Principal Employer is not liable to pay Bonus to Contract Worker

Will the principal employer be liable to pay bonus to the employees employed by the contractor?

Principal employer is liable to pay wages to the employees of the contractor if the latter fails to make payment of wages to his employees unders Section 21(4) of The Contract Labour (Regulation & Abolition) 1970. 

On this analogy, a question arises as to whether principal employer is liable to pay bonus to the employees of the contractor in case the contractor, if liable, fails to pay bonus to its employees. 

Having regard to the definition of employee found in section 2(13) of the Payment of Bonus Act, the claim of the Labour Department that the contract labour are also entitled for payment of bonus on par with the regular employees, as contended in the complaint, has no legal basis and it does not amount to violation of section 11 of the Act attracting punishment under section 28 of the said Act. It is clear that the contract labour cannot be treated on par with the regular employees for the purpose of payment of bonus. 

verdict - liable was quashed  

Reference:

1. Cominco Binani Zinc Ltd. VS. Pappachan, 1989 LLR 123 (Ker. HC). 
2. Shachindra Kumar, Factory Manager, Hindustan Unilever Ltd. vs. State of Karnataka, Labour Department, 2013