Introduction:

The Bombay High Court has directed Mumbai’s Renaissance Hotel and Convention Centre to pay Rs. 25 lakhs as lumpsum compensation to a former driver, Bhikan Laxman Deokar, terminated without a disciplinary inquiry and retrenchment compensation. Despite initial recruitment by the hotel, the driver worked through various contractors, leading to a dispute over his termination. The court, relying on tests for determining employer-employee relationships, affirmed that an employment connection existed between the hotel and the driver. This decision follows concerns about witness safety and the need for a fair trial in the murder case of Advocate Babar Qadri, where the Jammu and Kashmir High Court ordered the trial’s transfer.

Arguments:

Chalet Hotels Ltd., operating the Renaissance Hotel, argued against the existence of a direct employer-employee relationship with Deokar, who worked as a driver through various contractors. The hotel challenged the scope of the Labour Court’s reference, contending that it was limited to the contractor who terminated Deokar. The Labour Court, however, appropriately framed the issue of an employer-employee relationship based on the denial by the hotel in its written statement. Deokar sought full back wages, challenging the termination by contractor Orix Auto Infrastructure Services Ltd.

The Labour Court, in an Award, set aside the termination order and directed reinstatement with continuity and 50 percent back wages. Chalet Hotels contested the Award, leading to the present writ petition. The court observed that Deokar’s initial appointment was by the hotel, and he continued in service without a break despite changes in contractors. Warning letters by the hotel during contractual employment indicated disciplinary action and control over Deokar’s activities.

Court’s Judgement:

Justice Sandeep V Marne held that an employer-employee relationship existed between the hotel and Deokar. The court relied on tests laid out in Balwant Rai Saluja v. Air India Ltd. to determine this relationship. While acknowledging the tests were satisfied, except for the actual payment of salary, the court emphasized the importance of the employer’s authority to dismiss and take disciplinary action.