1. This petition under Article 199 of the Constitution is directed against the order dated 16th December, 1979 passed by the Presiding Officer. III Sind Labour Court No. 3, Karachi, respondent 1, in Appeal No. 17/1979 filed under section 17 of Payment of Wages Act, 1936 (hereinafter called the 1936 Act) by Ali Hassan son of Abdul Ghaffar, respondent 3.
2. The facts giving rise to this petition briefly stated, are that respondent 3 filed an application under section 15 of the 1936 Act against F. A. Zuberi, Managing Director, Merck Sharp & Dohme of Pakistan Ltd., Karachi (hereinafter for the sake of convenience called the Company) before the Authority under the Payment of Wages- Act, respondent 2. Claiming Rs. 10,165.95 on account of wrongful deduction from wages and delay. Ing payment of wages and Rs. 10 as compensation. An objection was raised by the petitioner on the maintainability of the application on the ground that the same was filed against a wrong person as F.A. Zuberi was neither the employer of respondent No. 3 nor was he a person respon--sible under section 3 of the 1936 Act for payment of wages to him. It was claimed that the applicant was an employee of the Canteen Committee that was established under a Memorandum of Settlement between the Company and Employees' Union and he works in the Canteen under the supervision and control of the Canteen Committee. I shall refer to the relevant clause of this memorandum a little later.
3. Respondent 2 by the order dated 9th October, 1979, upheld the objec--tion and dismissed the application stating that the same as framed was not maintainable. Aggrieved by the order respondent 3 filed an appeal under section 17 of the 1936 Act before respondent 1 who allowed the same holding that respondent 3 was the employee of the Company. Before him both the Company and respondent 3 placed reliance on clause 17 of the settlement arrived at between the parties, which I may reproduce immediately herein--below for it is the interpretation of this clause on which the order of respondent 1 rests. The clause reads : "17. Canteen. -It is agreed that the present arrangements to run the factory canteen with the help of the contractors will be changed in that-
(a) the company will now give a fixed subsidy of Rs. 800 per month for the lunches to a canteen committee composed of the repre--sentatives of the workers and the management headed by a Manager. The said canteen committee will be responsible for the purchase of raw' material for the lunches and hot drinks and for the smooth operation of the canteen.
(b) the expenses on the lunches in ` addition to the fixed monthly subsidy of Rs. 800 will be equally distributed amongst the factory employees availing the lunch facilities and paid by them accordingly.
(c) the canteen committee will also be responsible for the purchase of raw material, preparation and service of tile loot drinks (coffer and tea) to the factory staff. The raw material cost of the coffee and tea will be paid by the Company.
(d) the members of the canteen committee including the Manager will be nominated by the management and the Union. The canteen servants will be employed by and work under the direct supervision and control of the canteen committee. However the salaries of the canteen servants (employed by the canteen committee) will be reimbursed by the company to the Canteen committee."
4. Interpreting this clause respondent 1 reasoned that since the salaries of the canteen servants were to be paid by the Company, respondent 3 was, therefore, the employee of the Company. The relevant observa--tions of respondent 1 appear at page 3 of the impugned order and read as follows :- "According to clause 17 (a) the Canteen Committee was to be com--posed of the Representatives of the workers and the management, headed by a Manager. According to clause 17 (d) the members of the Canteen Committee, including the Manager, were to be nominat--ed by the management and Union. According to this very clause the salaries of the Canteen Servants (employed by the Canteen Com--mittee) were to be reimbursed by the Company to the Canteen Committee. The Canteen Servants were not exclusively appointed by the Union of the workers but they were appointed by the Can--teen Committee which include the members of the management also. Besides this, it has been specifically stipulated in clause 17(d) of the settlement that the salaries of Canteen Servants were to be paid by the company. This being the position, it is clear that the appel--lant was a servant in the Company of the respondent No. 1. There--fore, the respondent No. I is responsible for the outstanding dues of the appellant, if any. The learned Authority has failed to appreciate the aforesaid clause 17 and thereby reached to a wrong conclusion."
5. Aggrieved by the aforesaid .Order the petitioner has filed this constitu--tion petition.
6. I have heard Mr. Latif-ur-Rehman's Sarwari learned counsel for the petitioner and Mr. Syed Safdar Hussain learned counsel for respondent 3. The other respondents are not contesting this petition.
7. Mr. Latif-ur-Rehman's Sarwari has raised the following grounds in support of this petition:-
(1) The employer of the petitioner was the Canteen Committee and not the Company or the petitioner.
(2) The order of respondent 1 that respondent 3 was the employee of the Company is based on misreading of the evidence.
(3) The appeal under section 17 of the 1936 Act filed by respondent 3 was not maintainable.
8. Taking up the first ground it may be stated that it is the case of both the parties that respondent 3 is employed and works in the canteen of the factory owned by the Company. Now, under section 3 of the 1936 Act it is the employer or in the case of a factory it is the person who has been named as manager of the factory under section 9, subsection (1), clause (e) of the Factories Act, 1934 (hereinafter called the 1934 Act) who is respon--sible for the payment of wages. However, it is further provided in section 19 of the 1936 Act that when the authority referred in section 15 of the 1936 Act or the Court referred to in section 17 (ibid) is unable to recover from any person (other than employer) responsible under section 3 of the 1936 Act for the payment of the wages any amount directed by the said authority under section 15 or under section 17 to be paid by such person, the authority shall recover the amount from the employer of the employed .Person concerned. It therefore, follows that respondent 3 could recover the arrears of wages from either the manager of the factory if the Company was his employer. Therefore, the real question for determination is whether Canteen Committee was the employer of respondent 3 or the Company.
9. This being a question of fact the finding thereon by respondent would be conclusive provided it is not based on misreading of evidence or non-consideration of .Material evidence or is otherwise not perverse. Therefore, this brings me to the second ground urged by the learned counsel for the petitioner, namely, the order is based on misreading o evidence.
10. I have already reproduced clause 17 of the Settlement and also the observations and the conclusion reached by respondent 1 on the basis thereof. In sub-clause (d) of clause 17 of the Settlement it is clearly pro--vided that the canteen servants will be employed by and will work under the direct supervision and control of the Canteen Committee, though, no f doubt, it is further provided therein that the salaries of the canteen servants employed by the Canteen Committee will be reimbursed by the Company to the Canteen Committee. The above provisions make it absolutely clear that the petitioner was employed by the Canteen Committee and he worked in the canteen under the direct supervision and control of the Canteen Committee. Respondent 1 himself has found that "the can--teen servants were not exclusively appointed by the union of the workers but were appointed by the Canteen Committee which included the members of the management also. "This finding by itself negatived the finding that respondent 3 was the employee of the Company for it is nowhere found that he was employed by the Company or worked under the control or supervi--sion of the Company.
11. Further, the finding of respondent 1 that the salaries of the canteen servants were to be paid by the Company on the basis of provisions of clause 17 (d) is either based on misreading of the evidence or on no evidence, for what is provided in clause 17(d) of the Settlement is that the salaries of the Canteen servants (employed by the Canteen Committee) would be reimbursed by the Company to the Canteen Committee and not that the )company would pay the salary to the employees of the canteen. Payment of salary to an employee and reimbursement of salary paid by another to his employee under a contract or settlement are not one and the same thing and two situations may have vast difference. In clause 17 of the Settlement the company seems to have made its intention quite clear that it has nothing to do with the employees of the Canteen Committee. 1n my view the main consideration to find out whether a person is an employee of one or the other would be as who has employed him, under whose supervision and control he works, who can terminate his employment and of course, who pays his salary. In the present case all these factors point out that respondent 3 is the employee of the Canteen Committee for even in the reimbursement of the salary by the Company to the Canteen Committee it is implied that the Canteen Committee pays the salary to respondent 3 otherwise there would not have been any question of reimbursement. In my opinion merely because the Company agreed under the settlement to reimburse the salary to the Canteen Committee would not make it the employer of respondent 3. 1 therefore, find substance in the ground urged by Mr. Latif-ur-Rehman's Sarwari that the order is based on misreading of evidence.
12. Mr. Latif-ur-Rehman's Sarwari referred to Souvenior Tobacco Co. Ltd. v. Najamuddin and others (PLD 1977 Kar. 250) in which under similar circumstances it was held that the application for payment of wages should have been filed against the Canteen Managing Committee and not against the petitioner in that case. I may here reproduce paragraph 3 of the judgment relied upon by Mr. Latif- ur-Rehman's Sarwari which reads as follows :- '(3) The main contention of the learned counsel for the petitioner is that respondent No. 1 was never employed by the petitioner, According to the Karachi Factories Canteen Rules of 1953 read with the contents of above-mentioned settlement, the affairs of the Can--teen of the petitioner were directly under the control and management of the Canteen Managing Committee and the application for re-instatement should have been filed against the said Committee and not against the petitioner whose participation towards the canteen affairs was only to this extent that they paid a subsidy of Rs. 5,000 per month to the canteen and had two representatives on the panel of the canteen committee to look after the affairs of the canteen. However, the presence of the two representatives did not mean the transfer of the control of the affairs of the canteen to the petitioner. The petitioners participation is to a limited extent and, therefore,. If at all any action was contemplated by the respondent No. 1 it should have been initiated against the Canteen Managing Committee which was solely responsible for the management of the canteen. And which had two representatives of the .,,`petitioner and two members from amongst the employees on its panel.
13. The letter of termination of services of respondent No. 1 had also been issued by the Canteen Managing Committee under the signatures of its Chairman and not by the petitioner. The conten-- tions raised by the learned counsel have sufficient force because the perusal of the Karachi Factories Canteen Rules of 1953 as well as the Memo of Agreement dated 27th August, 1974 shows that the Canteen Managing Committee was exclusively responsible for the control of the affairs of the canteen. This Committee was formed under the aforesaid rules and, therefore, it was validly constituted committee. The services of the respondent No. 1 had been terminated by this Committee vide letter dated 1st September, 1974. It could not, therefore,' be held by the Junior Labour Court that the respondent No. 1 was employee of the petitioner."
14. Mr. Syed Safdar Hussain attempted to distinguish this case on the ground that in that case only subsidy of Rs. 5,000 per month was to be paid to the Canteen Managing Committee by the Company while in the present case not only a subsidy of Rs. 800 per month was to be paid by the Company to the Canteen Committee but also the Canteen Committee was to be reimbursed for the salaries paid to the workmen or the employees employed in the canteen by the Canteen Committee. In my view the distinction sought to be made is not material for in that case Rs. 5,000 were paid as subsidy and in the present case Rs. 800 per month plus the salary paid by the Canteen Committee to its employees were paid.
15. Mr. Syed Safdar Hussain further submitted that the arrears of wages, etc., would be recovered from the employer as well as the person named in section 3 of the 1936 Act and. In support of his submission he relied upon Motabar and 14 others v. Messrs S. M. Rahman & Co., Quetta and another (1971 PLC 321). He particularly referred to paragraph 13 of the judgment which reads as follows :-- "There is also another aspect of the case to which I have referred an aspect so obvious that I cannot understand how it escaped tile atten--tion of the learned District Judge. As the respondent is being sued under the said Act, the question of his liability has to be determined primarily by reference to its provisions and I repeatedly invited learned counsel to refer me to some provisions of the said Act in support of his argument, but he failed to do so. I have there--fore to point out here that, in view of section 3 read with section 19 of the said Act, an application under section 15 can be filed by workmen, at their option, either against their employer or against the person `responsible to the employer for the supervision and control of the industrial establishment' (clause
(b) of the proviso to section 3) or both. Thus the said Act envisages two types of liability. The liability of the employer is based on his ownership of an industrial establishment (which includes a mine) and is a contractual liability, and section 15 only provides an addi--tional remedy for enforcing this liability. But a person `respon--sible for supervision and control' under clause (b) of the proviso to section 3 may have no financial interest whatsoever in an industrial establishment, and similarly he would not be liable on a contractual basis because even a contract executed by him would be on behalf of his employer, therefore, his liability is a purely statutory liability.'
16. The argument would have substance and the case cited would have been applicable if respondent 3 was employed by the Company and he had sued the Manager of the factory owned by the Company. But it is not so. Here the employer of respondent 3 was the Canteen Committee.
17. In fact he has not even sued the Company or the Manager of the Company. He has sued Mr. F. A.
18. Zuberi, Managing Director of the Company who does not figure as such in any of the relevant provisions of the 1934 Act or the 1936 Act.
19. Taking up the last ground urged by Mr. Sarwari that the appeal filed by respondent 3 was not maintainable as respondent 2 had dismissed the application and had not given any directions which is one of the conditions) mentioned in section 17 of the 1936 Act for maintaining the appeal, however, I am of the view that an appeal would lie not only ;against an order which is for payment of any arrears of wages or for satisfaction of any claim under the 1936 Act, but also where a claim is rejected. If any precedent is needed, reference may be made to C. S. Lal v. Shaikh Badshah and others (AIR 1955 Bom. 75) wherein Chagla, C. J, dealing with a similar question observed at page 76 of the report as follows :- "The contention of Mr. Baptista is that after the delay had been con--doned by the authority, the application was entertained, and the order made by the Authority is a direction under subsection
(3) of section 15 that' the employee is not entitled to wages, and that direction is subject to appeal under section 17. We think Mr. Baptista is right on the authorities that the right of appeal which is conferred is not limited to case where the authority gives a direction to the employer to pay amount to the employed person. The right of appeal would also arise if the authority refused to give a direction in the sense that he holds on the merits of the application that the employee is r-of entitled to any amount, in other words, he dismissed the application of the employee after considering the merits of his case."
20. Therefore, this ground has no substance.
21. I, therefore, for the reasons given above allow this petition and declare that the order passed by respondent 1 is without lawful authority and, therefore, of no legal effect. However, in. The circumstances of the case I leave the, parties to bear their own costs,.