On 6 November 1996, a three-judge bench held that once the appropriate Government issues a Section 10 notification under the Contract Labour Act prohibiting contract labour in a process, the displaced workers stand automatically absorbed into the principal employer's establishment. The doctrine lived for five years before a Constitution Bench overruled it in SAIL.
On 30 August 2001, a five-judge Constitution Bench unanimously held that no automatic absorption flows from a Section 10 notification under the Contract Labour Act. Air India Statutory Corporation was prospectively overruled. The remedy for displaced contract workers is industrial adjudication — not direct constitutional absorption.