Contract labour has become a structural feature of modern public sector enterprises, especially in high-capital industries such as oil and gas. Organisations including GAIL (India) Limited and Bharat Petroleum Corporation Limited (BPCL) increasingly rely on contract workers for both core and ancillary operations to maintain flexibility and cost efficiency. While contractual engagement expands operational capacity, it simultaneously raises concerns regarding employment equity, occupational safety, and social security among others. This paper is an effort to analyse various research articles of scholars based on employment conditions and labour practices affecting contract workers, applying these insights to the context of GAIL and BPCL as representative oil and gas PSEs. The paper explores key variables regarding employment conditions and labour practices which includes wages, health and safety, welfare provisions, and managerial practices through theoretical lenses such as dual labour-market theory, precarious employment, and institutional theory. Evidence from secondary sources indicates persistent wage gaps, limited welfare access, and fragmented accountability within contractor–principal-employer relationships. This research study emphasises the need for stronger regulatory enforcement and inclusive organisational policies that align flexibility with fairness.