New Delhi, Sept. 21 -- The Supreme Court has held that a principal employer cannot be held liable to pay gratuity to workers engaged through a contractor where no employer-employee relationship exists between the principal employer and the contractual workers.

The Court set aside a Bombay High Court order holding Oil and Natural Gas Corporation Ltd. (ONGC) liable for gratuity payable to workers engaged through a contractor. It held that the Controlling Authority under the Payment of Gratuity Act cannot adjudicate liability for payment and is limited to computing the gratuity amount payable to an employee.

Controlling Authority's Jurisdiction Limited

The dispute arose after the Controlling Authority held ONGC liable for gratuity despite...