A Company hired employees through a Contractor under Contract Labour (Regulation & Abolition) Act. Contracted employees are engaged in seurity service, gardening, peon and also in maintenance. Contractor pays the salary/wages to these employees and submit his bill to the Company with his service charges.My queries are as under:
1. Whether Company being a principal employer is liable to pay bonus to the contracted employees in case the company pays bonus to its regular employee.
2. What would be the position if the contractor does not pay the bonus to these contractual emplyees.
3. Please inform about any notification of ministry of labour/citation of case laws on payment of bonus to contractual employees.
Ramesh Sharma
From India, Chandigarh
1. Whether Company being a principal employer is liable to pay bonus to the contracted employees in case the company pays bonus to its regular employee.
2. What would be the position if the contractor does not pay the bonus to these contractual emplyees.
3. Please inform about any notification of ministry of labour/citation of case laws on payment of bonus to contractual employees.
Ramesh Sharma
From India, Chandigarh
Hi Ramesh,
As per the Bonus Act, the Principle employer is responsible for the payment of Bonus to his employees.
In your case, you have to ask your contractor to pay the Bunus to their employees and submit the proof of receipt to you.
In case he is not paying the Bonus, you can pay the Bonus to those employees and deduct the amount from the Contractor Bills.
For detail kindly go through the Payment of Bonus Act.
Hope it is clear to you........
AMATYA
4As per the Bonus Act, the Principle employer is responsible for the payment of Bonus to his employees.
In your case, you have to ask your contractor to pay the Bunus to their employees and submit the proof of receipt to you.
In case he is not paying the Bonus, you can pay the Bonus to those employees and deduct the amount from the Contractor Bills.
For detail kindly go through the Payment of Bonus Act.
Hope it is clear to you........
AMATYA
Dear Amatya
Thanks for reply. At least you came forward for picking up the issue.
As per Contract Labour (R&A) Act, 1970 the liability of principal employer is limited to payment of wages and providing facility like wash room, canteen, first aid etc and the expenditure incurred for providing these facility can be deducted from the bill of contractor. However, the term 'wages' does not include bonus as defined in the Minimum wages act. Therefore, I have opined that payment of bonus is not a liability of principal employer in the case of contractual employees. This is the liability of contractor. In case the contractor is not paying the bonus he should be liable for any violance, if any.
I needy your comment on these findings. Can u provide any citation of case laws on this issue.
Thanks and regards
Ramesh Sharma
From India, Chandigarh
Thanks for reply. At least you came forward for picking up the issue.
As per Contract Labour (R&A) Act, 1970 the liability of principal employer is limited to payment of wages and providing facility like wash room, canteen, first aid etc and the expenditure incurred for providing these facility can be deducted from the bill of contractor. However, the term 'wages' does not include bonus as defined in the Minimum wages act. Therefore, I have opined that payment of bonus is not a liability of principal employer in the case of contractual employees. This is the liability of contractor. In case the contractor is not paying the bonus he should be liable for any violance, if any.
I needy your comment on these findings. Can u provide any citation of case laws on this issue.
Thanks and regards
Ramesh Sharma
From India, Chandigarh
Dear friends,
Payment of bonus by the contractor to his employees would depend upon the type of contract which the Principal Employer (PE) has entered into with his contractor. Suppose, the PE pays wages and all other legal dues of the workmen to the contractor plus a fixed percentage of amount as his profit, then the PE would be responsible for payment of bonus to his employees.
Wishes
JPratap
From India, Chandigarh
Payment of bonus by the contractor to his employees would depend upon the type of contract which the Principal Employer (PE) has entered into with his contractor. Suppose, the PE pays wages and all other legal dues of the workmen to the contractor plus a fixed percentage of amount as his profit, then the PE would be responsible for payment of bonus to his employees.
Wishes
JPratap
From India, Chandigarh
Dear Ramesh,
Neither the Contract (Regulation & Abolition) Act or Payment of Bonus Act, 1965 says that bonus shall be payable by the Company to Contract Employees. Therefore legally speaking bonus is not payable as it is not a wage.
Even Kerala High Court in one case held that Principal Employer (Company) will be liable to pay wages not below minimum wages to the employees of the Contractor if the later fails to make the payment of the wages to his employees. It has been held that bonus will not be payable by the Principal Employer to the workers engaged by the Contractor since bonus do not come with in the purview of wages
From India, Rudarpur
Neither the Contract (Regulation & Abolition) Act or Payment of Bonus Act, 1965 says that bonus shall be payable by the Company to Contract Employees. Therefore legally speaking bonus is not payable as it is not a wage.
Even Kerala High Court in one case held that Principal Employer (Company) will be liable to pay wages not below minimum wages to the employees of the Contractor if the later fails to make the payment of the wages to his employees. It has been held that bonus will not be payable by the Principal Employer to the workers engaged by the Contractor since bonus do not come with in the purview of wages
From India, Rudarpur
1. If the Principal Employer (PE) engage a contractor to provide certain skills of workforce only and the estimate of rate offered to the contractor or the rate quoted by the contractor and agreed between PE and Contractor does not include bonus element, then the PE is bound to pay bonus element to the contractor for the workers engaged by the contractor and ensure its payment.
2. Similarly, if there is an increase in rate of min.bonus (as is the case of latest amendment to Bonus act), then the PE has to make good the difference of amount of bonus to the Contractor for the workforce engaged by him on the job.
Pls give your opinion on this.
Thanks
From India, Thane
2. Similarly, if there is an increase in rate of min.bonus (as is the case of latest amendment to Bonus act), then the PE has to make good the difference of amount of bonus to the Contractor for the workforce engaged by him on the job.
Pls give your opinion on this.
Thanks
From India, Thane
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