DECISION ' There were 23 grievance applications under section 25-A, IRO which were disposed of by the Labour Court by a common order and I propose to dispose of the appeals against the same by a composite decision. Shorn of all details, the circumstances forming the background of this dispute are as follows:-
2. The applicant respondents in their applications alleged that they had been recruited by the appellants after medical tests, to work as their employees more than a decade ago. However later on a contractor in the name and style of `M/s. Stefcon' appeared on the scene, and it was they who started paying the daily wages to them through Wage-sheet bearing their name. As a result of this change over, they were denied the benefit of the holidays and other benefits which were available to the other employees of the appellants, though they remained working shoulder to shoulder with them. Though the daily wages were paid by Stefcon, yet the daily meals at the canteen and the medical treatment facilities were still being provided by the appellants. Because of the pressure exerted by the appellant, even the CBA was not helpful to their cause and they were deprived of all the lawful benefits which they were entitled to under the law.
3. They had served a grievance notice on the appellants and since there was no response they had been constrained to file grievance applications before the Labour Court. It might as well be mentioned that Stefcon also had been made a party to the proceedings, and filed written replies wherein they had maintained that the respondents were their workers and had nothing to do with M/s. Siemens Company. But later on their name was struck off for want of grievance notices.
4. The appellants in their written reply denied that there was any medical check up of the respondents at their instance and even denied any privity of contract with them. It was alleged that the respondents had never served any girevance notice earlier, and were employees of M/s. Stefcon "for the execution of welding, fitting, painting and switch gear and X-ray Units as well as the maintenance of factory building and office electrical equipments". It was the contractor that is M/s. Stefcon who employed them and who had full control and supervision over them. It was further denied that they were working shoulder to shoulder with the employees of the appellant. It was also denied that the respondents were assigned any work by them or that their work was being supervised by the supervisors of the company. Their case is that Stcfcon were working with them since 1983 and before them they had M/s. Rose & Rite as their Contractor. It was further urged that the grievance petitions were not maintainable as the same were barred by limitation. It was, however, admitted that the respondents were provided meal facilities from their canteen, but it was under an agreement between the management and the contractor as there was no space available for a separate canteen for the workers of the contractor. They also denied the existence of other facilities.
5. The respondents had examined Saleem Akhtar, Hameedul Haque and Ajmer Sharif while Naeemul Haque and Israr Ahmed came to be examined on behalf of the respondents.
6. The learned Presiding Officer for the reasons given by him agreed with the contention raised by the workmen and allowed the petitions resulting in the present appeals.
7. It was contended by Mr. Mahmood A. Ghani, learned representative for the appellant that the grievance notices would be barred by time as on the showing of the workers themselves, they had been wronged for more than a decade and the notices were allegedly given in 1989. Patently the contention is devoid of any merit, as the grievance is not about any events past and closed. They have been suffering for all these years it is true, but the injury is a continuing one as they are not getting the pay and other facilities to which they allege to be entitled to, under the law even now. I am afraid the objection hardly deserve any serious consideration.
8. It was also maintained on behalf of the appellants that the notices otherwise too, were bad as the same had been addressed to the Plant Manager.
' The appellants do not have any Plant Manager and the Manager notified under the Factories Act is the Factory Manager of the Company.
9. The difference between the Factory and a Plant is much of a muchness, and it is not necessary to dilate on this aspect of the matter because the receipt of the notices has not been specifically denied in the Written Reply. I am satisfied that the notices served by the respondents were valid ones in the eye of law.
10. The sole question that remains to be determined is whether the respondents, are the employees of the appellants of M/s. Stefcon as maintained by the appellants and also asserted by M/s. Stefcon in the Written Reply.
11. Three contracts have been put on the record pertaining to the years 1983, 1986 and 1988 appointing M/s. Stefcon as their Contractor. It would be in the fitness of things to have close look at them. The first of these reads as under:- "Whereas the Company wants the following jobs to be contracted-out, and taken in hand and completed by the contractors and whereas the contractors have agreed and accepted the said job on the following terms and conditions:-
(1) That the company will pay a total amount of Rs,6,00,000 only per year to the contractors in consideration of execution and completion of the said job namely:-
(i) Welding, fitting and painting of switch gear and X-Ray Units and maintenance of factory building and office electrical equipments;
(ii) That the contractors would employ their own skilled, semi-skilled and unskilled workers on the job as required and would be responsible for regular payment of their wages and other remunerations under the relevant law and rules;
(iii) That the workers of the contractors will be employed by the contractors themselves and they shall maintain their Attendance Register in accordance with law;
(iv) That in case of any demand by the workers which may be either financial or non-financial will be responsibility of the contractors;
(v) The contractors undertake to bring all the record of the workmen and he will be responsible for their wages, all sorts of leaves, insurance against hazards and/or getting advice applicable under current labour laws;
(vi) That all the payments including wages notice pay, gratuity (if applicable etc.) shall be made by the contractors and the company shall not be responsible for the workers recruited by the contractors;
(vii) That the contractors shall take the signature of the company on the wage sheet of their workers to ensure that they do not pay less than minimum wages to their workers; (viii)That the company would afford all the necessary facilities to the contractors and other workers to enter into the factory premises to carry out the work on the said jobs and also to take meals from the factory canteen;
(ix) That the contractor workers will have to obtain gate pass from the Company's Labour Office for permission to enter the factory premises and would be responsible to keep it with them safely and produce to any Officer of the Company on demand etc. Etc.
12. The third contract between the parties is dated 20th of January, 1988. Most of the clauses are the same as reproduced earlier but clause (1) thereof deserves mention. It is as follows:--
(i) That the company will pay to the contractors on presentation of bill every month, of the actual amount of the charges for execution of the said jobs namely:- "Welding, fitting and painting of motors, transformers, switch gears and X-Ray Units and repair and maintenance of the Office electrical equipments.
13. The text of the second contract is also in similar words and need not be re-produced.
14. A mere look of the contracts indicates, that these were meant to protect and shield the appellant from any demands and claims of any sort, from the workmen who were entrusted to the care of the contractor in question. These contracts are totally silent about the liabilities of the contractor, in case the work was found to be unsatisfactory, or behind the schedule. There are no stipulations about any guarantees, claims for damages, or the termination of the contract.
15. The appellant is a multi-national company, manufacturing turbines, transformers and all sorts of sophisticated electrical goods. It is catering to the needs of WAPDA and other Government and semi-Government Corporation and organisations. There would be fluctuations in its manufacture.
Its work could expand and occasionally it could slow down, but as made out by the first contract a sum of Rs,6,00,000 (Rupees Six hundred thousand) was good enough to satisfy the claims of the contractor for a whole year. There is nothing on the record to show that for 4 years or so that the arrangement subsisted, there was any ripple on the surface, or any strains in their relationship. And the way the things are going on since 1986, when the second contract was executed, are "curiouser and curiouser" as the bewildered girl exclaims in Alice in Wonderland. At the end of every month M/s. Stefcon present their bill "of the actual amount of the charges for the execution of the jobs" which came to be specified. All I would say is that it will be too much of a demand on one's credulity to believe, that this was an arrangement between a company and one of its contractors.
M/s. Stefcon demonstrably are merely convenient agents to deprive a group of workers of their rightful emoluments, privilleges and benefits which would be available to them under the law of the land as enjoyed by other workers of the company.
16. Now we may as well advert to the actual working conditions at the factory.
17. It has been denied that the respondent had been medically examined by the medical staff of the compay at the time of the recruitment. Both the witnesses of the appellant get their employment much later than the workers. Naeemul Haque is the Labour Officer of M/s. Siemens and Israr Ahmed Khan professes to be the Site Incharge on behalf of M/s. Stefcon.
18. It is admitted by both of them that the respondents have their daily meals free, at the Canteen of the appellant. It is said that it has been done because there was no space for a separate Canteen and there are no other eating places in the vicinity. However adjustment had been made for the same from the contractor in the terms of the contract. The fact however remains that the contract is totally reticent about it. It is also admitted that the respondent get first aid and ordinary treatment from the dispensary maintained by the appellant. In cases of emergency the dispensary again looks after them. It is said that all this is done on humanitarian grounds. It is also admitted that all the raw material and goods needed for the work in different shops and wings of the factory come from the appellant. The plant and all the machinery are also their's. It is also an admitted position that the respondents work at the factory site, and in the words of the respondents witnesses, work shoulder to shoulder with the workers of the appellant, and their work is supervised by the foremen and Site Incharge of the appellant.
19. Naeemul Haque who is the Labour Officer of the appellant in his cross-examination has conceded that the supervisor and foreman and the Shop Incharge are all employed by Siemens.
Their job is "to watch the working of the workers employed by the contractor."
20. Israr Ahmed Khan says that the "appellants are working in different sections". Mukarram one of the respondents was working in Motor Shop. Jamal Hafeez was the Incharge, Abdul Qadeer was the Assistant Incharge, and Abdus Sami was the supervisor there. They were all officers of Siemens and there was none on behalf of Stefcon. Nasir Gill and Muhammad Riaz two of the respondents were working in Repair Workshop. He names the, officers of Siemens who supervise their work. Again he admits that there was no one to supervise on behalf of M/s. Stefcon. The said witness had to concede that Muhammad Hanif, Waqar and Sher Jan from amongst the respondents, were working in the Tank Section Shop No, 20 and their work was being supervised by the appellant's men. There was no one from M/s. Stefcon. He names Idrees and Ghulam Jan working in the Transformer Assembling Shop No,
20. Again all the work was being supervised by the appellant's men. M/s. Stefcon had nothing to do with the same. Similarly he admits that the work of some of the respondents workmen in Transformer Assemblying Shop No, 20, Transformer Winding Shop No, 20, Fabricating Shop No, 20, Motor Winding Shop No, 10, Punching Shop No, 10, Machine Shop No, 10 was being solely supervised by the appellant's men whom he has named. He also admits that Stefcon had no concern with the facilities to be provided under the Factories Act. "It is a fact that none on behalf of Stefcon is notified under the Factories Act by the occupier."
21. All this goes to show that the veneer of an independent contractor is very thin indeed. On the record of the Income Tax Authorities, the status of M/s. Stefcon as a taxpayer, as borne from the record, is mentioned as labour suppliers. And that truly reflects his position in relation to Siemens Pakistan Limited, the appellant.
22. As for the legal aspect, Mr. Mahmood Abdul Ghani, learned representative for the appellant has referred to a number of authorities; the most pertinent of them being Farid Ahmed v., Pakistan Burmah Shell 1987 SOAR 1463, M/s. Fector Sugar Mills Ltd. v. Director Excise and Taxation 1989 PLC 484, Tauseefun Nabi v. Metal Containers Ltd., Karachi 1991 PLC 305 and Muhammad Sharif and others v. Punjab Labour Court No, 3 and another being Civil Appeal No, 39 of 1977.
23. The facts in Farid Ahmed's case were that M/s. Burmah Shell owned a number of petrol pumps and stations at Karachi. Most of the petrol pumps were run by dealers appointed by the company, while some others were managed by contractors. "Saife's Filling Station" fell in the latter category and was being run and managed by a. Contractor.
24. According to the terms of the contract, the contractor employed a goodly number of his own pump attendants and personnel, to provide the required service, and regulated their timings and duties. They were his appointees and he had the authority to dismiss, discharge and retrench them.
25. Farid Ahmed had been employed by the contractor. His services were terminated. He took up proceedings against the Burmah Shell. It was a long-drawn contest and ultimately proceeded before the Supreme Court.
26. Their Lordships examined the definition of "worker" and "workmen" as to be found in section 2(xxviii) of the I.R.O. And referred -to the decision of D.C. Works Ltd. v. State of Saurashtra AIR 1957 SC 264, wherein it was laid down that "the prima facie test for the determination of relationship between master and servant was the existence of the right in the master to supervise and control the work done by servant, not only in the 'matter of directing what the servant is to do, but also the manner in which he shall do his work."
27. As it was found that the contractor had been employed to run the petrol pump of the respondent and not merely to supply labour to be engaged by the company, he had the power of hiring and firing the employees..................... and not only directing them, what to do, but also the manner, in which they shall render service to the customers at the petrol pump."
28. As would be seen, the contractor engaged in his business at the pump station was on his own, totally independent of the company in the choice of his employees and the conduct of his business, without any let or hindrance, not to talk of supervision or control of the company. The facts of the case are therefore distinguishable and do not support the appellants.
29. In M/s. Fector Sugar Mills Ltd., the petitioners were engaged in the business of manufacturing sugar and had given contracts to outside parties for:
(1) collection of sugar-cane from different pick up points;
(2) unloading of sugar-cane brought by the contractors or growers;
(3) removal from the mill premises of the press mud, boiler ash etc. And
(4) handling of sugar bags and removing them to the godowns.
30. The contractors employed their own labour including drivers and cleaners and the petitioners paid the contractors for the work done by them at the rates linked with the weight of the goods handled by them. The petitioners had no concern with the number of the labourers, their wages or other terms and conditions of employment.
31. In 1972, The Workers Children (Education) Ordinance came into force and the question was whether the petitioners were liable to pay the education cess, levied under the aforesaid Ordinance.
32. In the judgment by the Lahore High Court, reference was made to a decision of Taj Din v. Punjab Labour Court PLD 1976 Lahore 1169, and distinction was drawn between a contractor who had been engaged to procure the necessary labour and a contractor who had been entrusted to perform a certain function for the establishment. In the latter case, there was no privity of contract between the workers and the establishment. "If the establishment finds their work satisfactory (unsatisfactory) all that it can do is to direct the contractor to take remedial steps, or even penalise him by making deductions from the compensation payable to him
33. As it was found that there was no nexus between the establishment on the one hand and the employees of the contractors it was held that the petitioners could not be asked to pay cess in respect of them. Apparently the facts in this case will be distinguishable.
34. In Tauseefun Nabi's case, which was before the Sindh Labour Appellate Tribunal the factory admittedly was not being run by the management of the establishment. It had been given on contract, which was being carried under the strict supervision control, and guidance of the respondent; the objection taken was that the factory had not been given on contract, but the respondents were running it through their employees. It was found that the mere fact that the contractors are ex-employees would not debar them from taking the contract and "that there is no evidence to show, that the contractors are not running the factory, though admittedly the respondents do exercise control and supervision, which is necessary because they would be marketing the goods". This citation also hardly advances the case of the appellants.
35. In Civil Appeal No, 30 of 1977 of the Supreme Court, Muhammad Sharif and others v. Punjab Labour Court No, 3, reference was made to a case of our Tribunal, Shahab Industries Ltd., Karachi v.
Shah Nimroze PLJ 1976 Tr.C. (Labour) 269, wherein some tests had been laid down to determine whether a person was an employee of the industry or of a contractor and on the application of these tests the concurrent findings of the Courts below were approved. But as held in Hussainbhai Calicut v. Alath Factory Union and others 1978 LLJ 397 "the true test is that where a worker or a group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact the employer. He has economic control over the worker's existence, skill and continued employment. If he, for any reason chokes off, the worker is virtually laid off. The presence of intermediate contractors with whom alone the workers have an immediate contactual relationship is of no consequence, when on lifting the veil, the naked truth is discovered, though draped in a different paper arrangement that the real employer is the management and not the immediate contractor..Court should be a statute to avoid the mischief and achieve the purpose of the law and not be misled by the maya of legal appearances".
36. In the case of United States of America v. Silk (1946) 131 U.S. 704 also, it was held that "the common law tests of control etc. Were no longer decisive and that one had to look to the economic reality of the relationship to determine its true nature".
37. In Sindh Employees Social Security Institute v. Pakistan National Produce Co. Ltd. 1989 PLC 81, a decision by this Tribubnal, the contractors were found to be in fact agents of the company. In Appeal No, KAR-323/88 Muhammad Nazeer Khan and others v. Seagull Export Ltd. This Tribunal found that "the so-called contract was a manipulated contract to escape from the liabilities under the Labour Laws". In Appeals Nos, KAR-323/85 and KAR-333/85 Obah Khan and 26 others v. M/s. Rashid Textile Mills Ltd. On the basis of the evidence in the case and some authorities, this Tribunal again found that the contractor was not an independent contractor and the workmen were held to be the employees of the Mill.
38. Mr. Mahmood Abdul Ghani urged before me that before Stefcon, M/s. Rose and Rite were the contractors and in a case decided by this Tribunal, they were found to be employers of their staff.
All I need say is that their Contract is not before us. Nor is the record of the case; and we cannot simulate, as to how the matters stood then. I agree with Mirza Muhammad Kazim, learned counsel for the respondents, that M/s. Stefcon are just a convenient cover, to deprive the respondents of the fruits of their labour.
39. All that the said respondents want is that they should be treated at par with the other workers of the appellant. They had detailed their entitlements in the grievance petitions the correctness thereof was not challenged.
40. In the result, I will uphold the impugned order and dismiss the appeals.