I have a different opinion from what Swanswantbanejee has said. Contract Labour Act is an Act to 'regulate and abolish' engagement of contract labour. As such the Act is intended to reduce the practice of engaging workmen through a contractor and thereby disallowing the benefits to be paid to workmen as per various labour laws in force. In the absence of a specific law all employers will engage workmen through an intermediary and will say that the workmen who actually work for them are not their employees and we have nothing to do with their statutory liabilities. This has been very categorically stated in a very recent judgement of our Apex Court in Bhilwara Dugdh Utpadak Sahakari S. Ltd. Vs. Vinod Kumar Sharma Dead by LRS & Ors and the following sentences of the judgement are noteworthy.
“in order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position.
Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees” The judgement also hints that “globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers”
The above judgement is expected to be a landmark judgement. Therefore, if the contractor is not paying the gratuity to his employee(s) the principal employer cannot escape from his liability. Please find the attached judgement also.
Regards,
Madhu.T.K