Month: November 2017

Chand Chhap Fertilizer vs Labour Commissioner, Fertilizer on 18 January, 2006 – Allahabad High Court.

The principal employer, M/s. Chand Chhap Fertilizer and Chemicals limited, in order to undertake certain jobs in the industry, had engaged contractor, M/s. Saran Engineering Works, who was a duly licensed contractor under the provisions uder Section 7 of the Contract Labour (Regulation & Abolition) Act, 1970 thereinafter referred to as the Act, 1970).

Two Workman moved an application under Rule 25(2}(v)(a) of the Rules, 1975 to the authority claiming that they we’re not being given wages as that of the other workmen employed by the principal employer and the wages should be paid to them same and similar to the other workmen of the principal employer.

Rule 25(2)(v)(a) of the Rules, 1975 as hereunder: In cases where the workmen employed by the contractor perform the same and similar kind of work as the workmen directly employed by the principal employer of the establishment, the wages rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work;

Provided that in the case of any disagreement with regard to the type of work the same shall be decided by the Labour Commissioner, U.P., whose decision shall be final.

However, the obligation cast upon the principal employer is under the provisions of Section 21 of the Act 1970, which is limited to the wages as agreed between the contractor and the workmen. Section 21 of the Act, 1970 is quoted hereunder.

Section 21. Responsibility for payment of wages-

(1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.

(2) Every principal employer “shall nominate a representative duly authorized by him to be present at the rime of disbursement of wages by the contractor and it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.

(3) It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.

(4) 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.

The provisions of Rule 25(2)(v)(a) of the Rules, 1975 do not impose any liability or obligations on the principal employer but it simply is a term of licence and it is the licence holder that is the contractor who is put to terms in the said rules. If there is any violation of the said Rules, no liability of the same can be fixed on the principal employer.

Also in – Hindustan Steel Works Construction Ltd. v. The Commissioner of Labour and Ors. reported in 1996(74) FLR 2151 – The right of workers to recover any additional wages which may be so determined would be against the contractor and would not fix or impose any liability on the principal employer.

Thus the provisions of Section 25(2)(v)(a) of the Rules, 1975 only deal with the term of the license granted to the contractor who is put to terms in the said Rules find no liability for any violation of the said Rules can be imposed on the principal employer.

So, the scope of Rule 25(2)(v)(a) of the Rules, 1975 is confined to the terms of the licence of the contractor and violation thereof of any of the terms would result in consequence against the contractor alone.

Recruiting new people can be a relatively simple task for organizations, but managing employees and tracking their record can be a daunting one. Right from maintaining the attendance record to disbursing salary and from ensuring the mandatory tax deductions to paying the entitled perks, this becomes to be a herculean activity. However, your task gets even fiercer when you have the liability to stick to the labour laws and you are not much familiar with them.

Whether you do it yourself or get it done by a dedicated manager, you just cannot ignore the likelihood of messing up with some rules. Given to note that the Labour Ministry amends some rules from time to time, you better stay abreast of every single labour rule or hand this task over to some agency.

Good news for you is that there are various agencies which deliver specialized services in this regard. This significant area is covered under the services of manpower agencies – most of the times. When you entrust this task to a professional labour law consultant, you can rest assured because the agency has the complete hold on every single rule and regulation pertaining to employment. Labour law experts associated with the agency keep a close track of every aspect of recruitment regulations of government and hence, never let you face an undesirable situation on this account.

You may appoint a labour law consultant also for obtaining his advice in the human resource and employment matters. The expert’s advice not only facilitates you in understanding every rule but also makes your company more compliant with every law governing labour appointment of your organization.

This experienced labour law consultant is a handy resource for your organization and is a smart choice from your business point of view!