M. L. SHAHANI, J. The appellants in this case have assailed an order passed by the Sindh Employee Social Security Court dismissing the Appeal No. 1 of 1993 filled by the appellants assailing an order passed by the Commissioner Sindh 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. 1,86,000.00/- 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 compliances of interim order. It is hoped that the parties who seek the relief from 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 Sindh 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 Sindh 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.
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 leamed Commissioner and certainly this is not the Court to adjudicate upon such demands which have not raised before the leamed 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 the granting the aforesaid amount to the appellant has heard the parties properly, perused the record and passed the decisions which in my humble opinion can not be challenged. Therefore, point No. 1, is accordingly answered in the negative."
3. 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 reading 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.
4. Learned counsel for the appellant on merits of case contended as follows: The payment of bonus for the year 1989 and 1990 which was declared after the fiscal year cannot be termed as wages and has invited my attention to &e settlements which are at pages 23 and 35.
His second contention was that the demand was made in relation to the employees who were drawing wages exceeding Rs. 1500/- per month according to him they are not covered under the terms of employees in view of the definition under section 2(8)(f) of the said Ordinance. According to him the judgement 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 coling of Rs. 1500/- was extended to Rs! 3000/- in relation to the covered employee. According to him the proviso is to be strictly construed.
5. His further contention was that the Head Office is situated in Karachi which is out side the notified area, therefore the employees employed in the Head Office could not be covered for the purpose of contribution.
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- 1S91 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 to employee deals with actual engagement and that engagement is initial engagement which runs through till such time, the services are terminated and the word "employed" relates to the relationship of Master and Servant 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 contest the judgment of Hon'ble Supreme Court reported in PLD 1988 SC I is to be interpreted.
According to him the Head Office at Karachi is notional extension of the factory at Hyderabad and the demand for employees at Head Office would be valid.
6. I have given my anxious consideration to the contentions urged by the parties and gone through the record with their assistance.
7. 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:
8. Coming to the first contention urged by the counsel the bonus have been given under the agreement there is SO 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 th$ settlement dated April 19, 1989 and equally identical wording have been , made in settlement dated 18-4-1990. Hon'ble Supreme Court of Paki&n in the case of M/s. Consolidated Sugar Mills Ltd. v The Sindh 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 time, any sum paid to defray special expenses, any gratuity payable on discharges or any sum paid as bonus by the employer (Page 867 of the judgment). The incentives in the form of bonus, therefore, are covered in the definition of wages. There is another reason for holding that the 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."
Consequently, therefore, no exceptions could be taken in relation to the payment' demanded by the respondents for payment of contribution on the bonus as it was given even when insufficient profits returned to the employer and same is the case for the subsequent year.
9. This brings me to the second contention urged on behalf of the appellant that no payment can be demanded in ration to the employees whose wages by virtue of increment exceeds beyond Rs.
1500/-. He was contended that the moment an employee who was initially covered (as his wages were upto Rs. 1500) when his wages exceed Rs. 1500/-. 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 express shall have the meaning hereby respectively assigned to them that is to say-
(8) "employee means any person working normally for at least twenty-for 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."
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 cause be an employee for the reasons that his monthly wages ex throe thousand rupees."
10. 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 wages Rs. 500/-. When the ceiling of Rs. 500/- increase to Rs. 1000/- no corresponding change was brought in section 20 which continue to cover the worker drawing wages upto Rs. 20/-. That was the ratio of the case decided by this Court and reported ass Messrs Dawood Cotton Mills Ltd. Karachi v. Social Security Institution, Karachi (PLD Kar. 744} and the appellate judgment of the Hon hie Supreme Court is reported as Sindh Employee's Social Security Institution v. Dawood Cotton Mills Lid (PLD 88 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 extant of Rs. 20/- and su'b. Error-was detected by the legislature when the ceiling from Rs. 1000/- was enhanced to Rs.
15000/- and the sum of Rs. 20/- was substituted with word Rs. 60/- and now it has resisted to Rs.
120/- per day.
11. Mr. Khalid Habibullah learned counsel for the respondent stated that the word "employed" is used in section 2(8)(f) in 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 lordships at page 936. He has further relied on the case of Board of Comm'rs 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 Mexico and stated that the word employed is synonomous 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. 1500/- per month tt employer is not liable to pay the contribution in respect of such employee. This 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 upto the sum of Rs. 1500/- when he was covered under the net of social security he-shall .Continue to remain under the cover even after his wages exceeds Rs. 1500/-by virtue of normal increment in the ordinary course of rendering services for the employer. Bi the employer shall pay 7% contribution upto Rs. 1500/- wages, and even no after the amendment the employer shall pay 7% of Rs. 3000/- and not beyond that amount.
12. In relation to the arguments to the proviso to clause (f) quote supra, suffice to say (f)at proviso is to be strictly construed as it is exceptio to tjhe general concept convey by the legislature. The reasons that it was n< included by the legislature earlier, was that now the legislature has brought more workers under the net of social security i.e. Employees drawing wage upto Rs. 3000/- per month or Rs. 120/- per day. The legislature felt the need that such employees heeded protection of the social security benefit therefore, expressly now it has been provided that even though they ma draw wages exceeding to Rs. 3000/- and therefore, would not be deprive from the benefits under the beneficial legislation i.e. Under the Social Security Ordinance. Another reason that may be for inclusion for sue provision is that the legislature knows& the existing state of law which may b gathered from the judgments delivered by the Hon'ble Supreme Court Th law expressly declared by the Supreme Court in PLD 1983 SC 1, is give express contours in the form of the proviso which Was added by th legislature to confer express approval on the law declared by the Supreme Court.
13. Coming to the last contention urged by the learned counsel tha the Head Office is situated in Karachi and outside the covered area o Hyderabad the notification only covers 4 the factory and, therefore, no contribution was payable in respect of the employees employed in the Head Office.
Mr. Khalid Habibullah learned counsel drew my attention to th< deposition of the witness of the appellant which reads as follows: "It is a fact that the staff working in office of the management ii 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.
14. This deposition of the witness of the respondent is enough t 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 th Head Office is a different establishment than that of a factory at Hyderabad In the case of the Associated Cement Companies Lid. Chaibasa Cement Works, jhinkpani, v. Their Workmen, (AIR 1960 SC 56), the Indian Supreme Court has held that though the lime query was situate in Agra and th factory was situated in Delhi but since there was unity of ownership, unity 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 cost provided under the Industrial Disputes Act, 1947. In another case of Messrs. Jang Publication Ltd. v. Registrar of Trade Union Sindh and thee (PLD 1984 Kar. 292), a Division Bench of this Court in relation to e 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 polity decision from one centre, and have there segments of work force, each independently working under the banner of Its own trade union, yet has unity of interest because of its working under one umbrella.
15. Consequently, therefore, apart from the evidence, and on the tis 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 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 they would be deemed to be working for the mills, in absence specific evidence which was the duty of the appellants and also due to ive answer of appellants witness.
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 accord to them are covered but the contribution is not given by the employers.
With the above observations and for the above stated reasons this appeal is dismissed with no order as to costs.