Full & Final Settelement

Dear Sir,
As our company is a Manufacturing company,where permanent as well as contract labours are working. Our contractor has made Full & Final settelment of
his employees who worked for the company for more than 9 years. In order to avoid their Provident fund amount to get diverted in to pension scheme,Contractor has made Full & Final Settlement to his employees. but still their labours are working in our company. Now i need advise Can we stop contract Labourers to enter the plant on the ground of Full & Final Settlement..... Kindly Advise urgently as it can raise IR issue.
Thanks

This is like blocking the welfare of employees, where there is no benefits available after retirement.
If someone is looking for welfare, they will make them to transfer the amount to new pf no to have continuation of the service.
To avoid IR issue, you have to plan to stop one by one by showing production is low or some disciplinary action. Give some break and can take them back with fresh details. Give this work to contractor. You don't involve in this matter. I think this is the procedure most of the companies are doing.
Thanks

Dear Pussy Cat,
When the contractor has settled those workmen fully and finally once for all, in what capacity they are now permitted to work in your establishment - as direct labour or through some other contractor?