This is an usual query,how ever would like to clarify from seniors as to who will be held responsible for non compliance ,Principal employer or the contractor , if the principal employer in spite of Knowing about all the statutes related of contract work awards the contract to the contractor on adhoc price.Later it is revealed by the labour inspector that compliance is not being followed properly... by the contractor.While contractor pleads what ever he receives from principal employer is the mere cost of salary which does not include any statutory deduction.Note there does not exist any written agreement for this work assigned.
From India, Vadodara
365From India, Vadodara
Dear Bijay,
No mention in your post about the type of the industrial establiahment and whether the "non-compliance" detected relates only to wages of the workmen and the statutory deductions thereof or total non-compliance including registration, licensing, maintanence of registers etc.
The definition of "worker" under the Factories Act,1948 includes any person employed through a contractor in connection with the manufacturing process. As per Sec2(1)(b) of the CLRA Act,1970 when a workman is employed in or in connection with the work of the establishment through a contractor with or without the knowledge of the principal employer, he would be deemed as "contract labour".
If the non-compliance is total including failures of registration by PE and licensing by the contractor coupled with no documentary evidence for the contract, the effect is that the workmen so employed are the workmen of the principal employer and in which case the PE is alone responsible.
From India, Salem
No mention in your post about the type of the industrial establiahment and whether the "non-compliance" detected relates only to wages of the workmen and the statutory deductions thereof or total non-compliance including registration, licensing, maintanence of registers etc.
The definition of "worker" under the Factories Act,1948 includes any person employed through a contractor in connection with the manufacturing process. As per Sec2(1)(b) of the CLRA Act,1970 when a workman is employed in or in connection with the work of the establishment through a contractor with or without the knowledge of the principal employer, he would be deemed as "contract labour".
If the non-compliance is total including failures of registration by PE and licensing by the contractor coupled with no documentary evidence for the contract, the effect is that the workmen so employed are the workmen of the principal employer and in which case the PE is alone responsible.
From India, Salem
What exactly do you mean "held responsible" ?
The principal employer is liable to pay salary and all statutory dues in case the contractor fails to do so. So if the contractor fails to pay, principal employer has to pay the same. The same can then be recovered from the contractor. The contractor can't claim helplessness. He wasn't forced to take the work. He chose to do it knowing he is liable for the statutory dues. In reality, the possibility of recovery is slim in most cases.
If the work is without a written contract, then the matter is worse for the principal employer.
From India, Mumbai
The principal employer is liable to pay salary and all statutory dues in case the contractor fails to do so. So if the contractor fails to pay, principal employer has to pay the same. The same can then be recovered from the contractor. The contractor can't claim helplessness. He wasn't forced to take the work. He chose to do it knowing he is liable for the statutory dues. In reality, the possibility of recovery is slim in most cases.
If the work is without a written contract, then the matter is worse for the principal employer.
From India, Mumbai
Concurring with what the seniors said above, the Principal employer is liable under the Factories, PF and ESI Acts as the relevant labour statutes do not leave any doubt on that score. I may also add that the fact that there is not even a semblance of any contract between the contractor and the principal employer in the form of a written agreement, may even render the contract workers as the employees of the principal employer, if there is non compliance in respect of registration and license also.
B.Saikumar
From India, Mumbai
B.Saikumar
From India, Mumbai
Contractor can only be responsible if he has been registered under contract labour act and his name was in principal employer registration form. Principal Employer is solely responsible for any compliance related to the worker working under his premises.
Thanks & Regards,
From,
Sumit Kumar Saxena
From India, Ghaziabad
Thanks & Regards,
From,
Sumit Kumar Saxena
From India, Ghaziabad
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