1. The appellants in this case have assailed an order passed by the Sind Employees Social Security Court dismissing the Appeal No. 1 of 1993 filed by the appellants assailing an order passed by the Commissioner Sind Employees Social Security Institution directing the appellants to pay the sum of Rs.1,85,838.41. This appeal was admitted on 18-9-1994 and it was ordered that the appellants shall furnish the bank guarantee in the sum of Rs.1,86,000 which was not furnished, however, this case is being fixed for regular hearing and it was indeed surprising that the respondents did not bring to the notice of this Court that the orders regarding furnishing bank guarantee have not been complied with, for the reasons best known to the respondent. However, the appeal could not be disposed of due to non---compliance of interim order. It is hoped that the parties who seek the relief form Court will comply with the conditions by virtue whereof interim relief is granted.
2. Coming to the facts of the case that the appellant, establishment was declared to be the establishment notified in terms of section 1(3) of the Sind Employees Social Security Ordinance, 1965. The respondent No. 1 issued demand notice on the basis of checking the record of the appellants' mill and demanded a sum of Rs.1,85,838.41. The demand was disputed by the appellants and they filed application under section 57 of the Sind Employees Social Security Ordinance, 1965. Thereafter, they went on filing applications under section 58 called by them to be Review Application and supplementary Review Applications. These applications were decided by the Commissioner Social Security. Such orders were impugned before the Social Security Court.
3. The appeal was decided by the Social Security Court vide order dated 30-4-1994 and held as follows: "The appellant has claimed such more amount in the appeal and this fact should have been placed before the learned Commissioner and before the Appellate Authority. However, the appellant is at liberty, if the law permits to re-submit further demands before the learned Commissioner and certainly this is not the Court to adjudicate upon such demands which have not raised before the learned Commissioner. Consequently, there is no reason to interfere with the decisions of the learned Commissioner, who has rightly granted the amount of Rs.1,85,838.41, to the appellant. The learned Commissioner has before granting the aforesaid amount to the appellant has heard the parties properly, perused the record and passed the decisions which in my humble opinion cannot be challenged. Therefore, point No. 1, is accordingly answered in the negative. "
4. The first contention of the learned counsel for the appellant is that the order passed by the learned Social Security Court is not sustainable and contrary to the facts on record and, therefore, liable to be set aside and the matter be remanded to the Social Security Court. I would have agreed with that contention of the learned counsel for the appellants but no useful purpose would be served by remanding the case as the appellate Court can decide the matter after considering the entire material available before the Appellate Court uninfluenced by the errors committed by the subordinate Court, therefore, I declined to remand the case to Social Security Court.
5. Learned counsel for the appellant on merits of case contended as follows: The payment of bonus for the years 1989 and 1990 which was declared after the fiscal year cannot be termed as wages and has invited my attention to the settlements which are at pages 23 and 35.
6. His second contention was that the demand was made in relation to the employees who were drawing wages exceeding Rs.1,500 per month according to him they are not covered under the terms of employees in view of the definition under section 2(8)(1) of the said Ordinance. According to him the judgment reported in (PLD 1988 SC 1) is distinguishable. He has also contended that even the names of the employees who are covered but their names have not been mentioned in relation to whom appellant have not paid the contribution. His further contention is that the word "employed" under section 2(8)(f) need interpretation. He further contended that wherever the Legislature wants that the particular set of employees be given benefits even if their salary exceeds from the prescribed limit it expressly says so and according to him the law was so amended in 1994 when the ceiling of Rs.1,500 was extended to Rs.3,000 in relation the covered employees.
7. According to him the proviso is to be strictly construed.
8. His further contention was that the Head Office is situated in Karachi which is outside the notified area, therefore, the employees employed in the Head Office could not be covered for the purpose of contribution.
9. As against the above-contention of the learned counsel for the appellant Mr. Khalid Habibullah, learned counsel for the respondent stated that .The complaint was filed by the appellants on 24-8- 1991 and it was decided on 8th June, 1992. The order dated 8th June, 1992 was not impugned in any appeal. The appellants filed Review Application and supplementary applications. According to him the amount is payable on the bonus. According to him the employees deals with actual engagement and that engagement is initial. Engagement which runs through till such the, the services are terminated and the word "employed" relates to the relationship of master and servant.
10. According to him that only those persons are excluded who are employed initially whose wages exceeded Rs.500 or Rs.20 per day as was initially mentioned and subsequently Rs.60 per day and in that context the judgment of Hon'ble Supreme Court reported in PLD 1988 SC 1 is to be interpreted.
11. According to him the Head Office at Karachi is notional extension of the factory at Hyderabad and the demand for employees at Head Office employees would be valid.
12. I have given my anxious consideration to the contentions urged by the parties and gone through the record with their assistance.
13. After hearing the parties on 7th April, 1987 for the reasons to be recorded subsequently I dismissed this appeal and the following are the reasons;- Coming to the first contention urged by the counsel the bonus have been given under the agreement there is Standing Order 10(c) bonus given and in addition thereto another bonus is mentioned being the incentive to the worker for giving more production which is specifically mentioned at page 2 of the settlement, dated April 19, 1989 and equally identical wording have been made in settlement dated 18-4-1990. Hon'ble Supreme Court of Pakistan in the case of Messrs Consolidated Sugar Mills Ltd. v. The Sind Employees' Social Security Institution (PLD 1991 SC 862) has ruled that in the term of wages it is obvious it includes remuneration for service paid or payable in cash or in kind excluding the items mentioned in above classes i.e. Any payment for over the, any sum paid to defray special expenses, any gratuity payable on discharge, or any sum paid as bonus by the employer (page 867 of the judgment). The incentives in the form of bonus, therefore, covered in the definition of wages. There is another reason for holding that he bonus which though termed bonus is part of wages. In fact it is integral part of pay packet and in the settlement referred to by Mr. Khursheed Anwar Sheikh, learned counsel for the appellant, one such clause reads as follows: "That the both parties has agreed that the Bonus will be paid to the workers on 25-4-1989 (This is a special case where although the profit for the year was lower than previous years, the management have agreed to pay ex-gratia for more days."
14. Consequently, therefore, no exceptions could be taken in relation to the payment demanded by the respondents for payment of contribution on the A bonus as it was given even when insufficient profits returned to the employer and same is the case for the subsequent year.
15. This brings me to the second contention urged on behalf of .The appellant that no payment can be demanded in relation to the employees whose wages by virtue of increment exceeds beyond Rs.1,500. He has contended that the moment an employee who was initially covered (as his wages were up to Rs.1,500) when his wages exceed Rs.1,500 he can no longer be termed as covered employee and has referred to section 2(8)(f) which reads as follows: "2. Definitions. ---In this Ordinance, unless the context otherwise requires, following expression, shall have the meaning hereby respectively assigned to them that is to say -
(8) employee means any person working normally for at least twenty--'s hours per week for wages, in or in connection, with the work for any industry, business undertaking or establishment, under any contract of service of apprenticeship whether written or oral, express or implied but does not include--
(f) any person employed on wages exceeding one thousand five hundred rupees per mensem. "
16. His further contention was that wherever the Legislature wanted that the person once covered shall continue to be covered employee, the Legislature expressly says so and in support of his such contention he has relied upon the proviso to clause (f) which now reads as follows:
(f) any person employed on wages exceeding three thousand rupees per mensem. Provided that an employee shall not cease to be an employee for the reasons that his monthly wages exceed three thousand rupees. "
17. He has further stated that initially in terms of section 20 a sum of Rs.20 per day was mentioned and the covered employee in terms of clause (f) was the person drawing wage Rs.500. When the ceiling of Rs.500 increase to Rs.1,000 no corresponding change was brought in section 20 which continue to cover the worker drawing wages up to Rs.20. That was the ratio of the case decided by this Court and reported as Messrs Dawood Cotton Mills Ltd., Karachi v. Social Security Institution, Karachi (PLD 1978 Kar.. 744) and the appellate judgment of the Hon'ble Supreme Court is reported as Sind Employees' Social Security Institution v. Dawood Cotton Mills Ltd. (PLD 1988 SC 1). According to the judgment of the Hon'ble Supreme Court if the wages of an employee exceed beyond Rs.20 per day the employer is liable to pay the contribution to the extent of Rs.20 and such error was detected by the Legislature when the ceiling from Rs.1,000 was enhanced to Rs.1,500 and the sum of Rs.20 was substituted with word Rs.60 and now it has resisted to Rs.120 per day.
18. Mr. Khalid Habibullah learned counsel for the respondent stated that the word "employed" is used in section 2(8)(f) is the same word "employed" as mentioned in section 20. According to him the word employed leads to the initial engagement and has reference to the concept of master and servant i.e. 'it declares the relationship between employer and the employee. He has relied upon the judgment of Supreme Court of India reported in the case of Workmen of the Food Corporation of India v. Food Corporation of India (AIR 1985 SC 670). He has relied upon the case of Muhammadi Steamship Co. Ltd. v. The Commissioner of Income-tax (Central), Karachi (PLD 1966 SC 828) where "capital employed" was discussed by their Lordship at page 936. He has further relied on the case of Board of Commissioner's of Confax County at Al. v. Department of Public Health at Al (100 Pacific Reporter 2nd series page No. 222) decided by the Supreme Court of New Maxico and stated that the word employed is synonymous to hire or appoint. Mr. Khursheed Anwar Shaikh, Advocate for the applicant has relied upon the dictionary meaning of the word employed which means to appoint and to engage. After considering the point urged by the parties I would, hold that the concept of employment/engagement/appointment is an initial appointment. In case a person is employed initially with salary more than Rs.1,500 per month the employer is not liable to pay the contribution to respect of such employee. The conclusion in consonance with the judgment of Hon'ble Supreme Court reported in (PLD 1988 SC 1). The employer is liable to pay the contribution up to the sum of Rs.1,500 when he was B covered under the net of social security, he shall continue to remain under the cover even after his wages exceeds Rs.1,500 by virtue of normal increment in the ordinary course of rendering services for the employer. But the employer shall pay 7% contribution up to Rs.1,500 wages, and even now after the amendment the employer shall pay 7% of Rs.3,000 and not beyond that amount.
19. In relation to the arguments to the proviso to clause (f) quoted supra, suffice to say that proviso is to be strictly construed as it is exception to the general concept convey by the Legislature. The reasons that it was not included by the Legislature earlier, was that now the Legislature has brought C more workers under the net of Social Security i.e. Employees drawing wages up to Rs.3,000 per month or Rs.120 per day. The Legislature felt the need that such employees needed protection of the social security benefit, therefore, expressly now it has been provided that even though they may draw wages exceeding to Rs.3,000 and, therefore, would not be deprived from the benefits under the beneficial legislation i.e. Under the Social Security Ordinance. Another reason that may be for inclusion for such proviso is that the Legislature knows the existing state of law which may be gathered from the judgments delivered by the Hon'ble Supreme Court. The law expressly declared by the Supreme Court in PLD 1988 SC 1, is given express contours in the form of the proviso which was added by the Legislature to confer express approval on the law declared by the Supreme Court.
20. Coming to the last contention urged by the learned counsel that the Head Office is situated in Karachi and outside the covered area of Hyderabad the Notification only covers the factory and, therefore, no contribution was payable in respect of the employees employed in the Head Office.
21. Mr. Khalid Habibullah learned counsel drew my attention to the deposition of the witness of the appellant which reads as follows: "It is a fact that the staff working in office of the management in Karachi, is meant for the business and working of M/s.' Jupiter Mills, Hyderabad. The management is contributing the payment to respondent from its inception."
22. This deposition of the witness of the respondent is enough to bring in the net of social security the employees employed at the Head Office. Even otherwise there is no evidence on record which may suggest that the Head Office is a different establishment than that of a factory at Hyderabad. In the case of the Associated Cement Companies Ltd. Chaibasa Cement Works, Jhinkpani v. Their Workmen (AIR 1960 SC 56), the Indian Supreme Court has held that though the lime quarry was situated in Agra and the factory was situated in Delhi but since there was unity of ownership, unity of management, supervision of control, unity of finance and employment, unity of labour and conditions of service and workmen, functional integrity, general unity of purpose and geographical proximity, therefore, such establishments were declared to be one establishment, in the absence of any test provided under the Industrial Disputes Act, 1947. In another case of Messrs Jang Publication Ltd. v. Registrar of Trade Union, Sind and another (PLD 1984 Kar.. 292), a Division Bench of this Court in relation to the section 22-EE of I.R.O. Held that the petitioner had establishment in three different Provinces of the country which are managed and controlled under one Board of Directors who formulate policy, switch policy decision from one centre, and have three segments of work force, each independently working under the banner of its own trade union, yet has a unity of interest because of its working under one umbrella.
23. Consequently, therefore, apart from the evidence, and on the basis of the discussion of law I would hold that the Head Office at Karachi is notional extension of mills, therefore, liable to pay contribution in respect of the employees employed at Head Office drawing wages less than the ceiling mentioned and no exceptions can be taken to the demand raised by the respondents as such employees would be deemed to be working for the mills, in absence of specific evidence which was the duty of the appellants and also due to the positive answer of-appellant's witness.
24. Although I have held that no exceptions can be taken to the demand yet it will be better that the social security institution in the demand raised, must mention the persons who according to them are covered but no contribution has been paid and not in the general terms. Social Security Contribution is payable in respect of the covered employee. It is not a tax on the total wages bill, therefore, in relation to the demand pertaining to the contribution, it is expected from the institution that the specified persons may be mentioned who according to them are covered but the contribution is not given by the employers.
25. With the above observations and for the above-stated reasons this appeal is dismissed with no order as to costs.