LI Network
Published on: February 5, 2024 at 12:40 IST
In a recent judgment, the Bombay High Court directed the Renaissance Hotel and Convention Centre in Mumbai to pay a lump sum compensation of ₹25 lakhs to a former driver who was terminated without a disciplinary inquiry and retrenchment compensation.
Justice Sandeep V Marne ruled that despite the driver’s salary being paid by a transport service contractor, an employer-employee relationship existed between the hotel and the driver.
This relationship was established due to the driver’s initial appointment with the hotel and the hotel’s authority to dismiss and take disciplinary action.
The Court relied on six tests outlined in the Balwant Rai Saluja v. Air India Ltd. (2014) case to determine the employer-employee relationship. These tests included initial appointment, salary payment, authority to dismiss, disciplinary action, continuity of service, and extent of control.
The driver, Bhikan Laxman Deokar, worked for the hotel through various contractors, and his termination by one of the contractors led to the dispute.
The Labour Court had set aside the termination order and directed the hotel to reinstate Deokar with continuity and 50 percent back wages.
The hotel challenged the Labour Court’s award through a writ petition, arguing that Deokar was never directly employed by the hotel. However, the High Court upheld the Labour Court’s decision, stating that the issue of an employer-employee relationship was appropriately framed based on the denial by the hotel.
The Court noted that Deokar’s continuity of service and initial appointment were with the hotel, and warning letters issued during his contractual employment indicated disciplinary action and control by the hotel. While considering non-registration of the agreement and non-issuance of a license as additional factors, the court clarified that its finding was based on the specific facts of this case.
However, the Court held that 100 percent back wages were not justified due to Deokar’s admission of earning wages as a Badli Driver. Considering the unsavoury relationship between the parties and the lapse of thirteen years, the court awarded a lump sum compensation of ₹25,00,000 to Deokar as a full and final settlement.
Case Title: M/s. Chalet Hotels Ltd. v. Bhikan Laxman Deokar and Anr.