Can Contract Workers Become Permanent Employees After a Year? Seeking Clarity on Labor Laws

Dear Experts,

If any semi-skilled or skilled category workers work for more than one year in one establishment under the Contract Labor Act, can they be eligible for permanent employment with the principal employer?

Please help.

Best Regards,
Pankaj

Dear Pankaj,

Continuous employment of contract labor in a particular establishment alone does not entitle them for absorption as the regular employees of the PE's establishment.

Dear Sir,

Please provide a brief explanation regarding the absorption of contract labor as regular employees.

Regards,
Ajay Misra

Normally, no legal obligation is cast upon the Principal Employer to absorb the contract labor as regular employees upon the expiry of the contract, whether by efflux of time, completion of work, or cancellation of the contract for any other reason. However, this does not preclude the Principal Employer from selecting and appointing such displaced contract labor as new appointees on a regular basis, based on their suitability.

Alternatively, if there is a demand by the contract labor, espoused by any competent trade union, the Principal Employer may, through a negotiated settlement with such a union, take the required number of contract labor as regular workmen.

There is no legal rule to hire a contractual employee as a regular employee. There are many employees who have been working in contract mode for the past 10 years.