Steel Authority of India Ltd. v. National Union Waterfront Workers

This Constitution Bench judgment comprehensively interpreted the Contract Labour (Regulation and Abolition) Act, 1970, particularly addressing the crucial question of whether abolition of contract labour leads to automatic absorption of contract workers in the principal employer's establishment. The Court held that mere abolition of contract labour does not result in automatic absorption. The appropriate government's notification under Section 10 only prohibits employment of contract labour for specified work; it does not mandate absorption. The Court overruled the contrary view taken in Air India v. United Labour Union (1997). The judgment clarified that contract workers whose services are abolished have no automatic right to be absorbed by the principal employer. However, the Court directed that displaced workers should be given preference in fresh employment and provided procedural safeguards. This judgment significantly impacted the rights of contract labour across India.