High Court rules principal employers liable for contract worker wages

The High Court of Jammu & Kashmir and Ladakh has ruled that principal employers bear ultimate financial liability for the wages of contract employees, even if a contractor is responsible for disbursements.

In a judgment involving security personnel supplied to AFCONS Infrastructure Limited for a highway project, the court addressed claims regarding unpaid minimum wages and overtime. While AFCONS argued that contractual agreements placed wage responsibility solely on the contractor, Parmar Security & Placement Services, the court rejected this stance.

Justice Sanjay Parihar noted that the duty to disburse wages and the ultimate liability to bear the cost are “conceptually distinct”. The ruling emphasized that under the Contract Labour (Regulation and Abolition) Act, 1970, a principal employer must pay when a contractor fails to do so, maintaining a right of recovery against the agency.