Himachal Pradesh High Court
Gurbachan Singh vs The Executive Engineer on 31 March, 2026
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
1
( 2026:HHC:9621 )
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 3661 of 2026
Decided on: 31.03.2026
.
Gurbachan Singh .....Petitioner
Versus
The Executive Engineer, Changer
Area Lift Irrigation Project, Bassi,
.....Respondent
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of
Coram
Ms. Justice Jyotsna Rewal Dua
Whether approved for reporting?1
rt
For the Petitioner: Mr. Rahul Mahajan, advocate.
For the Respondent: Mr. Y.P.S. Dhaulta, Additional
Advocate General.
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Jyotsna Rewal Dua, Judge
Reference of the petitioner moved under
Section 10(1) of the Industrial Disputes Act, 1947 has
been decided against him by the learned Presiding Judge,
Labour Court-cum-Industrial Tribunal, Kangra at
Dharamshala on 31.12.2024 primarily on the ground that
the petitioner failed to discharge burden of proving
employer-employee relationship between him and the
respondent. Feeling aggrieved, petitioner has laid
challenge to the aforesaid award in this writ petition.
2. Heard and considered the case file.
1
Whether reporters of print and electronic media may be allowed to see the order? Yes.
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3. The case:-
3(i). Following reference was sent by the
Appropriate Government for adjudication by the learned
Labour Court:-
.
“Whether termination of services of Shri
Gurbachan Singh S/o Shri Chuhara Ram, R/o V.P.O
Bassi, Tehsil Shri Naina Deviji, District Bilaspur,H.P. w.e.f. 01-07-2012 (as alleged by workman) by
the Executive Engineer, Changer Area Lift Irrigation
Project Division Bassi, District Bilaspur, H.P.,of
without complying with the provisions of the
Industrial Disputes Act, 1947, is legal and justified?
If not, what amount of back wages, seniority, past
service benefits and compensation the above
rt
worker is entitled to from the above employer?”
3(ii). The claim set up by the petitioner (Annexure P-
2) was that on the basis of result of an interview process
conducted by the respondent on 01.05.2011 he was
employed by the respondent as Daily Waged Helper on
01.05.2011 in Changer Area Medium Lift Irrigation Project,
Division Bassi, District Bilaspur, H.P. He continued to work
till 30.06.2012. With effect from 01.07.2012, the
respondent awarded entire work to contractor.
Consequently, services of the petitioner alongwith 12
other workers were terminated. It was the case set up by
the petitioner that his daily waged services were
terminated under a verbal order of the respondent on
01.07.2012 without any notice. That before awarding
work to the contractor, notice was not even issued to the
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petitioner. Petitioner alleged concealment of his muster
roll, attendance register and demand register by the
respondent. According to the petitioner, despite making
repeated requests, he was not reinstated in service.
.
Petitioner asserted violation of provisions of Sections 25-
F(a), 25-F(b), 25-G and 25-H of the Industrial Disputes Act,
1947 as also the principle of ‘Last come first go’.
Petitioner prayed for reinstatement in service alongwith
of
seniority, continuity of service and other consequential
benefits including back wages.
rt
3(iii). Respondent in its reply (Annexure P-3) raised
several preliminary objections including there being no
relation of employer-employee between petitioner and
respondent. Respondent denied petitioner having worked
under it upto 30.06.2012 and awarding the work to
contractor on 01.07.2012. Respondent denied terminating
services of the petitioner alongwith 12 workers. According
to the respondent, Changer Area Medium Lift Irrigation
Project was constructed through different contractors.
Upon completion of the project, the same was again
awarded to several contractors for purpose of operation
and maintenance of project by outsourcing labour;
Respondent neither engaged nor terminated services of
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the petitioner. There was no relationship of employer and
employee between them.
3(iv). In support of his claim, petitioner furnished his
affidavit, Ext. PW1/A (Annexure P-5) reiterating the facts
.
alleged in the claim petition. Petitioner also produced on
record list of workers employed in the project and termed
it as seniority list maintained by the respondent.
Respondent examined one Shri S.K. Patial, Executive
of
Engineer, Changer Area Medium Lift Irrigation Project. The
said witness besides his affidavit Ex. RW1/A (Annexure P-
rt
6) also placed on record several documents. Learned
Labour Court after considering the entire case, dismissed
the claim petition.
4. Consideration:-
4(i). Hon’ble Apex Court in General Manager,
U.P. Cooperative Bank Ltd. Versus Achchey Lal &
Anr.2, while allowing the appeal against the impugned
decision, where respondents were held to be appellant’s
employees, laid down following tests through which
relationship between employer and employee could be
determined in case of an industrial dispute:-
“1. Control Test, where the hirer has control over
the work assigned and the Control manner in
which it is to be done. The control test is2
Civil Appeal No.2974/2016, decided on 11.09.2025.
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derived from common law application in
vicarious liability claims.
2. Organization/Integration Test, which looks at
the degree of integration in the work
committed in the hirer’s primary business with
the understanding that the higher the level of
integration, the more likely the worker is to be.
an employee. A combination of control and
integration test allows the professional
workers to be classified as employees,
notwithstanding lack of control over themanner of work.
3. Multiple Factor Test, which includes control,
ownership of the tools, integration/of
organization, chance of profit, risk of loss,
master’s power of selecting his servant,
payment of wages or other remuneration,
master’s right to control the method of doing
rt
the work and master’s right of suspension or
dismissal. Where the question arises regardingsham arrangement, Court has to examine
following factors:-
a) Who is the appointing authority?
b) Who is the paymaster?
c) Who can dismiss?
d) Duration of an “alternative service”.
e) Extent of control and supervision.
f) Nature of the job, e.g. whether
professional or skilled work;
g) Nature of establishment.
h) Right to reject.
4. Refinement of the multifactor test, which
includes consisting of following factors:-
a) Control over the work and manner in
which it is conducted.
b) Level of integration into employers’
business.
c) Manner in which remuneration is
disbursed to workers. d) Economic control
over workers.
e) Whether work being conducted is for
oneself or a third party.”
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Relevant paras of the decision in Achchey
Lal2 read as under:-
“75. As held in Parimal Chandra Raha
(supra), if there is a mere obligation to
provide facilities to run a canteen, the.
canteen would not form part of the
establishment. If the Bank is discharging the
same as a mere obligation, it permits to run
a canteen and at the same time, it is not
having any control or right of supervision
over the staff, the canteen will not form part
of the establishment. Likewise, the nature
of
and character of management, and the
interest shown by the Management in
having control and supervision over the
running of the canteen also has to be taken
rt
into consideration. The material on record
would indicate that the Bank had nothing to
do with the working of the canteen. The only
contribution made by the Management was
to provide infrastructure and subsidy to the
Society. If there is total lack of evidence on
this point and what the Bank discharged was
only an obligation to provide a facility, under
no stretch of imagination can it be said that
the canteen staff is also part of the
establishment, i.e., the Bank. FEW TESTS TO
DETERMINE EMPLOYER EMPLOYEE
RELATIONSHIP TO BE KEPT IN MIND WHILE
DECIDING MATTERS ARISING FROM
LEGISLATIONS LIKE INDUSTRIAL DISPUTES
ACT, 1947, THE FACTORIES ACT, 1948 ETC:
1. Control Test
(i) The control test postulates that when
the hirer has control over the work
assigned and the manner in which it is
to be done, an employer-employee
relationship is established. The control
test is derived from common law
application in vicarious liability claims.
(ii) The earliest instance of applying the
control test in India is in Shivanandan
Sharma v. Punjab National Bank Ltd.
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reported in AIR 1955 SC 404. Here, a
claim under the Industrial Disputes Act
arose as to whether a head cashier was
the bank’s employee. The bank had an
agreement with a contracted treasurer
who nominated people to work for
discharging function of the bank under
.
the agreement, including the cashier in
question. The court held that although
the treasurer chose the nominees who
discharged the functions, yet the bank
had complete control over the
nominee’s disciplinary matters, leave of
absence, how the nominees discharged
of
their functions, and, importantly, their
salaries were paid by the treasurer
from the funds provided by the bank. It
rt was held that the bank manager had
the same degree of control over the
nominees as he did over numerous
other employees, and thus an
employer-employee relationship
existed. The bank also had the right to
select bank personnel who would have
the authority to supervise how the cash
department conducted its work. The
court concluded that the cashier was
an employee of the bank. The scope of
indirect employment was expounded as
under:
“If a master employs a servant and
authorises him to employ a number
of persons to do a particular job andto guarantee their fidelity and
efficiency for a cash consideration,
the employees thus appointed by the
servant would be equally with the
employer, servants of the master.”
(emphasis supplied)
(iii) While Shivanandan Sharma (supra) was
the first instance of the control test
being applied, an important step in the
test’s evolution was in Dharangadhara
Chemical Works Ltd. v. State of
Saurashtra reported in (1957) 1 LLJ
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477. The dispute was whether agarias
(salt workers) were employees and
whether the claim under the Industrial
Disputes Act 1947 was maintainable.
To establish that the hirer had control
over the hired person, it was ruled that
control must exist in two aspects. First,
.
control over the nature of the work
performed and, secondly, the manner
in which the work is conducted. It was
argued that since agarias assisted
several persons in performing work,
they were independent contractors.
(iv) For the court, the true difference
of
between the workers and independent
contractors was whether the work was
being committed for oneself or a third
rt party. The existence of external help
would not rule out an employer-
employee relationship. The court
opined that the greater the degree of
control, the more likely the hired
person would be an employee.
Accordingly, the agarias were held as
employees and eligible for benefits
under the Industrial Disputes Act 1947.
(v) The court enunciates the manner to
make this distinction as under:
“The correct method of approach,
therefore, would be to considerwhether having regard to the nature
of the work there was due control
and supervision by the employer.”
(emphasis added)
(vi) Thus, the control test was expanded to
mean due control and supervision. In
numerous cases, the control test
adopted in Dharangadhara (supra)
remained the sole factor determining
employer-employee relationship. The
degree and level of control required
would depend on the facts and
circumstances of each case.
2. Organisation/Integration Test
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(i) The first instance of the shift from the
control test as a sole determinative
factor was in Silver Jubilee Tailoring
House v. Chief Inspector of Shops and
Establishments reported in (1974) 3
SCC 498. This Court observed that the
.
earlier reliance on the control test was
attributed to the agrarian economy,
where masters often exercised control
over workers. This occurred due to
masters having more knowledge, skill
and experience. The shift to a
multifactor test is due to modern work
of
being conducted by professionals
where masters lack the technical
expertise to direct the manner in which
rt the work is undertaken. The court
arrived at these conclusions relying on
judgements in the Market
Investigations Ltd. v Minister of Social
Security reported in (1969) 2 WLR 1,
Cassidy v Ministry of Health reported in
(1951) 2KB 343, Montreal v Montreal
Locomotive Works Ltd reported in 1947
1 DLR 161 (Privy council). In Silver
Jubilee (supra) reliance was placed on a
combination of the organisation test
(also known as the integration test) as
interpreted in the Market Investigations
Ltd. (supra), Cassidy (supra), Montreal
Locomotive Works (supra) and the
control test used in India.
(ii) The organisation test looks at the
degree of integration in the work
committed in the hirer’s primary
business with the understanding that
the higher the level of integration, the
more likely the worker is to be an
employee. A combination of control and
integration tests allows the professional
workers to be classified as employees,
notwithstanding a lack of control over
the manner of work. Furthermore, the
existence and potential use of factors
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beyond the control and integration in
future cases was also recognised. This
opened the path for the multifactor
test.
3. Multiple Factor test
(i) The multifactor test includes:
a) Control
.
b) Ownership of the tools
c) Integration/Organisation
d) Chance of profit
e) Risk of loss
f) The master’s power of selecting
his servant
g) the payment of wages or other
of
remuneration
h) The master’s right to control the
method of doing the work, and
rt i) The master’s right of suspension
or dismissal.
(ii) In Steel Authority of India Limited v.
National Union Waterfront Workers,
reported in 2017 NLS Bus L. Rev. 20, it
was opined that where sham
arrangements exist, the Contract
Labour (Regulation and Abolition) Act,
1970 would not apply, and workers
would be deemed employees and have
the right to raise an industrial dispute
in the same manner as an employee.
(iii) To identify whether sham
arrangements exist, this Court in
Workmen of Nilgiri Coop. Mktg. Society
Ltd. v. State of T.N. reported in (2004)
5 SCC 514 ruled that piercing the veil
was necessary. Whether the
arrangement was a sham was not
considered as a question of law. Such a
determination must be adjudicated
based on the evidence adduced in the
court by either party and not merely
by referring to the provisions. The
relevance of factors other than the
control and integration to determine
whether the workers are employees or
independent contractors was brought
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out. The court examined the following
factors:
a) who is the appointing authority?
b) who is the paymaster?
c) who can dismiss?
d) the duration of an “alternative
service”;
.
e) the extent of control and
supervision;
f) the nature of the job, e.g.
whether it is professional orskilled work;
g) nature of establishment;
h) the right to reject.
of
(iv) This Court in Bengal Nagpur Cotton
Mills v. Bharat Lal reported in (2011) 1
rt SCC 635 laid down two factors to be
considered to determine the true
nature of the hiring entity, i.e.,whether it is the principal employer or
contractor:
(i) Whether the principal employer
pays the salary instead of thecontractor; and
(ii) Whether the principal employer
controls and supervises the work
of the employee?
4. Refinement of the multifactor test
(i) The courts, over the years, have
refined the scope of the multifactor test
by adding various factors based on the
facts and circumstances. This Court, in
many cases, has applied the
refinement of the multifactor test.
(ii) In Sushilaben Indravadan Gandhi v The
New India Assurance Company Limited,
reported in (2021) 7 SCC 151, this
Court revisited the distinction between
a contract of service and a contract for
service. After analysing Market
Investigations Ltd. (supra), Cassidy
(supra) and Montreal Locomotive Works
(supra), the multifactor test was
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reiterated, consisting of the following
factors:
a) Control over the work and manner
in which it is conducted
b) Level of integration into
employers’ business
c) Manner in which remuneration is
.
disbursed to workers d) Economic
control over workers
e) Whether work being conducted is
for oneself or a third party
(iii) In Sushilaben (supra) priority was given
to factors of control and mode of
remuneration, noting these would
of
ordinarily suffice to identify the true
nature of the relationship unless other
contractual terms indicated otherwise.
(iv) In Sushilaben (supra) the articulation of
rt the control test has been given
importance as it varies from that in
Balwant Rai Saluja v Air India Ltd.
reported in 2014 9 SCC 407. This was
elucidated as under:
“The three-tier test laid down by
some of the English judgments,
namely, whether wage or other
remuneration is paid by the
employer; whether there is asufficient degree of control by the
employer and other factors wouldbe a test elastic enough to apply to
a large variety of cases.”
(emphasis added)
(v) The use of the term “sufficient degree
of control” is in stark contrast to the
“effective and absolute control” ruling
in Balwant Rai Saluja (supra). However,
no reference to Balwant Rai Saluja
(supra) was made while discussing the
evolution of the various tests. (Referral:
IIMA, Working Paper by M.P. Ram
Mohan and Sai Muralidhar K.)
76. In the overall view of the matter, we
are convinced that the Labour Court as
well as the High Court committed an::: Downloaded on – 02/04/2026 20:31:04 :::CIS
13egregious error in taking the view that
the respondents could be termed as
employees of the Bank and since their
services came to be terminated with
the closure of the Canteen, they are
entitled to be reinstated with full back
wages in accordance with the.
provisions of the Industrial Disputes
Act.
77. We need not say anything further.
78. In the result, these appeals succeed
and are hereby allowed.
79. The impugned judgments and orders
passed by the High Court are set aside.
of
Consequently, the Award passed by the
Labour Court also stands set aside.”
4(ii). Petitioner in his claim petition had asserted
rt
having been employed by the respondent pursuant to an
interview conducted on 01.05.2011. However, during
course of his cross-examination, he admitted of having
not been interviewed by anyone. The stand of the
respondent had been that work of Changer Area Medium
Lift Irrigation Project had been carried out by the
contractors; On completion of work, it was again awarded
for operation and maintenance to contractors by
outsourcing of labour. Learned Labour Court has properly
appreciated the evidence adduced by the parties and
drew conclusion that Ex. PW1/B produced by the
petitioner as seniority list was actually only a list of
employees working in the project. Though according to
the petitioner, he had not worked under the contractor
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but there was no oral or documentary evidence produced
by the petitioner to prove that he was being paid wages
directly by the respondent. There was no documentary or
oral evidence on record to establish that petitioner had
.
been working under the control or supervision of the
respondent. This factor assumes significance in view of
the stand taken by the respondent that work under the
project was being executed by them all throughout by
of
different contractors on outsource labour basis. The
documents produced by the respondent Exts. RW1/B,
rt
RW1/C and RW1/D were pointer to the fact that work of
project had been awarded to contractors on prescribed
terms of agreement. Learned Labour Court drew
justiciable conclusions from the evidence on record that
the petitioner while raising his dispute before the Labour-
cum-Conciliation Officer did not mention his employment
under the contractor. Respondent in its reply filed before
Labour-cum-Conciliation Officer (Ex. RW1/I) had
mentioned existence of neither any attendance register
nor muster roll in favour of the petitioner. That there was
no appointment letter issued by it in favour of the
petitioner. So called seniority list Ex. PW1/B was not a
seniority list maintained by the respondent but list of
workers in the project. In view of above, learned Labour
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Court correctly held that work had been awarded by the
respondent to the independent contractors for different
purposes. The contractor had not even been impleaded by
the respondent. The petitioner failed to demonstrate his
.
employment under the respondent or that his services
were terminated by the respondent.
In the given facts & circumstances, the
evidence led by the parties and the law laid down, learned
of
Labour Court had correctly concluded that the petitioner
failed to establish
rt employer-employee relationship
between him and the respondent. Petitioner having failed
to discharge this burden cast upon him, his claim was
justly dismissed by the learned Labour Court.
5. For the foregoing reasons, no interference is
called for with the impugned award. This writ petition,
therefore, lacks merit and is accordingly dismissed.
Pending miscellaneous application(s), if any, also stand
disposed of.
Jyotsna Rewal Dua
March 31, 2026 Judge
yogesh
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