' ABDUL GHIAS NOUSHERWANI (MEMBER).--- I intend to decide the captioned appeals by one consolidated judgment having similar facts and questions of law arising out of the same impugned judgment passed by District and Session Judge 1st Labour Court Quetta dated 25-8- 2011.
2. Brief facts leading to filing(?) present appeals are that appellant/ applicants claiming that initially they were appointed by respondent company and posted as machine operator, packers, loaders, checkers, cleaners, peon and drivers in various sections i,e, tablets, injections, liquid, manufacturing, packing, warehouse, Kachra store, mess, and printing department on permanent posts between 2002 to 2008 as same is evident from list issued through consultant, where after through a so-called agreement dated 14-12-2007 company asked the applicants/ appellants to work under consultant on word to accomplish the company work. The respondent initially while appointing them did not issue appointment letter and on 10-7-2009 retired or dismissed the service of all applicants without issuing any notice on the ground that respondent company has cancelled the contract of consultant as such the consultant retire or terminate the service of applicants who were working with consultant under his control again after illegal termination of applicants company started appointments on their posts as such applicants prayed to set aside oral termination order dated 13-7-2009 with direction to respondent to reinstate all the applicants in their previous jobs with all back benefits.
3. Record reveals that after submissions of written statement the grievance application was rejected by the learned Labour Court by means of order 29-8-2009 with the following observations:--- "Hence the applicants cannot claim his reinstatement in service against the respondent No,1 being not in picture any more it is thus concluded that the legal objection (S) raised by the respondent No,1 relating to the status of applicants and the relief claims by him against the respondent No,1 are correct, thence are upheld here with for the said reason the under reference grievance application is not maintainable before this court"
4. Against above said order Labour Appeal No,37 of 2009 has been filed before this Tribunal which was allowed by means of Judgment dated 15-12-2010 with the following direction:--- "Thus with the above discussed circumstances appeal is allowed. The order of Learned Presiding Officer dated 28-10-2009 is set aside and matter is remand back to Learned Presiding Officer 1st Labour Court Quetta to decide the matter on merit after framing issues and leading the evidence from both the side"
5. After remand the Learned Labour Court framed 11 issues recorded the evidence of both the parities and dismissed the grievance B application in view of Issues Nos.1 to 4 jointly decided which were interrelated to each other with the following observation:--- "in view of the above mentioned facts and circumstances of the case it is concluded that since there exist no relationship between the parties and consequences thereof no cause of action between occurred in such behalf therefore without discussing the other issues the Issues Nos.1, 3 and 4 are resorted in negative and against the applicants. However the power of attorney so executed is available in its proper form so the issue No,3 is resolved.In affirmative. Consequently the application in hand is here by dismissed."
6. In support of appeals it was contended that the termination of the appellants was tainted with malice, the contractor was set up witness and the action of respondents was vindictive, the order passed by Learned Labour Court was against evidence, illegal, illogical and thus unsustainable.
Conversely it was argued on behalf of respondents that the applicants had no proof of employment with respondents. Further contended that the applicants were not employees of the respondent and the burden of proving such facts was on the applicants/appellant which was not discharged by them. Lastly submitted that the applicants were employed by independent contractor besides that they were not employed on the job of permanent nature. Good number of authorities was cited by the learned counsel in support of the contention.
7. Considered the arguments advanced by the learned counsel, scanned the evidence available on record and have also sought guidance from the relevant case-law on the subject besides the ruling cited by the parities.
8. It is the case of appellant that they were employed by the respondents in the factory and were working there since last many years and on 13-7-2009 they were not allowed to enter in factory. It is further case of appellants that contractor namely consultant is the agent of respondent and so- called agreement is fictions document.
9. Contrary to this the case of respondent is that the appellants have no concern whatsoever with the respondent. It is their case that respondents have awarded some work on contract to the consultant vide agreement dated 14-12-2007 which is a separate independent identity. It is further the case of respondents that the contractor engages/employees his own Labour/workers to undertake the contractor work independently in the factory premises according to requirements and specifications of respondent company.
10. Consultant Nizam-ud-Din appeared as C.W.-1 and stated that in view of agreement he was awarded some work of company and he engaged/appointed the applicants on temporary basis and the payments of the applicants were made by him along with contribution of EOBI and other charges. Further stated that he opened the bank account of his Labour in Askari Bank Jinnah Road branch. Lastly stated that on 10-7-2009 his contract came to end and he terminated the employees by means of notice. In cross-examination he stated,
11. {{ URDU TEXT }} ' statement of account 4._
12. In view of his statement that he issued appointment letter to his worker nothing produce by him except the application and education certificate of Ghulam Mehudin tendered by him as Article C-
1. Apart from the above application a temporary employment order also produced by him but name of employee is not mention.
13. The representative of Askari Bank C.W.-2 stated that the consultant opened his account and paid the worker front his account. In cross-examination he stated:---
14. {{ URDU TEXT }} : Statement of account ' Statement of account 4- ' Company consultant ' Statement of account ; account ' As stated hereinabove that the respondents claimed that the applicant/appellant are the employees of contractor. Meaning thereby the respondents have no concerned/connection with the appellant/ applicant.
15. Contract Labour is an issue which is prevalent in most of the establishments and industrials concerns. In number of cases before Judicial forum and the writ issued by the government in its most reliable reports it was more often revealed that the contract Labour is resorted to by the employer to escape from the application of Labour Laws and deprived workers of their legitimate rights. It would not be out of place ID to cite the observations/judgments of some of these Courts and extracts of the Government decree that provides test of determination of the fact whether the workers engaged by the contractor actually formed part of the employers strength of Labour force and whether the contract Labour is a device to avoid the application of Labour Laws and so acts as means of cheap Labour to meet the business needs and objectives of the actual employer.
A. The learned full Bench of NIRC in case title General Sectary v. Pakistan Fertilizer Limited held, "Reliance on S.O. 20 of W.P. Industry and Commercial Employment (Standing Order) Ordinance, 1968, section 2(i) of the Factories Act, 1934. It was held by the honorable Bench that the legislative intent is Clare that the provisions of Labour Laws will equally be applicable to workers in an establishment whether they are recruited directly or through a contractor in any manufacturing or commercial establishment"
' The honorable Karachi High Court 1989 PLC 81 held, "Workers employed by the contractor to work in connection with the manufacturing processes of the industry or establishment were included in the definition of an employee as given in clause (8) of section 2 of Provincial Employees Social Security Ordinance, 1965 (Ordinance X of 1965). It was further held that the agreement between workers and contractor were merely a cover to deprive a group of workers of their right-full emoluments, privileges and benefits"
C. In 1987 PLC 397 referred an authority of Indian Supreme Court wherein it was held, "That the presence of intermediate contractor with whom alone the workers have an intermediate contractual relationship is of no consequence when on lifting the veil, the naked truth is discovered, though draped in a different paper arrangement, that the real employer is the management and not the intermediate contractor. It was further held that Court should be astute to avoid the mischief and achieve the purpose of the law and not to be missed by the legal appearance"
' The honorable apex Indian Court in this case further observed that in such cases the contractor was an agent or representative. .
D. In AIR 1964 Supreme Court 355 it was held, "The crucial test to judge whether employees are the workers of the establishment is the type of work done by them in the industry and where work is done in the industry by Labour engaged by a contractor, the real employer is the owner of the industry."
E. In a reported Judgment 2006 PLC 450 it is observed, "We are not naive in comprehending the situation given rise to the use of contract Labour increasingly from the beginning of the decade of 1980s. The background of increase of contract Labour in industry in Pakistan is the provision of termination simpliciter incorporated in Standing Order 12(3) by the Act No,XXIII of 1968. This service as a condition to restrain the employer who is required to assign explicit reasons while terminating the services of a workman. This condition virtually has taken away the unfettered powers of the employer. The condition so imposed by the law is fully in conformity with the principles of natural justice and Islamic injunctions, the employer reportedly has adopted a via media to disrupt the law so developed by resorting to engage Labour through contractor in most of the cases and also to split work to be carried at different places not only to regain its. Control on employment conditions but also to deprive workers of their legal rights and benefits"
14. In this respect a report has been prepared by Task force on Labour published by Ministry of Labour, Man Power and Overseas Pakistanis on 17th October, 1994 wherein this problem has been discussed in detail for the purpose of legislation. Some relevant and important Paragraph of the said report are reproduced herein below:---
(i) At page 18 "Whereas factors responsible for contract Labour are associated with the introduction of worldwide trend towards market economy, the management found its way to re-establish its control on employment conditions of workers which was lost by it by the restrictive legislation that has taken place of termination simpliciter provisions. The management to defeat the prevalent law and legislative checks on its authority and control resorted more frequently to contact Labour practice"
(ii) At page 23 "contract workers are deprived of their legitimate legal rights, because practically principle employer as well as the contractor escape the sanction of the law. The contractor by not notifying purposely his fixed address does not feel obliged to be answerable to the authority and so he without fear of law, pays less wages to workers, refuses them over time payments due leave, holidays, bonus, gratuity, health cover and other welfare facilities prescribed by the law."
(iii) At page 24 "As the use of contract Labour has spread during the past several years particularly in the manufacturing industry of the provinces of Punjab and Sindh, employers are stated to have resorted to it in certain departments of their factories or have divided establishment into smaller units and rely on contractors to hire pay, and supervise workers, in some cases the entire workforce has reportedly been given over to one or more contractors. The employers resort to contract Labour is due to the need to enforce discipline, cut down on production cost"
15. A reference to relevant Labour laws indicates that law makers did not make any distinction between workers employed directly or E through a contractor. The relevant provision of some of the Labour laws are opt to be reproduced, "A. "Industrial Relation Ordinance. 2002".
' Section 2 (xxx) "Worker" and "Workman" mean any and all persons not falling within the definition of employer who is employed in an establishment or industry for remuneration or reward either directly or through a contractor; whether the terms of employment be express or employed, and or the purpose of any proceeding under this Ordinance, in relation to an industrial dispute includes a person who has been dismissed, discharged, retrenched; laid off or otherwise removed from employment in connection with or as consequence of that dispute or whose dismissal, discharge, retrenchment, lay-off or removal has led to that dispute but does not include any person who is employed mainly in a managerial or administrative capacity. B. "West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968"
S.O. 20 liability of Employer.--- The employer of the industrial and commercial establishment shall personally be held responsible for the proper and faithful observance of Standing Orders, whether or not the workman of such establishment are employed through contractors."
C. 'Factories Act, 1934 ' Section 2(h): "Workers" means a person employed directly or through an agency whether for Wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work whatsoever, incidental to or connected with the subject of the manufacturing process, but does not include any person solely employed in a clerical capacity in any room place where no manufacturing process is being carried on.
' The term, "manufacturing process" appearing in this definition has been defined in section 2(g) ibid as follows:--- ' Section 2(g)--- "manufacturing process" means any process---
(i) For making, altering, repairing, ornamenting, finishing or packing, or otherwise treating any article or substance with a view to its use sale, transport, delivery or disposal, or
(ii) For pumping oil, water or sewage, or
(iii) For generating, transforming or transmitting power.
Note: All workman whether employed directly or through an agency who, are engaged to do any of the job listed in the manufacturing process are covered as workman and so it is employer's liability to provide them their rights and benefits under the law, which does not draw any distinction between workers directly employed and workers employed through an agency or contractor"
16. Another important aspect of the case as agitated by the learned counsel for respondent that according to agreement tendered by the consultant as Art.C/2 the respondents are not responsible with the rights of the appellant. In this respect it has to see whether the job/work which were performing by the appellant were of temporary nature or otherwise. The consultant tendered agreement dated 2nd March, 2006 whereas the learned counsel for appellant relied upon agreement dated 14th December, 2007 however the first agreement at Para B indicates, "And whereas Merck desires to contract out partial services job of its pharmaceutical manufacturing plant, Quetta, excluding security of the premises."
' In agreement of 14th December, 2007 Para No,3 is reproduced, "And whereas Merck desire to contract out to an independent contractor certain designated job(s) of its pharmaceutical manufacturing plant, Quetta, comprising of partial manufacturing, required packing operations and allied technical support services such as cotton printing, quality control/analysis of products, warehousing activities, machine maintenances, cleaning of designated working areas etc. Besides the jobs will include providing all administrative services, such as cooking and serving meal and tea etc."
The work/job indicated in above reproduced para are permanent nature of works/jobs. Secondly it is admitted that all the above mentioned jobs/works had been performed in the premises of factory therefore the said plea of respondent is not sustainable. Even otherwise it is admitted by the representative of company that they had appointed employee on G the job/work done by the appellants therefore there is no distinction between the Labour appointed directly and by the contractor.
17. The consultant/contractor in his statement/affidavit tendered Art.C/3 with the heading "the consultants Karachi work site Merck factory, Quetta" which are the pay roll for March, 2006 wherein the names of appellants in Labour Appeal No,44 of 2011 at serial Nos.1, 4, 6, to 9 and 11 and similarly in Labour Appeal No,45 of 2011 at serial Nos.1, 17 and 23 are not mentioned, Even otherwise it is the case of respondents that they have awarded contract to the consultant. On 14th December 2007 therefore the pay rolls pertaining to the month of March, 2006 cannot be considered. Similarly statement of social security are also pertaining to March, 2006 are out of consideration.
18. It is the stand of respondent that a list submitted along with grievance application was tempered by the appellant by removing the name of consultants but the list of the consultants bio data of contract workers filed along with grievance application and signed by the consultant as annexure wherein the date of appointment of appellants appeared between 2002 and 2006 whereas contract was awarded in 2007. This question specifically put to the learned counsel for respondent that according to their statements they have awarded jobs/works to the consultants according to agreement of 14th December, 2007 but did not satisfy this Tribunal on this point. Even otherwise the consultant in his affidavit expressed his ignorance about the appointment of the appellants stating:---
19. {{ URDU TEXT }} ' agreement ' In such situation the claim of respondent is not correct.
20. As stated herein above that the pay rolls of Labour pertaining to the month of March 2006 which was held to be not considered but even otherwise the representative of Askari Bank in cross- examination,
21. {{ URDU TEXT }} ' Statement of account ' Therefore, appellants were not the Labour of consultant.
20. The last attempt of learned counsel for respondent that power of attorney is bogus and not entertainable in such proceedings which is not sustainable for the reason the learned Labour Court in impugned Order/Judgment declared the same executed on valid stamp paper having genuine signatures of the parties by giving power to the attorney which is also attested. Similarly on its round of appeal before this Tribunal this point was also rejected with the following observations, "Learned counsel objected that there is no authority letter from the side of rest of appellants as such present appeal is defective but this objection was also denied by counsel of appellants and stated that there is authority letter with the appellant respondent Muhiudin as such this objection also having no any weight to change the position."
Against both above mentioned orders no remedy has been availed by the respondent which attains its finality.
21. In view of above substantive laws, citations and discussion in respect of contract Labours the respondent could not established non-relationship of the appellants with the respondent. Further in view of material discussed herein above the appellants were terminated illegally. Consequently both the appeals are allowed impugned Judgment/Order dated 25-8-2011 is set aside with the directions that the appellants be reinstated by means of permanent appointment letters.
22. The copy of order along with original record of trial court be sent to trial court. Case after completion be consigned to record.