That is the dispute. In this contract (a contract for service and not contract OF service) there exists no employer- employee relationship but the relationship is just like a purchaser and seller. It is just like hiring the service of a truck for transporting the goods on a regular basis or hiring service of a cab for the employees. When you hire a taxi, will you ever ask whether the owner of the taxi has paid salary to the driver? It is true if you have a car or truck and in order to run it you hire the services OF a driver and then you pay the concerned agency their bill which should include only the driver's wages plus an amount as service charges. In such an arrangement, the employer/ the factory occupier will become Principal employer in respect of the driver but when the arrangement is that a vehicle is leased out and the fuel, maintenance, wages of the crew etc are met by the agency who owns or possesses the vehicle and in consideration the latter issues an invoice then he is the seller of service in all respect. The factory owner is not at all concerned with the wages, PF or ESI, fuel, maintenance etc but he buys the service in return for a consideration payable based on kilometer run, kilo/ tons of load carried.
However, whether the provisions of the CLRA will apply or not will be finally decided by the agreement between the two parties. It is true that a clause in the agreement to the effect that the driver should inform the factory manager of his absence on any day, the driver should report to an officer of the company, the driver is subject to disciplinary action if he is involved in any misconduct etc will make the agreement take a different status.