Employer’s failure to prove distinct corporate identity and produce pre-termination attendance records justifies reinstatement with back-wages.

The employee, Rajendrasinh Puvar, claimed he joined Mercury Laboratories Ltd. (Petitioner) as a labourer in 1994 but was often sent to work at a sister concern, Mercury Phytochem Ltd. (Respondent No. 2), situated in the same compound

He was terminated on April 4, 1998, and filed a dispute in the Labour Court.

The Petitioner produced attendance registers for July–September 1998 but failed to file a written statement or lead evidence

The Labour Court initially ruled against Respondent No. 2, but upon review, it passed a fresh award on October 21, 2014, directing the Petitioner to reinstate the employee with 40% back-wages, concluding the two companies were sister concerns

The Petitioner challenged this award under Articles 226 and 227 of the Constitution.

During the pendency of the petition, the employee passed away

1. Whether an employer-employee relationship existed between the Petitioner and the deceased workman despite the workman holding an ID card issued by a different entity

2. Whether the Labour Court’s finding that the Petitioner and Respondent No. 2 were sister concerns was based on any legal evidence

The court applied the principles of the Industrial Disputes Act, 1947, specifically regarding Section 25B concerning "continuous service" of 240 days

It also followed the evidentiary rule that in industrial adjudication, the burden of proving the absence of an employer-employee relationship may shift to the management if the workman provides a plausible explanation for the lack of formal documentation and establishes a prima facie case through oral testimony

Furthermore, the court exercised limited supervisory jurisdiction under Article 227, which precludes interference with findings of fact unless they are perverse or lack any evidence

The Court noted that while the ID card was issued by Respondent No. 2, the workman successfully explained that the Petitioner (his primary employer) sent him there for night shifts

Crucially, the Petitioner failed to file a written statement or cross-examine the workman on his claims that his attendance was recorded by the Petitioner and his salary was paid by them

The Court observed that a common manager (Tarunbhai Patel) served both companies, supporting the "sister concern" theory

The Petitioner’s reliance on attendance sheets from July–September 1998 was rejected as irrelevant because they dated after the April 4, 1998 termination; the Petitioner failed to produce records prior to termination to disprove the employment

Since the Petitioner did not establish that the two companies were legally and operationally distinct entities, the Labour Court’s inference was held to be reasonable

The Court confirmed that the workman had completed more than 240 days of continuous service between 1994 and 1998

Due to the employee's death on August 3, 2016, the order of reinstatement was modified: the Petitioner is directed to pay 40% back-wages and all ancillary benefits (including continuity of service benefits) to the legal heirs of the deceased from the date of termination until the date of death. Compliance is required within four weeks