Contract Worker Accident: Should the Principal Cover Wages During Recovery?

Dear Sir,

If a contract worker meets with an accident while working on a machine, should the wages for his absent period be paid by the principal or not?

Sir, wages to contract workers are paid by the contractor, and ultimately, it is for the principal employer to reimburse the wages in the form of a bill received from the contractor.

It appears that your question or the issue you raised is not clear. I hope you will clarify whether the ESI Act, 1948 is applicable in your unit.

Thank you for the response. Basically, the ESI Act is not applicable to our zone. Our factory unit is not in the Municipal Corporation area; hence, the Employee Compensation Act is applicable. The contractor has covered their employees under an unnamed Employee Compensation Policy from Bajaj, but without hospitalization. The treatment expenses of the injured employee will be reimbursed to the contractor against actual costs, but what about the wages? Should wages be paid by the principal employer to the contract workers during their unfit period and hospitalization period? Please confirm.

Regards

Mr. Avinash Pathak,

Temporary disablement compensation can be claimed under EC policy for the unemployment period. Please check with the insurance company whether hospitalization expenses can also be claimed.

Regards,

N. Nataraajhan
Sakthi Management Services
HP: +91 94835 17402
E-mail: natraj@sakthimanagement.com

If the contractor's worker is covered under ESI, then wages during the period of absence due to an accident will be paid by ESIC. Workers should produce an ESIC doctor's certificate.

Dear Mr. Kartik,

My question is related to the wages of contract workers during their unfit period after an accident. In my opinion, the contract worker should receive wages for the period of absence due to the accident, and the treatment expenses should be borne by the principal employer.

I hope you agree with this perspective. ESIC does not apply to our zone, except for the Municipal zone area, and the Employee Compensation policy does not cover hospitalization charges unless there are partial disabilities resulting in payment.

Thank you.

As Mr. Mehta has mentioned, the wages of the worker have to be paid by the contractor themselves. If the same is not paid by the contractor and is claimed by the worker legally, then the Principal employer can pay on behalf of the contractor, and the said amount can be deducted from their respective bills. Hope it clears.

Under the Employee Compensation Act, there is a provision that the employee will be paid wages for temporary disablement. This amounts to 50% of wages and full payment of all medical expenses. Since it was an accident involving a machine, I would suggest paying the full wages for the period of unfitness. If there is a complaint and investigation, you could face significant trouble because the employee should not have been assigned work in core production activities anyway.

The case is covered by Section 12 of the EC Act. If the contractor has covered the employee under EC policy, he has to arrange compensation from the insurance company, including the cost of medical expenses. If not, the principal employer is liable unless he is indemnified by the contractor under Section 12(2) of the Act.