Employee Engaged Through Third Party

Dear Cite-HR Members,
I want to know about this following matters as early as possible.
01. One Company engage some staff on contract basis through third party (Outsourcing Staffing Company). In that if any employee will do the job for two years in this particular company. At last Company will bound to engage this employee in their role or not?
02. In that case what is the responsibility of this third party?
03. What benefits empployees are received from third party?
04. In what way we (Third Party) are handling them?
Your brief suggestion required at the earliest.

Dear Jnana,
My replies in Bold
01. One Company engage some staff on contract basis through third party (Outsourcing Staffing Company). In that if any employee will do the job for two years in this particular company. At last Company will bound to engage this employee in their role or not? There is no such clause in the laws you can discontinue the employees if not necessary
02. In that case what is the responsibility of this third party? the third party can employee the employee somewhere else or can terminate him
03. What benefits employees are received from third party? the same as any normal employee in an organisation as he is the employer
04. In what way we (Third Party) are handling them? not sure what u mean

Dear Viraj,
many many thanks for your good suggestion, but which book i found this rule kindly tell me, which author and which book it is mentioned. that is rquired

Dear Sir,
as per today's business practice, out sourcing is acceptable due to the nature of business, availability of skilled manpower etc. Many big companies do the manufacturing thru outsourcing and in house.
But befor identifying the outsourcing company, the credibility of the company should be verified because in future any thing happens the parent company (principle Employer) is held responsible as per the various acts in india,

Here the million dollar question is who is employer. Outsourcing company is in fact not retaining employee on their roll. Istead he has outsourced the employee to parent company. After outsourcing, the job of outsourcing company is over. Now onus lies on parent company who has hired the employee. The defaulter for violation of any law with regard to employment rules will be on them.

But what parent company is doing. They are

getting appointment letters issued from outsourcing company and avoiding responsibility by stating that you are the employee of outsorcing company. The outsourcing company only will take care of terms of your employment. This is totally illegal. Only job susch as training, recruitment, typing,data generation etc. Can be outsourced to outsourcing company. Once the emloyee is outsourced after recruitment and selection he is employee of parent company. However,if outsourcing company is service provider, he has to retain employee on his roll and charge fee for service provided to parent company. In that case he has to charge service tax Nand deposit it to custom department.

I am trying to ellaborate more because so many companies with conivance with labour department, manpower outsourcing company are doing brisk illegal business cheating not only employee, but income tax, excise department, and various other govt.agencies.