2015 P L C 313
[Balochistan High Court]
Before Naeem Akhtar Afghan and Shakeel Ahmed Baloch, JJ
MERCK (PRIVATE) LIMITED through Notified Factory Manager
Versus
MEMBER LABOUR APPELLATE TRIBUNAL and 24 others
C.Ps. Nos.393 and 394 of 2012, decided on 6th August, 2015.
Industrial Relations Act (IV of 2008) ---
----Ss. 2(viii)(xxix), 41 & 55 ---Industrial and Commercial Employment (Standing Orders)
Ordinance (VI of 1968), S.2(c), (i) & S.0.12 ---Constitution of Pakistan, Art.199 ---Constitutio nal
petition -- Termination of employment ---Grievance application ---Relationship of employer and
employee ---Respondents, claiming themselves to be employees of the petitioner -company, filed
grievance application challenging termination of their services by the company ---Grievance of
the respondents was, that they were appointed by the company on permanent basis and were
placed under probation for a period of three months and that after completion of the probation
period they had become permanent employees of the company, but they were not issued any
appointment letters by the company with terms and conditions of employment and were
terminated from their services, without any lawful justification ---Grievance application by the
respondents, was contested by the company by filing written statement, contending that,
respondents had no cause of action against the petitioner, as they were never hired by the
company, but were employees of the contractor/consultant of the company; that no relationship
of "employer and employee" existed between the company and the respondents ---Company also
clarified that respondents were engaged by the consultant/contractor intermittently for the
purpose of contractual work in the premises of company's factory and that agreement was ar rived
at between the company and the consultant/contractor, that the company would provide suitable
working place/facility to the consultant, and the consultant would employ, hire, engage technical
competent employees to discharge the contractual obligatio ns under the agreement ---Sole
proprietor of 'The Consultants' had acknowledged execution of said agreement with the
company ---Labour Court dismissed grievance application, but Appellate Tribunal set aside the
judgment of the Labour Court, directing the com pany to reinstate the respondents by means of
permanent appointment letters ---Validity ---No appointment letter had been issued to any of the
respondents by the company ---No pay -roll existed on record to prove that the respondents were
employees of the comp any-Nothing was on record to show that the respondents were paid
wages/salaries/remuneration by the company as an employer of the respondents ---Record,
however, revealed of the pay roll of "the consultants" mentioning the names of the respondents
as the em ployees of "the consultants" against whom no grievance had been agitated by the
respondents ---Labour Court had rightly concluded that there existed no relationship of "employer
and employee" between the company and the respondents; that the respondents wer e employees
of the contractor "the consultants", who were engaged in pursuance of an agreement between the
company and "the consultants" and that no cause of action had accrued to the respondents against
the company ---Appellate Tribunal, while passing impu gned judgment, had erred in facts as well
as law and had failed to properly appreciate the evidence available on record ---Appellate
Tribunal, had erred in allowing the appeals of the respondents and issuing directions to the
company to reinstate the respon dents by issuing their permanent appointment letters ---
Constitutional petition against judgment of Appellate Tribunal, was allowed ---Impugned
judgment passed by Labour Appellate Tribunal, was declared null, void and of no legal effect ---
Judgment passed by the Labour Court dismissing the grievance application of the respondents,
was upheld, in circumstances.
Messrs Allied Precision Engineering Products v. J. Handa Khan Maree 2011 PLC 286
distinguished.
Muhammad Ali Khan for Petitioner (in C.Ps. Nos.393 a nd 394 of 2012).
Iftikhar Ahmed Sawati for Private Respondents (in C.Ps. Nos.393 and 394 of 2012).
Date of hearing: 9th April, 2015.
JUDGMENT
NAEEM AKHTAR AFGHAN, J. --- This common judgment disposes of Constitution Petitions
Nos.393 and 394 of 2012 as common questions of facts and law are involved in both the matters.
2. Facts of the case are that the respondents Nos.3 to 25 in C.P. No.393/2012 and respondents
Nos.3 to 13 in C.P No.394/2012 along with 125 others (who have not filed any constitutio n
petition), claiming themselves to be the employees of the petitioner (a Pharmaceutical Company
manufacturing Life Saving Drugs and Marketing all over the Pakistan) filed grievance
application No.63/2009 under section 41 of the Industrial Relations Act, 2 008 before the 1st
Labour Court Balochistan Quetta (hereinafter "the Labour Court") against the petitioners
challenging their alleged termination by the petitioner.
3. It was contended by the respondents and 125 others in their grievance application that they
were appointed by the petitioner on permanent basis and were placed under probation for a
period of three months and after completion of the probation period, they have become the
permanent employees of the petitioner; that they have worked in the pe titioner's factory till 10 -7-
2009; that they were not issued any appointment letters by the petitioner with terms and
conditions of the employment; that on 13 -7-2009, when the respondents and 125 others reported
for their duties as usual, they were not all owed to enter into the factory premises and were
forcibly prevented by the police which was already deployed on the front gate of the factory of
the petitioner; that the respondents and 125 others were forcibly terminated from their
jobs/service unlawfully ; that some of the respondents had formed a Trade Union, which was also
registered by the Registrar Trade Union Balochistan Quetta which caused annoyance to the
petitioner; that the petitioner threatened the office bearers of the Labour Union for terminati on of
the respondents if they took part in the Union activities; that the respondents and office bearers
filed petition before NIRC Quetta Bench for grant of stay, which was granted and confirmed on
9-7-2009 in favour of 217 workers; that the respondents a nd 125 others were terminated without
any lawful justification. The following relief was claimed in the grievance application:
"i. To set aside the oral terminated order dated 13 -7-2009, issued by the respondents.
ii. To direct the respondents to reins tate all the applicants at their previous job/service
with all back benefits and continuity of service from retrospective effect.
iii. To direct the respondents to issue the appointment letters of applicants under section
2-A of Industrial and Commercial Employment (Standing Order) Ordinance, 1968.
iv. To declare the services/employment of the applicants as, permanent workers of the
respondents, under section 1(b) of Standing Order Ordinance, 1968.
v. Any other relief which this Honourable Court deems fit may kindly be awarded to the
applicants in the interest of law and justice."
4. The grievance application was contested by the petitioner by filing written statement wherein
certain preliminary legal objections were also raised. It was agitated by t he petitioner that the
respondents have no cause of action against the petitioner as the respondents were never hired by
the petitioner and they were employees of the consultant/contractor; that no relationship of
employer -employee exists between the petit ioner and the respondents; that respondents and
others were engaged by the consultant/contractor intermittently for the purpose of contractual
work in the premises of the petitioner's factory at Quetta; that the contract agreement dated 14 -
12-2007 and the supplementary agreement dated 12 -1-2009 between the petitioner and
consultant/contractor had ended w.e.f. 10 -7-2009; that consequently on the last date of the
expiry/ termination of the contract, the consultant/contractor issued notice to all the concerned
that since 10 -7-2009 the contractual agreement with the petitioner has finally ended and that all
the workers of the consultant/ contractor should not come to the gate for the work purpose. It was
prayed that the grievance application being misconceived b e dismissed.
5. After hearing arguments of learned counsel for the parties, on the basis of preliminary legal
objections, the grievance application of the respondents was rejected by the Labour Court vide
order dated 28 -10-2009 while concluding that there exists no relationship of employer and
employee between the petitioner and respondents.
6. The respondents and 125 others filed appeal under section 55 of the Industrial Relations Act,
2008 before the learned Member Labour Appellate Tribunal Baloch istan Quetta (hereinafter "the
Tribunal"), which was accepted vide order dated 15 -12-2010 and the matter was remanded to the
Labour Court to decide the same on merits after framing issues and recording evidence of the
parties. After remand of the matter, t he following issues were framed by the Labour Court:
(1) "Whether this Grievance application/ petition filed by the applicants is maintainable
under the provisions of BIRO, 2010?
(2) Whether the applicants Ghulam Muhi -ud-Din Bhatti, Saeed Khan and Muha mmad
Jaffar are the lawful Attorneys for the remaining applicants of this grievance petition?
(3) Whether any relationship of employers and employees exists between the applicants
and the respondents?
(4) Whether any cause of action occurs to the appli cants against the respondents?
(5) Whether the termination of service/retrenchment of applicants by the respondents was
in accordance to law?
(6) Whether the respondents have intentionally violated the provisions of Standing Order
Ordinance, 1968 and have forcibly stopped the applicants from entry into the premises of
factory?
(7) Whether the applicants are entitle for reinstatement in service with all back benefits?
(8) Whether the oral termination order of the applicants dated 13 -7-2009 was issue d by
the present respondents and was legal or otherwise?
(9) Whether the respondents are legally bound to issue appointment letters under section
2(a) of the Industrial and Commercial Employments (Standing Order) Ordinance, 1968 to
the applicants and dec lared the applicants as permanent workers of the respondents?
(10) Whether the applicants are entitle for the relief claimed for?
(11) Relief?
7. After framing of issues, the matter was persuaded by the attorney of the respondents and 125
others namely Ghulam Muhi -ud-Din and the said attorney got recorded his statement and also
produced two witnesses AW -1 Naeem Khan and AW -2 Banaras Khan.
In rebuttal, the petitioner got recorded the statement of representative of the petitioner namely
Muhammad T ahir Qazi Deputy Manager and on acceptance of applications filed by the
petitioner, the petitioner further produced CW -1 Nizam -ud-Din (contractor) and CW -2 Asad Bin
Saif Officer Grade -2/representative of Askari Bank.
8. After hearing arguments, the Labou r Court, while resolving material issues Nos.1, 3 and 4 in
negative i.e. against the respondents, dismissed the grievance application vide judgment dated
25-8-2011.
9. The respondents filed Labour Appeals Nos.44 and 45 of 2011 before the Tribunal against the
judgment dated 25 -8-2011 passed by Labour Court. Both the appeals have been accepted by the
Tribunal vide common judgment dated 24 -5-2012 (hereinafter "the impugned judgment") and
after setting aside the judgment dated 25 -8-2011 of the Labour Court, t he petitioner has been
directed to reinstate the respondents by means of permanent appointment letters.
10. Feeling aggrieved of the impugned judgment passed by the Tribunal, the petitioner has filed
the instant petitions.
11. Learned counsel for the p etitioner stated that witnesses produced by the respondents were
interested and were aggrieved with the petitioner, as such, their statements are not worthy of
reliance; that the evidence of the petitioner remained un -rebutted; that material deposition wer e
not denied by the respondents; that under section 41 of the Balochistan Industrial Relations Act,
2010 grievance can be agitated if related to an Industrial dispute; that in absence of any
termination of services of the respondents by the petitioner ther e was no industrial dispute
between the parties; that the respondents were not employees of the petitioner and as such, no
question arises for their reinstatement or any other benefits; that the Labour Court after proper
appreciation of oral as well as doc umentary evidence available on record has rightly dismissed
the grievance application of the respondents; that the employment of the respondents by the
contractor/consultants has been ignored/overlooked by the Tribunal; that the Tribunal while
allowing the appeals of the respondents and directing for their reinstatement by issuing
appointment letters has badly erred in facts as well as law.
12. Learned counsel for the respondents stated that the witnesses have given true account of the
matter irrespective of their employment; that statements of the witnesses cannot be discarded on
mere ground that they are the aggrieved employees of the petitioner; that the witnesses were duly
cross -examined and the relevant deposition were denied; that no termination lett er was issued by
the petitioner, but only publication was made on the gate for the respondents. Learned counsel
for respondents relied upon the case of Messrs Allied Precision Engineering Products v. J. Handa
Khan Maree, 2011 PLC 286.
On query by the Cou rt, learned counsel for the respondents conceded that neither any
appointment order/letter was issued in favour of the respondents, nor they were issued any
termination letters by the petitioner.
13. Heard the learned counsel and perused the available re cord. The contents of the agreement
dated 2 -3-2006 between the petitioner and the sole proprietorship concern namely "the
consultants" reveal that "the consultants" had the requisite technical expertise, experience,
resources, adequate and appropriate work force/staff to accomplish the job. It was agreed
between the petitioner and "the consultants" that the petitioner will provide suitable working
place/facilities to "the consultants" and the "the consultants" shall employ, hire, engage
technically competen t, knowledgeable, physically and mentally fit work force/employees to
discharge the contractual obligations under the agreement and it was further agreed that "the
consultants" shall ensure that before putting on job, their employees attend the training
course/lectures of the petitioner relating to good manufacturing practices, health and safety and
other risks/hazards associated with the job; that "the consultants" shall furnish update list of his
employees; that "the consultants" shall ensure that their e mployees wear proper uniform; that
"the consultants" shall organize detail and manage his employees, observing petitioner's routine
working hours or the working schedule; that "the consultants" may appoint any number of
employees as may be considered suffi cient for efficient performance of the contractual work and
such person will be employed directly by "the consultants" who will exclusively supervise the
direction and control over them; that "the consultants" will be responsible for the payment of
wages/r emuneration of their employees. The said contract continued till 31 -12-2007.
According to schedule "A" of the agreement dated 2 -3-2006, the petitioner was to pay "the
consultants" the amount paid to and received by the staff employed by "the consultants" at the
petitioner's establishment and the petitioner was to reimburse "the consultants" the amount spent
by them on the medical examination of his employees and the uniform of his employees
including washing expenses. The agreement dated 2 -3-2006 is suppo rted by pay roll of 276
workers employed by "the consultants" at the work site (Quetta Factory) of the petitioner.
14. The Registration Certificate issued by Employees' Old Age Benefits Institution ("EOBI")
reveals that "the consultants" was registered as a employer/establishment for providing human
resources to the petitioner at Quetta. The contribution payment slip No.0107873 reveals that the
contribution of Rs.50,035/ - was made by "the consultants". The statement of EOBI with the
name of the workers e mployed at Quetta Factory of the petitioner also reveals that they were
employed by "the consultants". The Challan dated 15 -4-2006 reveals that "the consultants" paid
contribution of Rs.62,776 for the month of March, 2006.
15. Another agreement dated 14t h December, 2007 of the similar nature reveals that the sole
proprietorship concern "the consultants" entered into an agreement with the petitioner for
providing the work force/employees to the petitioner till 31 -12-2008. The supplementary
agreement dated 12-1-2009 reveals that the agreement was further extended. The above
agreement between the petitioner and "the consultants" was terminable by either party by giving
30-days advance notice to either party and the agreement was renewable with mutual consent of
both the parties.
16. The sole proprietor of "the consultants" i.e. Nizam -ud-Din Khattak appeared as CW -1 and
has acknowledged the execution of the above agreements with the petitioner; he has owned the
contents of the same and has confirmed that he w as providing workers to the petitioner for
different services by virtue of the above agreements; that he was paying EOBI contribution of his
employees provided to the petitioner; that he used to pay salaries to the workers. He also
produced and acknowledge d the pay roll of the respondents. He further admitted that on expiry
of his agreement with the petitioner he informed his employees about the same through notice.
17. The Bank account statements Articles C/8 and C -9 reveal that a Bank Account of Askari
Bank M.A. Jinnah Road Quetta was existing in the name of "the consultants" wherein huge
amount of salaries were deposited. In view of the above evidence, the oral assertions of AWs -1,
2 and attorney of the respondents to the effect that the respondents are Workers of the petitioner
is of no significance.
18. There is no appointment letter issued to any of the respondents by the petitioner. There is no
pay roll of the petitioner on record to prove that the respondents were employees of the
petitioner. Noth ing is on record to show that the respondents were paid wages/salaries/
remuneration by the petitioner as an employer of the respondents. On the contrary record reveals
of the pay roll of "the consultants" mentioning the names of the respondents as employe es of "the
consultants" against whom no grievance has been agitated by the respondents.
19. After appreciating the oral as well as documentary evidence, available on record the Labour
Court has rightly concluded that there exists no relationship of emplo yer and employee between
the petitioner and the respondents; that the respondents are employees of the contractor i.e. "the
consultants" who were engaged in pursuance of the agreements between the petitioner and "the
consultants"; that no cause of action h as accrued to the respondents against the petitioner. The
resolving of issues Nos.1, 3 and 4 in negative by the Labour Court is not perverse or contrary to
the evidence available on record. The judgment passed by the Labour Court is not suffering from
any illegality or irregularity.
20. Perusal of record reveals that while passing the impugned judgment, the Tribunal has badly
erred in facts as well as law and has failed to properly appreciate the evidence available on
record. The Tribunal has failed to ap preciate that there is no appointment order issued by the
petitioner in the name of the respondents; that the respondents were not on the pay roll of the
petitioner; that the respondents were not paid any wages/salaries directly by the petitioner; that
there was no industrial dispute between the petitioner and the respondents; that the respondents
were employees of the contractor i.e. "the consultants"; that instead of suing the contractor, the
respondents have wrongly dragged the petitioner into litigation without accrual of any cause of
action against the petitioner; that the Tribunal has failed to properly resolve the legal as well as
factual controversy; that the Tribunal has badly erred in allowing the appeals of the respondents
and issuing directions t o the petitioner to reinstate the respondents by issuing their permanent
appointment letters.
21. The case of "Messrs Allied Precision Engineering Products" relied upon by the learned
counsel for the respondents is distinguishable as in the referred case , the respondents
(employees) were on the pay roll of the petitioner (employer) and the petitioner (employer) was
having administrative control over the respondents (employees) with power of hiring and firing.
22. For the above reasons, the Constitution Petitions Nos.393 and 394 of 2012 are accepted with
no orders as to cost. The impugned judgment dated 24 -5-2012 passed by the learned Member
Labour Appellate Tribunal Balochistan Quetta is declared null, void and of no legal effect. The
judgment dated 25 -8-2011 passed by the 1st. Court Balochistan Quetta, dismissing the grievance
application of the respondents, is upheld.
HBT/87/Bal. Petition accepted.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
let us know.