All my dear friends responding to the current thread,
The implication of the question so far as I am able to understand is two-fold: (1) In the absence of any contract between A the contractee and C the sub-contractor engaged by B the contractor of A, How could A become the Principal Employer to C, instead of B? and (2) If A is the Principal Employer, who is the immediate employer of the contract labour for all practical purposes, whether B the original contractor or C the sub-contractor?
The practice of contract labour is, in the first place, sought to be regulated under the Contract Labour ( Regulation and Abolition ) Act,1970 through registration of the establishment wherein labour are engaged for certain specific activities through contractors and licencing of the contractors. So, it is highly imperative that one should understand and interpret certain terms used in this Act in the contextual back ground of the objectives of the Act.
Interestingly, when any work divisible into different and distinct componential activities is carried out through contract labour, sub-contracting of such activities becomes inevitable thereby creating two distinct contracts as per the Contract Act - one between the principal employer and the contractor and the other between the contractor and the sub-contractor. However, the term " Principal Employer" is used in this Act only in relation to the contract labour whose conditions of service have to be regulated just in contra-distinction of his immediacy of employment by the contractor. Moreover,the definition of " contract labour" u/s 2(b) presupposes his engagement through the contractor with or without the knowledge of the principal employer. Therefore, one can not be both the principal employer and the contractor as well. So, A alone is the principal employer to all the workmen engaged through both the contractor B and sub-contactor C.
The questions raised by Destinywins in his/her last post are of wider import and hence require deeper analysis of the aspect of licencing of contractors under the Act in general as an academic exercise and the conditions stipulated in the Rules in particular as a matter of practical importance. As stated earlier registration of principal employer and licensing of contractors under the Act are the two broader and basic regulatory measures employed by this special Statute. Registration is a must for employing contract labour and the failure is visited with penal action. The licence granted to a contractor is name-specific in respect of the contractor, work-and-time specific in respect of the contract and number-specific in respect of the contract labour likely to be engaged. In other words, the licence is non-transferable as mentioned in the Rules. Hence, not-withstanding the fact that the contractor has a valid licence for the work, if it is sub-contracted, the sub-contractor should also take up a separate licence in the event of employing 20 or more number of workmen.