New Delhi, Dec. 22, 2025 — With implications for industrial dispute and labour law jurisprudence, the Delhi High Court in the case of Indraprastha Gas Limited vs. Ambrish Kumar , W.P.(C) 3743/2013( 2025LiveLaw (Del) 1748) has held that a workman engaged through a contractor cannot be treated as a direct employee of the principal employer where the claimant fails to demonstrate credible evidence establishing such a relationship.
The High Court set aside the Labour Court award that had earlier directed reinstatement of a contract worker to Indraprastha Gas Limited (IGL) on grounds of an employer–employee relationship.
The dispute arose from a claim by a Driveway Sales Man (DSM) who alleged that he worked for IGL since 2001 and was illegally terminated in 2005 without compliance with statutory provisions of the Industrial Disputes Act, 1947. The DSM contended that, despite being engaged through a contractor, he was effectively under IGL’s control and supervision, and therefore entitled to legal protections as an employee of IGL.
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Labour Court decided that where a principal employer retains control over the deployment, supervision, and removal of personnel engaged through contractors, an implied employer–employee relationship arises. Based on that finding, the Labour Court ordered the claimant’s reinstatement with back wages.
Labour court judgment was challenged in high Court. Delhi High Court disagreed with the Labour Court’s conclusions and observed that The claimant failed to produce credible evidence to substantiate direct employment by IGL, such as an authentic appointment letter, salary slips issued by IGL, or other formal documentation. Alleged supporting documents such as identity cards and internal records lacked proper seals, authorized signatures, or reliability to prove a direct contractual relationship with IGL. High Court further observed that the claimant could not demonstrate that he underwent IGL’s formal recruitment procedure — especially relevant as IGL is a government undertaking with prescribed hiring norms.Payroll, attendance, and statutory compliance documents produced by the contractor clearly identified the claimant as an employee of the contractor, not of IGL.
On these grounds, the High Court concluded that the employee DSM was not an employee of IGL but was engaged through an independent contract worker arrangement. The Labour Court award was accordingly set aside.
The judgment underscores the legal principle that mere engagement at the workplace and supervision in functional terms do not automatically create an employer–employee relationship unless this foundational fact is supported by reliable documentary or evidentiary proof. The burden remains firmly on the claimant to establish such a relationship.
The court also reiterated established doctrines from prior case law, such as Gopal v. BSNL, which emphasise the necessity of credible evidence to link contract labour directly to a principal employer for statutory protection.
The interim relief amount under the section.17 B of the ID Act paid to the employee by the company was treated as compensation, which he was not required to refund to the company.
Source: Live Law
