What is Principal Employer-Subcontractor Relationship?

The principal employer-subcontractor relationship refers to a work arrangement in which all or part of a job is handed over to a subcontractor that works in connection with the principal employer but has a separate legal personality. In such relationships, subcontractor employees can benefit from certain rights even though they are not directly tied to the principal employer. Under labor law, the principal employer has a responsibility to protect the rights of subcontractor employees. This relationship is common especially in large-scale projects, construction, manufacturing and subcontracting systems.