ESI and PF contributions under management code shift onus to employer to disprove employer-employee relationship.

The Petitioner-workman claimed employment as a "Checker" with the respondent-management from June 11, 1995, until his services were allegedly terminated on May 15, 2010, without notice or compensation

The Respondent denied the employer-employee relationship, suggesting the Petitioner was likely engaged through a third-party contractor, M/s A.K. Enterprises, though the Respondent admitted depositing ESI and PF contributions for the workman under its own code

On February 12, 2019, the Labour Court dismissed the Petitioner’s claim, finding he failed to establish the employment relationship

The Petitioner challenged this award via a writ petition, asserting that the Labour Court ignored material evidence such as the ESI Card and conciliation records

1. Whether the findings of the Labour Court regarding the non-existence of an employer-employee relationship were perverse or based on a misreading of evidence

2. Whether the Respondent-management’s plea of engagement through a contractor was substantiated by evidence

3. What relief is appropriate given the prolonged nature of the litigation and the impracticality of reinstatement

The court primarily applied Article 226 of the Constitution of India regarding the limited scope of interference in writ jurisdiction, noting that while the High Court is not an appellate authority, it can intervene if findings are "perverse"

It relied on the precedent Syed Yakoob v. K.S. Radhakrishnan & Ors. to define the bounds of this jurisdiction

Regarding the employer-employee relationship, it applied the "control and supervision" test and the six-factor criteria established in Bharat Heavy Electricals Limited v. Mahendra Prasad Jakhmola & Ors. and Balwant Rai Saluja v. Air India Ltd. These factors include who appoints, pays wages, has authority to dismiss, and maintains ultimate control

The Court found that the Labour Court failed to properly appreciate the Petitioner’s documentary evidence, specifically the ESI Card, gate passes, and the conciliation record (Annexure 'A'), which served as a contemporaneous official record of the Petitioner’s engagement

While the initial burden of proof lies with the workman, the Court held that once prima facie evidence (like statutory ESI records) is produced, the onus shifts to the management

The Court criticized the management’s defense as "vague and uncertain," noting that despite claiming the Petitioner was a contract worker, the management failed to produce any contract, examine the contractor, or prove that the contractor paid his wages

Since the management admitted depositing statutory contributions under its own code and failed to prove the existence of an intermediary, the Court concluded the Respondent exercised primary control and supervision over the Petitioner

It quashed the Impugned Award dated February 12, 2019. However, noting the lapse of time (litigation from 2010 to 2026), the Court found reinstatement to be impractical. Consequently, the Court allowed the petition and directed the Respondent-management to pay a lump-sum compensation of Rs. 5,00,000/- (Five Lakhs) within four weeks, failing which an interest rate of 12% per annum would apply