Can a Contractor Also Be an Employee in Their Own Contract? Let's Discuss the Implications

We are providing services with three manpower supply contractors for the Admin, Sanitation, and Security departments.

One of the contractors is also working as an employee within his own contract. Can a contractor work as both an employee and a contractor in the same department?

We (the principal employer) are not concerned with who is engaged; we are only concerned with the number of persons engaged. There is nothing wrong with a contractor working. A contractor himself can work as a worker in his team. If not allowed, what is the significance of an independent contractor?