LIABILITY OF PRINCIPAL EMPLOYER


 

                     Can the workmen engaged by the contractor recover their unpaid wages from the principal employer, if the contractor fails to make the payment ? Whether it will make any difference, if the contractor and the principal employer are registered under the Contract Labour (Regulation and Abolition) Act?

 

In this connection, a reference is made to a decided case where a dispute has arisen between the employees engaged by a contractor who did not pay their wages and the employees flied their claim for their unpaid wages against the management of Indian Airlines. The management contended that the Central Government has refused to make a reference for adjudication under section 10(1) of the Industrial Disputes Act and as such their application under section 33C(2) of the Act was not maintainable. However, the Labour Court accepted and allowed the application of the workers of the contractor and held that the application was maintainable. The High Court also upheld the contentions of the employees hold­ing that there is no specific provision under the Contract Labour (Regulation and Abolition) Act to ensure the payment of wages to the workmen employed by the contractor and as such the workmen had rightly claimed their wages due to them by moving an applica­tion under section 33C(2) of the Industrial Disputes Act. It was further provided that section 21 (4) of the Contract Labour (Regula­tion and Abolition) Act also provides that in case the contractor fails to pay the wages, the principal employer is responsible to make the payment of wages and also the contract labour employed by the contractor can claim wages either from the contractor or from the principal employer to pay wages to the employees, engaged by the contractor is recognized in section 21(4) of, the Contract Labour (Regulation and Abolition) Act, 1970. Thus if the contractor fails to pay wages to his employees engaged by him the principal employer will be liable to pay the same.

 

Reference:

 

Indian Airlines v.s. Presiding Officer, labour Court & others, 1988 Lab. IC 818 (Delhi HC). - Cominco Binant Zinc Ltd. vs. Pappachan, 1989 LLR 123 (Ker.HC).

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ACT AT GLANCE

OBJECT OF THE ACT :

 To regulate the employment of contract labor in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

APPLICABILITY :

 Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labor.

 Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen. Sec. 1

REGISTRATION OF ESTABLISHMENT :

 Principal employer employing 20 or more workers through the contractor or the contractor(s) on deposit of required fee in Form 1 Sec. 7

REVOCATION OF REGISTRATION:

When obtained by misrepresentation or suppression of material facts etc. after opportunity to the principal Employer. Sec. 9

PROHIBITION OF EMPLOYMENT OF CONTRACT LABOUR :

 Only by the appropriate Government through issue of notification after consultation with the Board (and not Courts) can order the prohibition of employment of contract labor. Sec. 10

LICENSING OF CONTRACTOR:

 Engaging 20 or more than 20 workers and on deposit of required fee in Form IV.

 Valid for specified period.Sec.12, Rule 21

REVOCATION OR SUSPENSION & AMENDMENT OF LICENCES:

 When obtained by misrepresentation or suppression of material facts.

 Failure of the contractor to comply with the conditions or contravention of Act or the Rules. Sec. 14

WELFARE MEASURES TO BE TAKEN BY THE CONTRACTOR :

 Contract labor either one hundred or more employed by a contractor for one or more canteens shall be provided and maintained.

 First Aid facilities.

 Number of rest-rooms as required under the Act.

 Drinking water, latrines and washing facilities. Sec. 16 & 17

LAWS, AGREEMENT OR STANDING ORDERS INCONSISTENT WITH THE ACT-NOT PERMISSIBLE:

 Unless the privileges in the contract between the parties or more favorable than the prescribed in the Act, such contract will be invalid and the workers will continue to get more favorable benefits. Sec. 20

LIABILITY OF PRINCIPAL EMPLOYER:

 To ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines and urinals, washing facilities.

 Principal employer entitled to recover from the contractor for providing such amenities or to make deductions from amount payable. Sec. 20

REGISTERS OF CONTRACTORS:

 Principal employer

• To maintain a register of contractor in respect of every establishment in Form XII.

• Contractor Rule 74

• To maintain register of workers for each registered establishment in Form XIII.

• To issue an employment card to each worker in Form XIV.

• To issue service certificate to every workman on his termination in Form XV. Rules 75, 76 and 77

MUSTER ROLL, WAGES REGISTER, DEDUCTION REGISTER AND OVERTIME REGISTER BY CONTRACTOR:

 Every contractor shall

 Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively when combined.

 Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or less.

 Maintain a Register of Deductions for damage or loss, Register or Fines and Register of Avances in Form XX, from XXI and Form XXII respectively.

 Maintain a Register of Overtime in Form XXIII.

 To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of wages.

 Obtain the signature or thumb impression of the worker concerned against the entries relating to him on the Register of wages or Muster Roll-Cum-Wages Register.

 When covered by Payment of Wages Act, register and records to be maintained under the rules

 Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wage slip.

 Rule 79

 To display an abstract of the act and Rules in English and Hindi and in the language spoken by the Majority of workers in such forms as may be approved by appropriate authority Rule 80

 To display notices showing rates of wages, hours of work, wage period, dates of payment, names and addresses of the inspector and to send copy to the inspector and any change forwithwith Rule 81

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