Delhi HC Upholds Nursery Aaya’s Reinstatement And Back Wages, Finding EDMC Controlled School Staffing Under MOU

Smt. Munni Devi was engaged as a daily-wage Nursery Aaya at a school under a Memorandum of Understanding between the erstwhile East Delhi Municipal Corporation (EDMC) and M/s. Frigorifico Allana Pvt. Ltd. The MOU assigned school administration and staff management to EDMC, while the company was to provide assistance and equipment.

Munni Devi claimed that her services were terminated on 16 January 2019, after she had completed 240 days of service, without compliance with statutory requirements.

The Labour Court found an employer–employee relationship with EDMC and ordered reinstatement, full back wages from the date of termination until the award, and consequential benefits.

MCD challenged that award, contending that her engagement depended on the MOU and was not against a sanctioned post.

Sections 10(1)(c) and 12(5) of the Industrial Disputes Act, 1947 provided the basis for the reference to adjudicate the employment relationship and termination dispute.

The Court considered the statutory requirements governing termination, including Sections 25F, 25G and 25H of the Act, in light of the Labour Court’s findings concerning 240 days’ service and non-compliance.

Under General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal, (2011) 1 SCC 635, relevant tests for determining direct employment by a principal employer include whether that employer pays wages and whether it controls and supervises the work.

Under Syed Yakoob v. K.S. Radhakrishnan, AIR 1964 SC 477, judicial review under Articles 226 and 227 does not permit reappreciation of evidence merely because another view is possible; interference is warranted for jurisdictional error, patent error of law, or another legal infirmity.

The MOU placed the school’s administration, control and management—including appointment and management of staff—with EDMC. The engagement letter and office order concerning remuneration, together with evidence that EDMC issued a cheque for earned wages, supported the Labour Court’s finding that Munni Devi’s engagement and payment were connected to EDMC’s administration of the school.

The company’s subsequent withdrawal of assistance and termination of the MOU did not alter the employment relationship that existed during her engagement.

Nor did the absence of a sanctioned post or prescribed recruitment process, by itself, negate that relationship; the Labour Court had also found 240 days’ service, failure to establish statutory compliance, and no evidence of gainful employment elsewhere.

Applying the limited supervisory standard, the High Court found no sufficient legal or jurisdictional error warranting interference with the award.

It directed that the deposited amount of ₹2,24,500, with accrued interest, be released to Munni Devi and that MCD pay the balance due under the award within four weeks.

The pending applications were disposed of accordingly.