SC outlines tests to identify employer-employee link under labour laws

SC outlines tests to identify employer-employee link under labour laws

In General Manager, U.P. Cooperative Bank Ltd. v. Achchey Lal & Anr. (Supreme Court, September 11, 2025), a Bench of Justices J.B. Pardiwala and Sandeep Mehta ruled that canteen workers employed by the U.P. Cooperative Bank Employees Society were not employees of the Bank. The Society independently managed appointments, operations, and salaries, though the Bank provided infrastructure and subsidies. Applying the control, organization, and multiple-factor tests, the Court held that an employer-employee relationship requires effective and complete administrative control, which the Bank lacked. It reiterated that financial aid or subsidies do not create employment. Distinguishing between statutory and non-statutory canteens, the Court clarified that, absent legal or contractual obligation, canteen staff cannot be deemed Bank employees. Accordingly, it set aside the Labour Court and High Court orders directing reinstatement, emphasizing that mere facilitation does not establish an employment nexus.