Burden Of Proof In Establishing Employer-Employee Relationship Rests With Party Claiming It, Delhi High Court Dismisses Writ Petition Filed By Workmen

Chambers of Ishaan Garg

Ch. No. 217, Western Wing, District & Sessions Court, Tis Hazari, New Delhi, Delhi 110054

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The Delhi High Court single bench of Justice Chandra Dhari Singh held that the onus of proof in establishing an employer-employee relationship rests with the party making such a claim. The High Court dismissed a writ petition filed by certain Workmen hired on a contractual basis, who failed to establish a direct relationship with the Association they were working for.

Brief Facts: 

The matter pertained to a dispute concerning the employment status of workers involved in the maintenance and security operations of the Kanchanjunga building. Initially, the building's promoters, M/s Kailash Nath & Associates, engaged individuals for these tasks. However, this arrangement shifted over time, with the flat owners forming an association, Kanchanjanga Flat Owners Association, to manage these responsibilities. Subsequently, an agreement was made with M/s M/s Goliath Securities Pvt. Ltd. to handle security and maintenance services, leading to the transfer of workers through intermediary contractors.

The workers, dissatisfied with their employment status, raised an industrial dispute seeking regularization of their services. This dispute was referred to the Industrial Tribunal, which, in an award, ruled against the workers, denying them relief. The workers, aggrieved by this decision, filed a petition in the Delhi High Court (“High Court”) to challenge the award.

The workers' union argued that the Tribunal erred in denying regularization, emphasizing the workers' long-standing service and the purported misuse of contractual arrangements to deprive them of benefits. Conversely, the Association contended that the award was rightfully passed. It argued against the validity of the petition, stating that the union was not registered.

Observations by the High Court:

The High Court noted that the Workmen argued that they had been working with the Association since 1991 and their services were engaged through a contractor. Therefore, the Association's denial of their employment was an attempt to evade liability. They presented evidence of direct supervision and control by the Association, including signing attendance registers and having identity cards.

In contrast, the Association denied any such relationship, stating that various entities were entrusted with security and maintenance tasks over time. Respondent no. 2, the contractor, argued that they had deployed the Workmen for security purposes and directly supervised them. The Tribunal, after examining the evidence, held that the Workmen failed to substantiate their claim, leading to the dismissal of their regularization plea due to their inability to prove an employer-employee relationship with the Association.

The High Court held that there is a settled legal principle regarding the burden of proof in establishing an employer-employee relationship. It emphasized that the onus lies on the party claiming such a relationship, and the matter is a question of fact. Despite contentions from the Workmen, the High Court held that the evidence pointed towards a direct employment relationship with the contractor, not the Association. It noted that there was an absence of documentary or oral evidence supporting the Workmen's claims of direct employment by the Association.

Considering these factors, the High Court held that the Workmen failed to establish an employee-employer relationship with the Association. Therefore, the High Court noted that the Workmen could not be entitled to regularization with the Association. Additionally, the High Court dismissed the contention that the contract between the Association and the contractor was a sham.

Therefore, the High Court upheld the Tribunal's decision and found no grounds to interfere with the award. Consequently, the High Court dismissed the petition filed by the Workmen.

Case Title: Kanchanjunga Building Employees Union Vs Kanchanjunga Flat Owner's Society & Anr (2024 Del HC)