The liability of an worker engaged by a contractor rests with the main employer who had awarded the work or contract, ruled the high court
The Bombay High Court, in a significant ruling, has laid down a substantial point of law saying that the liability towards an employee engaged by a contractor or managing agent is on the main or principal employer.
Justice AH Joshi upheld the decision of Mumbai Commissioner for Workmen’s Compensation for awarding monetary relief to a worker, who died in an accident. The worker was not employed by the principal employer but by a contractor.
Justice Joshi was hearing an appeal filed by United Assurance Company, which challenged the award of compensation to a driver who was hired by MGM Motors to transport vehicles on behalf of Mahindra & Mahindra (M&M).
Admittedly, the victim was not employed by M&M, which owned the vehicles. The victim was rather employed by MGM Motors to whom the work/ contract for transport of vehicles was entrusted by the auto company.
The vehicles were required to be transported by a driver, Sureshkumar Parasnath Singh, engaged by MGM Motors on behalf of M&M. Thus, the HC held the liability towards an employee engaged by contractor or a managing agent is on the principal employer (in this case M&M).
The judge noted that this being an appeal under the Employees’ Compensation Act, the appellant has to substantiate the challenge on substantial questions of law.
He directed the appellant’s advocate KV Vitonde to pin point and address the court on substantial question of law whether a principal employer would be liable to pay compensation to a worker employed by a managing agency.
The HC, however, said it is not proved that due to any terms of contract between the two sides, the liability towards employees’ compensation was to be borne by MGM Motors.
Irrespective of the terms, the employee concerned is seen to be entitled to receive the compensation, the judge remarked and dismissed the appeal finding no merit in it.
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