Employer–Employee Relationship Must Be Proved, Not Presumed: Kerala High Court Remands Compensation Case Due to Lack of Evidence

“Existence of Employer–Employee Relationship Is a Jurisdictional Fact That Cannot Be Assumed Solely from FIR”, In a crucial decision the Kerala High Court has clarified that the employer–employee relationship, forming the bedrock of any compensation under the Employees’ Compensation Act, 1923, must be proved through admissible evidence, and not inferred merely from an FIR or police documents.

Justice S. Manu set aside the award passed by the Employees’ Compensation Commissioner, Thiruvananthapuram in ECC No. 330 of 2017, which had granted ₹8,54,280 with 12% interest to the dependants of a deceased quarry worker. The Court held that the Commissioner’s conclusion was based entirely on unproven FIR and FIS documents, and therefore lacked jurisdictional foundation.

"The initial burden to prove employer–employee relationship lies on the claimants. In the absence of oral or admissible substantive evidence, a finding on jurisdictional fact cannot be sustained," the Court ruled, while remanding the matter for fresh evidence and consideration.

“FIR Is Not Substantive Evidence—Documents Were Marked, But Never Proved Through Witness Examination”

The dispute arose from the death of Sri. Sreekumar, who allegedly suffered a fatal accident while operating a Hitachi machine in a quarry said to be owned by the appellant, Madhusoodhanan. His mother and brother (Respondents 1 and 2) claimed compensation under the Act, asserting an employer–employee relationship.

However, the High Court found that:
"No witness was examined by the claimants. The only documents produced were the FIR, First Information Statement (FIS), and a few others—all marked without objection, but crucially, without oral proof.”

The appellant had categorically denied that the deceased was his employee. Despite this denial, the Commissioner proceeded to award compensation solely relying on the FIR/FIS and invoked the Kerala High Court decision in Gangan v. Christin Raj.

Justice Manu, however, distinguished that precedent:
"In Gangan, there was adequate and substantive evidence. In contrast, here, no witness was examined, and the FIR alone is insufficient to establish the jurisdictional fact of employment."

“Jurisdictional Facts Must Be Judicially Determined, Not Assumed on Compassion”

Referring to the concept of jurisdictional fact, the Court held that a substantial question of law arose in the matter—whether the Commissioner had jurisdiction to entertain the claim without proof of employment.

Relying on its previous ruling in MFA (ECC) No. 18 of 2024, the Court reaffirmed:
"The question whether there is a total lack of evidence regarding a jurisdictional fact is not a question of fact, but a substantial question of law. The Commissioner cannot assume jurisdiction unless the foundational facts are proved.”

The Court also noted that even in MFA (ECC) No. 18 of 2024, the claimant had examined two witnesses, yet the case failed for want of credibility. In contrast, in the present case no oral evidence whatsoever was led by the claimants, making the situation far more precarious.

“Commissioner Must Give a Full Opportunity to Both Sides – Marked Documents Alone Cannot Displace Legal Burden”

Justice Manu observed that the documents were marked without objection, and the claimants might have assumed that oral evidence was unnecessary. While this procedural gap did not shift the burden, the Court held that in the interest of justice and the beneficial object of the Employees’ Compensation Act, the parties should be given one more opportunity.

"Although the burden was on the claimants, the fact that the FIR was marked without objection might have led them to believe that further proof was unnecessary. In the interest of justice, remand is appropriate,” the Court held.

Accordingly, the Court directed:

• The impugned order was set aside.
• The matter was remitted to the Commissioner for fresh adjudication.
• Both parties were granted liberty to adduce evidence—oral and documentary—on the issue of employment.
• The parties were directed to appear before the Commissioner on 15.12.2025, and to complete evidence within four months.
• The Commissioner was instructed to pass final orders within six months.
• Deposited amounts to remain untouched pending fresh disposal.

Judicial Scrutiny Over Empathy in Compensation Cases

This judgment delivers an important message: benevolent legislation like the Employees’ Compensation Act cannot override basic legal principles like proof of jurisdiction.

The Court did not shy away from recognising the potential hardship a remand might cause, but stressed that compensation must flow from a legally proven relationship, not merely compassionate assumptions based on FIRs.

The decision reiterates the Court’s commitment to procedural fairness while upholding the legislative intent of ensuring that only those who qualify under the Act receive its protection.

Date of Decision: 26 November 2025