02 April 2024 Employee Related >> Corporate Law   |   Employment, Labor & Service >> Corporate Law  

Two groups of contract workers in India recently challenged the termination of their employment by Kirloskar Ebara Pumps Ltd. (KEL) The workers, though hired through contractors, claimed they were actual KEL employees and filed writ petitions against the termination.

The Dispute:

The petitioners, working through Shree Datta Agencies and Allied Engineering Services (contractors), argued that KEL exercised control over them through supervision, assigning work shifts, and other aspects. They felt this established an employer-employee relationship, making KEL responsible for their termination.

 

 

The Court's Consideration:

The Labour Court dismissed the petitions, finding no employer-employee relationship between the workers and KEL. The court considered a key Supreme Court judgement outlining six factors to determine such a relationship:

• Who appoints the workers?
• Who pays the salaries?
• Who has the authority to dismiss?
• Who takes disciplinary action?
• Is there continuity in service?
• What is the extent of control and supervision?

Why the Petitions Failed:

The court pointed to several factors against the petitioners' claims:

• They did not include the contractors, who directly terminated them, in their legal challenge.
• The workers themselves admitted during questioning that the contractors managed their leave, shifts, and holidays.
• Salary payments and termination letters came from the contractors.
• KEL's role in Provident Fund deductions was explained as a service for contractors with less than 20 workers.

The Outcome:

The court found the petitioners failed to establish the necessary employer-employee relationship with KEL. While some level of supervision might exist for better workflow, this alone doesn't create an employment bond. The petitions were dismissed, leaving the termination by the contractors as the legal standing.

  Industrial Disputes Act, 1947