#Principal Employer

The Bombay High Court has ruled that under Section 21 of the Contract Labour Act, principal employers cannot evade statutory wage obligations merely by outsourcing labour. Even when contractors fail to pay minimum wages, the principal employer remains secondarily liable - ensuring workers’ rights are protected regardless of contractual arrangements. This reinforces the Act’s protective intent and expands accountability across supply chains.

Delhi High Court holds that principal employers cannot evade liability under the Employee’s Compensation Act by delegating work to contractors; Section 12 creates a deemed employment relationship.