Hello Friends,
In a conciliation meeting between contractors and their workers for settlement of the issue of bonus principal employer was requested to attend the meeting to help in arriving settlement. The workers were demanding bonus in view of the amendment in the bonus act under section 36 (vi). in the settlement that principal employer agreed for reimbursing the bonus if the contrcators pays and signed as witness. Now queries are:
From India, Delhi
1In a conciliation meeting between contractors and their workers for settlement of the issue of bonus principal employer was requested to attend the meeting to help in arriving settlement. The workers were demanding bonus in view of the amendment in the bonus act under section 36 (vi). in the settlement that principal employer agreed for reimbursing the bonus if the contrcators pays and signed as witness. Now queries are:
- whether there is any statutory liability of principal employer to reimburse the amount of bonus.
- Whether the settlement is binding on the principal employer.
- Can principal employer challege the settlement and if yes where.
From India, Delhi
Dear Menthresh
Obviously all payment related issues are the responsibilities of Principal employer in case the Contractors failed to resolve the same.
Once the payment of Bonus is accepted by the Principal employer in conciliation meeting then there will not be any issue at all.
Principal employer is to ensure that all the contractors are to maintain the Statutory obligation. In case if the same is not mainained by the Contractors, the onus of maintenance lies with principal employer and he can debit the cost to the Contractors. Here Payment of Bonus is also comes under the purview of Statutory Obligation. Hence contractor has to adhere the payment of Bonus Act.
In this specific case the Principal employer has accepted to bear the cost of bonus to workmen, then the matter of settlement does'nt arise.
With warm regards
S. Bhaskar
9099024667
From India, Kumbakonam
Obviously all payment related issues are the responsibilities of Principal employer in case the Contractors failed to resolve the same.
Once the payment of Bonus is accepted by the Principal employer in conciliation meeting then there will not be any issue at all.
Principal employer is to ensure that all the contractors are to maintain the Statutory obligation. In case if the same is not mainained by the Contractors, the onus of maintenance lies with principal employer and he can debit the cost to the Contractors. Here Payment of Bonus is also comes under the purview of Statutory Obligation. Hence contractor has to adhere the payment of Bonus Act.
In this specific case the Principal employer has accepted to bear the cost of bonus to workmen, then the matter of settlement does'nt arise.
With warm regards
S. Bhaskar
9099024667
From India, Kumbakonam
Mr. Bhaskar,
Sorry for the delay. i am grateful 4 ur response. But i would like to add that admittedly bonus is not a part of wage hence i feel that principal employer cannot recover the same from the bils of contractor. moreover in the bonus act no such term principal employer has been used.
menthresh
From India, Delhi
Sorry for the delay. i am grateful 4 ur response. But i would like to add that admittedly bonus is not a part of wage hence i feel that principal employer cannot recover the same from the bils of contractor. moreover in the bonus act no such term principal employer has been used.
menthresh
From India, Delhi
payment of bonus is statutory. once it is agreement of conciliation, the contractor is supposed to pay. Though Principal employer is not involved, it is payment to the worker, and hence in case of violation, both conciliation authority and principal employer should act on the same.
From India, Nellore
From India, Nellore
It is quite natural that the Principal employer is also asked to attend the conciliation relating to contractors' workers because it is on the principal employer only that the burden of expenditure is going to come as any payment given to the workers will be a cost to principal employer. Therefore, the agreed amount though paid initially by the contractor will have to be reimbursed to the contractor by the principal employer. Though as per most of the contract, there will be an element of statutory bonus included in the monthly bills raised by the contractor, any increase in it will have to be borne by the principal employer alone.
Note that in a conciliation/ settlement it is always advisable to ensure that the principal employer is not signing the settlement.
Regards,
Madhu.T.K
From India, Kannur
Note that in a conciliation/ settlement it is always advisable to ensure that the principal employer is not signing the settlement.
Regards,
Madhu.T.K
From India, Kannur
The definition of Employee in the Bonus Act is wide :
(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;
(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and
(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;
Therefore the place of work being the place of the Principal Employer ,Principal Employer will ultimately become liable in view of his having the ultimate control over the affairs of the establishment .In case of compliance of the Bonus Act by the Contractor by Conciliation proceedings Principal Employers ultimate liability will get erased.
rajanlawfirm
Pls see https://www.citehr.com/285737-legal-...-industry.html
From India, Madras
(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;
(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and
(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;
Therefore the place of work being the place of the Principal Employer ,Principal Employer will ultimately become liable in view of his having the ultimate control over the affairs of the establishment .In case of compliance of the Bonus Act by the Contractor by Conciliation proceedings Principal Employers ultimate liability will get erased.
rajanlawfirm
Pls see https://www.citehr.com/285737-legal-...-industry.html
From India, Madras
Dear M/s Rajan Lawfirm
It is well settled that there is no employer - employee relationship exists between the Principal Employer and the contract worker. In the case of an employee engaged through the contractor, the contractor is the employer and not the principal employer. When the Principal Employer had not employed the contract worker, there is no liability on the part of the Principal Employer to pay bonus to the employee(s) engaged through the contractor. The contract workers as a matter of strategy also include the Principal Employer whenever a dispute regarding bonus is raised. Depending on the facts and circumstances of each case, the Principal Employer particiaptes in the conciliation proceedings, and even after participating in the conciliation proceedings may refuse to be a party to the settlement that may be reached between the contractor and his employees.
With regards
From India, Madras
It is well settled that there is no employer - employee relationship exists between the Principal Employer and the contract worker. In the case of an employee engaged through the contractor, the contractor is the employer and not the principal employer. When the Principal Employer had not employed the contract worker, there is no liability on the part of the Principal Employer to pay bonus to the employee(s) engaged through the contractor. The contract workers as a matter of strategy also include the Principal Employer whenever a dispute regarding bonus is raised. Depending on the facts and circumstances of each case, the Principal Employer particiaptes in the conciliation proceedings, and even after participating in the conciliation proceedings may refuse to be a party to the settlement that may be reached between the contractor and his employees.
With regards
From India, Madras
Though Principal Employer is not a party for conciliation, most of the conciliations end up with financial benefits to the workers. Hence Principal Employer should know or should be informed to fulfill the obligation of payment to the workers, in case of failure by Contractor. Whatever the case, giving a deaf year is not a part of welfare activity. Worker, Contractor are on weak footing and Principal Employer is on strong footing and trying to defy the statutory provisions and not otherwise. Regards.
From India, Nellore
From India, Nellore
Dear M/sRajan Lawfirm
What happens if the principal employer does not participate in the conciliation proceedings and therefore does not sign the settlement if at all any is reached. Can a settlement be enforced against a person who has not signed it. The discussion in the present thread is about a principal employer who has signed the settlement as a witness. Can you give your views in a situation where the Principal employer does not participate in the conciliation proceedings or having participated refuses to sign the settlement. The present discussion is not about a claim for the recovery of the bonus from the principal employer before a judicial or quasi judicial forum. The Judgment cited by you has for its background a claim on the principal employer for the payment of gratuity and his non payment of the same. Still the High Court has not said that the Principal Employer only has to pay the gratuity. This judgment has not extinguished the liability of the contractor pay the gratuity. It is well accepted that whatever amount the principal employer pays to the contract worker can be recovered from the contractor. This does not mean that the liability for payment is on the principal employer. Moreover, in the first post in this thread it is stated that the principal employer signed as a witness therefore he is not a party to the settlement. Can a settlement be enforced against a witness to the settlement. These are the issues which remains to be answered.
With regards
From India, Madras
What happens if the principal employer does not participate in the conciliation proceedings and therefore does not sign the settlement if at all any is reached. Can a settlement be enforced against a person who has not signed it. The discussion in the present thread is about a principal employer who has signed the settlement as a witness. Can you give your views in a situation where the Principal employer does not participate in the conciliation proceedings or having participated refuses to sign the settlement. The present discussion is not about a claim for the recovery of the bonus from the principal employer before a judicial or quasi judicial forum. The Judgment cited by you has for its background a claim on the principal employer for the payment of gratuity and his non payment of the same. Still the High Court has not said that the Principal Employer only has to pay the gratuity. This judgment has not extinguished the liability of the contractor pay the gratuity. It is well accepted that whatever amount the principal employer pays to the contract worker can be recovered from the contractor. This does not mean that the liability for payment is on the principal employer. Moreover, in the first post in this thread it is stated that the principal employer signed as a witness therefore he is not a party to the settlement. Can a settlement be enforced against a witness to the settlement. These are the issues which remains to be answered.
With regards
From India, Madras
The idea of the Principal Employer being involved is on account of the Statutory liability u/s 21 which arises with or without his participation in the Conciliation :
21. RESPONSIBILITY FOR PAYMENT OF WAGES. -
(1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.
(2) Every principal employer shall nominate a representative duly authorised by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.
(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorised representative of the principal employer.
(4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.
The extended definition of wages as propounded by the Division Bench of the Madras High Court is the guiding factor to understand the risk of the Principal Employer.What the Judgment says is let the Principal Employer pay and recover.The liability of the Contractor gets never extinguished.
rajanlawfirm
Pls see https://www.citehr.com/285737-legal-...-industry.html
From India, Madras
21. RESPONSIBILITY FOR PAYMENT OF WAGES. -
(1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.
(2) Every principal employer shall nominate a representative duly authorised by him to be present at the time of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.
(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorised representative of the principal employer.
(4) In case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.
The extended definition of wages as propounded by the Division Bench of the Madras High Court is the guiding factor to understand the risk of the Principal Employer.What the Judgment says is let the Principal Employer pay and recover.The liability of the Contractor gets never extinguished.
rajanlawfirm
Pls see https://www.citehr.com/285737-legal-...-industry.html
From India, Madras
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