1. The petitioner who is a statutory Corporation established under section 3 of the West Pakistan Employees' Social Security Ordinance, 1965 (W. P. X of 1965) challenges the orders of respondents 4 and 4(a) registering Respondents 1 to 3 (a) as Trade Unions formed by the employees of petitioner as illegal and without jurisdiction. It is the case of the petitioner that attempts were made to have the registration of respondent No. 1 cancelled through application No. 23 of 1974 of respondent No. 4 before the Labour Court No. V, but the same was dismissed as incompetent. The petitioner authorised by the Registrar under section 13 (b) of the Industrial Relations Ordinance, 1969, then filed application No. 6 of 1947 before the Labour Court No. 1, which was dismissed as being barred by the principle of res judicata.
2. The main grounds on which the petition is based are as under
(1) That the Industrial Relations Ordinance, 1969 does not apply to employees of the petitioner Institution, as the Ordinance under section 1 (3), sub-clauses (b) and (f) has expressly been made inapplicable to them.
(2) That even otherwise the petitioner not being an "industry" as defined under section 2 (xiv) of the Industrial Relations Ordinance, 1969, that Ordinance is not applicable to the employees of the petitioner.
3. With regard to. Ground No. 1 sub-clauses (b) and (f ) of subsection (3) of section 1 of the Industrial Relations (Ordinance, 1969 read as under :-- "(3) It shall not apply to any person employed---
(b) in the administration of the State other than those employed as workmen by the Railway,. Posts, Telegraph and Telephone Department ; or ....
(f) by an Establishment maintained for the treatment or care of sick, infirm, destitute as mentally unfit persons , . . . :'.
4. For the purpose of properly appreciating the points raised in ground No. 1 it is necessary to examine the provisions of the Provincial Employees' Social Security Ordinance, 1965 (W. P. Ordinance No. X of 1965) (herein--after referred to as the Ordinance). Mr. S. A. Sarwana, the learned counsel for the petitioner, referring to the aims and objects of the legislation has pointed out that under Article 38 of the Constitution of the Islamic Republic of Pakistan the promotion of social and economic well- being of the people is the avowed function of the State and equitable adjustment of such rights between employers and employees and providing all persons employed in the service of Pakistan or otherwise social security by compulsory social insurance or other means in the object of the enactment of the Ordinance. As the preamble indicates, the scheme of social security provides benefits to certain employee or their dependents in the event of sickness, maternity, employment injury, or death, and for matters ancillary thereto. The Institution has been estab--lished under section 3 of the Ordinance, subsections (1), (2) and (3) which provide that Government shall establish an Institution which shall be a bode corporate baying its own fund to be called tae employees Social Security Fund and may incur out of the said fund such expenditure as may be necessary. Section 4 of the Ordinance provides that the general direction and superintendence of the affairs of the Institution shall vest in a governing body ; and section 5 is to the effect that the governing body shall consist of members to be appointed by the Government. The members shall be appointed from the categories of persons shown in clauses (a) to (e) of section 5 which inter alia includes a person who has been a Judge of the High Court or Senior Officer in the service of Pakistan not below the rank of a Commissioner of a Division or a Secretary to Government and such person shall be the Chairman of the governing body. The members shall also include four persons to represent Government, one each respectively from Departments of Labour, Industry, Health and Finance.
5. Section 17 of the Ordinance provides that the Institution shall appoint medical practitioners and medical boards in such social security areas and in such manner as may be provided by regulations and section 18 provides for appointment of Commissioner and Vice-Commissioner by the Government, and section 19 provides for appointment of officers and staff of the Institution.
6. Section 20 of the Ordinance requires the employer to pay to the Institution as contribution the prescribed percentage of. The wages of employees. Chapter V provides benefits which include service benefits, maternity benefits, death grant, injury benefits, disability pension, survivor's pension, etc. It is the case of the petitioner that it is not a profit-making organisation and it is apparent from the legal provisions already referred to that the Institution is strictly under the control of the Government, although it is a corporate body, and it has been set up for the purposes indicated in the preamble to the Ordinance, in order to carry out, the statutory functions of, the Government.
7. Clause (f) of subsection (3) of section 1 of Industrial Relations Ordinance reproduced above clearly lays own that persons employed by establishments maintained for treatment and care of sick, infirm, destitute as mentally unfit persons, are to be excepted from application of the Industrial Relations Ordinance, 1969. However, since the clause was added by the Industrial Relations (Second Amendment) Ordinance, 1979 it is argued by Mr. Syed Saeed Hassan, the learned counsel for respondent No. 1 that the provision cannot be considered to have retrospective effect. The legal position is that with regard to amending provision, the rule of interpretation is that ordinarily it can be assumed that the Legislature must have intended a change in the law. The point whether employees in a hospital being run on no profit basis are persons to whom the Industrial Relations Ordinance, 196) applies had been dealt with in decisions of Superior Courts and even before the addition of clause (f )aforesaid it had been held in several decisions that the provisions did not apply to them. Reference may be made to the decisions in Holy Family Hospital v. Third Labour Court. Karachi and another (PLD 1979 Kar. 529) and the Medico Education Uplift Fund Association of Seventh Day Association in Pakistan v. Vth Sind Labour Court, Karachi and 2 others (PLD 1978 Kar. 536). The conclusion reached would have been the same and the addition of clause (f) aforesaid by the Legislature is meant to remove any doubts.
8. With regard to ground No. 2, namely, whether the petitioner is not an "industry" section 2 (xiv) of the Industrial Relations Ordinance, 1969 defines "industry" as under :- "Industry" means any business, trade, manufacture, calling, service, employment or occupation."
9. Mr. S. A. Sarwana, the learned counsel for the petitioner, has referred to the decision in Holy Family Hospital v. Third Sind Labour Court, Karachi and another in which it was held that the Holy Family Hospital, being a charitable organisation, the mere fact that certain charges were recovered from patients did not change its basic character of charitable organisation. He has also referred to the Lahore High Court decision in K. G. Old Principal, Christian Technical Training Centre, Gujranwala v.
10. Presiding Officer, Punjab Labour Court Northern Zone and 16 others (PLD 19,76 Lah. 1097) wherein it was inter alia held that enterprise had to be looked into as a whole to find out its raison deter and any part of it which is incidental, ancillary and adjunct part thereof cannot determine the character as a whole. It was further held in that decision that what is incidental to the main purpose of establishment cannot be detracted from its being an educational Institution, and therefore the orders of the Labour Court treating workshop of such Establishment not to be a part of the educational process or education to be an "industry" for purposes of Industrial Relations Ordinance was declared to be without lawful authority. In that decision it was further observed as under ---The upshot of the entire discussion is of the use of expressions "business, trade, manufacture, calling, service employment or occupation" in the definition of the Industrial Relations Ordinance, is not in its ordinary dictionary meaning but in its popular and conventional meaning. In the context of industrial and labour laws these expressions apply to any enterprise which is organised and is systematic dependent specially, if not entirely, on the co-operation between labour and capital and having as its object production, distribution and consump--tion of wealth or the production or provision of material service. The enterprise as a whole has to be looked at to find its raison deter and any part of it which is incidental, ancillary or adjunct cannot determine the character as a whole.--- On the other hand, Mr. Syed Saeed Hassan for respondent No. 1 has referred to the decision of the Lahore High Court in Punjab Employees' Social Security Non-gazette Staff Union, Lyallpur v. Punjab Labour Appellate Tribunal, Lahore and another (PLD 1979 Lah,448) In which it was held that Social Security Institution established under Ordinance X of 1965 was "Industry" as defined in the Industrial Relations Ordinance. It was observed in that decision as under :- "The above narration of facts about the above Institution would show that it is not a business, trade or manufacture. It is, on the other hand, a service as it provides medical care etc. It is in part also an employment, as it is to collect and. Receive contribution from employers and also to receive returns, check employer's books and perform other administrative functions. It also provides benefits other than medical care."
11. Against the aforesaid decision of a learned single Judge of the Lahore High Court the Supreme Court in C. P. S. L. A. No. 515 of 1979 granted leave to appeal. It was observed, while granting the leave, that it was inter alia contended that the provisions of Industrial Relations Ordinance do not apply to the staff of the Social Security Institution who are employed in admini3tra--tion of the State or in connection with the affairs of the Province. Further that the West Pakistan Employees Social Security Institution is practically a Department of Government having been established by the Government by a notification under' section 3 of the West Pakistan Employees' Social Security Ordinance, 1965 to carry out the statutory functions of the Government for implementation of the statutory scheme of social security for providing benefits to certain employees in the event of sickness, maternity, employment injury, death, etc. Hence the employees of the Institution are excluded from the operation of the Industrial Relations Ordinance. It was further contended before the Supreme Court that the Institution did not fall within the definition of the term "industry", therefore also the provision of the Industrial Relations Ordinance were not applicable with the result that the application moved by the respondent Union before the Labour Court was incompetent.
12. The appeal was fixed for hearing in October, 1979. The Petition for leave to appeal was heard on 21- 7-1979 and presumably therefore there could be no reference to the Industrial Relations (Second Amendment) Ordinance, 1979 (Ordinance LI of 1979) which took effect on 20th September, 1979.
13. As mentioned in the order of the Supreme Court granting leave to appeal the fundamental question that the provisions of the Industrial Relations Ordinance do not apply to the staff of the Social Security Institution who are employed in the administration of the State or in connection with the affairs of the Province, though raised before the learned Single Judge of the Lahore High Court was not dealt with by him. With respect for the reasons given above I am also unable to agree that the institution falls within the term "industry": The petition is accordingly accepted and it is hereby declared that the Industrial Relations Ordinance, 1969 has no application to the employees o t? The petitioner and therefore the registration of respondents Nos. 1 to 3a by Respondents 4 and 4a is void ab initio and of no legal effect and the registra--tion which is without effect is canceled. In view of the nature of the controversy no order is made as to costs.