Jammu & Kashmir High Court: Employer Responsible for Wage Payment If Contractor Fails to Make Payment Under Payment of Wages Act

Jammu & Kashmir High Court: Employer Responsible for Wage Payment If Contractor Fails to Make Payment Under Payment of Wages Act

The High Court of Jammu and Kashmir and Ladakh has emphasized the employer's fundamental obligation for wage payment according to the Payment of Wages Act, 1936. The court has stated that if the contractor or the individual designated by the employer fails to fulfil the payment obligations stipulated by the Act, it is the direct responsibility of the employer to ensure the payment of all wages.

Justice Vinod Chatterji Koul, while dismissing two writ petitions that contested orders of a Labour Court and instructing government departments to directly remunerate workers, despite the initial routing of payments through a contractor, remarked:

“The employer, as provided under Section 3 of the Act, shall be responsible for payment of all wages required to be paid under the Act to the persons employed by him, and in the case of persons employed in factories, in industrial establishments, or in other establishments, in the case of a contractor, a person designated by such contractor who is directly under his charge, and in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act.”

The case originated from awards issued on July 22, 2013, by a Labour Court under the Payment of Wages Act, followed by subsequent judgments delivered by the Principal District Judge, Bandipora, in two appeals.

The petitioner department contested the awards and the judgment of the lower court, asserting that since the contracted work was outsourced to a third party, they were thereby absolved of direct responsibility for wage distribution.

Justice Koul highlighted employers' primary responsibility for wage payment under the Payment of Wages Act and underscored that this obligation applies even in scenarios involving contractors, as delineated in Section 3(2) of the Act.

While addressing the rejection of appeals against the awards by the Principal District Judge Bandipora, Justice Koul underscored the obligatory character of Section 17(1A) of the Act. This provision mandates the deposit of disputed amounts with the appropriate authority when filing an appeal. The court is observing that the petitioner, who was aggrieved by the orders of the authority under the Act, failed to fulfil the mandatory condition of appending a certificate from the authority confirming the deposit of the amount payable under the orders. As a result, the appellate court rightfully dismissed the petitioner's appeal because this mandatory condition was not met.

Referring to the case of Executive Engineer v. Authority under the Payment of Wages Act 2007 , the court stressed that failure to comply with this requirement renders appeals ineffective and deficient.

Based on these observations, the court concluded by dismissing the writ petitions and affirming the orders instructing the department to directly compensate the workers.

Case Title: Executive Engineer Roads and Buildings, Bandipora v. Nazir Ahmad Teli