Who Should Pay When Contract Workers Are Absent? Seeking Advice on Handling Penalties and Payments

Greetings to all! I would like to put forward a daily issue that is a little tangled up, and I am confused about which way to approach this situation.

Case 1: The production line stopped as the casual labor or contract workers were absent. Should the contractor be penalized and also asked to make the payment to the rest of the contract workers who had to be returned back? If yes or no, who is liable to pay, and how much, taking minimum wages into reference.

Case 2: What should be the criteria for penalizing the contractor in the case of piece-rate work?

I require your suggestions and advice, so please help me.

Even though the payment of wages is to be made by the contractor, it is the responsibility of the principal employer to ensure the payment as per the Minimum Wages Act. What is the contractual agreement between the contractor and the principal employer? Is there any clause available regarding the penalty in case of a breach in the contractual agreement?

What is the agreement regarding the payment to the workmen? As per the Payment of Wages Act, the payment to the workmen must be made on or before the 7th of the preceding month. If the contractor fails to make the payment and the workers approach the principal employer, the PE has to make the payment and debit the same in the contractor's bills. If a penalty clause exists, the penalty will also be added on the deduction side.

Hope your query is cleared.

On this issue, the terms and conditions of the agreement executed by both parties are crucial. Yet, it needs to be examined without prejudice whether the circumstances were beyond the control of the contractor. Regarding payment of wages, it is also essential to verify whether the laborers returned on their own or under any commitment by the contractor. This verification will help in drawing inferences and settling the issue regarding penalties and wages.

Contractual Agreements and Responsibilities

What kind of contract do you have? Do you contract with individual labor or a particular contractor to supply labor to you? What kind of agreement does your company have? It all depends on that. Yes, you can fire, stop payment, or deduct money, but it all depends on the agreement.

Regards,
Abhijeet Kumar