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Depositing ESI contributions of contract labour by principal employer employed by a unregistered contractor does not make such contract labour an employee of principal employer simply because the ESI card of such person carry the name of principal employe - The Contract Labour (Regulation and Abolition) Act, 1970

To establish employer-employee relationship would include inter alia

(i) who appoints the workman
(ii) who pays the salary
(iii) who has the authority to dismiss 
(iv) who can take disciplinary action 
(v) whether there is continuity of service 
(vi) extent of control and supervision 

An employee would not be treated as an employee of the principal employer only on the basis that the contractor is not a registered one or having license under the Contractor Labour (Regulation & Abolition) Act, 1970. When the workman has no relationship of employer-employee with the principal employer, his plea that termination of his services by the principal employer is in violation of section 25F of the Act, is not sustainable even when the contractor was not a registered one. Mere non-imp leading the contractor as a party by the workman would not enable him to establish that he was employee of the principal employer. Mere depositing of ESI contribution of the contractor's employees by the principal employer since it is a mandatory responsibility of the principal employer ensure that workman is registered member under the Scheme of ESI Act and contributions are deposited subject to realization of the same from the contractor as the same from the contractor as the ESI Act does not prescribe that a contractor has to possess his own code number. Only on the basis of ESI card having address of the principal employer, employer-employee relationship between principal employer and the employee would not come into existence. An Award passed by the Industrial Tribunal can only be interfered by the writ court in exercise of its writ jurisdiction under Article 226 of the Constitution of India if the same is illegal, irrational and suffers from procedural impropriety.

-Manoj Kumar vs. M/s. Sintex Industries Pvt. Limited 2016 (H.P. H.C.)

The contract labour (regulaton and abolition) Act, 1970

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