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Mahendra Yewale   26 June 2018

Contractor is not paying salary to labour


I am finance Manager and want to know if the contractor has not pay the bonus amount to employees. company will face any legal issues. company has paid all compension to labour contractor.



Mahendra yewale


 10 Replies

R.Ramachandran (Advocate)     26 June 2018

As a Principal Employer, the Company has responsibility and liability.

If you have already paid the amount to the contractor, then ask the contractor to produce proof that he has made payments to the workers.  Otherwise, stop further payments to him.

In fact you are liable to ensure that he properly remits the EPF amounts etc. with the authorities.

Pradipta Nath (Advocate)     26 June 2018

It is always the principal employer's responsibility to see that the contractual workmen are getting the statutory benefits. That is reason why many principal employers engage Labour Law Auditors in their Company to minimizing the legal risk. If you have not engage any Statutory Audit System in your Company till now, please ensure it is right now before you trapped into unnecessary legal hackles.

Mahendra Yewale   26 June 2018

Ok, thanks for info.

May I get any rule or notification related to this to show management.


Best regards

Mahendra Yewale

Pradipta Nath (Advocate)     26 June 2018

Section 21(2) and (4) of the CLRA Act and Section 2(13) of the Payment of Bonus Act.

Kumar Doab (FIN)     26 June 2018

You may also relate with agreemenrt signed with Contractor and payments made..

Press the contractor to pay.

Kumar Doab (FIN)     26 June 2018

Such queries have been discussed in many threads that you can seacrh in SEARCH option and relate with extent facts of your matter...


Mahendra Yewale   28 June 2018

Ok, Thank you.

Sudhir Kumar, Advocate (Advocate)     28 June 2018

is the contractor depositing dues in PF and ESI as well.

V. VASUDEVAN (LEGAL COUNSEL)     08 October 2018

The employees engaged through the contract labour as covered under the Contract Labour (Regulation & Abolition) Act will not be entitled to bonus from the principal employer. In Cominco Binani Zinc Ltd. v. Pappachan, 1989 (1) LLJ 452: 1989 LLR 123, the Kerala High Court has held that neither the Contract Labour (R&A) Act nor the Payment of Bonus Act provides that the employees engaged through the contractor will be entitled to bonus under the Payment of Bonus Act.

Stephannie   13 June 2019

This was really helpful.

Thank you

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