' AHMAD ALI M. SHAIKH, J.-- By this single order we propose to dispose of C.Ps. Nos.392 of 2005, 2053 of 2002 and 1546 of 2003, as in all the above petitions the petitioners have assailed the wires as well as applicability of Companies Profit (Workers' Participation) Act, 1968.
2. The facts giving rise to C.P. No,D-392 of 2005 are that the petitioner Messrs Pak Grease Manufacturing Company (Pvt.) Limited is a registered Company under, the Companies Ordinance, 1984 and is engaged in the business of manufacturing petroleum grease, lubricant products etc. The total number of employees including the staff workers employed in the above Company are only 12 and they are drawing wages more than Rs,5000 per month. In C.P. No,D-2053 of 2002 the petitioner S.G. Power Limited is a Public Limited Company and is operating a power plant. It is pertinent to mention here that the petitioner has claimed that not a single person is employed in the Company who could fall within the definition of "worker". Similarly, the Hub Power Company Limited, the Petitioner in C.P. No,D-1546/2003 which is a Public Limited Company, incorporated in Pakistan for the purpose of undertaking the design, construction, finance, ownership and operation of a power plant located in Hub, Baluchistan having its principal business office at Clifton, Karachi.
3. The respondents through the Ministry of Labour, Manpower and Overseas Pakistanis is responsible for the administration and implementation of "The Companies Profits (Workers'
Participation) Act, 1968" (hereinafter called as 'the Act 1968") and "The Workers Welfare Fund Ordinance, 1971" (hereinafter called as "N.-W.F.P. Ordinance"). On 3-11-2002 the respondents issued a notice to the petitioner, S.G. Power Limited. For the sake of convenience same is reproduced hereunder:--- "NOTICE ' Subject:-- COMPANIES PROFITS (WORKER'S PARTICIPATION) ACT, 1968 ' Messrs S.G. Power Ltd. Karachi were advised vide this Division's letter of even number dated 22-11- 2002 to furnish the details of constitution of Board of Trustees and details of distribution of Workers'
Profits Participation Fund as per Annex-III & III-A pertaining to period 1994-1995 to 2000 -2001 which are still pending with the Company.
(2) The Company have since failed to comply with provision (s) of section 6 of the Companies Profits (Workers' Participation) Act, 1968 now, therefore, Messrs S.G. Power Limited Karachi hereby directed to show cause within 15 days of this NOTICE, why an ORDER should not be passed under Section 5 of the aforesaid Act, for failure to comply with the above provision(s) of the aforesaid Act."
' Similar notices were issued by the respondent to the petitioners in the other two petitions.
4. The grievance of the petitioner in C.P. No,D-392/2005 is that through the impugned notices dated 17-2-2005 and 11-3-2005 issued by the respondent the petitioner was directed to constitute a Board of Trustees as provided in section 4 of the Act 1968 and to deposit an amount of 5% of net profits before tax even without constitution of a Board of Trustees. In similar circumstances, vide Letter dated 29-11-2002 issued by the respondent, S.G. Power Limited (Petitioner in C.P. No, D-2053 of 2002) was directed to establish Workers' Welfare Funds as required under section 3 of the Act, 1968 and in case no worker of the Company is entitled to the share, the entire allocated funds be transferred to the Workers' Welfare Fund under Paragraph 4(d) of the Schedule to the Act. On 3-2- 2000 the respondents issued identical Letter to Messrs Hub Power Company Limited (Petitioner in C.P. No, D-1546 of 2003) whereby the petitioners were informed that the provisions of Act, 1968 are applicable to the petitioner-Company and they were advised to allocate 5% of the net profit towards Workers' Participation Fund and deposit the entire amount of the fund in the Federal Treasury.
5. Through the instant proceedings all the three petitioners have called in question the aforesaid Letters and also challenged the vires of the Act, 1968.
6. Mr. Muhammad Sabir, learned Counsel for the petitioners in C.P. No,D-392 of 2005 contended that the impugned decision contained in the Letters dated 17-2-2005 and 11-3-2005 and demands raised by the respondent are patently illegal, without jurisdiction and lawful authority. He further contended that the provisions of Act, 1968 are neither applicable even to a single worker of the Petitioner's Company nor the requirement of constitution of "Board of Trustees" or other provisions are enforceable/tenable, therefore the impugned decision of the respondents whereby the petitioners is directed to deposit the amount i.e, 5% of the net profit in the Government Treasury is illegal and of no legal effect. Per learned counsel, under the Act, 1968 the Company's liability to pay 5% of its net profit during the year in question arises only when there exists a Board of Trustees as only the Board of Trustees can disburse the said profit to the eligible workers but neither there exists the eligible workers nor Board of Trustees can be constituted much less the Workers'
Participation Fund. He lastly contended that the main object of the Act, 1968 is to provide a mechanism by which a specified category of workers of an establishment/company as defined in Section 2(f) of the Act, 1968 may get participation in the profits and to get benefits thereof. Hence in absence thereof the Company is not under an obligation to distribute, transfer and provide benefits to the workers at large or to transfer the said amount to the Government Agencies as demanded by the respondents. He concluded his arguments by contending that due, to nonexistence of the workers as defined under section 2(f) of the Act, 1968, the Board of Trustees cannot be constituted as the law requires that only the Board of Trustees is competent to transfer any amount left out of the annual allocation of the Federal Government and not by the Petitioners.
In support of his contentions, he referred to Rule 4 of the Companies Profits (Workers' Participation)
Rules, 1971.
7. Mr. Umer Soomro, learned counsel for the petitioner in C.P. No,D-1546 of 2003, contended that there is no worker in the petitioners' company; in terms of section 2(f), before amendment in 2006, therefore the provisions of the Act 1968 are not applicable to the Petitioners' Company. He further contended that. The Act, 1968 is for the benefit of the workers i.e, to share profits. Per learned counsel, the monthly emoluments paid to the petitioners' workers are Rs,5000 to Rs,7000, therefore the impugned Letter whereby the petitioners were directed to pay 5% of the net profit, when he had no worker to pay, would amount to imposing a penalty upon the petitioners or, in other words, retrospective application of the amendment which is against the very spirit of the Act, 1968.
Learned counsel further contended that paragraph 4 of the Scheme requires the annual allocation of the funds to be expressed as units or fraction of Rs,10 and then to be distributed among the workers in accordance with the provisions thereunder; only such units are required to be allocated to the Workers' Welfare Fund as remain after the units have been allocated to a company's workers. Since the petitioners have no worker, hence they are unable to allocate any units to them.
He lastly contended that the intention of the legislature is the workers' welfare and if there is no worker, per definition, in the petitioners' Company why should the Company be burdened. Mr. Soomro finally concluded his arguments by contending that section 2(t) of the Act, 1968 defines "worker' and if is there is no worker, it means there is no scheme and to hold otherwise would be tantamount to retrospectivity which cannot be done.
8. Mr. M.A. Awan, Advocate for the petitioners in C.P. No,D-2053/2002 adopted the arguments of Mr. Shabir and Mr. Soomro. However, in addition he contended that the petitioners never had any worker and hence the demand could not be made and the directions contained in the Letter to the effect that if there is no worker then entire amount be transferred to workers' welfare fund is illegal and without any justification.
9. Mr. Jawwad Sarwana, learned Amicus Curiae contended that there are four following distinct elements of the Act, 1968:
(i) Applicability of the scheme to a Company;
(ii) Establishment of the funds;
(iii) Formation of Board of Trustees for distribution of the funds and
(iv) Payments from the fund ' According to him the schedule of the Act, 1968 provides that the scheme of the Act, 1968 applies to all companies engaged in industrial undertakings which fulfil any one of the following conditions:-- -
(a) The number of workers employed by the Company at any time is 50 or more;
(b) The paid-up capital of the Company as on the last date of the Accounting Year is Rs,20 Lacs or more;
(c) The value of the fixed assets of the Company as on the last day of the Accounting Year is Rs,40 Lacs or more.
' Hence, the first independent condition for application of the scheme requires that the company has employed at least 50 workers or more at any time during a year. Per learned Amicus, the definition of a "worker" in section 2(f) of the Act, 1968 as prevailing after the enactment of Finance Act, 2001, reads as follows:-- "'worker' in relation to a company means an employee of the company whose average monthly emoluments computed in the manner set forth in the Schedule does not exceed Rs,5000 and who has been in the employment of the company for a period of not less than six months."
' However, vide Finance Act, 2006 the definition of 'worker' was amended and was substituted by the following:--- "worker' in relation to a company means an employee of the company who falls within the definition of worker as defined in clause (xxx) of section 2 of the Industrial Relations Ordinance.
2002 and has been in the employment of the company for a period of not less than six months."
' Subsequently, by Finance Act, 2007 the definition of 'worker' was further amended in the following words:- "'worker' in relation to a company means an employee of the company including the one employed by or through the contractors, who falls within the definition of worker as defined in clause (xxx) of section 2 of the Industrial Relations Ordinance, 2002 and has been working in the company for a period of not less than six months."
' Per learned Amicus Curiae, the petitioners have not disputed the applicability of either conditions viz. (b) or (c) of the Scheme of Act 1968 with regard to the paid up capital value of the fixed assets of the company but all of them stated that the wages of the workers employed by them during certain periods/years do not exceed the statutory wage limit i.e, Rs,5,000 to Rs,7,000 per month, therefore the scheme does not apply to them for the specified years.
10. Mr. Sarwana contended that the scheme is applicable to all the companies which satisfy any one of the three conditions specified in clause (a) (b) or (c) of the Scheme and/or are engaged in industrial undertaking, thus the scheme applies to all the petitioners and as a consequence the companies are required to establish the workers' profit fund under section 3 of the Act 1968. Per Mr. Sarwana, the argument advanced by some of the petitioners that for the purpose of Act, 1968 existence of workers in the company, as defined above, is necessary, therefore if the required workers, do not exist, the provisions of Act, 1968 would not be applicable to such company, consequently the company need not establish the fund under section 3 of the Act, 1968, is not tenable because the Act, 1968 is applicable to all the petitioners who qualify under conditions (a) and/or (b), as stated above.
11. Learned D.A.-G. Adopted the arguments advanced by the learned Amicus Curiae.
12. Heard learned counsel for the parties and perused the impugned notices/letters.
13. Upon a perusal of the Act, 1968 it appears that this legislation is specifically meant for the welfare and benevolence of the workers. Section 2(e) of the Act defines a 'scheme' as set out in the Schedule. From a bare reading of the Schedule of the Act it appears that the Act is applicable to companies if they fulfil any of the following conditions:
(i) The number of workers employed by the company in any shift at any time during a year is 100 or more.
(ii) The paid-up capital of the company as on the last day of its accounting year is Rs,20 lakhs or more.
(iii) The value of the fixed assets of the company (at cost) is on the last day of the accounting year is Rs,40 lakhs or more.
' It is pertinent to mention that none of the petitioners in the above titled petitions have argued that they did not earn net profit during the specified period/years when they received notices from the respondent to establish the CPWP fund and transfer the entire balance to the Workers' Welfare Fund. It appears that they have admitted the following position regarding the establishment of CPWP Fund and the possibility of a contingent liability arising therefrom which is reflected in the Balance Sheets for the specified period/years submitted by some of the petitioners to their shareholders:--
(i) In C.P. No, D-392 of 2005 the petitioner has disclosed in para 7 of the petition that the petitioner Company, on its own and in the absence of any Board of Trustees, itself paid the entire 5% undisbursed profit amount under the head of "left out amount" into Government Treasury of the Workers' Welfare Fund for the period July 2001 to June 2004.
(ii) In C.P. No,D-2053 of 2002 in para 15 of the petition the ptitioner, S.G. Power Limited's Chartered Accountants have advised their client (the petitioner) to report this matter as a contingent liability in. The Notes to the Accounts for the year ended June 30, 2003.
(iii) In C.P. No,D-1546 of 2003, the Hub Power Company Limited had made no provision in its financial statements in relation to CPWP Fund on the grounds that any payment made by the.
Company under the head of CPWP Fund is a pass through item under the PPA between Hubco and WAPDA i.e, it is ultimately the liability of WAPDA. In the circumstances though the WAPDA may reimburse Hubco the amount paid by it to the CPWP fund but this does not absolve Hub Co. From fulfilling its obligation of payment of 5% profit to the Fund as required by the statute.
' Consequently we are of the opinion that the Act, 1968 is applicable to all the petitioner Companies.
14. Section 3 of the CPWP Act relates to the establishment of the Fund while section 4 of the Act relates to the management of the Fund, which requires that as soon as may be after establishment by a company of a Fund under section 3, there shall be constituted a Board of Trustees consisting of the following namely:---
(a) two persons elected by the workers of the company from amongst themselves; and
(b) two persons nominated by the management of the company of whom at least one shall be a person from the accounts branch of the company, ' Rule 3(1) of the Companies Profits (Workers' Participation) Rules, 1971, states that as soon as possible but not later than two months, after the establishment of a Fund by a company, the company shall intimate to the Federal Government the names, addresses and other particulars of the two persons nominated by the company to represent the management on the Board to be constituted for the administration of the Fund and where there is no collective bargaining agent in relation to the company, hold elections amongst the workers to elect two of them to the Board by the method of single non-transferable vote; provided that if a collective bargaining agent in relation to the company comes into existence subsequent to the elections, the elected representatives of workers shall cease to be trustees as soon as such agent has nominated two persons to represent the worker on the Board. Hence, according to CPWP Act read with CPWP Rules the following position regarding formation of the Board of Trustees emerges:
(i) The Board of Trustees shall manage the amount allocated or accruing to the Fund;
(ii) The Board of Trustees shall consist of two persons nominated by the management and two persons either elected by the workers of the company or two nominees of the collective bargaining agent;
(iii) The trustees shall hold office for two years.
' From a bare reading of section 2(13)(d) of the I.R.O. 2002, it appears that the rights of the C.B.A.
Have been described as under:- "A collective bargaining agent in relation to an establishment or group of establishments shall be entitled to:
(c) .........................................................................................
(d) nominate workmen on the Boards of Provident Funds and Workers' Participation Fund of their respective establishment of industry."
' Hence even if there are no persons falling within the definition of "worker" under section 2(t) of the CPWP Act in any given year, the same does not affect the management of the Fund by the Board of Trustees provided there is a Collective Bargaining Agent which can nominate two workmen to manage the Fund. It appears that none of the petitioners has contended that at the specified time/year their establishment did not have any CBA except the petitioners in C.P. No,No,D-1546/03 and C.P. No,D-392 of 2005. The petitioners should have asked the C.B.A. To nominate two persons to represent the workers on the Board but they did not do so, thus the petitioners have breached their duty under the Labour Laws.
15. Upon a perusal of CPWP Act it appears that this is a welfare orientated legislation enacted for the benefit and welfare of the labour class and same should be liberally interpreted to advance such cause as held in Kohinoor Chemical Co. Ltd v. SESSI (PLD 1077 SC 197) and National Embroidery Mills Ltd. Vs. Punjab Employees Social Security B Institution (1993 SCM R 1201). If the term "worker" is given any strict and narrow meaning, as argued by the learned counsel for the petitioner, it would frustrate the very intent of the legislature, therefore in order to achieve aims and object of the legislature, it must be given a liberal meaning in the general sense of the term "worker". As far as the contention of the learned counsel for the petitioners with regard to their inability for formation of a Board of Trustees is concerned, it appears that there is no impediment in the establishment of the fund but the problem arises in its administration because of the inability to form a Board of Trustees on account of strict interpretation of the term 'worker' applied by them. It appears that the Draftsman while putting into effect the intention of the Legislature committed a mistake in drafting by using the term "worker" in section 4(1)(a) instead of using the term "nonmanagement staff/employees" which was the real intention of the Legislature. The drafting errors; however, can be corrected in appropriate cases as stated in Maxwell on Interpretation of StatutesTwelfth Edition page 231 in the following words: .... Sometimes, where the sense of the statute demands it or where there has been an obvious mistake in drafting, the Court will be prepared to substitute another word or phrase for what actually appears in the text of the Act.
If the term "worker" is interpreted strictly according to its definition given in the Act, it would defeat the legislative intent. To achieve the purpose and object of the Statute, it is necessary that the term "worker" be given a general meaning i.e, 'workers in general or employees in general excluding the management category. Therefore, to correct the drafting error if the term "worker" is interpreted in this fashion, there would be no problem and two persons can be elected by the non-management employees/staff for inclusion in the Board of Trustees. This would be a reasonable interpretation which would not frustrate the object of the legislature, on the contrary would advance its purpose and object for the benefit of the workers in the entire country. In the case of Miss Sumaeea Zareen v. Selection Committee, Bolan Medical College Quetta reported in 1991 SCM R 2099, the honourable Supreme Court held as under:-- "It is now settled principle of interpretation of statute or the rules framed thereunder that the words have to be given their ordinary meaning in absence of any special meaning assigned to them under the relevant statute or the statutory rules."
Keeping in view the intent and object of the Lawmakers and the dictum laid down by the honourable Supreme Court in case of Miss Sumaeea Zareen, (supra), we hold that for the purpose of the Companies Profit (Workers' Participation) Act, 1968, the term "worker" should be interpreted as "an employee of non-management category".
16. Upon a perusal of clause 4(d) of the Schedule of the CPWP Act, it appears that the same was substituted for the original text in the year 1972 through Ordinance No,IX of 1972 as there was no provision in the original Act for deposit of left over amount in Workers' Welfare Fund. The purpose of transfer of the left over amount from the CPWP Fund into the Workers' Welfare Fund constituted under section 3 of the WWF Ordinance, 1971 is for the larger benefit of workers of the entire country i.e, to finance projects connected with establishment of Housing Colonies for workers, financing welfare snemes such as award of scholarships to workers' children, Jahez fund for their girls, grant of sewing machines to widows and bicycles to industrial workers. In the case of Messrs Hafiz Textile Mills Ltd. v. Government of Pakistan (1986 M LD 206), a Division Bench of this Court has observed that, "if any annual allocation was made thereafter by the company to the Workers' Participation Fund and some funds out of that allocation were left to be disbursed to the workers then the same were to be transferred to the Workers' Welfare fund and were not to remain as part of Workers'
Participation Fund." It may be noted that some of the petitioners argued that if the impugned Letters/Orders issued by the respondent were acted upon, same would amount to retrospective application of the law but we are of the considered view that such contention is misconceived and devoid of force as the dispute between the petitioners and the respondents arose prior to the amendments of 2006 and 2007 to the CPWP Act. During the relevant period/year, the Federal Government raised a demand for transferring the entire CPWP Fund for the specified year to the WWP Fund. The impugned orders which have been challenged by the Petitioners relate to the time/period prior to 2006 and 2007 amendments to the CPWP Act, thus no question of retrospective applicability of the Act arises in these petitions. In the case of Hafiz Textile Mills (supra) the Federal Government had demanded the petitioners to transfer the undistributed funds of the CPWP fund which had been accumulating prior to the 1972 amendment (between 1968 upto 1972) to the Workers' Welfare Fund by virtue of the amendment to the Act. A Division Bench of this Court disagreed with the contention of the Federal Government and held that, "the amount deposited by the petitioner (Company) would constitute a part of the Workers' Participation Fund and would be used or invested by the Board of Trustees of the Fund as provided in para 2 of the Scheme contained in Schedule of Act XIII of 1968."
17. For the foregoing reasons and the dictum laid down by the superior courts, we are of the considered view that the petitions being devoid of force and meriting no consideration, are liable to be dismissed in limine. Order accordingly.