Delhi High Court Sets Aside Illegal-Termination Award; Holds Driver Failed to Prove Employer-Employee Relationship or 240 Days’ Service, Accepts Firm’s Intermittent Contractor Defence on Evidence

Delhi High Court Rejects Driver’s Illegal-Termination Claim; Finds Evidence More Consistent With Intermittent Contractual Transport Services

Facts

M/s Vadhera Oil Company challenged an award dated 9 February 2016 passed by the Labour Court in Reference Case (ID) No. 356/2012. The Labour Court had held the termination of Respondent No. 2 workman illegal and awarded him ₹1,50,000 as lump-sum compensation plus ₹20,000 litigation expenses.

The workman claimed that he had been working as a driver since January 2003. According to him, no appointment letter was issued, part of his salary remained unpaid from July 2008 onwards, and on 28 August 2011 his services were terminated without notice or reason and without payment of outstanding wages.

The Labour Court accepted the existence of an employer-employee relationship on the preponderance of probabilities and held that the termination violated Section 25F of the Industrial Disputes Act, 1947. However, instead of reinstatement, it awarded ₹1.5 lakh compensation because the workman had not demonstrated sincere attempts to obtain alternative employment.

The management’s case was fundamentally different. It contended that the workman was never its regular employee and had only been engaged intermittently as an independent contractor for transporting/loading kerosene, including through his own vehicle.

Issues

The central questions before the Delhi High Court were:

Whether the workman had established an employer-employee relationship with M/s Vadhera Oil Company.
Whether he had proved that he rendered 240 days of continuous service in the year preceding termination.
Whether ID cards, temporary gate/access permissions and the disputed experience certificate constituted sufficient evidence of employment.
Whether the Labour Court had wrongly shifted the evidentiary burden to the management.
Whether Section 25F of the Industrial Disputes Act could apply without proof of the statutory threshold of continuous service.
Whether the Labour Court’s finding was sufficiently perverse or legally erroneous to warrant interference under writ jurisdiction.

Petitioner/Management’s Arguments

The management argued that it was a small establishment which ultimately closed in 2016.

Its case was that the respondent was hired only on certain occasions in 2004, 2006 and 2010–2011 to provide transport/loading services for kerosene and was never employed as a regular driver.

It argued that:

no appointment letter existed;
there was no reliable salary or wage record;
gate passes merely facilitated access to the premises;
those passes did not establish continuous employment;
the workman owned the vehicle used for transportation; and
even assuming some engagement, there was no proof that he worked continuously for 240 days.

Workman’s Arguments

The workman defended the Labour Court award and relied principally upon documentary material including:

a management letter dated 3 December 2004 seeking temporary permission;
his identity cards;
an experience certificate allegedly issued by the management; and
another ID card identifying his connection with the establishment.

He argued that the Labour Court had properly appreciated these documents and reasonably concluded that an employer-employee relationship existed.

Analysis of the Law

1. Limited interference with Labour Court findings

The High Court began by reiterating that writ jurisdiction is not appellate jurisdiction.

A High Court ordinarily cannot reappreciate evidence merely because another view is possible. Interference is justified where the Labour Court’s decision suffers from:

patent illegality;
perversity; or
an error apparent on the face of the record.

The Court nevertheless found such interference justified here because the Labour Court’s core conclusions concerning employment and continuous service were inadequately supported by evidence.

Burden of Proving Employment and 240 Days

This is the principal legal proposition emerging from the judgment.

The High Court held that where the management disputes employment, the initial onus lies upon the workman to establish:

the employer-employee relationship; and
completion of more than 240 days of continuous service where Section 25F protection is invoked.

The Court relied upon Essen Deinki v. Rajiv Kumar for this proposition.

The Court also referred to Chander Sain v. J.B. Garments, where it was held that an employer-employee relationship cannot simply be presumed. Positive evidence such as an appointment letter, wage slip, ESI/PF contribution or equivalent evidence is ordinarily required to discharge the initial burden.

240 Days Must Be Proved by the Workman

The High Court extensively referred to precedent holding that a workman asserting 240 days of service must initially prove that fact through cogent evidence.

A mere affidavit containing the workman’s own assertion is ordinarily insufficient.

The judgment referred to:

Essen Deinki v. Rajiv Kumar;
Range Forest Officer v. S.T. Hadimani;
Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan;
RBI v. S. Mani; and
Municipal Corporation, Faridabad v. Siri Niwas.

The consistent principle was that the employer does not carry the initial burden of disproving 240 days merely because the workman makes such an assertion.

Why the ID Cards Were Insufficient

The Labour Court had relied substantially upon identity cards produced by the workman.

The High Court disagreed with the evidentiary weight assigned to them.

Although the cards described the petitioner as the workman’s employer, they:

were issued by a third party;
related only to limited periods; and
could reasonably have been issued merely to facilitate temporary access.

The Court therefore held that such ID cards could not, standing alone, establish continuous employment.

This distinction is important: the Court did not hold that gate passes or ID cards are legally irrelevant. Rather, it held that in the circumstances of this case they were insufficient to prove the required continuity and tenure of employment.

Workman’s Ownership of the Vehicle

A significant factual circumstance was that the vehicle used for transportation was financed in the workman’s own name.

The workman attempted to explain that although the loan was in his name, the vehicle was effectively connected with the management and that proceeds remaining after repayment of the loan went to the proprietor.

The Labour Court accepted aspects of that explanation.

The High Court found the premise implausible, observing that it was difficult to accept that a small firm would purchase a vehicle in an employee’s personal name rather than in the name of the firm or proprietor.

This circumstance supported the management’s version that the respondent provided transportation services through his own vehicle rather than serving continuously as its employed driver.

Experience Certificate Rejected as Unreliable

The strongest document favouring the workman was Exhibit WW1/11, an experience letter bearing the management’s letterhead and stamp.

However, the management witness expressly denied that such a certificate had been issued and denied knowledge of whether it bore the signature of an authorized signatory.

The High Court also found the circumstances of its alleged issuance unexplained, particularly because it was apparently issued before the claimed termination.

The Court therefore found the document sufficiently doubtful that it could not establish continuous employment.

Labour Court’s Error

The High Court identified two fundamental deficiencies in the Labour Court award.

First, although the Labour Court recognized that the initial burden rested on the workman, it effectively relied upon deficiencies in the management’s defence without first determining whether the workman had independently discharged that burden.

Second, the Labour Court did not specifically determine the tenure and continuity of employment, even though establishing 240 days was a prerequisite for holding that Section 25F had been violated.

The High Court also noted inconsistencies in the workman’s evidence concerning the quantum of wages, which the Labour Court had unjustifiably brushed aside.

Precedent Analysis

Essen Deinki v. Rajiv Kumar

Applied for the proposition that where completion of 240 days is disputed, the burden initially rests upon the employee asserting it.

Range Forest Officer v. S.T. Hadimani

Applied to emphasize that the workman’s own affidavit does not by itself constitute sufficient evidence of 240 days where no salary receipts, wage records, appointment documents or equivalent evidence are produced.

Chander Sain v. J.B. Garments

Applied on the separate but related question of establishing the employer-employee relationship. The relationship cannot simply be presumed; the workman must first lead positive evidence capable of establishing it.

Rajasthan State Ganganagar S. Mills Ltd. v. State of Rajasthan

Reiterated that the workman bears the burden of proving 240 days and that mere non-production of muster rolls by the employer does not automatically establish the workman’s case.

RBI v. S. Mani

The three-Judge Bench decision was cited for the proposition that the initial burden of establishing 240 days lies upon the workman, and placing that initial burden upon the employer is erroneous.

Municipal Corporation, Faridabad v. Siri Niwas

Similarly reaffirmed that the workman must establish more than 240 days’ work during the relevant preceding period before relying upon retrenchment protections.

Court’s Reasoning

The High Court ultimately assessed the competing versions on the preponderance of probabilities.

The workman had not produced reliable evidence proving continuous employment:

no appointment letter;
no wage slips;
no reliable continuous employment records;
limited-period ID/access cards;
a disputed experience certificate;
inconsistencies concerning wages; and
evidence that the vehicle was financed in his own name.

Although there were also gaps in the management’s evidence concerning the precise tanker services obtained from him, those deficiencies could not cure the workman’s failure to discharge his initial evidentiary burden.

On the overall evidence, the Court found the management’s explanation more probable: the workman had been engaged intermittently on a contractual basis as and when required to transport kerosene using his truck.

Conclusion

The Delhi High Court held that the Labour Court had erroneously found an employer-employee relationship and consequently erred in holding that the termination violated Section 25F.

The workman failed to discharge the initial burden of proving both the employment relationship and the necessary continuity of service.

Accordingly, the Court allowed M/s Vadhera Oil Company’s writ petition and set aside the Labour Court award, thereby extinguishing the ₹1.5 lakh compensation and ₹20,000 litigation-cost directions under that award.

Case Details

Case: M/s Vadhera Oil Company v. The Presiding Officer, Labour Court, Delhi & Anr.
Court: Delhi High Court
Case Number: W.P.(C) 4091/2016 & CM APPL. 19629/2024
CNR: DLHC011292372016
Judge: Justice Amit Mahajan
Reserved On: 5 August 2026
Pronounced On: 8 September 2026
Impugned Award: 9 February 2016 in Reference Case (ID) No. 356/2012
Labour Court Relief: ₹1,50,000 compensation + ₹20,000 litigation expenses
Result: Writ petition allowed; Labour Court award set aside; workman held not to have proved employer-employee relationship or 240 days’ continuous service.