Report No. 62
6.3. Special provision in section 12.-
Ordinarily the question who is the "employer" of a person claiming to be a workman is one of fact. But the legislature can make special provisions for special situation. We are here concerned with one such special provision. Where the employer has engaged a contractor, there is a legal fiction1 whereunder the employer of the contractor is liable to workmen engaged by the contractor. In the English Act, the words
"undertaken by the principal" appear, in place of the words 'which is ordinarily part of the trade or business of the principal" which occur in our sub¬section (1)-words qualify the kind of work which is to be executed by the contractor.2
To state the position broadly, even though the work may be within the scope of the general purposes of the principal, he is not liable in England if the work is not a part of the trade or business which the principal undertakes. For example, where the manufacturers of mouldings employed a contractor to stock timber imported by them for the purposes of their business they were not held liable3.
1. Section 12.
2. Section 6, English Act of 1925.
3. Hockey v. West London Timber Co., (1914) 3 Kings Bench 1013.
6.4. The Legislature has substituted the very material words "which is ordinarily part of the trade or business of the principal", for the words "undertaken by the principal", which occur in the English Act. The English Act applied only to work undertaken by the principal, but the Indian Act applies to work done by a contractor which is ordinarily part of the trade or business of the principal. "The variation was obviously deliberate, and the two phrases do not mean the same thing1." It may be that work which is ordinarily part of the trade or business of the principal, nevertheless, was not the work under taken in the particular case of usually undertaken by the principal.
1. AIR 1942 Born 20.
6.5. It may be noticed that sub-section (4) of section 12 (of the Indian Act) is a replica of sub-section (4) of section 6 of the English Act and refers to work undertaken of usually undertaken by the principal. But the word "undertaken" does not occur in the Indian Act in the first sub-section.
6.6. The principle of social justice underlying section 12(1) is that where a person by contract, entrusts1 certain work to another person, and that other person engages a workman, the person entrusting the work is liable as employer under the Act (if certain conditions are satisfied).
The important words are:-
"any compensation which he would have been liable to pay if that workman had been immediately employed by him". The fact that the first mentioned person is not the immediate employer thus becomes immaterial. The intervention of the person to whom the work is entrusted does not destroy the legal link between the person entrusting the work and the workman. To put the matter is a different way, the narrow legal view of contract of employment is extended (for the purposes of the Act) if certain conditions are satisfied to the case of employment of workman by another person, if he is one to whom the work has been entrusted by contract. Those conditions are-
(a) the contract (entrusting the work) is in the course of, or for the purpose of, the trade or business of the person entrusting the work;
(b) the contract must be for the execution, by or under the contractor, of the whole or any part of any work which is ordinarily part of the trade or business of the principal (i.e., the person entrusting); [These two conditions are to be found in section 12(1)];
(c) this section does not apply in any case where the accident occurred elsewhere than on, in or about the premises on which the principal "has undertaken, or usually undertaken, as the case may be", to execute the work or which are otherwise under his control or management." [This requirement is contained in section 12(4)].
1. This is not a paraphrase of the section.
6.7. Thus, the extension of the liability beyond the immediate employment seems to be based on a number of conditions, namely.-(a) the business character of the contract, (b) the work being part of the ordinary business, and (c) potential control or management of the employer as indicated by the geographical contiguity of the premises where the accident has occurred.
6.8. The geographical contiguity of the premises where the accident occurred has perhaps been inserted in order to indicate the possibility of control. This is reasonable on the whole. We recommend no change in this respect.