' MRS, KHALIDA RACHID, J.---Through instant Constitutional petition, the petitioner, challenging the order, dated 27-10-1996 issued by respondent No,1, Employees' Old-Age Benefits Institutions, Ministry of Labour Manpower (Labour Division) sought the indulgence of this Court to declare the same as illegal, ultra vires and without lawful authority.
2. The petitioner, a private limited company, registered under' the Companies Ordinance, 1984 under the name and style of Globe Trader (Pvt.) Ltd., Peshawar located at Peshawar, Medical Centre; Khyber Bazar, Peshawar, runs a business of distribution of medical equipment since 27-3- 1985. Employees' Old-Age Benefits Institution, respondent No,1, registered the petitioner-Company under section 11(3) of the Employees Old-Age Benefits Act, 1976 (hereinafter referred to as the Act) on 27-10-1996, vide Registration No,CCA 00673 and asked the petitioner to make contribution payable either with effect from 1-7-1996 or from 1-7-1993, the date of establishment of the organization, whichever, is later. The petitioner resisted the registration by filing a complaint under section 33 of the Act, before the Adjudicating Authority, alleging that the number of employees on the pay roll of the petitioner's establishment, during the whole period from July, 1993 to June, 1996, has never been more than eight, therefore, the petitioner-Company has wrongly been registered.
The Adjudicating Authority vide order, dated 16-1-1997 dismissed the complaint. The Review Petition, under section 34 of the Act, was moved on the plea that Adjudicating Authority has misinterpreted the term 'employee' by including three directors as employees in its definition, In fact, industry had only 8 employees on their pay roll, excluding the directors. The review petition was dismissed with the observations that three Directors were rightly included in the definition of the employee, thus, increasing the strength of employees to eleven. Therefore, the industry has rightly been registered on its full strength of eleven employees. Being dissatisfied with the said order the petitioner preferred an appeal before respondent No,3, (Board of Trustees, Employees' Old-Age Benefits Institution at Karachi) which was also dismissed vide order, dated 30-7-1997.
3. Praying to declare the impugned order, dated 27-10-1996 and subsequent orders passed by the respondents as illegal, null and void. Qazi Abdur Rashid, Advocate, appearing for the petitioner argued that the Act, cannot be applied to the petitioner's concern as it is being run by less than ten employees i,e, below the required strength. Therefore, the establishment has wrongly been registered by respondent No,1. It was further argued that,. The Managing Director, Director and Assistant Director of the petitioner's establishment do not fall under the definition of employee, hence they cannot be calculated towards the total strength of the employees under section 2(bb) of the Act.
4. Disagreeing with the submission of petitioner's counsel, Mr. Salim Dil Khan, learned counsel for the respondents, insisted that the directors very much fall within the provision of section 2(bb).
Despite repeated reminder to disclose the actual strength of employees the petitioner did not care to provide the required information therefore, the Institution (respondent No,1), after receiving information and fully satisfying themselves about the number of employees, suo motu registered, the petitioner-Company in accordance with the law.
5. The above resume of the facts and arguments of the learned counsel for the parties boiled down to a solitary moot question of definition of term 'employee' and as to whether Managing Director and other Directors could be considered as employees in terms of section 2(bb) of the Act.
According to section 1(4) of the Act, this Act is applicable to every industry which is being run with ten employees who are employed by employer defined in section 2(c) of the Act.
6. For the purpose of convenience and proper appreciation, the relevant provisions of law are reproduced as under:- "S.2. Definition.-In this Act, unless the context otherwise requires,--(a) benefits.......
(aa) board....
(b) contribution.............
(bb) 'employee' means any person employed, whether directly or through any other person, for wages or otherwise, to do any skilled or unskilled work. Supervisory, clerical, manual or other work in or in connection with the affairs of an industry or establishment, under a contract of service or apprenticeship, whether written or oral, express or implied, and includes such person when laid off: Provided that a director of a limited company or of a corporation set up under any law shall not be treated as an employee under this act, ' irrespective of his wages or emoluments.
(c) 'employer, in relation to an industry or establishment, means any person who employs, either directly or through any other person, any employee, and includes--
(i) in the case of an individual, an heir, successor, administrator or assign;
(ii) a person who has ultimate control over the affairs of an industry or establishment or where the affairs of an industry or establishment are entrusted to any other person (whether called a managing agent, managing director, manager, superintendent, secretary or by any other name), such other person.'
Proviso to section 2(bb) above categorically exempts/excludes a director of a limited company from the definition of an employee. Similarly section 2(c) describes employer a person who may be managing director if has a control over the affairs of the industry or where the affairs of the industry are entrusted to him."
7. We may also refer to the dictionary meaning of word "employee". According to the Concise Oxford Dictionary it means 'a person employed for wages'. The Collins Compact Thesaurus Dictionary provides alternate words as 'job holder', staff member and wage earner. The American Heritage Dictionary defines the term 'employee' as 'one who works for another.' According to Chambers Twentieth Century Dictionary, it means 'a person employed'. More elaborate definition is provided in 'Law Terms add Phrases' as employee means any person who was employed for hire or reward to any work skilled or unskilled, manual or clerical in a scheduled employment in respect of which minimum rates of wages had been taken'.
8. In coming' to the conclusion, after considering the above definitions, employee is a person who is engaged by another on payment of wages. It connotes relationship between Master and Servant.
The aforesaid three directors who are admittedly the owners of the petitioner concern and had employed the eight employees for wages cannot be termed as employee.
Furthermore, section 47 of the Act enumerates the person to whom this Act shall not apply which says:-- S.47. Act not to apply to certain persons.---Nothing in this Act shall apply to--
(a) persons in the service of the State, including members of the armed forces, police force and railway servants;
(b) persons in the service of a local council, a municipal committee, a cantonment board or any other local authority;
(c) persons who are employed in services or installations connected with or incidental to the Armed Forces of Pakistan including an ordnance factory maintained by the Federal Government or Railway Administration;
(d) persons in the service of Water and Power Development Authority;
(e) persons in the service of a bank or a banking company;
(f) persons in the service of statutory bodies other than those employed in or in connection with the affairs of a factory (as defined in) section 2(j) of the Factories Act, 1934 (XXIV of 1934), or (as defined in the) Mines Act, 1923 (IV of 1923): ' Provided that workshops maintained exclusively for the purposes of repair or maintenance of equipment or vehicles used in such statutory bodies shall not be treated as factories for the purposes of this clause.
(g) members of the employer's family (that is to say, the husband or wife and dependent children of the employer) living in his house, in respect of their work for him.
9. Section 47(g) of the Act specifically lays down that this Act shall not be applicable to members of the employer's family, that is to say, the husband or wife and dependent children of the employer living in his house, in respect of their work for him.
10, Copy of pay roll of the petitioner-company at page 17 of the petition shows that Managing Director, Director Finance and Director namely:--- Assadullah Khan Lodhi, Ms. Robina Lodhi and Ms. Safia Khanum Lodhi are members of one family, hence this Act ostensibly shall not apply to the petitioner-concem.
11. We may also refer to the preamble of this Act. It is specifically mentioned that this law is enacted for the benefit of the persons employed in industrial, commercial and other organizations.
12. For the foregoing reasons, we accept the petition by setting aside the impugned orders of the respondent. The parties shall bear their own costs.