Hello
It is a known fact that the principal employer is responsible for all contract employees hired through contractors.
Liability includes-
1) paying minimum wages,
2) paying on-time wages,
3) pay statutory bonus,
4) pay wages for leave accumulated,
5) pay double overtime,
6) PF & ESIC/WC policy,
7) Maternity Bonus & Maternity Benefit,
8) Deduction of labour welfare fund
(Please add if anything is missing)
My question is
A) whether the above liability can be avoided if in some contracts like gardening, Effluent Treatment Plant, Utility etc we can give the total scope of activity as one work (eg-maintenance of 10000 sq ft of garden, maintenance of ETP or Utility areas, paying canteen contractor for per plate instead of his manpower etc) & convert these contracts as service contract instead of manpower contracts ?
B) Is there any case law supporting or opposing this concept ?
Experts may please throw some light on this as we can save a lot of liability of Principal Employer.
From India, Aurangabad
14It is a known fact that the principal employer is responsible for all contract employees hired through contractors.
Liability includes-
1) paying minimum wages,
2) paying on-time wages,
3) pay statutory bonus,
4) pay wages for leave accumulated,
5) pay double overtime,
6) PF & ESIC/WC policy,
7) Maternity Bonus & Maternity Benefit,
8) Deduction of labour welfare fund
(Please add if anything is missing)
My question is
A) whether the above liability can be avoided if in some contracts like gardening, Effluent Treatment Plant, Utility etc we can give the total scope of activity as one work (eg-maintenance of 10000 sq ft of garden, maintenance of ETP or Utility areas, paying canteen contractor for per plate instead of his manpower etc) & convert these contracts as service contract instead of manpower contracts ?
B) Is there any case law supporting or opposing this concept ?
Experts may please throw some light on this as we can save a lot of liability of Principal Employer.
From India, Aurangabad
Since the nature of work requires labour engagement, making it one contract will not make any difference. Upkeep of gardens, treatment plants etc shall be taken as non perennial work and as such engagement of contract labour is justifiable, but you cannot absolve yourself from your liability as principal employer. Had it been a work which is done some where outside the factory and then installed in your factory premises for a price rather than a labour charge, we could have called it as contract for service. But in this case everything has to be done within the boundaries of the establishment itself.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
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Contract employee & Principal employer 2017.pdf
NOTE ON PRINCIPAL EMPLOYER TO ENGAGE CONTRACT LABOUR.pptx