Labour Law & Hr Consultant
Hr Manager
Manager Hr & Administration
+1 Other

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one of the public sector company located in gujarat. Many jobs are outsourced by contract manpowwer throw contractor. one contractor has not paid wages to his workers. now worker are claim to principal employer. so principal employer is liable for payment of wages if provision in agreement with contractor seen that contractor only liable for payment of wages ?
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On the applicability of the CLRA Act,1970 to both the principal employer and the contractor, not only the responsibility for payment of wages, but also all other legal obligations to the contract labour employed through such a contractor for the works of the establishment are saddled on the principal employer in the event of failure by the contractor on the basis of the principle of vicarious liability. Therefore, the principal employer can not disown his statutory liability based upon any contra clause contained in a bilateral agreement between them.
I suggest you as a Principal Employer (PE) devise a checklist what compliance/s (PF/ESI/Insurance under employee compensation Act, minimum wages act, payment of wages act, payment of bonus act,and so on) are expected of you under different statutes. These should be positively checked before releasing the payment to all contractors working within your premises. Once you are satisfied that all such compliance/s are met with by the contractor/s then only monthly bill should be released. This should be a continuing exercise, every month. (I have even seen contractors keeping two sets of pay-sheets for reducing the burden of bonus; but that is another matter) The point is contractors are generally lax in payment of various dues or filing the returns due and expecetd of them, liability of which can devolve on the PE. I have advised this before very recently on the same subject, in this forum.
Dear Umakantham.M Sir You have used the term "principle of vicarious liability" . please. explain it
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