Understanding Employer Roles in Government Road Projects: Who's Really in Charge Here?

Government Company "X" Road Construction Project

A Government Company "X" wants to construct a public road on the Government's land, which will provide access to its factory. The road will also be used by the public. Since the road to be constructed is a public road, its ownership will vest with the Government's Public Works Department (PWD).

For the construction of the road on a 100% contribution basis, Company "X" approaches PWD. PWD accepts the offer and makes an estimate of Rs. 50 Cr. Company "X" deposits Rs. 50 Cr with PWD with the condition that if the final cost of the project exceeds the estimated amount, Company "X" shall deposit the extra amount to cover the deficit and vice versa.

As per the terms of the contract, Company "X" shall not have any control over the road construction work, i.e., no control over road completion time, drawing and design, construction site, sub-contractor, material procurement, manpower, and quality of construction, etc. Even after construction, the road shall be owned by PWD and not by Company "X."

PWD then prepares the DPR/drawing design and issues a contract to a contractor. The contractor completes the work at Rs. 45 Cr. Finally, Rs. 5 Cr is returned to Company "X" by PWD.

Question: Who is the employer in the above case?

(Note: Facts to be considered while framing an opinion: Company "X" is a Government Company; PWD is also a Government Department. Only the sub-contractor is a private firm. The important thing is that the Government Company has no control over road completion time, drawing and design, construction site, sub-contractor, material procurement, manpower, and quality of construction, etc.)

As per your question : -
1. PWD is the principal employer as he has offered/ issued work order to the contractor for construction of road.
2. The contractor who carried out the job is employer as per the B&OCW and has to pay the cess to Govt. as he has engaged the workmen to do the task.
Company “X” is out of frame as the land & road does not belong to them, neither they issued any work order for the work.

Under BOCW (RE & CS) Act, 1996, there is no definition of Principal Employer. There is a definition of Contractor and Employer. Therefore, as per the definition of an employer under the Act, the contractor who is engaged by the PWD is the 'employer'. The Contractor has to register under the Act with the Registering Authority under the State Government and deposit Cess with the State Government. The collection of cess and its utilization is entirely with the State Government even though the work is allotted by a company owned by the Central Government.

Therefore, the answer to the above question is: the Contractor is the Employer.