Dear Friends,
We have awarded a job contract (with item rates) to a contractor engaging more than 20 labours in our premises on firm price basis.During the currency of the contract, there has been two hikes in minimum wages. The contractor is now asking for reimbursement of wage hike.My question is, whether he is justified to ask for increase? How to deal with such situations in a contract? What is the liability of principal employer in such cases?
Is there any case law on the subject?
Thanks for your attention.
P C Das
From India, Bhubaneswar
We have awarded a job contract (with item rates) to a contractor engaging more than 20 labours in our premises on firm price basis.During the currency of the contract, there has been two hikes in minimum wages. The contractor is now asking for reimbursement of wage hike.My question is, whether he is justified to ask for increase? How to deal with such situations in a contract? What is the liability of principal employer in such cases?
Is there any case law on the subject?
Thanks for your attention.
P C Das
From India, Bhubaneswar
Yes, the Employer has to pay at least Minimum Wages notified by the State/Central Govt.
The Rate which you finalized was the time of entering into the contract. But Minimum Wages is subject to revision every six month by the concerned Govt. Accordingly the revised wage has to pay to the workers.
if contractor fails to pay the wages to the workers employed by him as per MW notified or per terms of employment, then its the liability of Principle Employer to pay difference of wages to workers, or any short payment i.( Section 21 of CL(R&A) Act).
By giving contract to third party does not absolve the Principle Employer from the liability to pay Minimum Wages and To ensure compliance of the provision of CL(R&A) Act and other applicable social welfare legislation is the responsibility of Principle Employer.
Regards
SB Enterprise
Legal & Compliance Consultant
87The Rate which you finalized was the time of entering into the contract. But Minimum Wages is subject to revision every six month by the concerned Govt. Accordingly the revised wage has to pay to the workers.
if contractor fails to pay the wages to the workers employed by him as per MW notified or per terms of employment, then its the liability of Principle Employer to pay difference of wages to workers, or any short payment i.( Section 21 of CL(R&A) Act).
By giving contract to third party does not absolve the Principle Employer from the liability to pay Minimum Wages and To ensure compliance of the provision of CL(R&A) Act and other applicable social welfare legislation is the responsibility of Principle Employer.
Regards
SB Enterprise
Legal & Compliance Consultant
Thank you for your comments.
Let me clarify one point here.
Contractor has paid minimum wages to the labours. This is as per contract & MW act.
However, since it is a job contract between Principal & Contractor on firm price basis, could he claim the wage difference from the principal?
Can you cite some case laws on this?
with thanks & regards,
P C Das
From India, Bhubaneswar
Let me clarify one point here.
Contractor has paid minimum wages to the labours. This is as per contract & MW act.
However, since it is a job contract between Principal & Contractor on firm price basis, could he claim the wage difference from the principal?
Can you cite some case laws on this?
with thanks & regards,
P C Das
From India, Bhubaneswar
Yes, it does not matter whether its a job contract or service contract, if the manpower is engaged by the contractor to carry out activities in your premises than in case of failure of payment of wages by the contractor to their workers, Principal Employer shall be liable to pay.
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Minimum Wage of UP & UK.pdf