The person was engaged through a contractor. The Principal Employer cannot and should not have any direct control over the said contract worker. If there is a behavioural issue with any contract workman, the Principal Employer should talk to the Contractor and advice him to remove him from his rolls / stop him. If the contract workman files a case against the company, then the PE can very well defend the case saying that he was only a contract workman and not a direct workman. However, it is to be noted that there should be a perfect contract between the PE and the Contractor, the PE should have the RC and the Contractor should have the Licence, there is no loophole in the contract, the contract workman do not have / possess any evidence to say that he is a direct employee of the PE and last but not the least, the contract workman was not engaged in a perennial nature of job for which he has some evidence with him. In such case, it is very difficult to defend the case by the PE.
If the contract is not a sham contract and is a genuine contract and the person is engaged as per the RC and licence, then even if the person works for 10 years, there should not be any problem unless, the appropriate authority abolishes the contract system in the particular industry.
Ranganathan RS