Person Awarded Work Through Quotation Process Can Still Be 'Employee' Under Employees Compensation Act If He Personally Executes Work: Kerala HC

The Kerala High Court has held that a person engaged through a quotation or tender process may still qualify as an “employee”under Employees Compensation Act , 1923 and entitled to compensation if he personally participates in the execution of the work.Justice S. Manu delivered the judgment in an appeal against the direction of the Industrial Tribunal and Employees Compensation Commissioner. “Mere fact that he submitted a quote in order to get the work awarded cannot be considered as a factor compelling to conclude that he cannot be brought within the scope of the expression 'employee' under the Act. Adopting such a pedantic approach will defeat the purpose of the Act.” the Court said. The respondents in the present appeal were the applicants before the Commissioner. The respondents approached the Commissioner contending that the husband of the first respondent and the father of respondents 2 and 3, one Anilkumar died of electrocution while he was engaged in the construction of iron roof sheeting work in the office building of the Appellant.The appellant, Kannur District Police Co-operative Society, denied the claims of the respondents by denying the alleged employer-employee relationship. The appellants contended that the deceased was an independent contractor for roofing work and the work was entrusted to him as he submitted the lowest quotation in response to the public notice inviting quotations for the roofing work.It was further contended that the deceased had employed some other persons and was not doing any work directly. The Commissioner on appreciation of evidence concluded that there was an employer-employee relationship and granted a compensation of Rs. 6,77,760. The appellants have approached the Court aggrieved by this order. The respondents contended that the deceased was actively engaged in the welding work alongside other labourers and therefore fell within the protective ambit of the Employees' Compensation Act.The appellant also argued that roofing construction was not part of its “trade or business” and therefore did not attract liability under Section 12 of the Employees' Compensation Act.Rejecting the argument, the Court relied on the Division Bench decision in Chief Post Master General v. Lekha and another [2017(3) KLT 853], which held that maintenance and repair of business premises form part of an establishment's “business” for purposes of Section 12.The Court further examined whether the deceased could be considered as an 'employee' for the purpose of the Employees Compensation Act. The Court noted that though the deceased submitted quotations and undertook to construct the roof, he was not executing the work entirely through other labourers. The Court took note of the First Information Report and Statement of a co-worker of the deceased where it was stated that the deceased was personally involved in the welding operations at the site. The Court also placed reliance on the Madhya Pradesh High Court's decision in Champalal v. Daryavbai and Others [1991 SCC OnLine MP 30], where it was held that when a person who agrees to perform work on contract, does not cease to be a workman by virtue of the contract or merely because he engages helpers or assistants. The Court thus held that an individual who contracts to perform work and physically participates in its execution may still be regarded as an employee under the Act.“If the other requirements are met, an individual who enters into a contract to carry out a task and physically participates in it may be deemed an 'employee', bearing in mind the purpose of the Employees Compensation Act. It would be harsh, unfair, unrealistic, and unquestionably against the legislative intention to hold that such a person cannot be recognized as an employee for the purposes of the Act, for the mere reason that he hires some additional workers to assist him in carrying out the task undertaken by entering into the contract.” Court held. The Court, however clarified that an individual entering into a contract and getting the work executed solely through others and is not physically involved in the actual execution of the activity would remain an independent contractor and not an employee under the Act. “Therefore, in cases like this, Commissioners should diligently evaluate the materials to find out the real nature of engagement and decide whether the injured was only a contractor or was involved in actual execution of work so that he can be considered as an employee for the purpose of the Act.” the Court added. The Court thus upheld the compensation award in favour of the deceased worker's dependents and dismissed the appeal.Case Title: The Secretary v K. Kanchana and Ors. Case No: M.F.A (ECC) 95/ 2017Citation: 2026 LiveLaw (Ker) 323Counsel for Appellant: P.U. Shailajan, D.N Nishani, M. Suresh Kumar Counsel for Respondent: C.P. PeethambaranClick Here To Read/ Download Judgment

Person Awarded Work Through Quotation Process Can Still Be 'Employee' Under Employees Compensation Act If He Personally Executes Work: Kerala HC

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Person Awarded Work Through Quotation Process Can Still Be 'Employee' Under Employees Compensation Act If He Personally Executes Work: Kerala HC

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