However, increase in the working hours, did not result into more output, as expected. There was a considerable gap between the work load and the available workhours. So, the management decided to give the labour-oriented

However, increase in the working hours, did not result into more output, as expected. There was a considerable gap between the work load and the available workhours. So, the management decided to give the labour-oriented work to an outside contractor. Contractor will provide his labour force and payment will be made directly to the Contractor. It will also avoid the groupism and will also increase the productivity and ultimately the Contractor will be responsible to give targeted output at a pre-fixed cost of wages. Accordingly, the company management contacted M/s Akshay Manpower Suppliers (AMS), for supply of workforce and to undertake the supply of entire labour force. The M/s Akshay Manpower Suppliers (AMS) took over all the workers of the Arihant Textiles Ltd. (ATL) on its payroll as per the terms and conditions set out by the AMS. The workers were asked to give certain parameters of output, else will loose their jobs. M/s Akshay Manpower Suppliers (AMS) entered into the contract with the Arihant Textiles Ltd. (ATL) for supply of labour force on contract basis. In the new changed scenario who shall be regarded as the Principal Employer?