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Liability of Principle for wages for outsourcing workers

Confused Officer
Thu, 08 Nov 2018 01:26:31 PM  (Last updated: Fri, 09 Nov 2018 06:58:22 AM)

I need help to understand if the principle would be liable for wages based on the employment act, should the "contrator of labour" is no longer able to pay their employees wages and the maximum amount that the principle is liable for, is a maximum of 3 months wages?

Thanks in advance


Liability of principals and contractors for wages

(1) Where a principal in the course of or for the purposes of his trade or business, contracts with a contractor for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, and any wages are due to any employee by the contractor or any sub-contractor under the contractor for work done in the course of the performance of the contract, the principal and the contractor and any such subcontractor (not being the employer) shall be jointly and severally liable with the employer to pay such wages as if that employee had been immediately employed by the principal and by the contractor and any such sub-contractor:

Provided that— 
(a) in the case of a contract for constructional work the principal shall not be liable for the payment of wages under this subsection unless he is also a constructional contractor or a housing developer; 
(b) the principal, and the contractor and any sub-contractor (not being the employer), shall not be liable to any employee under this subsection for more than the wages due to him for any three consecutive months; and 
(c) the employee shall have instituted proceedings against the principal for the recovery of his wages or made a complaint to the Director General under Part XV with in ninety days from the date on which such wages became due for payment by his employer in accordance with the provisions for the payment of wages contained in Part III. 

(2) Any person, other than the employer, who has paid wages under this section to the employee of any employer may institute civil proceedings against such employer for the recovery of the amount of wages so paid.  

KL Siew
Thu, 08 Nov 2018 02:38:40 PM

Yes, that's correct and furthermore the claim should be made within 90 days from date wages due. For making claim, it is advisable for the employee to make claim jointly and severally against both the contractor as well as the principal at the same time.

Confused Officer
Fri, 09 Nov 2018 06:58:22 AM

Thank you, this would be a good as some of my colleagues was outsourced and was looking into what prootection they have under the law.

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