temporary manpower
P.C. Joshi
(Querist) 27 December 2012
This query is : Resolved
Friends, pls advise on the following query. A compny has appoinmted ten temporary persons aas a field staff thjrougj a manpower agency to promote its products. As per the terms and conditions agreed betweem the company the liability of thje payment of wages and statutory compliance is on the agency. The agreement can be terminated by one month notice. Due to cost cutttimh measures the company decided to terminate the services of the temporary staff engagef through the agency from december eowe and intimated the agency for tytermination of contract. The account of the agency including wages for nov is yet to settled by the company. In the mean time it has been noticed that the agency has not paid the salary of nov to the staff. Please advise what is the liabilty of the company in case the agency defaults in payment of salary to staff can the company directly pay the salary to staff also please advise what legal action the company take agaimst the agency. Thanls p c joshi
Guest
(Expert) 27 December 2012
In contract case the liability to pay the dues of contractual employees rests only on agency with which the company entered in to a contract. The company is laiable to pay only to the agency that become due against the company till date of termination of contract, as per terms of the agreement. Irrespective of whether the dues of the agency up to November have not been settled by the company the agency cannot withhold salaries of the contractual employees on that plea. Company's action depends solely on the provisions of the agreement with the contractor agency. Whether and of what nature the company can take action against the contractor agency can be suggested after examination of the contents of the agreement with the agency. You may therefore advised to contact some local service law expert along with the copy of the agreement to have his advice/opinion on that aspect.
P.C. Joshi
(Querist) 27 December 2012
Sir, Thank you very much.
Pls also clarify my doubt that as per section 20(4) of the Contract Labour Act, in case the contractor fails to pay the wages to the employee, the principal employer is liable to pay the same and recover from the contractor. Is it not in this case the company is liable?
Thanks
Guest
(Expert) 27 December 2012
Dear Shri Joshi,
You have quoted the wrong section of the Act. There is no such sub-section (4) of section 20 of the Act. Moreover, section 20 provides for Principal Employer's liabilities towards providing at the cost of the contractor only those amenities, which become due to be provided under the provisions of law, but the contractor fails to provide the same.
However, section 21 deals with the payment of wages. Of course, according to section 21(4), the Principal Employer becomes liable to make payment of wages on behalf of the contractor and to recover the same from him in case the contractor fails to make payment of wages within the prescribed period or makes short payment of wages.
Sudhir Kumar, Advocate
(Expert) 28 December 2012
In case of default of PF dues the Principal employer fully remains liable
Raj Kumar Makkad
(Expert) 01 January 2013
Principal employer is duty bound to ensure the full compliance of EPF & MP Act from his contractor otherwise he is liable to follow it as desired.
