' IBRAHIM MAHMUD (CHAIRMAN). - This is an appeal against the order dated 13th December, 1984 passed by the Senior Member of the Commission, in his capacity as Registrar of Trade Unions, directing that a complaint be filed before a Bench for cancellation of the registration of the appellant, E.
0. B. I. Employees Federation, under section 10 (1) (1) of the Industrial Relation Ordinance, 1969 on the ground that the said Federation has been registered in contravention of the said Ordinance.
2. Briefly, the facts of the case are that the appellant E.
0. B. I. Employees Federation consists of two provincially registered Trade Unions which are affiliated to it, viz. E.
0. B. I. Employees Union Sind, claiming to represent some 97 employees working at the Head Office, at Karachi of the E.
0. B. I. Institution and E.
0. B. I. Employees Union, Punjab, claiming to represent some 103 employees working in the Punjab, Zonal Office of the Institution. The appellant Federation was duly registered with the N. I. R. C. As a federation of Trade Unions at the national level under registration No, 1/1979 and is also certified as C. B. A.
3. The respondent is Chairman of the Employees Old-age Benefits Institution. The Institution has been established under the Employees Old-age Benefits Act, 1976 as a Statutory Corporation with the object of providing and securing to eligible insured persons employed in an industry ' or establishment, certain benefits such as, old-age pensions, invalidity pensions, widows pension, old-age grants and other benefits, out of contributions payable to the Institution by every employer of an industry or establishment wherein 10 or more persons are employed, at the rate of 5% of the wages of every person in his insurable employment every month, in the prescribed manner. The Institution is managed by a Board of Trustees consisted of members appointed by the Federal Government under section 7 of the said Act.
4. On 30th August, 1984 the Chairman, E.
0. B. I. Institution moved the Registrar of Trade Unions, N. I. R. C. Pointing out that the appellant- Federation was registered in contravention of the provisions of the Industrial Relations Ordinance, 1969 (hereinafter referred to as 'the said Ordinance') on the ground that employees of the E.
0. B. I. Institution are persons employed "in the administration of the State" and are excepted from the purview of the said Ordinance by virtue of section 1(3) (b) and secondly on the ground that the Institution is not an 'industry' as defined in section 2 (xiv) thereof. It was therefore, prayed that the Registrar of Trade Unions may make a complaint to a Bench of the Commission as a Labour Court, under section 10(1)(i) of the said Ordinance for cancellation of the registration of the Appellant Federation. The learned Senior Member, in his capacity of Registrar of Trade Unions, after hearing the parties, passed the impugned order dated 13th December, 1984. He agreed with the submissions of Mr. Mahmood A. Ghani, learned representative of the Institution that E.
0. B. I. Institution is on par with the Social Security Institution which was also providing social security, which has been held not to be an industry by the Sind High Court in its judgment reported in 'Sind Social Security Employees Institution v. Sind Social Security Employees Union, Karachi and others 1, and that registration of all unions operating in the Social Security Institution have been cancelled. Further, that the Supreme Court of Pakistan has granted Special Leave to Appeal in C. P.
S. L. A. 515/79 against a contrary view taken by the Lahore High Court with regard to the Punjab Social Security Institution in PLD 1979 Lah.
448. Accordingly, the learned Senior Member/ Registrar of Trade Unions, held that the said Ordinance is not applicable to the Employees Old-age Institution and that the appellant- Federation has been illegally registered. Consequently, a complaint has been submitted for obtaining directions under section 10 of the said Ordinance for cancellation of the registration of the appellant Federation, which is pending under Case No, 20(44)184.
5. We have heard Mr. Raja Abdul Rashid, Advocate for the appellant and Mr. Mahmood A. Ghani, Representative for the respondent.
6. Raja Abdul Rashid raised a technical objection that the learned Senior Member wrongly entertained the application of the respondent Institution for cancellation of the registration of the appellant Federation as a Trade Union, since an employer has no locus standi to challenge the legality of the registration of a Trade Union in his establishment. While the contention of learned counsel is correct, the learned Senior Member has treated it as an information brought to his notice by the employer on the basis of which he could even .Suo motu file a complaint for cancella- ' tion of the registration and as such the impugned order does not appear to be vitiated. Counsel further submitted on the merits that the learned Senior Member wrongly relied on the analogy of Social Security Institution and also the decision of the Sind High Court holding that the said Ordinance is not applicable to the Social Security Institution, for the reason that the Social Security Institution being an establishment maintained for the treatment or care of sick, infirm, destitute persons has been expressly excluded from the purview of the said Ordinance under section (1) (3)
(f) with effect from 20th September, 1979 whereas it is not so in the case of E.
0. B.
1. Institution. Therefore, counsel submitted that reliance on the judgment of the High Court of Sind was misconceived. With regard to C. P. S. L. A. No, 515/1979, counsel submitted that there is yet no final decision of the Supreme Court on the point.
7. While I am inclined to agree with Raja Abdul Rashid that the analogy of the Social Security Institution with E.
0. B. I. Institution is not correct because the former stands excluded from the applicability of the said Ordinance under section 1 (3) (f), unlike the E.
0. B. I. Institution, the two grounds raised by the respondent Institution before the learned Senior Member, which were not discussed by him in the impugned order, require consideration as the same were pressed before us by Mr. Mahmood A. Ghani. The first ground is that the persons employed in the E. O. B. I. Institution are employed in the "Administration of the State" and the second ground is that the institution is not 'an industry' as defined in section 2 (xiv) of the said Ordinance and as such the said Ordinance is not applicable to the Institution.
8. Dealing with the first ground, the concept of exclusion of public servants engaged in the 'Administration of State' from the purview of the said Ordinance was first introduced by amending Ordinance No, XXI of 1979 on 5th April, 1979 after Pakistan had ratified the I. L.
0. Convention No, 98, Article 6 of which excludes public servants engaged in the `Administration of the State' from the application of the Convention relating to right to organise and collective bargaining. The meaning and scope of the expression of the Administration of the State were considered at length by a Division Bench of the Sind High Court in Sind Road Transport Corporation and others v. Staff Union and others , It was therefore held that the expression is to be interpreted in a limited and restricted sense to the performance of sovereign, regal and inalienable governmental functions of the State pertaining to the performance of the Constitutional functions of Government, Federal, Provincial, local Authority, performed by employees engaged by Governments in departments like justice, defence, taxation, legislature. Not all Government servants are excluded from the purview of the said Ordinance, as will appear from the fact that the persons employed in certain Government departments like the Railway, Posts, Telephone and Telegraph are not excluded and even establishments run by or under the Authority of the Federal Government or Provincial Governments or Local Authorities are mentioned in the definition of 'employer' under section 2 (viii) of the said Ordinance. Merely because Article 38 (c) of the Constitution of Islamic Republic of Pakistan provides that it is the function and duty of the State to provide Social security through Compulsory Social Insurance' or other means to all persons employed in the service of Pakistan does not make employees of an independent statutory Corporation which has been established by the Government to fulfil the aforesaid Constitutional duty and function, as its Agent or on his behalf as persons employed in the 'Administration of the State." In the aforementioned case, employees of the Sind Road Transport Corporation were held not employed in the administration of the State and not excluded from the benefits of the said Ordinance. The E. O. B. I. Institution was established to perform the Constitutional duty of the Government as an independent Statutory Cerporation with an independent Board of Management, though the Board may be guided by such instructions on the question of policy as may be given to it from time to time by the Federal Government. It has its own budget and has full control over receipts and expenditure. The Institution has an independent Old-age Benefits Fund and assets and property is vested in the Institution. It may invest moneys not required by it in Government securities, in loans to bodies, in interest bearing deposits, in debentures, in purchase of ordinary or preference shares in Companies listed on the Stock Exchange, as provided in Employees Old-age Benefits (Investment) Rules, 1979. It is clear therefore, that the Institution is not a Department of State and although employees of the Institution are deemed to be public servants, within the meaning of section 21 of Pakistan Penal Code, they are not Government or Civil Servants. Finally the work and functions of providing social security in the form of Old-age pensions, invalidity benefit and other benefits provided in the said Act, can also be performed by benign private employees.2 There is, therefore, no force in the submission that the employees of the Institution are engaged in the Administration of the State.
9. The second ground concerns the definition of Industry appearing in section 2 (xiv) of the said Ordinance which reads as follows :-
(xiv) "Industry means any business, trade manufacture, calling, service, employment or occupation."
' The main question is whether, considering the nature of its activity and functions performed by it, the E. O. B. I. Institution falls within the definition and in particular, whether it is a "service". The definition came up for interpretation in two leading cases A. F. Furguson & Co. v. 5th Sind Labour Court and others and K. G. Old Principal Christian Training Centre, Gujranwala v. Presiding Officer, Punjab Labour Court Northern Zone and others . In both the cases it was considered that as the words calling, service, employment, or occupation in the definition are of wide import and include in their sweep every conceivable human activity other than casual, recreational or a past time, including domestic, personal or casual service or employment, a line had to be drawn in a fair and just manner as it could not be the intention of the legislature to include service howsoever rendered in whatever capacity and whatever reason, and some limitation should be implied in interpreting the wide words used in the definition.
10. In the former case holding that a firm of Chartered Accountants is a calling and, therefore, industry, the Court expressed the view that the legislature had altered the definition of industry deliberately in 1970 by' the amending Ordinance No, XIX of 1970. It widened the scope of industry in order to bring within its scope calling, service, employment or occupation which before the amendment, were given a restricted meaning in decisions of the Court on it. The amendment of the definition appears to have been introduced in order to extend the benefit of the said Ordinance to make provision for investigation, the avoidance and settlement of any difference, or dispute arising between employees and workmen, as stated in the preamble of the said Ordinance and thus to maintain industrial peace and avoid dislocation and hardship to the public. It would be defeating the intention of the legislature if those words were construed and restricted by reference to the old definition and the decision given on it or by the interpretations put by the Judgments of the Indian Supreme Court on the definition of industry appearing in section 2(j) of the Indian Industrial Dispute Act, 1947 which though worded differently is substantially the same as the definition in our Ordinance and consists of the same critical words minus the word "undertaking".
11. On the other hand in the K. G. Old case, in which a technical training workshop attached to the Christian Technical Training Centre, Gujranwala and a printing press of the University of Punjab, were held not to be industries, a restricted meaning was given to the words "calling, service, employment or occupation" and it was observed by Mr. Justice Shafi-ur-Rehman (now of the Supreme Court), that these words are not to be interpreted in their plain ordinary dictionary meaning but are controlled and take colour from the opening words "business, trade and manufacture" on the principle of noscitur a soclils or ejusdem generis and that calling service, employment or occupation must bear the definite character of the opening words, trade, business or manufacture and must be capable of producing material goods or material services in order to be held to be an industry. That in the context of industrial and labour laws, the words used in the definition apply to an enterprise which is organised and is systematic depending substantially, if not entirely, on the co-operation between the labour and capital and having as its object, the production, distribution and consumption of wealth or the production or provision of material services. In applying these tests, the learned Judge relied on some Australian decisions and several other decisions of the Indian Supreme Court including the University of Delhi's case , The Madras Gymkhana's case , The CricketClub of India's case and Safdarjang Hospital's case . The various tests laid down in these Indian cases were reviewed later by a Special and Larger Bench of the3 4 5 6 7 8 Indian Supreme Couri in its recent judgment Bangalore Water Supply and Sewerage Board v.
Rajappa and others and the tests have been re-stated and those decisions have been overruled as wrongly decided. In particular the restricted interpretation requiring the character of business or trade was dissented from.
12. In the Bangalore ease it was held that an activity or enterprise is prima facie an industry if it satisfies the following triple tests .It must be a (1) systematic activity, (ii) organised by co-operation between employe' and employees and (iii) for the production and/or distribution of good and services calculated to satisfy the human wants and wishes. Absence of profit motive or gainful objective is irrelevant, be the venture in the public or private sector and that the true focus is functional and the decisive test is the nature of the activity with special emphasis on employer, employee relations.
13. Applying these tests, I am inclined to hold that E. O. B. I. Institution is an industry and falls within the expression "service". It satisfies the triple test. Firstly, it is a systematic activity. It is a permanent Institution created by Special Act as a body corporate with perpetual succession and a Board of trustees to manage the Institution. Its functions are to recover contributions from employers of industry and establishment in the prescribed manner and to make payments of Old-age pensions, invalidity pensions, and other grants and benefits to eligible insured persons in the prescribed manner. The Institution is empowered to decide questions and disputes such as whether a person is an insured person, the amount of wages of insured persons, the amount of contribution payable by the employer, question as to who is the employer, the question of entitlement to the benefits, the amount and duration thereof and other matters relating to contributions or benefits. Rules have been framed by the Federal Government under the Act for auditing the accounts and the procedure for meetings of the Board of Trustees. Procedure for investment of funds, and general regulations have been framed by the Board of Trustees for calculating daily wages, proof of age, payment of contribution and liability of employer and other regulations. Secondly, the institution is organised by co-operation between it as employer and the employees. The Institution maintains a cadre of employees of whom about 200 are workers. Their qualifications for recruitment and method of appointment, seniority and terms and conditions of service are determined, organised and laid down. A substantial quantum of work of the Institution is the maintenance and scrutiny of records and returns, issue of notices, correspondence, registration of establishments, preparation and issue of old-age benefits cards to eligible workmen which is more or less work of a clerical nature, involving the co-operation between the workers and the Institution. Thirdly, the result of the said activity of the Institution is the provision of valuable monetary benefits to insured persons and widows, in the form of old-age pensions, invalidity pensions, widows pensions, old-age grants and other payments and are clearly material services. "Service" has been defined in the 'Shorter Oxford English Dictionary page 1590' as including "the action of serving, helping or benefiting, tending to the welfare or advantage of another."
14. For the foregoing reasons, we would allow this appeal and set aside the impugned order. 1982 CLC 939 1975 PLC 361 1974 PLC 98 PLD 1976 Lab. 1097 (1963) 2 L L I 335 AIR 1968 SC 534 (1969) 1 L L J 775 (1970) 2 L L J 266 (1978) 1 L L J 3499 1 2 3 4 5 6 7 8 9