Control Test Not Sole Determinant Of Employer-Employee Relationship Under Employees' Compensation Act: Jharkhand High Court

A Single Judge Bench of Justice Sanjay Kumar Dwivedi was deciding connected appeals arising out of compensation claims filed by the families of three electrical technicians who died while repairing floodlights at the Jharkhand State Cricket Association (JSCA) Stadium in Ranchi in 2016. The appeals primarily concerned whether JSCA could be held liable as the principal employer under Section 12 of the Employees' Compensation Act or whether liability rested with M/s Valmont Structures India Private Limited.

The claimants alleged that the deceased technicians (Md. Ifthekhar, Shahbaz Ansari and Alim Ansari) were engaged in repairing floodlights at a height of nearly 60 metres when the trolley on which they were working collapsed, resulting in their deaths. The FIR and subsequent charge-sheet were registered against M/s Valmont Structures India Private Limited and contractor Gulab Khan.

JSCA contended that there was no employer-employee relationship between it and the deceased workmen. It argued that the technicians had been engaged by contractor Gulab Khan, who had been deputed by Valmont, and that neither the FIR nor the charge-sheet attributed any role to JSCA or its officials. Valmont, on the other hand, submitted that its responsibility was confined to inspection and supervision, while JSCA was required to provide the crane and other equipment for installation.

While examining the issue, the High Court observed:

“In determining the relationship of employer and employee, no doubt, 'control' is one of the important tests but is not to be taken as the sole test. In determining the relationship of employer and employee all other relevant facts and circumstances are required to be considered including the terms and conditions of the contract and for that a multiple pragmatic approach weighing up all the factors for and against an employment instead of going the sole 'test of control' and 'Integration' test is one of the relevant tests. It is applied by examining whether the person was fully integrated into the employer's concern or remained apart from and independent of it. The other factors which may be relevant are has the power to select and dismiss, to pay remuneration, deduct insurance contributions, organize the work, supply tools and materials and what are the 'mutual obligations' between them.”

The Court further observed:

“Whether a particular relationship between employer and employee is genuine or camouflage through the mode of a contractor, is essentially a question of fact to be determined on the basis of each of the case and in view of that it is required to be considered in deciding the employer-employee relationship i.e. (i) control, (ii) integration i.e. whether the employee has been fully integrated in the employer's concern or is independent of it, (iii) power of appointment and dismissal, (iv) liability to pay remuneration and deduct insurance contributions, (v) liability to organize the work and supply tools and materials, (vi) nature of mutual obligations and (vii) terms and conditions of contract.”

Applying these principles, the Bench held that installation and maintenance of electrical equipment was not the trade or business of JSCA, whose function was managing and administering cricket. On the other hand, Valmont was directly engaged in the supply, repair and maintenance of electrical equipment, and the evidence established that the deceased technicians were employed by Valmont through contractor Gulab Khan.

Accordingly, the Court modified the orders passed by the Employees' Compensation Commissioner and held that M/s Valmont Structures India Private Limited was the principal employer, while Gulab Khan was the immediate employer of the deceased workmen.

Case Title: The President, Jharkhand State Cricket Association v. Maizul Haque and Ors.

Case Number: M.A. No. 192 of 2023 (along with M.A. Nos. 193 & 194 of 2023 and M.A. Nos. 84, 85 & 86 of 2024)

Appearance: Mr. Nipun Bakshi, Mr. Shubham Sinha and Mr. Mrinal Singh for the Appellant (in M.A. Nos. 192, 193 & 194 of 2023). Mr. Indrajit Sinha and Mr. Ankit Vishal for the Appellant (in M.A. Nos. 84, 85 & 86 of 2024). Mr. Indrajit Sinha and Mr. Ankit Vishal for Respondent No. 3 (in M.A. Nos. 192, 193 & 194 of 2023). Mr. Nipun Bakshi, Mr. Shubham Sinha and Mr. Mrinal Singh for Respondent No. 4 (in M.A. Nos. 84, 85 & 86 of 2024).