' All these appeals arise from different judgments of the First Social Security Court, Karachi, having similar facts and question of law. Therefore, they are being disposed of by this common judgment.
2. It may be pertinent to refer to the facts of M.A. No,14 of 1999, which was argued at great length.
The appellants are establishment covered by the Employees' Social Security Ordinance, 1969, and liable to make contribution to the respondents in respect of certain employees under the provisions of the Ordinance. The appellant's case in nutshell is that they were making such contribution on the basis of wages of persons falling within the definition of employee in terms of section 2(8) of the Ordinance according to the mandate of section 20. At the relevant time i,e, in 1989, the definition of employee, inter alia, excluded persons employed on wages exceeding Rs,1,500 pursuant to a revision of salaries of employees in the appellant company effective from 1- 6-1989 the minimum wages payable in the appellant establishment was raised to Rs,1,545 and hence no contribution was required to be made. The respondent was accordingly informed by letter, dated 31-7-1989 and admittedly thereafter no payment was made. However, more than five years later the appellant received a letter from a Director of the respondent alleging that they were liable to make contribution, and directed them to do so together with statutory increase within 10 days, failing which, recovery will be made by way of arrears of land revenue. The appellant preferred a complaint against the aforesaid demand before the Commissioner of the respondent under section 57 of the Ordinance but the same was rejected vide order, dated 25-7-1996. An appeal to the Labour Court acting as Social Security Court under section 59 was also dismissed, whereafter this statutory appeal under section 64 of the Ordinance has been preferred.
3. Though the facts in the remaining three appeals are different all of them raise a common question of law as to whether any social security contributions are payable in respect of wages of persons employed by the appellants, whose wages did not initially exceed Rs,1,500, but were subsequently raised above the aforesaid limit for the period between the date of such increase and 25-9-1993 i,e, the date on which the Labour Laws (Amendment) Ordinance, 1993, was promulgated. Mr. Abdul Samad, Advocate for the appellant in M.A. No,14 of 1999 and Mr. Khalid Habibullah, Advocate for the respondents in all the appeals argued the matter at great length, discussing the history of the legislation of Employees' Social Security Ordinance, the principle governing interpretation of such statutes and its various provisions. Mr. Munib Ahmad Khan, learned counsel for the appellant in the remaining three appeals, however, largely adopted the arguments of Mr. Abdul Samad and relied upon his earlier written submissions. In my humble opinion, however, it is not necessary to go in so much detail and the controversy could be resolved upon examining the relevant statutory provisions prior to 25-9-1993 and the effect of the' amendment enacted on such date. It may be observed that under section 20 an employer is liable to pay the respondent-institution a certain amount calculated on the basis of wages drawn by every employee at a rate mentioned there. Section 2(8) defined the expression 'employee' and read as under prior to 1993:-- 'Employee' means any person working normally for 24 hours per week, for wages, or in connection with work of any industry business undertaking or establishment, under any contract of service or apprenticeship, whether written or oral, expressed or employed but does not include--
(a) ..................................................
(b) ..........................................................................................................................
(c) .................................................................
(d)
(e) ..........................................................................................................................
(f) any person employed on wages exceeding 1,500 rupees per mensum."
4. Through the Labour Laws (Amendment) Ordinance, 1993 (referred to hereinabove) a large number of amendments were brought about in various statutes relating to workers and the aforesaid section 2(8) was also amended in two respects. In the first instance the limitation of Rs,1,500 was substituted to Rs,3,000. Secondly a proviso to the following effect was inserted "provided that an employee shall not cease to be an employee for the reason that his monthly wages exceed 3,000 rupees".
5. Mr. Abdul Samad, learned counsel for the appellant presented a two-fold contention. In the first instance he raised a technical plea to the effect that upon being informed by the appellant that they were not liable, to make any contribution, the respondent, in case they disagreed with such contention ought to have preferred a complaint under section 57 of the Ordinance within a period of 90 days specified in the relevant Regulations. Since they failed to do so they could not foist the appellant with liability after more than 5 years. With due respect I am not impressed by this contention. Indeed section 57 does stipulate that if a complaint is received or any question or dispute arises, in relation to several matters enumerated therein, the matter shall be decided by the Institution and the Regulations prescribing the procedure for deciding such complaints require that an aggrieved person may file a complaint before the Commissioner within 90 days of the arising of a question or dispute. However, prima facie, it is difficult to subscribe to the view that the Institution itself is required to file a complaint before itself in terms of section 57. Moreover, Mr. Khalid Habibullah referred to the judgment of the Honourable Supreme Court in Kohinoor Chemicals Company v. Sindh Social Security Institution (PLD 1977 SC 197) and of this in Dawood Cotton Mills v. Sindh Social Security Institution (PLD 1978 Karachi 744), where it has been held that once an establishment is registered for the purpose of the Ordinance it is required to make contribution itself and cannot evade liability on the ground that no demand notice was received.
Thus, when the appellant failed to make contribution they did so on their own peril.
6. On merits, however, Mr. Abdul Samad appears to have a more formidable case. Though it must be stated with deference to the learning and industry of both Mr. Abdul Samad and Mr. Khalid Habibullah that elaborate arguments concerning, different provisions of the Ordinance and the principle of its interpretation supported by case-law were addressed, I do not think it is necessary to go into much detail. As is evident from the preamble to the Ordinance that it seeks to provide some benefits to certain employees and not every person received remuneration for services rendered. Section 2(8) defines the expression "employee" and clauses (a) to (f) thereof exclude certain persons who were otherwise fall within the broad import of the expression. Clause (0 as jt stood at the relevant time excluded persons employed on wages exceeding Rs,1,500 from the ambit of the expression "employee".
7. The effect of the amendment brought about through the Labour Laws (Amendment) Ordinance, 1993 (which was subsequently adopted as an Act of (Parliament) was two-fold from the stand point from expanding the definition of an employee. In the first instance the words 1,500 were substituted to read 3,000. In other words contribution became payable in respect of a person drawing wages not exceeding Rs,3,000 from the date of enforcement of the Ordinance. Secondly it was apparently realised that under the law. Existing prior to the amendment a person in respect of whom contributions were payable and who was allowed certain social security benefits would cease to enjoy such benefits the moment the quantum of his wage, crossed the amount specified in the clause (as appears to have happened in the instant case). To rectify this situation and to ensure that an employee does not loose such benefits a proviso was added stipulating that an employee shall not cease to be an employee for the reason that his monthly wages exceeds 3,000 rupees. In other words once a person was entitled to social security benefits and contributions were required to be made on his behalf, he would continue to remain so irrespective of the increase in his wages to an amount exceeding Rs,3,000. It is indeed settled law that a provision of a statute ought to be construed in the first instance according to their plain grammatical meaning and the unamended clause clearly showed that a person drawing wages exceeding the amount specified could not be treated as an employee for the purpose of the Ordinance. The amendment further fortifies the appellant's case inasmuch as it shows that a proviso (which is an exception to the general rule) had to be enacted to ensure benefits for and liability to make contribution in respect of those who would otherwise not be entitled thereto.
8. Mr. Khalid Habibullah, learned counsel for the respondents, however, vociferously argued that the Ordinance was a beneficial statute and must be liberally construed in favour of employees. Indeed there can be no cavil with its proposition but the question of strict or beneficial construction could only arise if otherwise there was an ambiguity regarding the scope and meaning of a statutory provision. Learned counsel, inter alia, referred to the case of Sindh Employees' Social Security Institution v. Dawood Cotton Mills (PLD 1988 SC 1) where the provisions of section 20(4)(a) to the effect that "no contribution shall be payable on wages which are in excess of Rs,20 per day, were construed as not to mean that no contribution was payabe in respect of persons drawing more than Rs,20 per day, but only to mean that irrespective of the wages the maximum contribution required to be made on behalf of a person falling within the definition of an employee could be Rs,20 per day and not more.
9. Though the Tribunals below found it possible to uphold the respondents' contention by referring to the aforesaid judgment, with all respects I do not see how it could be helpful to Mr. Khalid Habibullah case. In the aforesaid case their Lordships were concerned with the interpretation of section 20(4) of the Ordinance and came to the correct conclusion (if one may say so with respect) that the aforesaid section only stipulated a maximum limit on the quantum of contributions to be made on behalf of an employee and did not mean that if an employee's wages exceeded Rs,20 per day no contribution would be liable to be made on his behalf. The question in the present cases is not relatable to the quantum of compensation and what was indeed to be determined was whether they fell within the purview of the definition of the expression 'employee' in terms of section 2(8). The distinction between the requirement of section 2(8) and section 20 as well as the following observations of the Honourable Supreme Court appear to have been completely overlooked:-- "In doing the proper exercise for discovering whether any amount payable as wages is liable to be subjected to the contribution, it would first have to be seen whether the employee falls within the definition as contained in section 2(8). After this if it is found that a certain employee is covered by the definition the liability to the contribution would have to be determined under section 20(4)(a) read with other provisions of the relevant law."
10. Mr. Khalid Habibullah then attempted to argue that clause (f) of section 2(8) only intended to exclude those persons who joined employment at wages exceeding the specified amount (Rs,1,500 or Rs,3,000) or as the case may be and not those whose wages came to exceed such amount.
Quite frankly I find no substance in such contention in view of what has been discussed above.
Learned counsel then attempted to contend that the 1993 Amendment was only a piece of declaratory legislation enacted by way of abundant caution and ought to be given retrospective effect. In support of his contention he referred to various observations from Craies Statutory Construction. I regret I cannot agree. To hold so would nullify the very basis on which proviso to the aforesaid clauses was added. At best it could only be treated as a piece of remedial Legislation and when the Legislature itself gave it prospective effect the Court cannot make its application retroactive.
' For the foregoing reasons I would allow these appeals to the extent of holding that the appellants are not required to make any contribution in respect of persons of their pay roll whose wages exceeded Rs,1,500 prior to 25-9-1993 and set aside the impugned orders. The respondents may, however, claim contributions in respect of persons who qualified as 'employees' for any period in accordance with law.