Will the principal employer be liable to pay gratuity and bonus to the employees employed by the contractor?
No doubt a principal employer is liable to pay wages to the employees of the contractor if the latter fails to make payment of wages to his employees. However, it has been held in one case that the gratuity and bonus will not be payable by the principal employer since these do not come within the definition of 'wages'.
Reference:
Cominco Binani Zinc Ltd. VS. Pappachan, 1989 LLR 123 (Ker. HC).