Contract Labour Safety: Who Covers Costs in Case of an Industrial Accident?

Query on Contract Labour Safety and Liability

I'm Priya, working in a seamless tube manufacturing company in Dadra & Nagar Haveli (Union Territory). I have a doubt and need suggestions. The Contract Labour (Regulation & Abolition) Act, 1970 & Rules 1971 is silent about the safety aspect of contract labour; it only focuses on the health, hygiene, and amenities that need to be provided by the principal employer.

Please correct me if I'm wrong. My query is, who is going to bear the expenses in case of any industrial accident involving a labour contract employee? Is it a 50-50 ratio, or is the principal employer 100% responsible?

Regards,
Priya

Even though the worker is a contract laborer, the safety aspect will be covered under the Factories Act. In case of any industrial accident involving a contract laborer while on duty and during the course of employment, they will be taken care of by the Employees' Compensation Act. The medical expenses will be borne by the employer and not the worker.

I agree with your statement. However, my query is: the company is the principal employer, and the contract employee is directly under the contractor. So, is there any responsibility for the contractor or not? Will the principal employer bear the total expenditure in case of any industrial accident?

Regards,
Priya

As per the 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 principal employer, and not the contractor (who is the worker’s immediate employer), is responsible for paying 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.

Regards,
Narayan

Dear Priya,

1. The principal employer is responsible for compensation in case of any mishap involving the contractor, contract worker, visitors, auditors, or anyone present on the premises.
2. Please note that you can use a contract worker for temporary work. Nowadays, housekeeping is not considered contract work as it involves day-to-day tasks and is of a permanent nature.

Thanks,
Abhay