Sir,
may please tell if Principal Employer will be held liable by labour Dept, in case the contracor fails to make payment of gratuity at the the time contract closing and the workers have worked for more than five years each ?
P C Singh

From India, New Delhi
Sir,
may please tell if Principal Employer will be held liable by labour Dept, in case the contracor fails to make payment of gratuity at the the time contract closing and the workers have worked for more than five years each ?

From India, Hyderabad
Principal employer is liable only for payment of wages (in case contractor fails to do so). Here, wages as as defined in Payment of wages act excludes gratuity, bonus from definition of wages. Therefore Principal employer is not bound legally to pay for Gratuity to Contract Labour, unless there is an agreement in this behalf
From India, Mumbai
dear principle employer is not liable for payment of gratuity to contract workers.even it was decided by karnatka high court in one case
From India, Delhi
Sir,
Please clarify, if in certain annual contracts, the labours donot get changed, whereas the contrctors get changed and in this situation if the labours have worked for more than 10/15 years under different contractors, whether there will be any liablilty on P.E., say at the end of 15 years ?
P C Singh

From India, New Delhi
Yes if the contractual employee claiming for Gratuity prove that he has worked with the PE for more than 5 years without any break. Then PE will be held liable to pay Gratuity to such contract labours.

in recent judgement in case titled as Superintending Engineer V/s Appellate Authority, JLC Hon'ble High Court of Madras held that Inititial responsibility lies on the contractor to make payment of gratuity in view of section 21(4) of CLRA Act.
In case the contractor fails to pay gratuity to the contract labour, the principle employer is licable to pay gratuity which can in trun be recovered from Contractor.


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