The Delhi High Court has clarified that what really counts in an employment relationship is the work actually done, not the title or payment label given by the employer.
The case involved a man, Umed Singh, who was officially recorded as a “water supplier” at a State Bank of India branch in Karol Bagh. In reality, he was performing messenger duties — delivering cheques, carrying correspondence, and handling outdoor assignments. The bank paid him through vouchers marked as water bills, but these same vouchers, signed by the Branch Manager, also showed journeys for cheque deliveries and other office tasks. Singh’s services were discontinued in less than a year without notice or retrenchment compensation. The Bank maintained that there was no employer-employee relationship, that the
Branch Manager had no authority to make appointments, and that payments were restricted to only water supply, and once in a while, conveyance reimbursement.
The Court, however, said this proved an implied contract of service. In other words, even if the bank called him a vendor, the evidence showed he was treated as an employee under supervision and control. Labels, payment methods, or lack of formal paperwork cannot hide the true nature of the relationship.
However, Verdictum reports that the Court also ruled that while his termination was illegal (since mandatory safeguards under labour law were ignored), he could not be automatically “regularised” or made permanent. The Constitution Bench had in the past in some case already made clear that regularisation requires a sanctioned post and proper recruitment process. Simply working 240 days or being retrenched wrongly does not create a right to permanent employment.
Instead, the Court substituted the Tribunal’s order of regularisation with monetary compensation of Rs 1,00,000, payable within eight weeks.
Clearly, what the Court means employers cannot rely on job titles or payment tricks to disguise real employment. Courts will look at the substance of duties and control. At the same time, compliance with recruitment rules is essential — illegal termination may cost compensation, but it won’t force permanent absorption without due process.
