2011 P L C 286
[Quetta High Court]
Before Qazi Faez Isa, C.J. and Muhammad Hashim Khan Kakar, J
Messrs ALLIED PRECISION ENGINEERING PRODUCTS (PVT.) LTD. through
Notified Factory Manager and others
Versus
J.HA NDA KHAN MAREE and others
Constitutional Petitions Nos.691 to 695 of 2010, decided on 20th June, 2011.
Industrial Relations Ordinance (XCI of 2002) ---
----Ss. 2(x)(xxx) & 46 ---Industrial and Commercial Employment (Standing Orders)
Ordinance (VI of 19 68), S.2(c)(i) & S.O.12 ---Constitution of Pakistan, Art.199 ---
Constitutional petition ---Termination of service ---Grievance petition ---Status of worker,
determination of ---Criteria ---Question, in the present case, for consideration was whether
the responden ts were employees of the petitioner/establishment or that of contractor ---To
determine the real status of a worker, as to whether he was employee of an establishment or
a contractor, the criteria was whether the establishment had administrative control ove r the
worker; whether the establishment was based for the work done by the worker; whether the
establishment had the power to reinstate and dismiss the worker; whether the work
required to be performed by worker was of a permanent nature and was same relat ed to the
process of manufacturing before the finished goods were sent into market; whether
payment for the worker's service was made by the establishment; whether the goods, that
the worker helped to manufacture, when marketed, brought proceeds to the est ablishment
itself; whether the worker had been performing his duties and providing labour in connection
with the manufacturing process and whether the contractor was a genuine person and had
not been set up merely to deny the worker of the benefits under t he labour laws.
(b) Industrial Relations Ordinance (XCI of 2002) ---
----Ss. 2(x)(xxx) & 46 ---Industrial and Commercial Employment (Standing Orders)
Ordinance (VI of 1968), S.2(c)(i) & S.O.12 ---Constitution of Pakistan, Art.199 ---
Constitutional petiti on---Termination of service ---Grievance petition ---Status of worker,
determination of ---Grievance petition by the employees against order of their termination
of service had concurrently been allowed by the Labour Court and Appellate Tribunal ---
Validity ---Petitioner/employer had claimed that no relationship of employer and employees
existed between the parties; that employees and the employer had nothing to do with the
employment, contract and wages of the employees; as they were employees of the
contractor ---Cross -examination of Factory Manager of the petitioner company and
Assistant Director Social Security Institution had suggested that employees were the
employees of the petitioner establishment and not that of the contractor ---Record had
further indicat ed that the respondents, being employees of the petitioner, had no concern
whatsoever with the contractor ---During employment of the respondents/employees, a
number of contractors were changed, but the respondents remained at their jobs in the
petitioner's factory ---Petitioner/employer appeared to have had administrative control over
the respondents with power of hiring and firing ---Respondents were also on the pay roll of
the petitioner ---All the circumstances, individually as well as collectively having l ed to one
conclusion that respondents were the employees of the petitioner, finding of both the
Labour Court and Appellate Tribunal, declaring the respondents as employees of the
petitioner establishment, did not suffer from any illegality or irregularity, which did not
warrant any interference by High Court in exercise of its constitutional jurisdiction.
(c) Industrial and Commercial Employment (Standing Orders) Ordinance (VI of 1968) ---
----S. 12---Industrial Relations Ordinance (XCI of 2002), S.46 ---Constitution of Pakistan,
Art.199 ---Constitutional petition ---Termination of service ---Reinstatement ---Back -benefits,
entitlement to -Services of employees were terminated, but they were reinstated
concurrently by Labour Court - and Appellate Tribunal ---Employees claimed full back -
benefits ---Validity ---Back -benefits which were to be paid., to a workman, were not to be
allowed to him as a punishment to the employer for illegally removing him from service,
but only to compensate the worker for his remaining jobless on account of illegal removal
from service by the employer ---To be, entitled to claim back -benefits, a worker was
required to show that he was not gainfully employed during the period he was deprived of
service till the date of reinstatement ---Empl oyees had failed to prove that they remained
jobless during the period of their termination from services till reinstatement ---All the
employees in their grievance petitions, did not specifically state that they remained jobless
and were not engaged in any other gainful venture ---Employees were not entitled to receive
full back -benefits on the principle of "no work no pay" ---High Court observed that it was
reasonable to presume that a person who was removed from service, would not be able to get
alternate e mployment immediately or be able to set himself up in any gainful venture and it
would take a few months to do so ---Employees, in circumstances, would be entitled to receive
back -benefits for a period of three months from the date of their removal from ser vice.
Syed Anwar Ali Shah v. The Agricultural Development Bank of Pakistan and others 1999 PLC
223 ref.
Muhammad Ali Khan for Petitioners (in C.Ps. Nos.681 to 695 or 2010).
Muhammad Shafique Qureshi for Respondents (in C.Ps. Nos.681 to 695 of 2010) .
Date of hearing: 8th June, 2011.
JUDGMENT
MUHAMMAD HASHIM KHAN KAKAR, J .--- Through this common judgment, we propose
to dispose of the above constitutional petitions, as common question of law and facts is involved.
2. The relevant facts, in s mall compass, are that the petitioner is a company registered under the
provisions of the Companies Ordinance, 1984, having its head office at Karachi and also its
factory situated at Hub, District Lasbella (hereinafter sometimes referred to as the "Compan y" or
the "petitioner") and is engaged in manufacturing, fabricating and die -casting of auto parts.
Whereas the private respondents (the respondents), after their termination from service by the
Company, filed grievance applications under section 46 of the Industrial Relation Ordinance,
2002 read with Standing Order 12(3) of the Industrial and Commercial Employment (Standing
Orders) Ordinance, 1968 before the III Labour Court Balochistan at Hub (hereinafter referred to
as the "Labour Court"), which were all owed by means of common order dated 23rd February,
2009. The said orders were assailed by the petitioner before the Labour Appellate Tribunal,
Balochistan (hereinafter referred to as the "Tribunal") by filing appeals, which were dismissed
vide common judgm ent dated 12th October, 2010, which is the subject -matter of the instant
constitutional petitions.
3. Mr. Muhammad Ali Khan, learned counsel for the petitioner, argued that no employer/employee relationship
existed between the petitioner and the responde nts and the petitioner had nothing to do with the employment,
contract and wages etc. of the respondents, as they were employees of the contractor. He further contended that
the Labour Court as well as the Tribunal, while passing the impugned orders, allow ed full back -benefits
along with reinstatement on job in spite of the fact that it was not proved by the respondents
that they were not gainfully employed during the pendency of their cases.
4. Mr. Muhammad Shafique Qureshi, learned counsel for the respond ents, on the other
hand, stoutly defended the impugned orders, contending that no evidence, establishing the
fact that the respondents were, in fact, the employees of the contractor, having been adduced
before the Labour Court, as such, the presumption, th at the respondents were employees of
the Company, was clearly attracted in the peculiar circumstances of the cases in hand. He
further argued that this court can exercise a very limited jurisdiction in setting aside the
findings arrived at by the two court s below. He further contended that the respondents have
rightly been reinstated with back -benefits by the Labour Court, as they were jobless after their
illegal termination.
5. We have heard the respective contentions of the learned counsel and carefully g one
through the record. The sole question to be decided is, whether respondents were employees
of the petitioner (as claimed by them) or of contractor (as alleged by the petitioner)? To
determine the real status of a worker, as to he/she were employees of an
establishment/industry/company ("company") or a contractor, the superior courts, in a
number of cases, have introduced the following criteria/test: ---
(i) Whether the company has administrative control over the worker?
(ii) Whether the company based for the work done by the worker?
(iii) Whether the company has the power to reinstate and dismiss the worker?
(iv) Is the work required to be performed by workman of a permanent nature and is it
related to process of manufacturing before the finished goods we re sent into market?
(v) Whether payment for the worker's services was made by the company?
(vi) Whether the goods, that the worker helped to manufacture, when marketed, brought
proceeds to the company itself?
(vii) The duration the worker had been perform ing his duties and providing labour
in connection with the manufacturing process?
(viii) Whether the contractor is a genuine person and has not been set up merely to
deny the worker of the benefits under the labour laws?
5.A The evidence thus needs e xamination in the light of the above mentioned criteria/test.
The cross -examination of Sarfraz Hussain Sailani, Factory Manager of the petitioner -
company (respondent/ applicant Jhanda Khan's case) is very relevant. He admitted that the
applicant was workin g in the Die Casting Department under different officers and when the
applicant was removed from service, one Shahid was the Incharge. He further acknowledged
that the applicant and other workers were paid salaries from the amount realized from the
sale of the production. The applicant and other workers used to enter and exit the factory
premises as per schedule and subject to security check. The work done by the applicant and
others in the factory was subject to quality check by the Incharge concerned. He also
admitted that no separate factory or production area has been established inside or outside of
the factory premises nor any portion thereof was given on lease to anyone including the
contractors, whose names have been given by him in the statement. Th e factory was also
stated to be registered with the Social Security and Old Age Benefit Institutions and the
applicant's contribution and EOBI amount have been deposited under the allotted registration
number. The Manager admitted that it was their respons ibility to issue appointment and
termination letters, however, the applicant could not complain about it.
Similarly, Muhammad Hanif, Assistant Director, Balochistan Employees Social
Security Institution, District Lasbella at Hub, in the aforesaid case, ha s also supported the
version of the respondents and stated in cross -examination that no notification has been
issued in favour of the applicant by a contractor. He admitted that the registration of a
contractor is not permissible. He also admitted that dur ing the course of survey, the worker,
who is found working in the factory, is considered to be the worker of factory.
A careful perusal of the above mentioned evidence both shows and suggests that the
respondents were the employees of the petitioner and n ot of the contractor. The record
further indicates that the respondents, being employees of the petitioner, had no concern
whatsoever with the contractor. It emerges from the record that during employment of the
respondents, a number of contractors i.e. Co ntinental Engineering Service (Pvt.) Limited,
M/s Ali Associates, Industrial Contractors and Consultants, M/M Associates and Local
Contractor, namely, M/s Hashim Baloch Rind and Company were changed, but the
respondents remained at their jobs in the petiti oner's factory, meaning thereby they were
employees of the petitioner. The petitioner also appears to have had administrative control
over the respondents with power of hiring and firing. The respondents were also on the pay -
roll of the petitioner. It can thus be concluded that the Company had hired the services of
respondents just to save itself from the obligations and responsibilities under the labour laws.
All the circumstances, individually as well as collectively, lead to one conclusion that the
respo ndents were the employees of the petitioner. Under the provisions of the Industrial
Relation Ordinance and West Pakistan Industrial and Commercial Employment (Standing
Orders) Ordinance that worker is not merely a person employed directly by the employer, but
also one employed through a contractor. Therefore, the findings of both the courts below,
declaring the respondents as employees of the Company, do not suffer from any illegality or
irregularity and, as such, does not warrant any interference by this c ourt.
6. Adverting to the contention of learned counsel for the petitioner regarding back
benefits, we are of the view that back -benefits, which are to be paid to a workman, are not to
be allowed to him as a punishment to the employer for illegally removin g him from service,
but only to compensate the worker for remaining jobless on account of illegal removal from
service by the employer. To be entitled to claim back -benefits, a worker is required to show
that he was not gainfully employed during the period he was deprived of service till the date
of reinstatement. It will be useful to reproduce the following portion from the judgment in
the case of Syed Anwar Ali Shah v. the Agricultural Development Bank of Pakistan and
others 1999 PLC 223 of a Divisional B ench of the Hon'ble High Court of Sindh: ---
"Apart from it, we are of the view that the question of back -benefits to an employee is
not to be resolved in his favour as a necessary corollary of his reinstatement in
service. Initially the employee has to di scharge the burden of proof that, during the
relevant period he remained jobless and was not engaged in any other gainful venture.
Obviously, this aspect of the matter cannot be resolved without sufficient evidence or
other material to clarify factual posi tion in this regard. Examining the instant case
from this angle, we find that the petitioner has not even cared to file the copies of
grievance petition, its reply or the evidence, if any, recorded before the Trial Court or
any other material to substantia te his claim."
Obviously, this aspect of the matter cannot be resolved without sufficient evidence.
Examining the petitions from this angle, we are of the opinion that the petitioners have failed
to prove that they remained jobless during the period of the ir termination from services till
reinstatement. All the respondents in their grievance applications did not specifically state
that they remained jobless and were not engaged in any other gainful venture. In the
concluding paragraph it was simply stated, "that the applicant entitled to reinstatement with
full back -benefits being unemployed...". When the respondents gave evidence they also did
not make positive assertion that they were and remained unemployed and that they were not
engaged in any other gain ful venture. All of them instead stated, that,
"urdu"
The statement in the grievance application and statement made in court are in our opinion not
sufficient to establish that the respondents remained unemployed and did not engage in
gainful venture. The record also reflects that even till date they have not joined their duties
nor demonstrated that they attempted to do so, as such, on the principle of "no work no pay",
we hold that the respondents are not entitled to receive full back -benefits. However, it is
reasonable to presume that a person who is removed from service would not be to get
alternate employment immediately or be able to set himself up in any gainful venture and it
would take a few months to do so. Accordingly, the respondents would be en titled to receive
back -benefits for a period of three months from the date of their removal from service.
For the foregoing reasons, we partly accept these petitions, by setting aside the
common judgment dated 12th October, 2010 and common order dated 23r d February, 2009,
respectively passed by the Tribunal and Labour Court only to the extent of award of full
back - benefits to the respondents, however, the order of reinstatement of the respondents in
service shall remain intact and the petitioner shall pay to the respondents back -benefits for a
period of three months from the date of their removal from the service of the petitioner.
H.B.T./54/Q Order accordinglThis 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.