• Bonus payment

Is bonous paid by contractor to his workers is reimbursed by principal employer ? any court case in favour or disfavour of this ?
Asked 6 years ago in Labour

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8 Answers

Yes it is reimbursed in some cases. You can claim the same.

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

The contractor is liable to pay bonus failing which it becomes the liability on part of Principal Employer to make such payment.principal employer is not required to reimburse contractor 

 

2) Section 21 (4) of the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), mandates that a principal employer is responsible for the payment of ‘wages’ to a contract employee in the event of a contractor’s failure to pay within the stipulated timelines or in the event of a contractor making a short payment. The principal employer then has the ability to recover the amount paid as 'wages', from the contractor 

 

 

 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Whoever it is the Contractor also gots the profit, since he is taking profit, he too eligible to pay the Bonus to it's employees under Normal Practice. Here, the Principal Employer has to ensure whether the Bonus is paid to the Contract Employees or not. In the Wage Pattern itself, the Principal Employer has to make the break up which is inclusive of Bonus. The Bonus Act may talks about the Infancy Period ie, any organisation's age is below 5 years that has been exempted to pay Bonus, but in the same act it is clearly mentioned that, if the Organisation starts to getting Profit within 2 years, then it has to pay the Bonus to its employees from the Origin with Interest, that is why? Most of the Organisations are paying bonus from the starting Budget Year itself.
Since the Contractor is the Contractor to the Principal Employer, the Parent of the Contractor shall be Contract Labour Act (Regulation & Abolition). So you have to pay the Bonus to your Contract Employees, as a Principal Employer, you should ensure with the Contractor, whether the Bonus has been disbursed or not.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

The contractor are liable to pay bonus in case the contractor fails then the principal pays and then principal can recover that amount from contractor. 

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Not at all, please go through the citation of Allahabad High Court in the matter of The Fertilizer Corporation of India Ltd V/S A D J Gorakhpur and others decided on 14.07.2017.

Koshal Kumar Vatsa
Advocate, Gurgaon
2282 Answers
3 Consultations

Dear Sir,

It is understanding between the employer and the contractor, so no issue can be made out of it.

Netravathi Kalaskar
Advocate, Bengaluru
4951 Answers
27 Consultations

The bonus is paid by the contractor to his employees, the principal employer has no role to play in this hence there is no question of reimbursement of the same to the contractor. If the contractor is claiming any such thing you may ask him to quote the relevant rules for this claim which can be challenged if it is an illegal claim

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

  1. As per the information mentioned in the present query, makes it clear that you wish to know the provision of any of any case law which would clarify as to whether the bonus reimbursed to the employer or not.
  2. Let me tell you that bonus is something which is a employer is bound to give to it’s employee out of the profit of the company, it doesn’t not come back to the employer.
  3. But, yes if employer is not in a position to bring our profit in any year, then there is relaxation for the employer to not to bonus for the year or till the time it has again started making profit.
  4. Though, I would search for some good case laws if any, to let you know more precisely.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

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