' SABIHUDDIN AHMED, J.---According to the Respondent No,3 he was working in the weaving department of the petitioners textile A mills since 1984. However, his salary etc., was being disbursed by the Respondent No,4, but he and his co-workers were not being given the benefits to which they were entitled. Accordingly they made a joint complaint to the Director Labour on 17-2- 1994. On 26-3-1994 when he reported for duty at the factory gate he was refused entry by the security officer of the petitioner and the Respondent No,4. He was told that his services had been terminated though no order in writing was provided nor were the grounds for such termination disclosed.
2. The petitioner's case on the other hand appears to be that owing to crisis in the industry they had to close down their weaving section completely in 1978 which remained closed till 1989 whereafter they decided to have the manufacturing of cloth done through independent contractors. A copy of the "contract" dated 19-2-1989 has been placed on record whereby the Respondent No,4 has been assigned to carry out weaving work on the machine and at the premises belonging to the petitioner. The "contract" records that the contractor (Respondent No,4) is to employ his own work force and there will be an employer-employee relationship between the petitioner and such workers. It further provides that the contractor would be responsible for compliance with all labour laws as well as contributions to the Social Security Institution, E.O.B.I, Education Cess etc. He would also work according to the directions of the petitioner. For such services he would receive payment on per square meter of cloth woven at prescribed rates. The tenure of the contract was admittedly extended from time to time and it was operative when the termination of service of the Respondent No,3 took place.
3. Upon the de facto termination his services on 17-2-2004, the Respondent No,3 served a simultaneous grievance notice upon both the petitioner and the Respondent No,4 and upon failing to receive a satisfactory response moved the Labour Court for relief. It was inter alia alleged that the Respondent No,3 had been employed since 1984 and had acquired the status of a permanent workman of the petitioner whereas the device of describing him as an employee of the Respondent No,4 had been adopted to deny him and his collegues the benefits permissible to him.
The petitioner in their written statement claimed that the Respondent No,3 was not employee of the petitioner and disclaimed all liability. The Respondent No,4 also took up the same position and on merits asserted the apprehending disciplinary action the Respondent No,3 had voluntarily resigned and received all his dues in full and final statement of his case.
4. Evidence of the Respondents No,3 and 4 as well as the Labour Officer of the petitioner was recorded by the Respondent No,2. Thereafter the application as against the petitioner was dismissed on the ground that the Respondent No,3 was not an employee of the petitioner. It was also dismissed against the Respondent No,4 on the ground that the Respondent No,2 did not admit the former to be his employer who had also denied having received any grievance notice. The Respondent No,3 preferred an appeal against the aforesaid order before the Respondent No,1, which was allowed vide order dated 10-4-1997 and the Respondent No,3 alongwith certain other co-workers were directed to be reinstated in the petitioner's mills, the aforesaid order has been called in question through this petition.
5. The only question involved in this petition is whether the Respondent No,3 was an employee of the petitioner. Admittedly Standing Order 20 of the Industrial and Commercial Employments (Standing Orders) Ordinance holds the employer of an industrial or commercial establishment (i,e, the owner or a person responsible to the owner for supervision and control of such establishment) responsible for observance of the Standing Orders even where workmen are employed through contractors. Similarly the definition of "worker" under section 2(XXVIII) of the I.R.O. Also covers a person employed directly in an Establishment or industry or through or one employed through a contractor, Mr. M.A.K. Azmati learned counsel for the petitioner however, argued that only a perso employed through a contractor and not one employed by a contractor could be treated as a worker in relation to an Establishment. Reliance was placed upon a number of precedents from different jurisdictions though it might suffice to refer to the pronouncement of our own Supreme Court in Mian Munir Ahmed v. State (1985 SCM R 257) and Farid Ahmed v. Pakistan Burmah Shell Ltd.
(1987 SCM R 1463).
6. Learned counsel indeed appears to be correct to the above extent and it needs to be seen in every case whether the person described as a contractor is really an independent contractor required to perform contractual obligations in relation to an Establishment for which he has to emply workers to carry out duties under his own supervision and control or whether he acts as a mere agent of the owner of the Establishment for supplying work force to the later. Such question have cropped up on several occasions and Courts have carefully gone behind paper arrangements described as "contracts" and at times it has been found that such "contracts" were merely designed to deprive workers of the rights and privileges that they would have enjoyed by virtue of being employees of the Establishment. On other occasions the workers were found to be genuinely employed by independent contractors and owners of Establishment were absolved of all liabilities.
7. The learned Respondent No,1 in recording his findings against the Petitioner strongly relied upon a judgment of the Supreme Court of India in Hussain Bhai Calicut v. Alath Factory (1978 LLJ 397) to the following effect; "5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex-contract is of no consequence when on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different prefect paper arrangement, that the real employer is the Management, not the immediate contractor, Myriad devices, half hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer, based on Arts. 38, 39, 42, 43 and 43A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of the law and not be able by the maya of legal appearances."
8. It needs to be seen whether the law in Pakistan is different with reference to the two pronouncements of the Honourable Supreme Court referred to in para 5 above. In Mian Munir Ahmed's case the company had awarded a contract for the work of loading and unloading material brought into the company and for the aforesaid purpose the contractor employed workers in his own discretion and in accordance with the quantum of work involved. He exercised full powers of control and supervision over such workers. It was in this context that the Honourable Supreme Court held that these workers were not the employees of the factory owned by the Company and as such no obligations to provide them with history tickets in terms of the requirements of the Standing Orders Ordinance. In Farid Ahmed's case the appellant had entered a contract for running one of the several patrol pumps owned by and the Respondent was employed by the Contractor to work on the patrol pump. Their Lordships held that since the Respondent was not merely employed by the Contractor but the later also had the power to direct how the Respondent was to perform his work he could not be treated as an employee of the appellant.
9. Indeed the law declared by our own Supreme Court is binding upon us. At the same time, a careful consideration of the above precedent would show that the facts in both reported cases from our Supreme Court unmistakably showed that supervision and control over the working of the employees was exercised by the Contractors who were required to render certain services ancillary to the main functions of the company. Therefore, a finding to the effect that they were employees of the contractors was unexceptionable even in terms of principles laid down by the Indian Supreme Court.
10. The facts of instant case however appear to be substantially different. Though stated to be employees of the Contractor (Respondent No, 4) it is evident that the Respondent No,3 was required to work in the weaving department of the petitioner which constituted one of the principle organs of a textile mill owned by the petitioner. The machines upon which the work was performed belonged to the petitioner and the raw material was also to be provided by it. It was also admitted in evidence that the weaving section was controlled by the weaving master though there is nothing to suggest that he was employed by the Respondent No,4.
11. The Respondent No,1 also noted that though rates of wages have been changed from time to time and other incidental expenses have also been rising, the purported contracts tend to show that the Respondent No,4 was receiving the remuneration at the same rate which was fixed in 1989.
This fact itself created a doubt as to genuineness of an independent contract between him and the petitioner. It may be added that the Respondent No,3 had categorically asserted that he was employed as a weaver by the petitioner in 1984 which was neither denied by the petitioner nor, the Respondent No,4. On the other hand it has been asserted the petitioner that the weaving section was contracted out for the first time in 1989 and a "contract" dated 19-3-1989 has been placed on record. This would show that the Petitioner had acquired the status of a permanent worker of the Petitioner even before the contract has been entered into with the Respondent No,4. No doubt the Petitioner has stated in the memo. Of petition that the weaving section remained completely closed from 1978 to 1989. No such statement was made in the reply statement before the Respondent. No,2 or in the evidence adduced.
12. Be that as it may, the learned Respondent No,1 appears to have arrived at a finding of fact to the effect that the agreements brought on record were not genuine and under Standing Order 20 the petitioners were liable for application of the Standing Orders. Admittedly no order of termination of services of the Respondent No,3 was passed by the petitioner under Standing Order 12. The above finding of fact does not appear to suffer from any misreading of evidence of error of law so as to warrant interference in Constitutional jurisdiction. Accordingly this petition was dismissed vide short order announced in Court on 26-1-2004.