Report No. 62
Protection of Compensation and other Provisions Regarding Enforcement
The right to compensation conferred by the Act could be thwarted by agreements shutting out the right or by the real employer engaging workmen in the name of some other person, (say, contractors) or by the insolvency of the employer, or by an illegal transfer of assets and the like. Sections 12 to 14 and 17 afford the necessary protection against such devices. Section 18A provides for penalties for contravention of certain provisions of the Act. These sections have a very important feature in common. Their primary object is to protect the right to compensation and to make certain other provisions which either serve as a safeguard against an attempt to circumvent or violate the provisions of the Act, or nullify the effect of legal events (such as, insolvency) which might otherwise impair the right to compensation. These sections and sections 15-16 which happen to be placed amidst them will now be discussed.
6.1A. Section 12.-
Section 12 imposes liability on a person who gets certain works done through contractors in certain circumstances. The section is essentially linked up with the distinction between a servant and an independent contractor. The common law rule based on this distinction has been over ridden by this section which has been enacted pursuant to a specific public policy. Ordinarily the degree to which the principle may intervene to control the details of the performance of the agent, is the broad test applied to distinguish between a servant on the one hand and as independent contractor on the other hand. But here, ignoring the common law concept, a specific provision has been made. Of course such liability, apart from the Act, as may be attached at common law to the principal of an independent contractor, remains unaffected, if the remedy is pursued as at common law and not under the Act.