Section 2, "Principal Employer" means- (i) in relation to any office or department of the Government or a local authority, the head of that office or department or such other officer as the Government or the local authority, as the case may be, may specify in this behalf, (ii) in a factory, the owner or occupier of the factory and where a person has been named as the manager of the factory under the Factories Act, 1948 (63 of 1948), the person so named. (iii) in a mine, the owner or agent of the mine and where a person has been named as the manager of the mine, the person so named, (iv) in any other establishment, any person responsible for the supervision and control of the establishment.
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 authorised by him to be present at the time 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 authorised 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 any contract as a debt
payable by the contractor. (Own drafting - Means Liability
for payment of wages is of contractor but if the contractor doesnt make payment then principal employer needs to make payment and get the same recovered from contractor) Wages is defined in Contract Labour(Regulation and Abolition) Act as "wages" shall have the meaning assigned to it in clause (vi) of Section 2 of the Payment of Wages Act, 1936 (4 of 1936); Section2( 21) Payment of bonus act includes wages as "salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include (i)
any other allowance which the employee is for the time
being entitled to; (ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles; (iii) any travelling concession; (iv) any bonus (including incentive, production and attendance bonus); (for payment of bonus act link is http://labour.bih.nic.in/acts/payment_of_bonus_act_1965.p df (v)
any contribution paid or payable by the employer to any
pension fund or provident fund or for the benefit of the employee under any law for the time being in force; (vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him; (vii) any commission payable to the employee. Explanation.--Where an employee is given in lieu of the whole or part of the salary
or wage payable to him, free food allowance or free food
by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employee;
The principles to be deduced from the above provisions of law
are 1) The principal employer is not liable to pay bonus under the Payment of Bonus Act to the workers engaged through a contractor, whether the contractor makes a default in the payment of bonus or not. 2) If the terms of engagement of the workers by the contractor(that is the appointment orders issued by the contractor to his workers)stipulates that the contractor should pay his employees bonus, then the principal employer becomes liable to pay the bonus if there is default by the contractor. 3)If the bonus is payable to the workers of the contractor as a result of an award or a settlement or orders of court, then the principal employer is liable to pay bonus to the workers of the contractor in case the contractor commits default in the payment of bonus. Of course in the case of items 2 and 3 the principal employer can recover the payments made by him from the contractor. With regards
So gist is principal employer is not liable for bonus unless
agreement specifies and even then liable for payment of bonus will be recoverd from contactor so surplus will be of contactor will be seen rather that co
Even, the SC upheld that the bonus should be paid on
contractor's profitability and allowcable surplus available with the contractor's firm and not on par with the principal employers.
S. 21 -Payment of wages including overtime wages etc. must
be made directly to the workers in full except with authorised statutory deductions, if any. Payment through khatedars after deducting any advance repayable by the workers to the khatedars or any messing charges etc. was not proper. Due amounts could be recovered from the workers after paying full wages. Labourers Working on Salal Hydro Project v.State of J. &. K., (1983) 2 SCC 181: 1981 SCC (L & S) 289.