Legality of 3rd Party Operations - management of the premises are employees of the Outsourcing company

A Soap Manufacturing Company has decided to outsource the soap making activity to a 3rd Party Vendor. The 3rd Party Vendor has taken the land on Lease from a Land Owner. The 3rd Party vendor has set up the factory along with machinery purchased from the market. The 3rd Party Vendor has engaged multiple contractors and has deployed the contract laborers on the manufacturing activity. The supervisory employees such as shift officer, production manager & factory manager are the employees of the Soap Manufacturing Company and not of the 3rd Party Vendor.

Question 1: Can this be a legally tenable arrangement as the management of the premises are employees of the Outsourcing company?

Question 2: Can the Contract Labours deployed in 3rd Party Operations claim for permanency with the Outsourcing Company / Soap Making Company as their supervisors are employees of the Soap Making Company?

Question 3: Do you see any other challenges in this arrangement?

Dear Emerging trends,
To me your thread looks like a fairy tale hiding underneath some academic questions rather than moral ones. In short, the principal employer in the story becomes the contractor. If you post your own answers, we will be delighted.