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farukh ali

Hi everybody , I am a contractor with ordnance factory , ordnance factory as a principle employer had not made any provisions in their price bid format for bidders to quote bonus, though the format is such that EPF, ESIC, SERVICE TAX are automatically calculated and the software automatically calculates total contract value, but there is no mention of bonus, and no colume to fill % of bonus. Now we got the supply order and bonus is not paid to us since many years, now labourers are demanding bonus and principle employer is saying that it is a contractor liability. Plz help me to solve this issue. Suggest me what to do.
From India, Mumbai
Korgaonkar K A
+2 Others


Hi, Mr. Ali,
This is statutory responsibility of contractor (Employer) to pay Bonus minimum 8.33% of wages, It does not relate how you have filled tender form and what value you have quated for the tender; Otherwise being a Principal Employer, the ordance factory may pay directly to your worker the statutory bonus amount deducting from your bill amount. Please note the demand of your worker is legitimate.
With regards
Sandip Saha

From India, Kolkata
Harshil Patel

Mr. Sandip Saha has given you the complete right advise, in case you are fail to give bonus to your worker than you may be prosecuted under Contract Labour (R & A) Act. Please ignore this and pay bonus to your workers.
From Singapore

Dear Mr. Keshavji,
Please find enclosed herewith the press release of Govt of India, Ministry of Labour & Employment on 30-04-2012, where Contract Labour are safeguarded with other act including Payment of Bonus Act, 1965.
With Regards
Sandip Saha

From India, Kolkata

Attached Files (Download Requires Membership)
File Type: pdf Press Release 30-04-2012.pdf (580.3 KB, 212 views)

korgaonkar k a

Dear Sandip Ji,
I am fully with what you have said. I have appreciated your answer at first instance only. But my question is to our dear friend Harshil Ji on his statement which says that failure to pay Bonus attracts prosecution under CLA.
Incidentally I am aware of the press release. Thank you very much for sharing it in this forum. By amendment of 2007, the construction employees engaged by contractors are also covered under the POB Act effective from 01.04.2006. So, there is no exclusion of contract labour in POB Act. According to POB Act, employee is entitled to Bonus by his employer and it is rightly said by you that the PE can make the payment of Bonus to his contract labours, if his contractor fails to pay and entitled to recover the said amount paid from contractor's bill.
Thanks with regards.
Keshav Korgaonkar

From India, Mumbai
farukh ali

Thankyou very much Harshil. patel , keshav ji , sandip shah an.
d everybody for your valuable response. Actually I am aware of this law that only contractor is liable to make payment of bonus, PE is responsible to asure that the bonus is paid to labourers, when PE has to asure that contractor pay bonus to labourers then why doesn't PE asureS that bonus should be paid to contractor so that contractor can pass it to his labourers, atleast PE should make some provision in price bid so that a bidder can quote bonus. Is there any body which governs that the terms and conditions and format to fill price bid is lawfull or not. After knowing the whole situations and knowing that bonus is a statutory liability PE has still not included bonus as the integral part of work order and had still not made any provision in price bid filling format to quote bonus. Plz let me know can a contractor take any legal action against this faulty tendering format.waiting for ur reply . Thanks regards

From India, Mumbai
How we cross check as a Principle Employer PF & ESI monthly challan submitted by appointed Labour Contractor wheather these challan are not submitted by Contractor with monthly bill to other employer also.
Kindly give me tips to Cross check.
Pradeep Sharma

From India, Delhi
The definition of "Employer" and 'Employee" in Payment of Bonus Act 1965 does bring within its ambit the Principal Employer or the Contract employees. There are also cases where the Bank as the Principal employer pays the statutory bonus @8.33% of basic pay to the contractor on monthly basis as part of their bills which the contractor is expected to aggregate and pay tothe contract employees during the deepavali festival. Our experience, good number of contractors do the pay the full amount. The employees are compelled to seek the intervention of conciliation machinery
From India, Madras
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