India High Court held that an independent contractor does not come under the ambit of an employee

From Lexology, Manishi Pathak and Ranjan Jha discuss a recent case in which the court discussed the differences between an employee and independent contractor. Manishi and Ranjan write:

In a recent case titled “Latha & Anr. vs. T V Sahadevan & Ors.” Kerala High Court while hearing an appeal against the order of Employees Compensation Commissioner (“EC Commissioner”) enunciated the legal distinction between an independent contractor and a workman for claiming terminal benefits.

As per the facts of the case, one Babu (deceased) worked as a light and sound provider in programs and on the day of the incident was throwing the cable for connecting the mike set across the telephone post. The cable came in contact with the 11 KV electric line as a result of which he died due to electrocution. The dependents of the deceased approached the EC Commissioner for claiming compensation under Employee’s Compensation Act, 1923 (“ECA”) for the death of the deceased, however, the claim was dismissed on the ground that the deceased was a contractor and not a workman. Aggrieved, the dependents/appellants filed appeal before Kerala High Court contending that the finding of the EC Commissioner that deceased was not an employee coming under Section 2(1) (dd) of ECA was not correct as he could not be treated as a contractor and at the most, he could be considered as a petty contractor. According to them, ECA being a social security and welfare legislation, it should not be interpreted narrowly to deny compensation to the employee. Therefore, the appellants prayed for setting aside the impugned order passed by the EC Commissioner and to allow the claim petition.

The question that arose for consideration before the High Court was whether a person engaged in hiring mike set for rent was an employee coming within the purview of Section 2(1) (dd) of the ECA?

The Court considered various precedents to observe the distinction between an independent contractor and a workman and between contract for service and contract of service and observed that unlike an employee, a ‘contractor’ is a person who, in the pursuit of an independent business, undertakes to do specific jobs of wok for other persons, without submitting himself to their control in respect to the details of the work. The identifying mark of an employee is that he should be under the control and supervision of the employer in respect of the details of the work. The main features or identifying marks that distinguish a worker from an independent contractor are that in case of an independent contractor, he is not controlled by an employer regarding the manner in which the work allotted to him is done. He also need not do the work personally and may get it done by employing others.

The Court observed that of course, every person who makes an agreement with another for the doing of work is a contractor, in a general sense; but as used in ECA, contractor and workman have come to have a more restricted and distinctive meaning, and contractor means one who makes an agreement to carry out certain work specified, but not on a contract of service.

The Court observed that in the instant case, the respondents for the purpose of conducting a public function, hired the mike set of deceased claimant, who was an electrician. The mike set used in this case belonged to the deceased. Since it was only a hiring of mike set for the purpose of a programme, there was no necessity for the deceased to do the work personally.

Instead, he could have done the same by engaging his own employees and his work of connecting the mike set was not controlled by the respondents.

The Court thus held that the deceased Babu was not an employee but an independent contractor and therefore found no grounds to interfere with the EC Commissioner’s order which was perfectly justified.

Read the full story at High Court held that an independent contractor does not come under the ambit of an employee – Lexology

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