Hello,
As he is NOT an employee of the Principal Employer the question of paying any Lay Off compensation by the Principal Employer does not arise. Having said that, kindly note the following points:
1) The Registration Certificate (for the PE) and the Licence (for the Contractor) must be in place and the assumption here is that the establishment is covered by the Contract Labour (R & A) Act 1972
2) The Contract between the Principal Employer and the Contractor is NOT sham.
3) The Statutory Compliances by Contractor and/or PE are up to-date fin respect of all Contract Labour.
Next, despite the above position, many Principal Employers agree to REIMBURSE to the Contractor such expenses if the need arises. Such reimbursements can include, Lay off compensation, Retrenchment Compensation, Gratuity and the Bonus (though the applicable does not compel the PE to shoulder this burden) since the Service Charges payable to the Contractor do not cover such expenses anyway, hence the approach.
REgards
samvedan
January 16, 2015
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