This is a miscellaneous appeal under section ~64 of the Provincial Employees' Social Security Ordinance, 1965 (hereinafter referred to as the said Ordinance) from the order of the Second Sind Social Security Court, Karachi dated 29th August, 1982, whereby the order of the Commissioner, Sind Employees' Social Security Institution was set aside. The circum--stances which have given rise to this appeal may be briefly stated as under :- The appellant is a statutory body established under the said Ordinance for providing benefits to certain employees and their dependents. The provisions of the said Ordinance were made applicable to the respondent who used to pay to its employees, in addition to the wages, a monthly quota of cigarettes or smoking allowance in kind, The claim of the appellant is that this monthly quota of cigarettes paid by the respondent to its employees is part of wages of the employees and as such the respondent is bound to make contribution to the appellant institution on the wages including the value of the cigarettes quota, according to section 20 of the said Ordinance. The plea of the respondent was that the cigarettes quota was granted to the employees ex gratia i.e. By way of gift and did not form part of the wages as defined by section 2
(30) of the said Ordinance. The appellant did not agree with the plea of the respondent and gave notice to the latter to pay contribution to the appellant on the wages including the value of the monthly cigarettes quota or smoking allowance allowed to its employees. In pursuance of this notice, the respondent started paying contribution at the prescribed rate under the said Ordinance to the appellant during the year 1977-78, but stopped paying the same thereafter.
2. The Director of the appellant institution then checked the account books and registers etc., of the respondent and gave a decision that from the record it was established that smoking allowance was a part of the wages of the employees and as such the respondent was bound to pay contribution at the prescribed rate on smoking allowance as well. Again this decision of the Director, the respondent filed revision before the Commissioner of Social Security Institution under section 57 of the said Ordinance. The Commissioner also agreed with the Director and decided that smoking allowance granted to its employees by the respondent formed part of the wages and as such the respondent was liable to make con--tribution to the fund of the appellant on the said .Allowance. This order of the Commissioner was challenged by the respondent before the Social Security Court in appeal under section. 58 of the said Ordinance. The learned Security Court allowed the appeal as stated above by its order dated 29th August, 1982 and held that the smoking allowance could not be deemed to be part of the wages, according to terms and conditions of appointment of the employees of the respondent. In vi=w of this decision, it was held that the respondent was no more liable to make contribution to the appellant on such allowance. In coming to this finding, the learned Judge of the Social Security Court had relied on the case of Messrs Dawood Cotton Mills Ltd. 'Karachi v. Social Security Institution, Karachi (PLD 1978 Kar.7441).
3. The learned counsel for the appellant has referred to the various documents produced by the respondent during its evidence before the Commissioner of Social Security Institution in order- to prove that smoking allowance had been paid regularly by the respondent to its employees. It has also been argued that in the year, 1977-78 the respondent had been making contribution to the appellant by treating smoking allowance as part of the wages and as such the respondent is now estopped from denying that the smoking allowance was part of the wages.
4. 1n support of this plea he has relied on the definition of 'wages' as laid . Down in section 2 (30) of the said Ordinance which is to the following effect: "(30) 'wages' means remuneration for service paid or payable in cash or in kind to a secured person, not being less than remuneration based on the minimum rates of wages declared under the Minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or apprenticeship, expressed or implied, and shall be deemed to include any dearness allowance or other addition in respect of the cost of living and any payment by the employer to a secured person in respect of any period of object of the Legislature for which provision is made in section 2 (30) of the Ordinance."
It wag, therefore, held that the above allowances formed part of the wages for the purpose of contributions under the said Ordinance.
5. Mr. S A. Sarwana learned counsel for the appellant also relied on the case of Messrs Dawood Cotton Mills Ltd. Karachi v. Social Security Institution, Karachi (1). In this case the learned Single Judge held that `leave encashment' granted to the worker was covered by the definition of 'wages' under section 2 (30) of the said Ordinance. It was further held in the above case that reasonable construction should be placed on the provisions of the said Ordinance which provided for fee and not for tax. But it was also held that "amenities to labour, and rewards and subsidy to canteens by their very nature being ex gratia payments, are expenses incurred by the employer for the benefit of the employees and as such these expenses cannot be included within the ambit of wages under the said Ordinance." This case, therefore, does not help the appellant.
6. Mr. Muhammad Rafat Osmani learned counsel for the respondent has, on the other hand, argued that during the year 1977-78 contributions were made by the respondent on smoking allowance under protest, because a demand notice was issued by the appellant and as such that conduct of the respondent cannot stop them from challenging the validity of the appellant's demand. He has further referred to the smoking allowance cards issued to the various employees of the respondent to prove that smoking allowance used to be paid not only to the workers who _ were actually on duty, but also to those who were absent without leave or who were not on duty or not at the disposal of the respondent. These cards have been produced in the lower Court's record during evidence as Annexures'B/1 to B.7. The object of referring to these cards was that the smoking allowance was not a remuneration for the services render--ed by the employees. An important ingredient of the term 'wages' is that it should be remuneration for the services ren--dered by an employee. When an employee is absent from duty without leave or is on leave without permission, then he is no more on duty. Hence if smoking allowance is given to such employee even for the period when he was no more on duty and was not entitled to wages, the smoking allowance cannot be termed as `remuneration' for services rendered by the employee. It was further argued that another important factor for determining the meaning of 'wages' is that the employee should be at the disposal of the employer by way of return for the 'wages' paid to the employee. In support of this argument reliance has been placed upon the decision of Supreme Court in the case of Sind Employees' Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1977 SC 177).. While dis-- cussing the meaning of 'wages' following observations were made .By the Honourable Supreme Court :- "According to this clause, the term 'wages' means 'remuneration for service paid or payable in cash or in kind to a secured person, not being less than remuneration based on the minimum rates of wages declared under the Minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or . Apprenticeship, expressed or implied, and shall "be deemed to include any dearness allowance, or other addition in respect of the cost of living and any payment by the employer to a secured person in respect of any period of authorised leave, illegal lock-out or legal strike". The definition then excludes certain items of payment, with which we are not directly concerned in the-present case.
This definition accords with the dictionary meaning of the term 'wages' which is construed as the amount paid periodically, specially by the day or week or month, for time during which workman or servant is at employer's disposal. The word `remuneration' as used in the definition means, according to the Oxford Dictionary, a reward payable for service rendered. It would be seen that the rendering of service, or at least the availablity of the employee at the disposal of the employer for service, is an essential requirement or prerequisite for the payment of wages. The definition by including payments made by the employer in respect of any period of illegal lock-out or legal: strike has indeed given effect to the principle that during these periods the employee must be deemed to be available for service with the employer. By specifically including the payment made for any period of authorised leave, the definition has accorded a statutory status to this payment as if it were included in every contract of service.
We cannot, however, agree with the learned counsel for the appel1,jint that the definition should be so extended as to include therein every "payment made by the employer to an employee. The definition being clear and unambiguous, its extension in the manner suggested by Mr. Sarwana would be unwarranted. Even otherwise, such an extension can produce absurd, results. There may be a case, for instance, where an employer agrees to make an ex gratia or a charitable grant for the marriage of the employee's children, or. Scholarship for their education. Such payments could not be regarded as wages merely because they are made by an employer to his employee. The statutory definition being clear, payments not covered by it cannot be included. (Underlining* is mine)
Social Security Court . These documents and the evidence of Mr, Yousufee establish beyond any shadow of doubt that the smoking allowance was being paid to the employees only ex gratin and was not dependent upon the workers being on duty. The allowance, therefore, did not amount to remuneration for the duty performed by the workers. 1, therefore, agree with the views taken by the learned Social Security Court-11 that the smoking allowance could not be deemed to be part of the wages for the purpose of contributions under the said Ordinance.
Consequently the appeal is dismissed with no order as to costs.