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Madras High Court· 11 September 2026

Does the burden of proving an employer-employee relationship lie on the person who sets up that plea?

Management of Tractor and Fa v. M.Saravanan
WA(MD).2864/2025 · 2026:MHC:3761 · W.A.(MD)No.2864 of 2025
Coram: Justice C.V.Karthikeyan · Justice R.Sakthivel
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Answer

The burden of proving an employer-employee relationship lies on the person who sets up that plea.

Yes. The burden of proving an employer-employee relationship lies on the person who sets up that plea. Following Workmen of Nilgiri Cooperative Marketing Society, the Court treated the question as one of fact. The workmen, who had worked through the earlier contractor before the manufacturing unit began, produced no evidence that their engagement under the contractor ended and that they were appointed afresh by the management, and so failed to establish a direct nexus with it.

Headnote

Contract Labour (Regulation and Abolition) Act, 1970 — S.10(1) — Industrial Disputes Act, 1947 — S.2-A — Contract labour — Employer-employee relationship with the principal employer — Genuine labour contract — Burden of proof — Adverse inference — Relief not sought — Permanent status — Contract labour — Genuine contract — Principal employer — Held: Where both the principal employer and the contractor are registered under the Contract Labour Act, no prohibition notification under s.10(1) has issued and the labour contract is genuine and neither sham nor nominal, the workmen are employees of the contractor and of none other. Kirloskar Brothers Ltd. v. Ramcharan, followed; SAIL v. National Union Waterfront Workers, distinguished. (¶50, 62, 75, 82) Industrial law — Burden of proof — Adverse inference — Held further: The burden of proving an employer-employee relationship lies on the person who sets up that plea. An adverse inference under s.114(g) of the Evidence Act for non-production cannot be drawn where no finding is rendered that the documents are required and no notice to produce under Or.XII r.8 CPC was issued. Workmen of Nilgiri Coop. Marketing Society, followed. (¶65, 66, 73, 76, 77) Writ jurisdiction — Relief never sought — Held further: The learned Single Judge could not declare the workmen permanent or fasten joint compensation on the principal employer on a relief never sought before the Labour Court. Management's appeals allowed; workmen's appeals dismissed. (¶79, 80, 81, 83, 84)

Headnote

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In the Court's own words
Paragraph 73We have considered the arguments advanced. It must be however pointed out that the burden of establishing this fact is on the workmen, as pointed by the Hon'ble Supreme Court in the judgment relied on by Mr.A.L.Somayaji, reported in (2004) 3 SCC 514, (Workmen of Nilgiri Cooperative Marketing Society Limited) referred supra, wherein, in paragraphs Nos.47 and 50, which had also been extracted above, it had been held that the burden of proof of a plea of existence of a relationship of employer and employee was on the person who sets up such plea. It had also been held that it is purely a question of fact and the High Court while exercising its power of judicial review shall not interfere thereon, unless the finding is manifestly or obviously perverse or erroneous.
Paragraph 76In the instant case, it is an admitted fact that the workmen were employed by M/s.George Oaks Limited prior to the establishment of the manufacturing unit at Kalladipatti. They continue to work after establishment of the manufacturing unit. They have however not produced any evidence to prove that their employment under the contractor had been terminated and they had been appointed afresh in the manufacturing unit by TAFE. The burden was entirely on them to produce necessary evidence in this regard. They had to produce necessary evidence establishing direct nexus between them and TAFE. Unfortunately, they have failed to discharge such burden.
Acts & Sections
Section 10(1) Contract Labour (Regulation and Abolition) Act, 1970Section 114(g) Indian Evidence Act, 1872Order XII Rule 8 Code of Civil Procedure, 1908

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Also decided in this judgment
Are workmen employees of the contractor alone where the labour contract under the Contract Labour (Regulation and Abolition) Act, 1970 is genuine and neither sham nor nominal?Can an adverse inference under Section 114(g) of the Indian Evidence Act, 1872 be drawn where no finding is rendered that the documents are required?Can a relief of permanent status never sought by the workmen before the Labour Court be granted by the Writ Court?
Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections