Understanding the Difference Between Principal Employer and Occupier: Can You Help?

Just want a broad differentiation between principal employer and occupier. Please help me clear this confusion.

Thanks.

In legal terms, the words "Principal employer" or "Occupier" have been defined differently in various labor laws legislations, such as the ESI Act, Industrial Disputes Act, EPF & Misc. Provisions Act, and The Factories Act, 1948, etc. Perhaps, different meanings and assumptions of such terms have been adopted in various Acts, keeping in view the purposes of such enactments. Some of the enactments have adopted the definition of "Occupier" as mentioned in Section 2(n) of the Factories Act, 1948.

In common language, in my opinion, we can say that the employer means the owner of the establishment, such as Sole Proprietor, Partner, Managing Partner, Director, Managing Director, etc., whereas the word "occupier" has a wider meaning and will also include the officers of such employers having ultimate control or the authority of the factory/establishment, such as Manager, Executive Manager, CEO, or any other person by whatsoever name the same may be called.

As and when the question arises in any legal case regarding civil or criminal liability in any labor laws, the definition of the above words as provided in the respective laws is relevant.

H.K. Mehta has provided an elaborate clarification regarding this. In my view, a principal employer means the overall responsible person regarding ownership as well as the implementation of all relevant acts such as income tax and commercial acts, including the occupier's responsibility. On the other hand, the occupier is responsible for only factory-related acts such as the Factories Act, ESI, etc.

In legal terms, the words "Principal employer" or "Occupier" have been defined differently in various labor laws legislations, such as the ESI Act, Industrial Disputes Act, EPF & Misc. Provisions Act, and The Factories Act, 1948, etc. Perhaps, different meanings and assumptions of such terms have been adopted in various Acts, keeping in view the purposes of such enactments. Some of the enactments have adopted the definition of "Occupier" as mentioned in Section 2(n) of the Factories Act, 1948.

In common language, in my opinion, we can say that the employer means the owner of the establishment, such as a Sole Proprietor, Partner, Managing Partner, Director, Managing Director, etc., whereas the word "occupier" has a wider meaning and will also include the officers of such employers having ultimate control or the authority of the factory/establishment, such as a Manager, Executive Manager, CEO, or any other person by whatever name they may be called.

As and when the question arises in any legal case regarding civil or criminal liability in any labor laws, the definition of the above words as provided in the respective laws is relevant.

An apt answer by H.K. Mehta! However, let me please elaborate. The term "Principal Employer" occurs in the definition clauses of the Employees' State Insurance Act, 1948 [Sec.2(17)], the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 [Sec.2(m)], the Contract Labour (Regulation and Abolition) Act, 1970 [Sec.2(g)], and the Inter-State Migrant Workmen Act, 1979 [Sec.2(1)(g)]. The term "Occupier" occurs in Sec.2(n) of the Factories Act, 1948, Sec.2(15) of the ESI Act, and Sec.2(k) of the EPF Act, 1952. The term 'occupier' was employed and defined for the first time in the erstwhile Factories Act, 1934, and adopted in the present Act and other enactments such as the ESI and the EPF Acts. We cannot find any term defined in the Factories Act to convey the meaning of the provider of employment other than 'Occupier' in juxtaposition with the definitions of 'manufacturing process', 'worker', and 'factory' for the reason that it is an establishment-oriented labor legislation. On the contrary, the ESI and the EPF Acts are Social Security Labor Legislations, and the CLRA and the ISMW Acts being regulatory labor legislations having applicability over all industrial establishments wherein the engagement of direct and indirect labor is possible, it is imperative to use certain qualified terms for employers to fix vicarious liability for effective compliance.

Dear Learned Members,

Please clarify if the Canteen Licensee could be treated as an occupier since he has been provided a license to operate (with profits). This point is being raised so that maintenance of equipment could be overseen by the Canteen Operator.

As far as your query about the canteen licensee being treated as an occupier is concerned, please refer to the definition of an occupier in section 2(n) of the Factories Act.

For example, an occupier of a factory may be an owner, a lessee, or a mere licensee, but he must have the right to occupy the property. He should also control the management. Does your licensee fulfill these conditions? I doubt it.

Is your canteen a part of a factory, I presume? So, read these Acts properly, and you will get answers.