Contract Labour (Regulation & Abolition) Act, 1970

Transcription

1 Contract Labour (Regulation & Abolition) Act, 1970 Legal compliance Handbook Evaluer on Employment Law What the Contract Labour Act means and its applicability. The concept of employing workers on contract basis and procedure. Checklist and do s and don ts for an establishment.

2 1. INTRODUCTION The Contract Labour (Regulation & Abolition) Act, 1970 (the Contract Labour Act ) was enacted to regulate the employment of contract labour and also to introduce better conditions of work. Under the Contract Labour Act, an establishment is permitted to hire workers through an intermediately called a contractor. In doing so, the establishment is relinquished from the obligation of them being permanent workers of the organization. The concept of contract labour can be understood from the following example: suppose an establishment wants to build a factory. For this, the establishment hires a person B to get the job done. This person B hires other people X, Y and Z to build the factory. Now, it is not necessary that X, Y and Z should be hired by B with the permission of the establishment. It may not even know about this contract but B acting as a mediator has got into a contract with other people to get the work done on behalf of the establishment. These people X, Y and Z who have no direct contact or relationship with the establishment are the contract laborers. The Contract Labour Act is an important piece of social legislation which seeks to regulate the employment of contract labour and where necessary to abolish the same. The primary object appears to be there should not be exploitation of the contract laborers by the contractors or the principal employer. For achieving that object, statutory restrictions and responsibilities have been imposed on the contractor as well as on the principal employer. Of course, if any expenses are incurred for providing any amenity to the contract laborers or towards the payment of wages by the principal employer, the same can be deducted from the bill of the contractor. As per the Contract Labour Act it is the duty of principal employer to secure full compliance in respect of the workers engaged through a contractors or subcontractor. 1.2 APPLICABILITY The Contract Labour Act applies both to a principal employer and a contractor, whereby the principal employer will seek registration under the Contract Labour Act and the contractor will obtain a license. Additionally, the said Act also applies to every establishment in which 20 (twenty) or more workers are employed or were employed on any day of the preceding 12 (twelve) months as contract labour. In case there is more than one contractor and none

3 of them is employing more than 20 (twenty) workers, but the total number happens to be more than 20 (twenty) for an establishment, then in that case the principal employer will seek registration but the contractors (since none of them individually have hired more than 20 workmen) will not be required to obtain the license. 1.3 DEFINITION OF WORKMEN UNDER THE ACT An essential ingredient of contract labour is that the persons employed through a contractor must be workmen as defined in section 2 (i) of the Contract Labour Act 1. Workman means any person employed in or in connection with the work of any establishment to do any skilled, semiskilled or un-skilled manual, supervisory, or clerical work for hire or reward, but does not include any such person who is employed mainly in a managerial or administrative capacity or (b) exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or (c) who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer. 1.4 APPLICABILITY OF OTHER LABOUR LAWS ON CONTRACT LABOUR THE FACTORIES ACT, 1948 (THE FACTORIES ACT ) Contract labour employed shall be entitled to all privileges and benefits applicable to the workers in a factory as per the Factories Act, for example weekly holidays, compensatory holidays, extra wages for overtime, leave with wages etc subject to such conditions as are prescribed in the relevant sections of the Factories Act EMPLOYEE PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952 The term employee used in section 2 (f) of the EPF Act includes any person employed by or through, thus a contract laborer will get advantages of the scheme framed under the EPF Act, including appropriate EPF contributions. The prescribed contributions have to be made 1 Gammon India Limited vs. Union of India, 1974 (I) LLJ 489: AIR 1974 SC 960: (1974) 1 SCC 596; Ker Civil Aviation General Workers Co-op. Society vs. Union of India, 1984 (II) LLJ 314

4 in respect of the contract labour in the same manner and at the same rates as applicable to the employees directly employed by the concerned establishment. The principal employer has to pay the contributions in respect of contractor s employees as well as his own employees in the first instance, but the amount paid on behalf of the contractor is recoverable from the latter EMPLOYEE STATE INSURANCE ACT, 1948 In factories and such other establishments to which the ESI Act applies, contract labour will be eligible for the benefits as conferred under the ESI Act to the employees so long as they meet the requirements of the expression employee as defined in section 2(9) of the ESI Act which reads as follows: "Employee means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service. In view of the above and also as per a judgment of the Kerala High Court in Employee State Insurance Corporation vs. Vijayamohini Mills 2 the employees engaged by the contractor in an establishment will be covered under the ESI Act PAYMENT OF BONUS ACT Neither the Contract Labour Act not Bonus Act provides that the Bonus Act will be applicable to contract labour. In Cominco Benani Zinc Limited Vs Pappachan, 3 the Kerala High Court has held that bonus will not be payable by the principal employer to the workers engaged by contractors, since bonus does not come within the preview of wages. The only responsibility of principal employer is to make sure that wages are paid to contract labour and if the LLR 305: 1990 (1) LLN 902 (Ker HC) LLR 123 (Kerala HC)

5 contractor fails to make this payment, the principal employer can be held responsible for the same PAYMENT OF GRATUITY ACT, 1972 Neither the Contract Labour Act nor Gratuity Act, 1972 provides that the employees engaged through the contractor will be entitled to gratuity from the principal employer. The Kerala High Court however has clarified that the principal employer will not be liable to pay gratuity to the employees engaged through the contractor THE MINIMUM WAGES ACT, 1948 Sub-rule IV of rule 25 of the Contract Labour (Regulation & Abolition) Central Rules, 1971 (the Contract Labour Rules ) provides that the principal employer must ensure that the workers as engaged through the contractor will be paid wages not less than the minimum rate of wages as fixed under the Minimum Wages Act, 1948 from time to time WORKMEN S COMPENSATION ACT, 1923 Section 12 of the Workmen s Compensation Act, 1923 (the Workmen s Compensation Act ) deals with the liability for payment of compensation to a contract labour for personal injury caused by accident arising out of and in course of employment. The Bombay High Court in Surjeras Unkar Jadhaw Vs Gurinder Singh 5 has held that the principal employer cannot escape from his liability to pay compensation to the workers of the contractor. In another case, it has been held that principal employer will be liable to pay compensation in an accident covered under the Workman s Compensation Act even when the employee is engaged through the contractor whereas recovery can be made by the principal employer from the contractor for the compensation as paid STEP-BY-STEP PROCEDURE FOR OBTAINING LICENSE AND REGISTRATION 4 Cominco Benani Zinc Limited vs. Pappachan, 1989 LLR 123 (Ker HC) , 62 FLR 315 (Bombay): 1991 Lab IC 689: 1992 (II) LLJ Dean Agricultural College and Research Institute, Killikulam, Vallanad vs. S. Sakilabanu, 2004 (I) LLJ 741 (Mad HC)

6 Establishment to obtain registration Contractor to obtain licence Principal employer to provide certain amenities to workers Duty to maintain registers and records STEP 1 PRINCIPAL EMPLOYER TO OBTAIN REGISTRATION Every principal employer of an establishment who employs 20 (twent y) or more contract workers has to register under this Contract Labour Act. Therefore, an establishment must ensure that it has obtained a registration certificate before employing contract labour. STEP 2 PROCEDURE FOR REGISTRATION i. An establishment should make an application in triplicate in Form I at the office of the district labour officer having jurisdiction over the area. ii. The aforesaid application shall be accompanied by a demand draft showing payment of prescribed fees for registration. iii. If the above mentioned application for registration is complete in all aspects, the registration officer shall register the establishment and issue to it a certificate of registration which will be in Form II. iv. The registering officer shall maintain a register in Form III showing the particulars of establishment in relation to which certificates of registration have been issued.

7 Note: If the establishment notices any change, in the particulars specified in the registration (Form I), it should intimate to the registering officer, within 30 (thirty) days from the date when such change takes place, the particulars of such change. STEP 3 CONTRACTOR TO OBTAIN LICENSE Every contractor of an establishment who employ 20 (twenty) or more contract workers has to obtain at license under this Contract Labour Act. In a situation where each contractor engages less than 20 (twenty) workmen but together they engage more than 20 (twenty) workers, the principal employer will be under legal obligation to obtain registration but individual contractors having less than 20 (twenty) workmen will not be required to obtain license. If however, the contractor employs 20 (twenty) persons on any day during the preceding 12 (twelve) months, then the Contract Labour Act will need to apply for a license. STEP 4 PROCEDURE TO OBTAIN LICENSE i. Principal employer shall issue a certificate in Form V to the effect that the ii. iii. contractor has been engaged by the establishment. The contractor shall then apply for license in Form IV in triplicate, to the licensing officer of the area in which the establishment is located. The application shall be accompanied with Form V. The application shall also be accompanied by a demand draft showing the deposit of security calculated at the prescribed rate for each of the workman to be employed as contract labour. The amount is refundable at the expiry of the period of license. Where the applicant for the license was holding a license in regard to another work and that license had expired, the licensing officer, if he is of the view that any amount out of the security deposited in respect of that license is to be directed to be refunded to the applicant, may, on an application made for that purpose in Form VA by the applicant adjust the amount so to be refunded towards the security required to be deposited in respect of the application for the new license and the applicant need deposit, only the balance.

8 iv. The amount of security required to be deposited shall be paid in the local treasury under the Head of Account Section T Deposits & Advances Part II Deposits bearing interest (c) Other Deposit Accounts Departmental and Judicial Deposits Civil Deposits Deposits, under Contract Labour (Regulation and Abolition) Act, 1970 (Central). 7 v. The license officer will then grant a license in Form VI. STEP 5 VALIDITY AND RENEWAL OF LICENSE OF CONTRACTOR i. Every license granted to the contractor shall be valid for a period of 12 (twelve) months from the date it is granted or renewed. Renewal of license can be made in Form VII in triplicate and shall be made not less than 30 ii. iii. (thirty) days before the date on which the license expires. The fee chargeable for renewal of the license shall be the same as for the grant of license. If application for renewal is not made within the time specified above, a fee of 25 % (percentage twenty five) in excess of the fee ordinari ly payable for the license shall be payable for such renewal. STEP 6 TEMPORARY REGISTRATION AND TEMPORARY LICENSE i. Were employment of contract labour is estimated to last for not more than 15 (fifteen) days then the principal employer or the contractor, as the case may be may apply for temporary certificate of registration or license (in triplicate) in Form VIII (temporary registration for principal employer) and Form X (temporary license for contractor) respectively. ii. The application shall be accompanied by a demand draft showing the payment of appropriate fees and in the case of license the appropriate amount of security also. iii. Temporary registration certificate shall be granted in Form IX. iv. Temporary license will be granted in Form XI. Note: on expiry of temporary registration certificate principal employer shall cease 7 Rule 24 (2) of the Contract Labour Rules.

9 to employ contract labour in respect of which certificate was granted. The same shall apply to a contractor. STEP 7 PRINCIPAL EMPLOYER TO ENSURE DISBURSEMENT OF WAGES The principal employer has to ensure the presence of an authorized representative of the establishment at the place and time of disbursement of wages by the contractor and it shall be the duty of the contractor to ensure the disbursement of wages in the presence of such authorized representative. The authorized reprehensive of the principle employer shall record under his signature a certificate at the end of the entries in the register of wages or the register of wages-cummuster roll as the case may be, the following form: Certificated that the amount shown in column number. Has been paid to the workman concerned in my presence on at. STEP 8 EMPLOYMENT OF FEMALE EMPLOYEES No female employee, except women contract laborers employed in pithead baths, crèches, canteens, or as nurses and midwives shall be employed by the contractor or principal employer before 6:00 a.m. or after 7:00 p.m. 1.6 RETURNS, FORMS, RECORDS, TO BE MAINTAINED AND SUBMITTED S.NO COMPLIANCE REQUIREMENT FORMS DEADLINE FOR SUBMISSION OBLIGATIONS OF THE COMPANY / PRINCIPAL EMPLOYER 1. Register of contractors: Principal Form XII As soon as the establishment decides

10 employer must maintain a register of contractors. to employ contract labour. [Rule 74 of Contract Labour (Regulation and Abolition) Central 2. Notice of commencement / completion of contract work: Principal employer shall submit a return to the Inspector, intimating the actual dates of the commencement or, as the case may be, completion of work under each contractor. Form VI-B Within 15 days of commencement or completion of contract work, as the case may be. [Rule 81 (3) of Contract Labour 3. Annual return: Principal employer shall send annually a return so as to reach the registering officer not later than February 15 th following the end of the year to which it relates. [Rule 82(2) of Contract Labour Form XXV To reach the registering officer not later than February 15 th following the end of the year to which it relates. OBLIGATIONS OF CONTRACTOR 4. Notice of commencement / completion of contract work: The contractor shall send a return to the Inspector intimating the actual date of commencement or, as the case may be, completion of contract works. Form VI-A Within 15 days of commencement or completion of contract work, as the case may be. [Rule 25 (2) (viii) of Contract Labour 5. Half yearly return: Contractor to regularly send half yearly returns so as Form XXIV To reach the licensing officer concerned not

11 to reach the licensing officer not later than 30 days from the close of the half year. later than 30 days from the close of the half year. Half year means a period of 6 months commencing from January 1 and July 1 of every year. [Rule 82 (i) of Contract Labour REGISTERS AND RECORDS TO BE MAINTAINED AND FILED BY CONTRACTOR 6. Register of persons employed by contractor: Contractor must maintain in respect of each registered establishment where he employs contract labour a register of workmen employed. Form XIII As soon as the contractor decides to supply contract labour. [Rule 75 of Contract Labour (Regulation and Abolition) Central 7. Employment card: Contractor shall issue an employment card to each worker. [Rule 76 of Contract Labour (Regulation and Abolition) Central Form XIV Within 3 days of the employment of the worker. 8. Service certificate: On termination of employment for any reason whatsoever, the contractor shall issue to the workman whose services have been terminated, a service certificate. Form XV On termination of employment of the worker. [Rule 77 of Contract Labour (Regulation and Abolition) Central 9. Muster-roll: The contractor shall maintain a muster-roll in respect of each work on which contract labour is Form XVI When contract labour is employed.

12 engaged. [Rule 78 (1) (a) (i) of Contract Labour 10. Register of wages: the contractor shall maintain a register of wages in respect of each work on which contract labour is engaged. [Rule 78 (1) (a) (i) of Contract Labour 11. Combined register-cum-muster roll: If the wage period is fortnight or less, the contractor shall maintain a combined register of wages-cum-muster roll [Rule 78 (1) (a) (i) of Contract Labour 12. Wage slip: Where the wage period is one week or more, the contractor shall issue wage slips to the workmen at least a day prior to the disbursement of wages. [Rule 78 (1) (b) of Contract Labour 13. Register of deductions: The contractor shall maintain a register of deductions for damage or loss. Where no deductions have been made during any wage period, a NIL entry shall be made across the body of the register. [Rule 78 (1) (a) (ii) of Contract Labour Form XVII Form XVIII Form XIX Form XX When contract labour is employed. When contract labour is employed. When contract labour is employed. When contract labour is employed.

13 14. Register of fines: The contractor shall maintain a register of fines. Where no fine has been imposed during any wage period, a NIL entry shall be made across the body of the register. [Rule 78 (1) (a) (ii) of Contract Labour 15. Register of advances: The contractor shall maintain a register of advances. [Rule 78 (1) (a) (ii) of Contract Labour 16. Register of overtime: The contractor shall maintain a register of overtime, recording therein the number of hours, and wages paid for overtime work. Where no overtime has been worked during any wage period, a NIL entry shall be made across the body of the register. [Rule 78 (1) (a) (iii)] of Contract Labour 17. Wage slip: Where the wage period is one week or more, the contractor shall issue wage slips to the workmen at least a day prior to the disbursement of wages. [Rule 78 (1) (b) of Contract Labour Form XXI Form XXII Form XXIII Form XIX When contract labour is employed. When contract labour is employed. When contract labour is employed. When contract labour is employed.

14 WELFARE FACILITIES TO BE PROVIDED BY CONTRACTOR Note: if any of the following amenities are not provided by contractor, such amenities shall then be provided by the principal employer. However, the expense so incurred by the principal employer in providing the amenities may be recovered from the contractor by deduction from amount payable to the contractor. (Section 20) 18. Rest Rooms: Contractor shall provide rest rooms in case the contract labour is required to halt at night in connection with the work of the establishment and in which the employment is likely to continue for 3 months or more. These rest rooms shall be sufficiently ventilated and lighted and shall be maintained in a clean condition. NA To be provided within 15 days of the commencement of employment of contract labour. (Section17 & Rule 41 of Contract Labour 19. Canteen Facility: Contractor shall provide an adequate canteen in case employment of contract labour is likely to continue for 6 months and if 100 or more contract labour is ordinarily employed. The charges of foodstuff, beverages and any other items served in the canteen shall be based on noprofit, no loss and shall be conspicuously displayed in the canteen. NA To be provided within 60 days of commencement of employment of contract labour. (Section 16 & Rule 42and 47 of Contract Labour (Regulation and Abolition) Central 20. Latrines and urinals - Contractor shall provide latrines for its contract labour, in the ration of 1 for every 25 women NA To be provided within 7 days of commencement of

15 workers and 1 for every 25 male workers. (Section 18 (B) and Rule 51 of Contract Labour (Regulati on and Abolition) Central employment contract labour. of 21. Washing and screening facilities: Contractor shall provide to its contract labour separate and adequate washing and screening facilities for its women and male workers. [Rule 57 Section 18 (c) of Contract Labour (Regulation and Abolition) Central NA To be provided within 7 days of commencement of employment of contract labour. 22. First aid box: Contractor shall maintain and provide first-aid boxes at the rate of not less than one box for 150 contract labour. (Section 19 and Rule 58 & 59 of Contract Labour (Regulation and Abolition) Central NA To be provided within 7 days of commencement of employment of contract labour. DISPLAY OF NOTICES 23. Principal employer or contractor shall display a notice showing the wage period, rates of wages, hours of work, wage periods, dates and place of payment of wages, name and addresses of the inspectors having jurisdiction, date of payment of unpaid wage to be displayed in Hindi and English conspicuously in the establishment. NA When the Contract Labor Act becomes applicable. [Rule 81 (1) (i) of Contract Labour

16 PENALTIES 24. Contravention of the Contract Labour Act leads to imprisonment of 3 months or fine up to Rs 1,000 or both. 25. Obstructing the inspector or failing to produce registers etc will lead to 3 months of imprisonment or fine up to Rs 500, or both. NA NA NA NA 1.7 FAQ s LIABILITY OF PRINCIPAL EMPLOYER IN CASE OF SUB-CONTRACTING Liability of a principal employer is same as in the case of contractor. This because, as per provisions of the Contract Labour Act, sub-contracting is covered in the definition of the contractor RESPONSIBILITY OF PAYMENT OF WAGES TO CONTRACT LABOUR A contractor is required to pay wages and a duty is cast upon him to ensure its disbursement. In case of failure on the part of the contractor to pay wages either in part or in full, the principal employer is liable to pay the same. The principal employer is authorized to recover the amount from the contractor. This has also been stated by the Supreme Court in Senior Regional Manager, Food Corporation of India, Calcutta Vs Tulsi Das Bauri. 8 According to Rule 25 (2) (iv) of the Contract Labour (Regulation & Abolition) Central Rules, 1971, the rates of wages payable to the workmen of the contractor shall be not less than the rates prescribed under the Minimum Wages Act for such employment TERMS AND CONDITIONS OF EMPLOYMENT OF CONTRACT LABOUR VIS-À-VIS REGULAR EMPLOYEES LLR 601 (SC): AIR 1997 SC 2446: 1997 AIR SCW 2364

17 The Rules framed under the Contract Labour Act [Rule 25 (2) (v) (a)] carry a condition that where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by principal employer on the same or similar kind of work. Additionally, the Madhya Pradesh High Court in Steel Authority of India Limited Vs Authority under the Minimum Wages Act 9 has also held that in case where the type of work done by the workmen engaged by the contractor is the same as done by the workmen directly employed by the principal employer, the workmen employed by the contractor would be entitled to same wages RATIO OF REGULAR EMPLOYEES AND WORKERS THROUGH CONTRACTOR There is no guideline provided under the Contract Labour Act about this ratio. However, 100 % (percentage hundred) contract labour can t be engaged unless the whole industry is leased out to someone else. The ideal ratio of contract labour should be around 70:30 (70 % engaged by principal employer and 30 % through contractor) LAWS, AGREEMENT OR STANDING ORDERS INCONSISTENT WITH THE CONTRACT LABOUR ACT Unless the privileges in the contract between parties are more favorable than those prescribed in the Contract Labour Act, such contract will be invalid and the workers will continue to get more favorable benefits PAYMENT OF WAGES The contractor shall be liable for payment of wages to each worker employed by him as contract labour. 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 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. The Company must ensure that the contract laborers are paid minimum wages LLR 79 (MP HC)

18 1.7.7 WAGE RATE FOR CONTRACT LABOUR AND PERMANENT WORKERS Though Rule 25 (2) (a) and (b) of the Contract Labour Rules, 1971 carry a condition that where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer, the wage rate, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer, on the same or similar kind of work but if, but if there is disagreement with regard to the type of work, it shall be decided by the concerned labour commissioner. Additionally, the Madhya Pradesh High Court has clarified that workers engaged through contractor under the Contract Labour Act will be entitled to equal wages which were being paid to regular employees for similar work LICENSE NOT RENEWED BUT CONTRACTOR CONTINUES TO WORK LEGAL IMPLICATION Even if the license of the contractor is not renewed but continues to work, contract labour can t claim permanency with the principal employer merely on this ground. However, contractor can be prosecuted for violating the Contract Labour Act for not getting the license renewed. The Punjab & Haryana High Court has also clarified that when a contractor does not possess valid license, only penal provisions would be attracted and it is no where provided that such contract labour would become employees of principal employer WHAT IS THE LEGAL IMPLICATION OF A CONTRACTOR CHANGING BUT CONTRACT LABOUR NOT CHANGING? The situation where contractor has changed but the contact labour remains same may be viewed against the principal employer as it reflects against the spirit of the Contract Labour Act unless the shift of labour from one contractor to other is properly documented. This may lead to a sham contract. The Supreme Court in R.K.Panda vs. Steel Authority of India has held that workers working under different contractor for last ten years will be absorbed by the principal employer Steel Authority of India vs. Authority under Minimum Wages Act, 2007 LLR 79: 2007 (5) LLN 237 (MP HC) 11 Food Corporation of India vs. Presiding Officer, Central Government Industrial Tribunal-Cum -Labour Court 1, Chandigarh 2008 (116) FLR 69 4 (P&H) (69) FLR 256 (SC)

19 WHAT HAPPENS TO CONTRACT LABOUR WHEN THE CONTRACT BETWEEN A CONTRACTOR AND PRINCIPAL EMPLOYER IS TERMINATED DUE TO UNSATISFACTORY PERFORMANCE? In this situation the contract labour cannot claim permanency in the organization. The moment contract is terminated, the workers employed by such contractor lose the right to enter into the premises of the principal employer to work as it is the responsibility of the contractor to either keep such labour under his employment or clear their accounts. If principal employer allows such contract labour to work in the premises without any tag / identification, in all probabilities such contract labour will be deemed as the workmen of the principal employer WHAT IS THE LIABILITY OF PRINCIPAL EMPLOYER IF CONTRACTOR RUNS AWAY LEAVING BEHIND HIS WORKFORCE? It is for the contractor to discharge his responsibility as employer towards his workmen. If he runs away leaving behind his workforce, in no way principal employer is responsible for taking care of them in strict legal sense except payment of wages, if not paid by the contractor. Principal employer should not involve himself in the conciliation reference WHO IS RESPONSIBLE FOR PAYMENT OF WAGES TO CONTRACT LABOUR? A contractor shall be responsible for payment of wages to each worker employed by him as contract labour. Principal employer shall nominate a representative duly authorized 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. It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.

20 For further information please contact: Disclaimer: This handbook is not an advertisement or any form of solicitation. This handbook has been compiled for general information of the public and does not constitute professional guidance or legal opinion. Readers should obtain appropriate professional advice. Delhi Bangalore Chandigarh