Converting Contractors to Permanent Employees: Should Their Previous Service Count for Benefits?

A group of employees was employed by a manpower outsourcing company as contractors while an overseas-owned company was setting itself up in India. Now that the company is set up, it will convert them to permanent employees of the new entity. Is it necessary to recognize the period of employment as a contractor for purposes such as gratuity? I can imagine some liability here if the same company converts, but since they were employed by a third party, is there any liability on the new company?

Their employment with your company will commence only from the date of the letter of appointment issued, and prior to that, it cannot be considered as employment with you.