Srinagar: The High Court of Jammu & Kashmir and Ladakh on Monday ruled that a principal employer cannot escape ultimate financial liability for wages owed to contract security guards deployed at its project site merely because a contractor was made responsible for disbursing salaries.
Justice Sanjay Parihar delivered the common judgment in two connected writ petitions involving security personnel supplied by Parmar Security & Placement Services to AFCONS Infrastructure Limited for its Jammu–Udhampur highway project.
The dispute began when a Labour Enforcement Officer found that guards were not paid revised statutory minimum wages or weekly rest day wages, and that overtime had not been paid at the applicable rate.
An award of March 27, 2014 under the Minimum Wages Act directed the Agency, headed by Col. R.S. Parmar (Retd.), to pay differential wages and compensation of Rs 15,42,532 to 336 workmen, along with Rs 3,19,261 for weekly rest days.
A second award of October 31, 2017 fastened overtime and compensation liability jointly on AFCON and the agency.
The court noted that the agency did not essentially dispute the workers’ entitlement. The real question, it said, was who must ultimately bear the burden.
AFCON argued that contracts placed wage responsibility squarely on the agency.
Rejecting this, the court held that the immediate duty to disburse wages and the ultimate liability to bear the cost are “conceptually distinct”.
Contractual stipulations, it observed, must be read alongside the Minimum Wages Act, the Payment of Wages Act and the Contract Labour (Regulation and Abolition) Act, 1970, particularly Section 21, which requires the principal employer to pay where a contractor fails to do so, with a right of recovery.
The court found the guards were deployed exclusively at AFCON’s site, with attendance, shifts and utilisation substantially under its control.
Wages were disbursed in the presence of its representative, and wage-muster records went to its personnel department for certification, it noted.
Although a 2011 work order barred duty beyond eight hours, the court said any extra work extracted for the project carried statutory consequences.
The court also took note of AFCON’s own conduct: it had settled the claims of 91 of 100 similarly placed workmen. It could not, the judge held, adopt an “inconsistent position” towards the remaining nine merely because they chose adjudication.
In OWP No. 698/2014, the court set aside the 2014 award because AFCON, a necessary party, had not been impleaded before the authority.
The matter was remanded for fresh consideration with AFCON as a party, and the deposited amount will be remitted to the authority and kept in a fixed deposit meanwhile. The petition was allowed.
In OWP No. 2126/2017, the court found no ground to interfere with the 2017 award, but modified it to the extent of the agency’s liability, directing AFCON to satisfy it in its entirety.
The petition was partly allowed.
The court marked the judgment as speaking and reportable.
