The Bombay High Court recently clarified that a mere contribution to the Provident Fund does not ipso facto make someone an employer. A bench comprising Hon’ble Mr. Justice Sandeep V. Marne further clarified that even preparing an accident report and providing necessary medical treatment was a basic gesture and did not establish an employer-employee relationship.
Brief Facts:
The Writ Petitions were filed by contract workers of Kirloskar Ebara Pumps Ltd. challenging the common award passed by the Labour Court of Sangli on 06.11.2004. The Labour Court had held that there was no employer-employee relationship between the Petitioners and Respondents and that the Petitioner’s contractors were necessary parties to the References in the absence of whom References could not be adjudicated.
The contract workers in the instant matter were engaged through two agencies/contractors, and did not implead the said contractors, nor sought any relief against them. Therefore, the Labour Court held that adjudication of References for the termination of workers against Kirloskar Pumps was not permissible due to the absence of an employer-employee relationship.
Previously, in pursuance of workers being denied permanence, a complaint was filed before the Industrial Court, and an interim order was passed on 21.06.2001 directing Kirloskar Pumps to maintain the status quo for petitioner workers’ services. An interim application for stay was also rejected on 27.08.2001. Following the same, workers’ services were terminated on 29.08.2001. Further complaints before the Industrial Court were dismissed holding that there was no employer-employee relationship between the workers and Kirloskar Pumps.
The workers individually raised demands before the Conciliation Officer against their terminations, whose failure led to a reference order by the appropriate Government regarding termination and reinstatement of Petitioners to the Labour Court, which in turn denied an employer-employee relationship between the parties and held the said agencies as necessary parties.
The instant petitions challenged the awards passed by the Labour Court, claiming complete supervision and control over the workers.
Contentions of the Petitioner:
It was contended that the petitioner workers were engaged by Kirloskar Pumps since 1995 to perform various jobs. It was alleged that they were falsely shown to have been engaged through contractors while the Company (Kirloskar Pumps) directly controlled their service conditions, and allotted and supervised their work.
Several documents were produced on behalf of the workers including shift charts and communications to prove complete supervision and control by the company Kirloskar Pumps, over the workers. It was further submitted that the Provident Fund of the workers was deducted and deposited, the assignment of work was decided and an accident report was also prepared by the company whenever any accident occurred.
Contentions of the Respondent:
The Counsel for Kirloskar Pumps supported the Labour Court’s decision hinting at the specific admissions in the evidence as given by the said workers and sought dismissal of the petition.
Observations of the Court:
The Court perused a termination letter placed on record and highlighted that the termination letters were issued by the contractors and not the company (Kirloskar Pumps), and despite that, the said workers raised disputes regarding termination against the company and not the contractors who terminated their services. The Court explained that for the workers to succeed in their claims, proving the employer-employee relationship was necessary.
Looking at the documents produced by the workers, the Court observed that “control and management is not the only test to be satisfied for establishing an employer-employee relationship” and went on to refer to Balwant Rai Saluja & ANR. Vs. Air India Ltd. & Ors., 2014 Latest Caselaw 518 SC wherein, the Court laid 6 factors for establishing an employer-employee relationship. The Court remarked that although the Labour Court did not have the benefit of the said decision for the matter decided earlier, the said factors were not satisfied in the instant matter, particularly relying on the cross-examination of the said workers. The Court clarified that the employer-employee relationship existed between the workers and the contractors and not with the company (Kirloskar Pumps). Highlighting the earlier attempt of workers seeking abolition of the contract labour system, the Court pointed at their implicit admission of never being direct employees of the company.
Regarding payment of Provident Fund, the Court observed that the mere deposit of PF contribution in respect of workers by the company did not ipso facto make them direct employees of the company. The Court further remarked that “If a contract worker suffers an accident in the factory premises, the company is bound to prepare a report and provide necessary medical treatment to that worker. The same would however not make that worker a direct employee of the company.”
The Court cited Kalyan Dombivali Municipal vs Smt. Aruna Nivrutti, 2023 Latest Caselaw 6072 Bom regarding mere supervision of contract workers not held to be sufficient for establishing an employer-employee relationship.
The decision of the Court:
The Court highlighted the workers’ failure to prove the employer-employee relationship and did not find any patent error in the findings of the Labour Court. The Court also found the workers responsible for the non-impleadment of contractors as parties to the disputes. Therefore, the Court refused to interfere with the Labour Court’s findings and dismissed the writ petitions.
Case Title: Milind Nandkumar Kulkarni and Others v. Kirloskar Ebara Pumps Ltd.
Coram: Hon’ble Justice Sandeep V. Marne
Case No.: Writ Petition No. 4701 of 2005
Advocate for the Petitioner: Advocate Ms. Seema Sarnaik
Advocate for the Respondents: Senior Advocate Mr. Kiran S. Bapa, Advocate Mr. Gaurav S. Gawande
Read Judgment @LatestLaws.com
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