treating workers as SAIL's direct employees entitled to regularisation. The Supreme Court held that prohibition notifications do not automatically absorb contract labour or render genuine contracts void. The Court restored the Tribunal's factual findings, emphasizing that an industrial adjudicator's conclusions based on evidence should not be re-examined by courts of limited jurisdiction absent perversity, and that violations of labour law result in penal consequences, not automatic absorption.
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