i agree with your statement. but my query is company is principal employer and the contract employee is directly under the contractor. so any responsibility is there for contractor or not? or the principal employer is going to bear total expenditure in case of any industrial accident.
As Per Workmen Compensation Act Section 12:--
In case part of the work of an establishment is contracted out to a contractor and a worker employed by the contractor for this purpose, is injured then, the principle employer and not the contractor (who is the worker’s immediate employer), is responsible to pay compensation as though the worker was directly employed by him.
However, this principal employer holds the right to be indemnified by the person who would normally pay for the compensation of an injured/deceased worker, i.e. the contractor. However, nothing shall prevent the worker from claiming his compensation from the principal employer.
1. principal employer is responsible for compensation against any mishap with - Contractor , contract worker , visitors , auditors or any one who is in his premises.
2. Please note that you can use contract worker for temporary type of work , Now days housekeeping also not considered as a contact work as it is day to day work and it is of permanent type of work .