Irfan Saadat Khan, J.--The facts and law points that arise for consideration in both the petitions are common; hence, the same have been heard and decided by this common judgment.
2. C.P. No, D-64 of 1998 was admitted for regular hearing on 18.9.1998 for considering the following questions of law:-- That when the Act, namely Employees Old-Age Benefit (EOB) in Section 35 provides for appeal to be heard by the Board, had the Board authority to make provision of such appeal being heard by a Committee of one or two members?
2) That whether contribution is payable by the employer in respect of employees employed by an independent contractor?"
3. Briefly stated the facts of C.P. No, D-64 of 1998 are that the petitioner-company is a nationalized unit being controlled and managed by the Ministry of Production, Government of Pakistan. It is the claim of the petitioner that they were promptly and regularly paying to the Employees' Old-Age Benefits Institution (EOBI) to their satisfaction due contributions and had never defaulted in the payment. Apart from having employees of their own, who used to carry out certain jobs in the organization of the petitioner, the petitioner used to enter into agreement with the contractors for providing staff to carry out certain jobs in the establishment. The respondents were of the view that since the contractual labourers appointed through contractors fall under the definition of "employee", the petitioners were liable to make contributions in respect of those employees also.
Several correspondence took place between the petitioner and the respondents in this regard, however, the respondents vide demand notice dated 16th May 1991 raised a demand of Rs, 64,80,000/- against the petitioner for short contribution of EOB during the period July 1986 to December 1990. Being aggrieved with the said show-cause notice an appeal was filed by the petitioner under Section 33 of the Employees' Old-Age Benefits Act, 1976 (EOB Act) bearing Petition No, 53-SZ/91-92 and the Adjudication Authority of the EOBI, vide order dated 27.4.1992 dismissed the said petition. Being aggrieved with the said decision an appeal under Section 35 of the EOB Act was preferred before the Board of Trustees of EOB, Karachi, and this appeal too was dismissed by the said Board, vide order dated 22.11.1997. It is against this decision that the present petition has been filed which was admitted for regular hearing to consider the questions as enumerated above.
4. The facts relating to C.P. No, D-79 of 1998 are that the petitioner i.e, Sindh Abadgar's Sugar Mill, situated in Deenpur, Taluka and District Tando Muhammad Khan, after receipt of notice of determination of dues dated 17.01.1993, demand and show-cause notice dated 19.05.1993 for Rs, 2,28,819/-, including statutory increase, for the period from January, 1991 to December, 1992 and notice of demand under Section 81 of Land Revenue Act, 1967, dated 06.06.1993 preferred petition Bearing No 72 of 1993 before the Adjudicating Authority of the EOBI under Section 33 of the EOB Act, which was dismissed vide decision dated 08.08.1994. Being aggrieved, the petitioner preferred an appeal under Section 35 of EOB Act before the Board of Trustees EOB, Karachi, which was also dismissed, vide decision dated 03.01.1998. It is against this decision that the said petition has been filed, which was admitted for regular hearing on 18.01.2000 as C.P. No, D-64 of 1998 involving the same question had already been admitted for regular hearing.
5. Mr. S.M. Iqbal Advocate has appeared on behalf of the petitioners and submitted that the action of the respondents is without lawful authority. The learned counsel firstly submitted that perusal of the EOB Act indicates that the persons hired on contract basis, through a contractor, for performing certain jobs do not fall under the definition "employee" of the said Act as at no point of time such persons were the employees of the petitioners as they were the employees of the contractors with whom the petitioners had entered into an agreement and the payment in this behalf has been made directly to the contractors and not to those persons. Hence, at the very outset the learned counsel submitted that those persons, in fact, were the employees of those contractors and not that of the petitioners, therefore, contributions, if any, should, have been demanded by the respondents from the contractors, rather than claiming the same from the petitioners. The learned counsel submitted that neither appointment orders/letters have been issued by the petitioners to those persons nor those persons were on the pay-roll of the petitioners, hence the demand of the contribution was uncalled for.
6. The learned counsel further submitted that at no point of time the contractors were required by the respondents to pay the contribution as the persons who had worked at the site of the petitioners were, in fact, the employees of the contractors, which also prove mala fide on the part of respondents. The learned counsel also submitted that as per Section 35 of the EOB Act an appeal is to be preferred before the Board of Trustees and that appeal is to be heard by the Board itself having minimum quorum of eight trustees whereas a perusal of the order passed by the Board dated 22.11.1997, would reveal that the appeal was heard by two members only hence the impugned order was coram-non-judice and is liable to be whittle down. The learned counsel in this regard read out the provisions of Sections 18 and 35 of the EOB Act and Rule 11 of EOB (Board of Trustees) Rules 1977. The learned counsel submitted that since the respondents had firstly not adjudicated upon the matter in accordance with law and secondly failed to justify their claim of contribution of EOB from the petitioners, these petitions may be allowed and the demand raised by the respondents may be vacated. In support of his above contention, the learned counsel has placed, reliance on the following decisions:-- 1) Pakistan Burma Shell Limited vs. Employees' Old-Age Benefits Institution and others (2004 PLC 63)
2) Bank Al-Falah Limited and others vs. Federation of Pakistan (2014 PLC 40)
3) Pakistan Aluminium and Industrial Works (Pvt.) Ltd. vs. The Excise And Taxation Officer and another (1991 PLC 926)
4) Mumtaz Ahmed Silk Mills Ltd. vs. Sindh Employees Social Security Institution and another (NLR 1988 Labour 10).
7. Ms. Masooda Siraj Advocate appeared on behalf of the respondents and vehemently refuted the arguments of learned counsel for the petitioners. She submitted that so far the issue of quorum of the Board is concerned under Section 44 of the EOB Act the Federal Government is empowered to make rules to carry out the purposes of the EOB Act, which may also provide power and functions of the Board of Trustees and manner and procedure for disposal of appeals. She then invited our attention to Section 18(v) of the EOB Rules, 1977 and submitted that for the purpose of deciding the appeals of more, than Rs, 20,Q0,000/- quorum, would be that of two members whereas in the cases where the dispute is that of less than Rs, 20,00,000/- one members, i.e, Chairman is empowered to decide the appeals. She submitted that perusal of the order passed by the Board would reveal that the same was passed by two members hence no illegality was committed by the Board in deciding the appeal filed by the petitioners. She, therefore, submitted that the answer to Question No, 1 may be given against the petitioners and in favour of the respondents.
8. The learned counsel for the respondent then read out the definition of the term "employee" as used in the EOB Act and invited our attention to Sections 8, 11, 12, 33, 35, 43, 44 and 45 of the said Act.
She stated that as per the definition of "employee" even if a person is appointed through any other person or through a contractor, as the case may be, the said person would fall under the definition of "employee" and hence the establishment was under legal obligation to make contribution on behalf of those persons also. She further stated that even if for arguments sake it is assumed that the persons working in the establishment of the petitioners were not having appointment letters but were admittedly appointed through other person i.e, contractors, they would fall under the definition of the term "employee" and thus it was incumbent upon the petitioners to have made the contributions on their behalf, which they had miserably failed to do on the pretext that those persons were not their employees and hence they were not liable for making any contribution in respect of those persons. She stated that full details in this regard were obtained from the petitioners and thereafter assessm ent of the amount payable by them was worked out by the department. She further stated that the term "<b>through any other person"</b> has already been dilated upon in a number of judgments given either by this Court or the Hon'ble Supreme Court of Pakistan and hence the stance now taken by the petitioners is no more available to them and the answer to the Question No, 2 may also be given in favour of the respondents and against the petitioners. In support of her above contentions the learned counsel has placed reliance on the following decisions:-- 1) SESSI vs. Consolidated Sugar Mills Limited (1989 SCMR 888).
2) SESSI vs. Employees, Premier Tobacco Industries Limited (1990 PLC 06).
3) SESSI vs. Modern Textile Mills Limited (1999 PLC 210).
4) Okara Flour & General Mills vs. PESSI (1993 PLC 984).
5) MCB vs. Muhammad Nasim (2001 SCMR 1191).
6) M.A. Baqi Khan vs. NIRC (1993 NLR 146).
9. M/s. Asim Mansoor Khan, DAG, and Dilawar Hussain, Standing Counsel, have .appeared on behalf of the Federation of Pakistan on Court Notice. They have supported the arguments of Ms. Masooda Siraj and have relied upon the following decisions:-- 1) Taj Din vs. Punjab Labour Court (PLD 1976 Lahore 1169)
2) Quadari Brothers Foundry & Workshop vs. Sindh Employees Social Security Institution ( PLD 1977 Karachi 112)
3) Sindh Employees Social Security Institution us. Philips Electrical Industry of Pakistan (PLD 1977 Karachi 451)
4) Pakistan Tobacco Company Limited vs. Punjab Employees Social Security, Institution (PLD 1978 Lahore 704)
5) Sindh Employees Social Security Institution vs. Pakistan National Produce Company Limited (1989 PLC 81)
6) Sindh Employees Social Security Institution vs. Consolidated Sugar Mills Limited (1989 SCMR 888)
7) Sindh Employees Social Security Institution vs. Premier Tobacco Ind. Limited (1990 PLC 6)
8) Okara Flour & General Mills vs. Punjab Employees Social Security Institution (1993 PLC 984)
9) Sindh Employees Social Security Institution vs. Modern Textile Mills Limited (1999 PLC 210)
10) Cowesjee & Sons vs. Employees Old-Age Benefits Institution [2001 PLC 485 (Supreme Court)].
10. We have heard all the learned counsel at considerable length and have also perused the record and the decisions relied upon by them.
11. Before proceeding any further we deem it appropriate to reproduce herein below the relevant provisions of the law, as relied upon by the learned counsel: The Employees Old-Age Benefits Act, 1976.
1. Short title, extent, commencement and application.--(1) This Act may be called the Employees'
Old-Age Benefits Act, 1976.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once. 1(4) It applies to every industry or establishment-
(i) Wherein 2[five] or more persons are employed by the employer directly or through any other person, whether on behalf of himself or any other person, or were so employed on any day, during the preceding twelve months, and shall continue to apply to every such industry or establishment even if the number of persons employed therein is, at any time after this Act becomes applicable to it, reduced to less than [five] 21.1
2. Definitions. --In this Act, unless the context otherwise: requires,-- 11(a).................................................... ll(aa)] "board" means the Board of Trustees constituted under Section 7;
(b) "contribution" means the sum, of money payable- to the Institution by the employer 3[or by the Federal Government}4 in respect of an insured person under the provisions of the Act;
(bb) "employee" means any person employed, whether directly or through any other person, for wages or otherwise, to do any skilled or unskilled, supervisory, clerical, manual or other work in, or in connection with the affairs of, an industry or establishment under a contract of service or apprenticeship, whether written or oral express or implied, and includes such person when laid off: Provided' that a director. of a limited company or of a corporation set up under. any law shall not be treated as an employee under this Act, irrespective of his wages or emoluments; 4[(c) "employer", in relation to an industry or establishment, means any person who employs, either directly or through any other person, any employee, and includes-- .
(i) in the case of an individual, an heir, successor, administrator or assign;
(ii) a person who has ultimate control over the affairs of an industry or establishment, or where the affairs of an industry or establishment are entrusted to any other person (whether called a managing agent, managing director, manager, superintendent, secretary or by any other name), such other person ;and)
7. Board of Trustees.--(1) The Board of Trustees shall consist of the following members to be appointed2 by the Federal Government, by notification, namely:-
(a) the Secretary or Additional Secretary in the Labour Division, who shall also be the "[President] of the Board of Trustees;
(b) 4[two ] persons to represent the Federal Government, one each from, the Ministries of Finance, and Labour;
(c) four persons to represent the Provincial Governments, one to be nominated by each of the Provincial Governments;
(d) four persons to represent employers;
(e) four persons to represent insured persons; and
(f) 'lone] persons to represent the Institution.
(2) Members to be appointed under clauses (d) and (e) of subsection (1) shall respectively be chosen from a 1st of names submitted in the prescribed, manner by the organisations of employers and employees recognized by the Federal Government for that purpose: Provided that, pending the making of rules in this behalf, the first members to be so appointed shall be chosen from such persons as the Federal Government may deem fit.
8. Powers and Functions of the Board of Trustees. --In addition to the powers conferred on, and the functions entrusted to it, by the other provision of this Act or by the rules, the Board shall have powers--
(a) to approve the budget estimates, the audited accounts and the annual report of the Institution for submission to the Federal Government in accordance with the provisions of this Act; 2[***]
(b) to call for any information or direct any research to be made for the furtherance of the objects of the Act 3t; and] '1(c) to co-opt any other technical person by name as member on the Board for a specific purpose and for such limited period' as decided by the Board.]
33. Decisions on complaints questions and disputes.--If any complaint is received or any question or dispute arises as to--
(a) whether a person is an insured person within the meaning of this Act;
(b) the amount of wages of an insured person for the purposes of this Act;
(c) the amount of contribution payable by an employer in respect of an insured person;
(d) the person who is the employer in respect of an insured person; Re) entitlement to any benefit under this Act or as to the amount and duration thereof; I
(ee) registration of industry or establishment; or]
(f) any other matter in respect of any contribution or any [benefit I referred to in clause (e), or dues payable or recoverable, under this Act relating to contributions or the aforesaid 2[benefits]; the matter shall be decided by the Institution, in such manner, and within such time, as the regulations may provide and the Institution shall notify its decision to the person concerned in writing, stating therein the reason for its decision.
35. Appeal to Board.--Subject to rules, a person aggrieved by a decision of the Institution under Section 33 or on a review under Section 34, may appeal to the Board.
43. Delegation of Powers.--The Board may direct that all or any of its powers and functions may, in relation to such matters and subject to such conditions, if any, as may be specified, be also exercisable by any officer or authority subordinate to the Institution.
44.Power to make rules.--(1) The Federal Government may, subject to the condition of previous publication, by notification in the official Gazette, make rules to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules, may provide for all or any of the following matters, namely:--
(i) the tenure of office of members of the Board, other than the 1[President], and other terms and conditions of appointment of the members of the Board and the manner in which the Board shall conduct its business, including the number of members required to form a quorum at the meetings thereof;
(ii) the manner in which names of persons from whom member of the Board may be appointed shall be submitted by organizations of employers and employees recognized by the Federal Government for that purpose;
(iii) powers and functions of the Board;
(iv) fees and [benefits] of the members of the Board;
(v) times and rates at which, and conditions subject to which, contributions shall be payable; (vi)percentage or amount by which contributions in arrears may be increased under Section 13;
(vii) investment of surplus moneys, realisation investments and reinvestment of proceeds;.
(viii) terms at which and the manner in which the budget of the Institution shall be prepared and submitted to the Federal Government;
(ix) the forms and manner in which the Institution shall keep accounts of its income and expenditure and of is assets and liabilities:
(x) the times at which, and the manner in which, the accounts of the Institution shall be audited;
(xi) the matters which the annual report of Institution shall cover;
(xii) the times in which claims for [a benefit] shall be made;
(xiii) the manner and procedure for disposal of appeals by the Board; and
(xiv) any other matter which is required to be or may be prescribed.
45. Power to make regulations.--The Board may subject to condition of previous publication, by notification in the official Gazette, make regulations not inconsistent with the provisions of this Act or the rules.
(2) In particular, and without prejudice, to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:--
(i) the time and places at which meetings of the Board shall held;
(ii) the manner in which daily wages shall be calculated for the purpose of determining the contribution payable; (iii)determination of wages for computation of contributions where the mode of payment of remuneration, in cash or kind, makes such computation difficult.
(iv)records to be kept and returns to be submitted by employers, time at which and the form in which such returns are to be submitted, and particulars relating to the insured persons to be stated in such returns and the manner and from for registration of employers and insured persons;
(v) the manner in which any claim of the Institution for unpaid contributions may be extinguished;
(vi) powers and duties of internal auditors; (vii)*****]
(viii) the term and manner in which claims for 2[a benefit] shall be preferred, and the documents, information and evidence which, shall accompany such claims;
(ix) the manner in which and the time and places at which payment in respect of 2[a benefit] shall be made;
(x) the manner in which and the time within which complaints, questions and disputes shall be decided;
(xi) the circumstances and the manner in which, on new facts coming to light, the Institution may review decisions;
(xii) the method of payment of contributions and liability thereof;
(xiii) the manner in which invalidity shall be assessed and the procedure thereof;
(xiv) the manner in which proof of age shall be furnished for the purposes of this Act;
(xv) the manner in which the services of the Institution 'shall, be organised; and
(xvi) any other matter not provided for in this Act or rules and necessary to give effect to the provisions of this Act.
The Employees' Old-Age Benefits (Board of Trustees) Rules. 1977:
11. Quorum.--No business shall be transacted at a meeting, whether ordinary or emergent, unless at least 2[seven] shall be official members: Provided that if at any meeting a quorum is not present, the '[President] may adjourn the meeting to a later date informing the members present and notifying other members that the business of the adjourned meeting will be disposed of, even irrespective of there being a quorum, and it shall thereupon be lawful to dispose of the business at such adjourned meeting irrespective, of the number of members attending.
18. Appeals to Board.--the Board may entertain appeals from aggrieved persons under Section 35 subject to the following requirements, namely:- (i).....................
(ii)..........................
(iii)..............................
(iv).....................................
(v) The Board may, instead of hearing 2[appeals] itself, appoint a committee of the Board to hear and decide 2[appeals] on its behalf, and any decision of the Committee so given and communicated to the aggrieved person shall be as fully effective and binding as if given by the Board itself.
12. We will first take up the issue with regard to whether the Board comprising of one or two members was authorized to hear the appeals. Perusal of Section 35 of the EOB Act clearly reveals that a person aggrieved by a decision of the Institution may appeal to the Board under this provision of the law. The term "Board" has been defined under Section 2(aa), supra, according to which Board means "the Board of Trustees as constituted under Section 7 of the said Act. "As per Section 7, quoted supra, at the time the petition was filed Board of Trustees consisted of nineteen members, however, in 2005 the number of persons in, clause (b) and (f) of the said section were reduced from four to two and from two to one, respectively, meaning thereby that at present the Board consists of sixteen members only. Now the question is whether the Board has the authority under the law to hear the appeals comprising of two members only. The provisions of Section 8, supra, clearly enunciates the powers and functions of the Board of Trustees, according to which, apart from the powers conferred on the Board and the functions entrusted to it through the other provisions of the Act, the Board also have the powers, as specifically mentioned in the said section.
13. Perusal of Section 44 of the EOB Act reveals that the Federal Government has the powers to make rules to carry out the purposes of this Act and as per the said section the Federal Government has the authority to make rules so far as the powers and functions of the. Board is concerned. In the said Section it has also been provided, as per clause (xiii) of its sub-section (2), to regulate the manner and procedure for disposal of appeals by the Board and as per Section 18(v) of the EOB (Board of Trustees) Rules, 1977, it has categorically been mentioned that so far as the hearing of the appeals is concerned, the Board has the authority that instead of hearing the appeal itself appoint a Committee of the Board to hear and decide the appeals on its behalf and the said decision of the Committee has to be considered that of Board itself. It is seen from the record that the Board for the purposes of deciding the appeals has categorically mentioned that so far as the appeals involving a dispute of more than Rs, 20 lac is concerned the quorum would be that of two members and for less than the amount of Rs, 20 lac the Appellate Board would comprise of one member only i.e, Chairman to decide the appeals.
14. From the above discussion it is clear that for deciding the appeals in respect of disputes of more than Rs, 20 lac the quorum would be that of two members comprising of Chairman and any other member, who are competent to decide the disputes. In the present case it is evident from the order dated 22.11.1997 that the same has been passed by a Board comprising of Chairman and a member, hence, in our view, the quorum, so far as the hearing of the appeal is concerned,. appears to be in order and no illegality in this behalf has been found. We, therefore, reply the answer of Question No, 1 in favour of the respondents and against the petitioners.
15.So far as the second question is concerned, we would like to reproduce herein below the relevant portions of some of the decisions cited before us: NESTLE MILK PAK LIMITED vs. BOARD OF TRUSTEES, EOBI KARACHI and 2 other (2005 PLC 19)
Learned counsel, however, has been fair to point out that this Court has already held that "employees even on contract are employees under Section 2(bb) of the Employees Old Age Benefits Act, 1976 in a judgment reported in Crescent Textile, Mills Limited through Manager Accounts, Sadiq Saleem v. Board of Trustees, Employees Old Age Benefits Institution and 2 others (2003 PLC 41) wherein, relying on the judgment of the august Supreme Court of Pakistan, at page 46, it has been held as under: "It has already been settled that the employees on the contract are employed in the definition of Section 2(bb) of the Act, hence the petitioners were bound to deposit the amount before the Respondent No, 3 and even otherwise petitioner has filed the evasive reply of the show-cause notice for the payment of the dues issued by the Respondent No, 3 and no specific stand has been taken throughout the proceedings before filing a petition under Section 33 of the Employees Old Age Benefits Act, 1976 challenging dues, directed to be paid about the employees on contract and first time this, question had been raised before the Respondent No, 2 and there has not been mentioned a detail of the employees who are employees of the contractor and the distinction as drawn in 1989 PLC 434 has also not been mentioned that these workers do not fall within the definition of workers for the deposit of the dues by the petitioner "
7. For what has been discussed above, I do not find any merit in this petition, which is hereby dismissed with no orders as to costs.
ATTOCK CEMENT PAKISTAN COMPANY vs. THE BOARD OF TRUSTEES, EMPLOYEES' OLD-AGE BENEFITS INSTITUTION and others (2004 PLC 106)
In the case of Messrs Sindh Employees Social Security Institution v. Consolidated Sugar Mills Limited (supra) the Supreme Court, while examining the question as to whether the employees/laborers employed by a Contractor for purposes of executing the work on behalf of the owners/establishment/industry, on the premises of the industry/ establishment would be covered by the definition of term "employee' as defined in the West Pakistan Employees Social Security Ordinance, 1965 (hereinafter referred to as the Ordinance of 1965) observed that: "The definition of the "employee as appearing it Section 2 (viii) of the Ordinance of 1965 was very wide and would encompass within its workers/laborers employed of engaged 'through' a Contractor."
It was further held that:-- "The owner of the industry/establishment would be under an obligation to contribute to the Social Security Funds for such employees."
In the case of Messrs Crescent Textile Mills Limited v. Board of Trustees, Employees' Old-Age Benefits Institution (supra) the High Court, of Lahore while examining this issue by placing reliance on the case of Messrs Sindh Employees Social Security Institution v. Consolidated Sugar Mills Limited, (supra) held the workers/employees/ employed/engaged by Contractors as worker in the industry in connection with the affairs of the industry/establishment to be the employees as defined in Section 2(bb) of the EOB Act further holding the industry/ establishment to be responsible/liable for making payment of the contribution on their behalf in the Old-Age Employees Benefit Fund.
Upon the above discussion, this petition was found to be without any substance. By a short order dated 27-11-2002 it was dismissed in limine alongwith the miscellaneous application pending therein for reasons to be recorded later on. These are the reasons for the said dismissal.
HASHOO STEEL INDUSTRIES LIMITED vs. BOARD OF TRUSTEES. EOBI and others (2004 PLC 121).
6. .................On the other hand a person employed through a contractor is covered by the defining provisions of the expressions "employee" and "employer" under Sections 2(bb) and 2(c) of the E.O.B.
Act and obviously the charging Section 9 would apply to such persons.
SINDH EMPLOYEES SOCIAL SECURITY INSTITUTION vs. CONSOLIDATED SUGAR MILLS LIMITED (1989 SCMR 888).
Reading these provisions together the conclusion is inescapable that the owner of the industry is liable for employees engaged for his industry even through the contractor. The contention that the Contractor should be taken to be employer and not the owner, as expressed in the agreements with the contractors and made liable for the contribution, cuts, across the scheme of the statute, where it was intended, by law to make the Contractor, the employer, the statute, made provision for it directly [State undertakings-Section 2(9)] or indirectly (Section 20(8) and Section 20(9)]. By construction or interpretation the Courts were to introduce such contractors, also as employers on the basis of contracts or otherwise, then the Court would be rewriting the law itself. Such an interpretation being in derogation of the express provision that "in every other case" it is the owner who is to be the employer.
In the circumstances, the owner respondent is obliged to contribute to the Social Security Fund for employees engaged through the contractor.
SINDH EMPLOYEES' SOCIAL SECURITY INSTITUTE vs. PAKISTAN NATIONAL PRODUCE CO. LTD. (1989 PLC 81)
15. In view of the aforesaid discussion, I am of the opinion that the respondent is liable to pay the contribution etc. under the Ordinance for the workers employed by its contractor to work in or in connection with the establishment/industry of Respondent No, 2 SINDH EMPLOYEES' SOCIAL SECURITY INSTITUTION vs. EMPLOYER. PREMIER TOBACCO INDUSTRIES LTD. (1990 PLC 6)
Reverting to the contention of Mr. Sarwana that the employer of the respondent is liable to pay contribution for employees engaged through contractor. This question was considered by me in the un-reported judgment dated 26-4-1989 (MA. 50 of 1986 Sindh Employees' Social Security Institution v. Burshane Pakistan Limited and M.A. 19 of 1988, Sindh Employees' Social Security Institution v. M/s. Central Cotton Mills Ltd.) in which I have come to the conclusion after giving cogent reasons which are fully supported by the decision of Supreme Court in Civil Appeal No, 49 of 1988 of Social Security Institution v. Consolidated Sugar Mills, discussed by me in the said judgment that the employer of the respondent is liable to pay contribution for employees engaged for establishment through the contractors. I hold that the employer of the respondent establishment is liable to pay contribution on the wages of persons engaged by him directly or through contractors at such rate and subject to such contributions as may be prescribed.
I would accept this appeal and set aside the decision dated 5.10.1987 of the Social Security Court and restore the order of the Commissioner. In the circumstances of the case, the parties shall bear their own costs.
SINDH EMPLOYEES SOCIAL SECURITY, KARACHI vs. MODERN TEXTILE MILLS LTD, KARACHI (1999 PLC 210).
In view of aforesaid reasonings and circumstances the appellants are liable under the law to make contribution to the institution/respondents for the employees engaged through the contractors and thereby find no force in the contention of learned counsel for the appellants.
Messrs CAWASJEE AND SONS vs. BOARD OF TRUSTEES, E.O.B.I. and another (2001 PLC 485)
"Having heard learned counsel at quite some, length and analysed the impugned judgment we are of the considered view that by dismissing the instant petition learned High Court neither acted arbitrary nor in violation of the settled principles of law. In fact the question of law has been set at rest by this Court in Lahore Race Club's case (supra) and furnishes a complete answer to the points raised on behalf of the petitioners Para 17 of the judgment being relevant and attracted in the circumstances of the case may be reproduced for the sake of advantage as under: "17. In discovering whether any amount payable as wages is liable to contribution first is to be seen whether the employee falls within the 'definition of Section 2-bb and thereafter liability of contribution should be determined in accordance with Section 9 read with other provisions of the Act. Here, the persons in respect of whom contribution is demanded, have been rightly found to be employees in terms of Section 2-bb of the Act by the Court below. The mere fact that the disputed employees were working on part-time basis could not be a valid reason for excluding them from the, category of employees as envisaged by Section 2-bb of the Act. The appellant is, therefore, not absolved from the liability, to pay contribution under the Act, as demanded by the Institution.
8. Resultant, petitions are devoid of any merit and hereby dismissed.
OKARA FLOUR AND GENERAL MILLS, OKARA vs. THE PUNJAB EMPLOYEES' SOCIAL SECURITY INSTITUTION, LAHORE and another (1993 PLC 984)
7. The Pallaydars employed through the contractor whether for stitching the bags or for loading and unloading the filled bags certainly performed duties in connection with the business of the appellant-Mills. Their welfare and security is the concern of appellant and he is liable under the law to pay Social Security contribution for the workers/Pallaydars employed through the private contractor".
From the decision quoted supra, it is evident that, the persons hired by the petitioners, though through a contractor, falls squarely under the definition of term "employee" as provided under Section 2(bb) of the EOB Act and the petitioners are liable to pay the contribution of those persons to EOBI as it is their liability to make payment of the contributions in respect of the persons employed directly or through any independent persons i.e, contractors.
16.Thermometers relied upon by the learned counsel for the parties reported4as 2001 SCMR 1191, PLD 1977 Kar. 451, PLD 1978 Lah. 704, PLD 1977 Kar 112, PLD 1977 Kar. 1449, PLD 1976 Lah. 1169, NLR 1988 Labour 10, NLR 1993 Labour 146, NLR 1988 TD 21, 2014 PLC 40, 1991 PLC 926, 2004 PLC 63 are found to be either distinguishable or not relevant with the issue involved in the instant petition.
17.We, therefore, so far as the second question is concerned, hold that the petitioners being employers are liable to make the contributions to the EOBI in respect of the persons employed either directly or through an independent contractor and answer this question also in favour of the respondents and against the petitioners.
18.In view of what has been discussed above, both the petitions are dismissed with no order as to cost.