Brick HR

 

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 o...

It may be recollected that in  Assistant Provident Fund Commissioner, Gurgaon Vs. G4S Security Services (India) Limited & Anr, 2011 LLR 316 ,  the Punjab & Haryana High Court has held that the provident fund contributions are not necessarily to be paid on the wages which are fixed under the Minimum Wages Act. Being aggrieved, the EPFO filed a Letters Patent Appeal No.  1139 of 2011  before the Division Bench challenging the order of learned Single Judge.  The Division Bench, comprising of the Hon’ble Chief Justice Adarsh Kumar and the Hon’ble Justice A.K. Mittal, on  20.07.2011  dismissed the appeal.

The grievance of the appellant in the appeal is that the order dated 25.06.2010 passed by the EPF Authority under section 7A of the Act that -  the employer is liable to pay contributions under the Act on the wages as fixed under the Minimum Wages Act and not the actual wages paid to the workmen is illegal. The Appellate Tribunal observed that - the contribution under the Act is to be paid upon the ‘basic wages’ as defined under the Act and not upon the wages fixed under the Minimum Wages Act   Reference - As also held by the Punjab & Haryana High Court in the case of APFC Gurgaon vs. M/s. G4S Security Services (I) Ltd., 2011   Hence, the impugned order of the EPF Authority is set aside and appeal allowed. M/s. Black Panther Security Force vs APFC, Nagpur ATA   No.458(9)/2010   decided on 31.1.2012

Regularization /absorption of contract workers, if the contractor did not possess licence, not proper. and The Tribunal while directing regularization has to give finding that the contract labour system was ruse, sham or camouflage and Merely because the workers have worked for 240 days in a calendar year, it will not give any right for absorption/ regularisation.   JHARKHAND HIGH COURT M/s. Bharat Coking Coal Ltd.  Vs  Workmen M/s. Bharat Coking Coal Ltd. and Another Contract Labour (Regulation and Abolition) Act, 1970 _________________________________________________________________ JHARKHAND HIGH COURT  Hon'ble Mr. Ajit Kumar Sinha, J. W.P. (L) No. 2952 of 2001, D/–1-7-2009 between M/s. Bharat Coking Coal Ltd. vs. Workmen M/s. Bharat Coking Coal Ltd. and Another CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 – Sections 7, 10 and 12 – Absorption of workers as engaged through the contractor – Sustainability of – As permanent employees –...

CALCUTTA HIGH COURT  Hon'ble Mr. Jayanta Kumar Biswas, J. C.W.J. (Appellate Side) W.P. No. 17874 (W)/2007 with C.A.N. No. 5707/2008, D/–14-5-2009 between Wanson Leather Industries Pvt. Ltd. & Ors. vs. Union of India & Ors. EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 – Section 7A, Determination of money due from employer – Constitution of India, 1950 – Article 226, Powers of the High Courts to issue certain writs – Instead of filing an appeal – Petitioner challenged impugned order of RPFC Office for recovery of money due towards contributions – High Court dismissed the writ petition by holding impugned order passed after giving full opportunity of hearing to petitioner – No written objection submitted to show cause notice – Correctness of list of workers and other details given to petitioner, never disputed – The moment evasion was detected, petitioner gave membership to those 67 workers named in the list - No reason to interfere with ...

Many time my clients ask this question -   if   the contractor   fails to make payment to his contract employee   then   the liability will be on Principal Employer or not. In this regard please find my comment  below As per Section 21(4) of the contract labour (Regulation & Abolition) Act 1970 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 of wages 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 either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor. In this regard I am supported by the judgment of Bombay High Court where Management was made responsible for paying the arrears of wages and the amount deposited with the Registry of that Court...

Principal employer can be liable for EPF contribution of contractor when the latter does not have code number. and Principal employer not liable for provident fund dues of contractor with independent code number. M/s. Calcutta Constructions Company vs. Regional Provident Fund Commissioner and Others A. EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 – Sections 14B, 7A & 17Q – Contract Labour (Regulation and Abolition) Act, 1970 – Sections 2(e), (f) and (c) – Employer, Employee and Contribution – When liability to pay contribution is upon principal employer and when upon contractor – Where Code No. is allotted to a contractor it becomes an establishment under the Act – Would, thus, be liable to pay contributions of its employees – Where the contractor has not been allotted code number, the contributions in respect of contractor's employees shall have to be paid by the principal employer and recover the same later on from the contractor. Paras 15 t...

Both the Employer & Employee are prohibited against service to customer or for doing any business of the establishment on a closed day & therefore owner of Establishment giving service to his customer on weekly holiday is guilty of contravention of Section 18(1) of Maharashtra Shops & Establishment Act, 1948 Even though there were no employees. Jethlal Valand V. Vipinchandra Gandhi 1971 Under Section 18(3) an Employee is entitled to wages for the day for which the establishment remains closed in any week under section 18(1) of the Act, provided he has been employed for six continuously in that week. Under Section 18(3) of the Act the only condition to be satisfied about the period of employment & not about having worked a particular number of hours in week or on each of the six days other then the closed days. Sitaldas v. Kalekar 68 Bom. LR. 10 The piece-rated employee in the power-loom industry is not entit...