This judgment will dispose of F.A.Os. Nos.136 and 153 of 1990 as these arise out of common background and involve identical questions of law. The former appeal has been filed by the Commissioner Punjab Employees Social Security Institution and another while the latter has been filed by Lahore Cycle Industry (Pvt.) Limited. Both of these appeals call in question the validity of judgment rendered by learned Judge Social Security, Punjab, dated 21-5-1990.
A few facts, relevant for the disposal of these appeals, are:-- that Lahore Cycle Industry (Private)
Limited is an establishment under Provincial Employees Social Security Ordinance (X of 1965)
(hereinafter referred to as the Ordinance). Pursuant to the report of Director Punjab Employees Social Security institution (shortly stated as the Institution), a notice was issued to Lahore Cycle Industries Ltd. For the payment of an amount of Rs.1,40,249.66 as a contribution on account of following:--
(i) Temporary wagesRs.3,986.30
(ii) Building Repair Rs.18,984
(iii) Earned Leave EncashmentRs.1,011.27
(iv) Production Reward Rs.865.44
(v) Contractual Labour (As described in item No.V of the notice).
3. Feeling aggrieved from this notice, Lahore Cycle Industries lodged a complaint before the Commissioner of the Institution who vide an order, dated 4-6-1989 dismissed the complaint.
Against this decision, Lahore Cycle Industries preferred appeal which was partly allowed by Judge Social Security vide a decision dated 21-5-1990. The decision was rendered in following terms:-- "The demand of the respondents consists of five items (i) temporary wages, (ii) building repairs,
(iii) earned leave encashment, (iv) production reward, and (v) contract labour. So far as item No.(i) is concerned, the appellant is bound to pay the contribution for temporary workers because there is no distinction between temporary or a permanent worker for the purpose of Social Security. So far as item of building repair is concerned, the respondents have not made clear as to what contribution has been demanded. The item per se shows that it is being demanded on account of the building repairs. Whatever expenses the appellant may incur on the building repairs, no contribution is payable on this account and even the learned Deputy Director has not been able to clarify this item before this Court, therefore, the demand on this item is not justified. So far as the item of earned leave encashment is concerned, it is a part of the wages as defined by the Social Security Ordinance and the same is recoverable under the Social Security Ordinance. The next item is production reward. According to the respondents' own demand letter of bonus, which has been specifically excluded from the definition of wages by the Social Security Ordinance and no contribution can be claimed on this ground. So far as the contract labour is concerned, now it is the established law that the labour engaged by the contractor is also covered by the Social Security Ordinance and the employer is bound to pay the contribution for the contract labour also, therefore, the demand of the Social Security on this account is justified. In view of the above, except the items of building repairs and production reward, the other items are fully justified and as a result the appeal is partly accepted in the above terms."
4. After arguing the case for some time, learned counsel for the parties agreed that the Appellate Court had not correctly determined the question pertaining to building repairs and contract labour.
It was further agreed that the Court was required to first determine whether the persons employed by the Contractor were secured persons within the terms of subsections (25) and (30) of section 2 of the Ordinance. They further agreed that this was not done. It was next agreed that as far as production reward was concerned, it was part of wages as held by the Supreme Court in National Embroidery Mills Ltd. v. Punjab Employees Social Security Institution 1993 SCMR 1201 and so the impugned decision was correct to that extent. Similarly, it was not disputed that the judgment of the Court below regarding earned leave encashment was also not open to exception.
5. In view of above agreement and with the consent of the parties; the judgment of the Court below is affirmed to the extent of earned leave encashment (item No.(iii), production reward (item No.(iv) and temporary wages (item No.(i). With their consent the appeal is allowed to the extent of building repair (item No.(ii) and contractual labour (item No.(v). The case is remitted back to the Court below for decision on these two items afresh after hearing the parties and in consonance with law. The appeal filed by Lahore Cycle Industries Ltd. Shall be deemed to be pending to above extent.