Equal Pay for Contractual and Permanent Employees - Several sources emphasize that workers performing similar duties should receive equal wages and benefits, regardless of their contractual or permanent status. For instance, ["2025 0 Supreme(Guj) 2056"] discusses the demand that contractual workers should be paid the same salary, allowances, and benefits as permanent employees, including arrears with interest. Similarly, ["2023 0 Supreme(Guj) 468"] highlights that courts have directed daily wagers to be paid wages at the lowest grade of the concerned cadre, emphasizing the principle of wage parity for equal work ["2023 0 Supreme(Guj) 468"].
Legal Principles and Tests for Employee Status - Courts and legal authorities apply tests such as whether the principal employer pays the salary directly and exercises control over the worker to determine if contractual workers are de facto employees of the principal employer. ["2024 0 Supreme(Chh) 375"] and ["2025 Supreme(Online)(Mad) 71575"] state that payment of salary by the principal employer and control over work are critical indicators of employment status, and sham contractual arrangements can be challenged (He has stated that payment of salary is being made on a bill raised by the labour contractor and accordingly, the same was being paid by the Petitioner Company through its Accountant ["2024 0 Supreme(Chh) 375"]).
Disparity in Wages and Benefits - Many sources reveal that contractual workers often receive less than permanent employees for the same work. ["2025 0 Supreme(Mad) 2205"] notes that contractual employees are paid less than 50% of their legitimate dues and are often denied benefits like increments, allowances, and facilities extended to regular employees. ["2023 0 Supreme(Mad) 1912"] states that casual and contractual workers are paid wages less than those of permanent staff, violating the principle of equal pay for equal work ["2023 0 Supreme(Mad) 1912"].
Legal and Judicial Stance - Courts have consistently held that workers doing the same work should not be paid less solely based on their contractual status, especially in a welfare state. ["2023 0 Supreme(Guj) 468"], ["2025 0 Supreme(Gau) 861"], and ["2022 0 Supreme(Mad) 1138"] emphasize that paying less for similar work is demeaning and violates human dignity. The Supreme Court and High Courts have directed that daily wagers and contractual workers performing similar duties as permanent employees be paid wages at par with regular employees ["2023 0 Supreme(Guj) 468"], ["2025 0 Supreme(Gau) 861"].
Regularization and Absorption - Some sources discuss the possibility of contractual workers being considered for permanent absorption if they meet certain conditions, but generally, unless explicitly provided for, contractual workers are not automatically entitled to regularization. ["2022 0 Supreme(Mad) 1138"] notes that contractual workers considered for permanent absorption only if they meet specific terms, but many remain as casual or contractual employees without regular benefits ["2022 0 Supreme(Mad) 1138"].
Analysis and Conclusion:Based on the provided sources, contractual labourers can be paid less than permanent employees for the same work, but this practice is increasingly challenged and condemned by courts and legal principles. The prevailing legal view is that workers performing identical duties should receive equal wages and benefits, regardless of their employment status, to uphold human dignity and fairness. However, unless contractual arrangements are scrutinized and found to be sham or under legal scrutiny, contractual workers often receive lower wages, which is seen as discriminatory and contrary to the principles of equality enshrined in law. Therefore, contractual labourers can legally be paid less, but such practices are subject to legal challenges and judicial review, with a strong push toward wage parity for equal work ["2025 0 Supreme(Guj) 2056"], ["2023 0 Supreme(Guj) 468"], ["2025 0 Supreme(Mad) 2205"].
