Is My Friend in Trouble for Letting a Contract Worker in After the Contract Ended?

My friend Babu Nayak is working as a Manager in a government company, and he hired a contract laborer as an office clerk in the company through a contractor. Now, a few days back, the contract period has been completed, and it took 7 days for another new contract. During that gap, there was some important work. As the gate pass has expired, the contract laborer was called inside the company by issuing a separate gate pass during that period. He attended duty for 4-7 days. Now, when other contract laborers are asking him about the payment during that period, he is saying he has received payment from the company for those 4-7 days and that he worked for the company. However, in reality, he has not received any payment for that work from the company.

Potential Issues with Gate Pass Issuance

Is there any problem for Mr. Babu Nayak for issuing a gate pass during the period when the contract period has been completed? What would happen if the contract laborer goes to the labor court? Please assist him before the matter escalates to a higher level concerning my friend.

Regards,
Akki

Engagement of Casual Labor and Contractual Risks

It is not necessary that casual labor can only be engaged through a contractor. If there is a gap between two contracts, we can even consider engaging them as direct labor on a daily basis. Once the new contract is signed, we can place them under the contractor's rolls.

The risk is not in the gap but in continuous employment under different contractors. This could lead to the situation where the contract itself is deemed a sham. However, in government organizations, everything is often done outside standard procedures, not adhering to basic labor laws, and therefore, there is usually nothing to worry about. Nobody questions the engagement of contract labor for years, even in areas directly connected with the main operations of the company. Clerical work is incidental to the core activities of the business and is not like housekeeping or security services. In such work, we are not supposed to engage contract labor, but government companies still do it.

Regards,
Madhu.T.K