1. ' MUNAWAR AHMAD MIRZA, CJ.:-- Facts relating to present petition are very brief and simple.
2. SWE-PAK Pharmaceuticals Ltd. Is a Company incorporated under Companies Ordinance, 1984. It is engaged in the business of manufacturing and marketing of intravenous solutions. The petitioner-Company has its factory at Hub with Head Office at Islamabad. It is alleged that petitioner is a subsidiary of Shaheen Foundation Pakistan Air Force and beneficiaries therefrom are persons connected with or incidental to Pakistan Air Force. Admittedly 76 employees are working in petitioner's organization. Towards January, 1991 employees of Petitioner approached Registrar, Trade Union, Balochistan for registration of Union. Eventually on 27th. February, 1991 certificate for registering SWE-PAK Pharmaceuticals Employees Union was issued by the Registrar, Trade Union, Balochistan and intimation sent to petitioner. Subsequently respondent-Union applied to Registrar, for being declared as Collective Bargaining Agent. Necessary certificate was also issued on 6th June, 1991.
3. Aggrieved from Certificate of Collective Bargaining Agent, petitioner. In April, 1991 filed a petition under section 34, Industrial Relations Ordinance, 1969 before Labour Court-III, Balochistan at Hub which was contested by respondent Union. Learned Presiding Officer, Labour Court-III rejected the application being incompetent vide order dated 27th May, 1991.
4. It is the case of petitioner that its organization being subsidiary of Shaheen Foundation and created for benefiting persons connected with or incidental to Air Force, is immune from operation of Industrial Relations Ordinance, thus section 1(3)(a) of Industrial Relations Ordinance creates bar for registration of Union of the workers engaged in petitioner's organization.
2. ' Accordingly registration of said Union declaring it as ' Collective Bargaining Agent, is violative of law. Therefore being dissatisfied from decision of Labour Court instant Constitutional Petition was filed on 30th August, 1991 in which following relief was sought:-- "It is, therefore prayed that this Hon'ble Court be pleased to set aside the orders dated 27-2-1991 and 5-6-1991 as having been passed without lawful authority, without jurisdiction, void and of no legal effect and also set aside the notice dated 4th August, 1991 being without lawful authority and jurisdiction, with costs of the petition with any other relief which is deemed fit and proper under the circumstances of the petition."
5. Respondent-Union filed counter-affidavit contesting the claim in petition. It was asserted that petitioner is an independent industrial commercial organization having a separate entity from Shaheen Foundation. It was expressly averred that petitioner-Company has its own Memorandum and Article of association specifying aims and objects thereby has no interdependence or connection with Shaheen Foundation. It was further explained that petitioner being commercial organization was set up for earning profits through business therefore provisions of Industrial Relations Ordinance were applicable to its employees.
6. Registrar, Trade Union also filed counter-affidavit on 20th August, 1991 wherein it was explained that petitioner's company is industrial and commercial organization, therefore, its employees had been rightly registered as Trade Union. It has been asserted that action for registration of Trade Union and issuance of certificate declaring respondents-Union as Collective Bargaining Agent was in accordance with section 22 of I.R.O.
3. 1969.
7. Mr. M. Zafar Advocate vehemently contended that petitioner Factory had been set up as subsidiary of Shaheen Foundation for providing benefits only to persons connected with or incidental to Air Force. It was argued that by virtue of section 1(3), I.R.O. Petitioner-Factory was exempted from the application of Industrial Relations Ordinance. Learned counsel canvassed that action of Registrar, Trade Union regarding grant of registration certificate to petitioner's employees or issuance of Collective Bargaining Agent Certificate in their favour lacked jurisdiction and was totally without lawful authority. He has referred case-law to substantiate his contention.
4. ' Whereas on the other hand Mr. Suleman Habibullah learned counsel for respondent No,2, contended that petitioner is factory carrying out its commercial-enterprise for acquiring gains. It was argued that element of beneficiaries has no relevancy for examining applicability of Industrial Relations Ordinance, 1969. Learned counsel submitted that without availing alternate remedy under section 37, I.R.O. Present petition was not competent.
5. ' We have carefully considered the arguments advanced by learned counsel for parties in the light of available record and case-law.
6. ' In the instant case most pivotal question requiring determination would be whether employees of petitioner's Organization, perform functions connected with or incidental to Defence Services of Pakistan or have obligations and services associated with administration of State.
7. ' Petitioner is admittedly incorporated under the Companies Ordinance, 1984 and engaged in business of manufacturing and marketing of intervenus solutions. Aims and objects for establishing Company are specified in Para-3, of Memorandum and Article of Association.
8. Petitioner company is performing its function with Swedish Collaboration where extent of participation, financing and share are also specified in Article of Association. Therefore, it is to be ascertained whether petitioner would be entitled to protection under section 1(3), I.R.O. For reference relevant provision is reproduced below:-- "1. Short title, extent, application and commencement:
(3) It shall not apply to any person employed--
(a) in the Police or any of the Defence Services of Pakistan or any services or installations connected with or incidental to the Armed Forces of Pakistan including an Ordnance Factory maintained by the Federal Government;
(b) in the administration of the State other than those employed as workmen by the Railway, Posts, Telegraph and Telephone Departments;
(c) as a member of the security staff of the Pakistan International Airlines Corporation, or drawing wages in such pay group, not lower than group V, in the establishment of that Corporation as the Federal Government may, in the public interest or in the interest of security of the Airlines, by notification in the official Gazette specify in this behalf.
9. (d)....................
10. (e)....................
(f) ...............
11. ' Before dialating upon circumstances wherein party can claim exemption from the operation of I.R.O. It would be appropriate to review ratio decidendi of reported judgments placed for consideration in this case.
(i) Gammon (Pakistan) Ltd., Rawalpindi v. Muzaffar Khan and 7 others (1974 PLC 10). In this matter respondents were employees of Gammon (Pakistan) Ltd. The organisation deals with construction work. It was assigned construction work of the Ordnance Depot. Labour Appellate Tribunal Punjab, held that irrespective of company being private concern for the limited purposes of construction of Ordnance Depot its employees were not regulated by provisions of I.R.O.
(ii) Workers Union v. Registrar Trade Union (1976 PLC 322). The construction company was assigned work by Pakistan Navy at Islamabad for construction of its residential complex. It was held by Punjab Labour Court, that workers employed by Construction Company for the implementation of said project would be deemed to perform functions incidental to services rendered for Armed Forces, whereby provision of I.R.O. Would be inapplicable.
12. ' United Builders & Associates v. Presiding Officer, Punjab Labour Court No, I and others (1976 PLC 855). Petitioner-Company was engaged in constructing Highway of National importance under the control of Armed Forces. Persons employed by the contractors for implementation of said contract work were found immuned from availing benefits of I.R.O. For enforcing their rights till completion of road-construction-work controlled by the forces.
(iv) Ch. Rafiq Ahmed Shah and another v. Chairman, Punjab Road Transport Board (1977 PLC (CST)
13. 110). This judgment has no relevancy for the issues involved in this matter, as provisions of I.R.O.
14. Were held to be inapplicable on the ground that appellant was declared Civil Servant.
(v) Din Mohammad alias Dona v. Manager, Army Stud Farm Depalpur,. District Sahiwal (1979 PLC 260) services of appellant were terminated by the employer but directed to be restored by Labour Court. On reappraisal Labour Appellate Tribunal Punjab declared that purpose of Farm was to produce horses and mules for the use of Armed Forces of Pakistan and in its income eventually to be utilized for rehabilitation of the servicemen, Ex-servicemen and their families therefore by virtue of section 1(3) provisions of I.R.O. 1969 were found inapplicable.
15. ' Abdul Rashid v. Mohammad Shafi Bhatti, Manager, Military Dairy Farm, Malir Cantt., Karachi (1979 PLC 148). It was found by the appel:ate Tribunal that Dairy Farm was connected with defence services, therefore, application of I.R.O. Was excluded and jurisdiction of Labour Court clearly barred.
(vii) Rahmat Gill and another v. Quetta Cantonment Board (PLD 1983 SC 133). Action was taken against two employees of Quetta Cantonment Board; one being sweeper and other a Chowkidar. It was held that services of said persons were of essential nature and Cantonment authorities being attached to Armed Forces, services of aforementioned employees were incidental to and directly concerned with Armed Forces thus excluding application of I.R.O.
16. (viii)Canteen Stores Department Employees Welfare Union, Karachi v. Canteen Stores Department and others (1983 SCMR 1101). In this matter employees of Canteen Stores Department were found to be excluded from the ambit of Industrial Relations Ordinance by virtue of its section 1(3). It was observed that C.S.D. Employees had to provide services to Armed Forces, therefore covered exemptions prescribed under I.R.O.
17. ' National Radio and Telecommunication Corporation Employees and Workers Union, Haripur through its General Secretary v. Labour Appellate Tribunal, N.-W.F.P. Peshawar and others (1990 PLC 218). It was held that employees were working in company having installation connected with Armed Forces, because electric-equipment manufactured by said organization were being used and supplied to armed forces of Pakistan. Thus provisions of Industrial Relations Ordinance was not applicable to its employees.
18. ' In all the above-quoted cases it is quite apparent that functions performed by the employees of various concerns were either incidental or directly connected with duties/obligations related to Armed Forces. As such provisions of section 1(3) (a) of Industrial Relations Ordinance were found to be totally inapplicable. In the instant case it is an admitted position that petitioner company has enjoined upon itself manufacturing intravenous solution being life saving drugs, besides its marketing throughout the country and abroad. Undoubtedly use of products is not restricted to Army authorities or its families as distinguished from circumstances mentioned in aforequoted.
19. Reports. In the peculiar situation it needs to be determined whether activity undertaken by petitioner would be incidental to, or connected with functions of Armed Forces or Administration of State. It is petitioner's own case that its employees are engaged for manufacturing medicinal solution to cater requirements for special kind of patients, all over. This is quite apparent that failure of petitioner's Company to carry out manufacturing the commodity at best would result in great loss' and embarrassm ent to management but by no stretch would adversely affect, functions of any section of Army or services incidental to or connected with Armed Forces. Main object of petitioner-company as reflected from Article of Association appears to be persuit for gains and profits with Swedish Collaboration, for the welfare of families of ex-servicemen etc. It may be seen that in the aforequoted reported judgments, whether relating to construction of naval complex, building of roads of national importance at the desire of Armed Forces; maintenance of horses and mules; beneficial or effective management of C.S.D. Shop, utilization of dairy milk by Armed Forces or manufacturing of electronic-equipment for military use are obviously directly connected with Armed Forces. Any interruption or ineffective performance of respective functions by the employees associated with such concerns/organizations would tarnish affairs connected with or incidental to forces. Honourable Supreme Court while considering the question of exemption claimed by Old Age Employees Benefit Institution, has discussed relevant principle of law, and declared that its function do not constitute affairs connected with administration of State.
20. Observations in Employees Old Age Benefit Institution v. National Industrial Relations Commission and others (1988 SCMR 765) are highly instructive and are reproduced below:-- "6. It is difficult to accept this contention. The State has multifarious functions to perform in different fields in discharge of its Con :tutional responsibilities, affecting the citizens in almost all walks of life.
21. For this reason it is the largest employer of manpower in the country. If all persons who are concerned with implementing Constitutional responsibilities of the State, are to be treated as employed in the administration of State within the meaning of clause (b) of section 1(3) of the Ordinance, it will as a consequence, effectively put the largest employer in the country beyond the reach of labour laws. This could hardly be the intention behind clause (b). It is to be noticed that certain categories of State employees, for example, those serving in defence forces and police, have been expressly excluded from the ambit of the Ordinance, even though they too discharge duties relatable to the constitutional responsibilities of the State. If clause (b), ibid was intended to cover all those who were employed in connection with the constitutional responsibilities of the State it would have been unnecessary to specifically excluded certain categories of State employees by name. Quite obviously, the expression 'administration of State' has been used in a limited sense in the said clause. In Sindh Road Transport Corporation v. Staff Union 1975 PLC 361 this expression came up for consideration before Division Bcnch of the Sindh High Court and the learned Judges took the view. "the expression 'administration of the State' is to be interpreted in the limited and narrow sense of the practical management and direction of the executive machinery or the operation of the various organs of the sovereign or the conducting or carrying on of the details of the Government.
22. ' We see no reason to place a different interpretation on the clause. The appellant institution is entirely concerned with providing old-age benefits to person serving in industrial, commercial and similar organization. Its employees are not covered by the exclusion clause (b).
7. The contention that the appellant institution is one maintained for the treatment or care of sick, infirm, destitute or mentally unfit persons and, therefore, covered by clause (f) or section 1(3) is also untenable. It is to be noticed that under section 3, Employees' Old-Age Benefits Act, all persons employed in an industry or an establishment under a contract of service or apprenticeship are required to be insured. Under section 9, the contributions in respect of insurance of the employees are to be paid by their respective employers. The contributions so collected together with donations, grants and bequests received by the appellant institution constitute a Fund set up' under section 17. Out of this Fund, the appellant institution pays allowances to insured persons who fulfil certain qualification as laid down in sections 22 and 23. The appellant institution does not run a hospital or a nursing home of its own. In fact in order to receive an allowance out of the Fund administered by the appellant, one need not even be sick, infirm, destitute or mentally unfit; all that is required is that he should be an insured person, he should have attained a certain age, he should have retired from insurable employment and contributions with regard to him should have been paid by his employ :Its for certain minimum period. In the circumstances, it cannot be said that the appellant institution is being maintained for the treatment or care of sick, infirm, destitute or mentally unfit persons. It cannot, therefore, take advantage of the exclusion clause (f) of section 1(3) of the Ordinance."
23. ' In the similar circumstances the Punjab Labour Appellate Tribunal in case Garrison Engineers Construction (North), Gujranwala Cantonment through Major Muhammad Naseem, Engineer v.
24. Shujauddin (PLJ 1987 Tr.0 (Labour) 30) have held that M.E.S. Which is primarily Military concern was not entitled to protection under clause 1(3) of I.R.O. Relevant portion is reproduced below:-- "The simple reason that they were employed to work for the projects taken by the MES would not make the respondents as Army' employees. However, so far as MES is concerned, as held in the ruling mentioned above it is an Army organization but it does not mean that every person employed by it would be treated as an Army employee or connected with the Defence. The other fact which shows that the Industrial Relations Ordinance applies is that the MES does not work for the Army only. According to section 1(4) of Defence Service Regulations, Pakistan and Regulations for the Military Engineering Service, the MES carries out Engineering Service not only for the Army, PAF and PN but also for POF, Provincial Government departments and Ministries/Departments through Ministry of Defence obviously the works done for the departments of Provincial Governments or for the Ministries cannot be said to have any connection with the Defence. The mere fact that with the permission of Ministry of Defence the MES can work for Provincial Government departments and for the Ministries, would not be sufficient to say that the said works are connected with the Defence. In the absence of sub-clause (iv) of clause 4 there can be force in saying that all the works done by MES were for the Army and for the Defence but since the MES authorised to work for Provincial Government Department also, unless it had been proved that the respondents were employed particularly for the works connected with the Armed Forces or the Defence, it could not be said that the Industrial Relations Ordinance was not applicable."
25. Thus underlying principle for excluding operation of Industrial Relations Ordinance, 1%9 to any institution or organization, pre-supposes that services of the employees therein have nexus with functions, responsibilities or obligations relatable to Armed Forces of Pakistan. The Honourable Supreme Court in case of Controller Stationery & Forms Government of Pakistan v. The Registrar, Trade Union Sindh and others PLD 1991 SC 353 has specified test for determining basis for applicability or otherwise of section (3) I.R.O. To any organization. Relevant portion is reproduced below:-- "8. From the above-cited cases, it is evident that in order to bring an employee within one of the categories excluded by subsection (2) of Section 1 of the I.R.O. It is not necessary that the finances or the. Funds should come from the Government or installations should be under the control and management and control of a corporate body, but what is important is, whether the person is employed inter alia in any of the Armed Forces of Pakistan or in services or installations connected with or incidental to the Armed Forces of Pakistan or in the administration of the State. Keeping in view the functions of the appellant which not only supplied the princeling materials to the various organizations relating to the Armed Forces listed at pages 43 & 44 of the paper book, but also caters for the requirements of all other Government Departments and other State organs/functionaries, and which are used inter alia for facilitating communications between the various Armed Forces establishments and other government functionaries and without which no government department can function, it can be concluded that the appellant's employees are covered by clauses (a) and (b) of subsection (3) of section 1. Of the I.R.O. It may be pertinent to point out that in the aforesaid clause(b) of subsection (3) the persons employed as workmen by the Railway, Posts, Telegraph and Telephone Departments, have been excluded from the expression "in the administration of the State" for the purpose of application of the provisions of the L.R. .0. It can, therefore, be concluded that the Law Makers wanted to excluded the workmen of the departments specified in clause (9b) and not other workmen, who may be employed in the administration of the State."
26. Applying the said principle to the instant case it is quite clear that functions of the employees, or manufactured products of the petitioner's concern has absolutely no direct or incidental link or connection with Armed Forces or Administration of State. Mere fact that some of the officers of Armed Froces by virtue of their official status have been designated as Chairman or Director of any concern which otherwise is engaged in manufacturing general products for supplying the same to all classes of people including export abroad would not in our opinion warrant exemption from the provisions of I.R.O. Accordingly formation of Union by the workers in petitioners' organization unless otherwise prohibited is not violative of law.
27. ' In such view of the matter other aspects regarding maintainability of the petition, raised by respondents do not need any consideration.
28. ' For the above reasons, we are satisfied that Petition has no merits and as such must fail. However, parties are left to bear their own costs.