1989 PLP 2332 (CLC)

The appellant is a statutory body established under the Social Security Ordinance, 1965. The provisions of the said Ordinance were made applicable to the Employer and the Employees of the respondent establishment by Notification dated 18‑6‑1970. Thus a demand was made to the respondent by the appellant to pay Social Security contribution at the rate of 70% on their failure to pay it as required by law. Consequently respondent employer started paying contribution on the wages of its employees. In or about 1982 the appellant noticed a substantial difference in the payment of quantum of contribution made by the employer of the respondent establishment. On inquiry it transpired that the employer of the notified establishment had stopped paying contribution in respect of 57 of its workers on the ground that they were getting the work of the establishment done by employees through independent contractors. Consequently, the appellant institution called upon the respondent to pay contribution as required under section 20 of the said Ordinance. The respondent having failed, a dispute arose under Section 57 of the Ordinance. The respondent applied to the Commissioner under Section 57 of the said Ordinance, which was decided against the respondent by the Commissioner's decision dated 14‑5‑1986. Being aggrieved of the said decision the appellant filed Appeal No.3/1986 under Section 59 of the Ordinance of 1965 before the Social Security Court No.l, Karachi, challenging the above decision. The learned Social Security Court No.l by its judgment dated 30thSeptember, 1986 allowed the respondent's appeal, against which the above appeal has been filed under Section 64 of the said Ordinance. The appeal was admitted to regular hearing by order dated 18‑1‑1987, to consider, inter alia, the question of the interpretation of the words "employer" and "employees".

3. Learned counsel submits that the above question, which is the only question raised above has already been decided by the Honourable Supreme Court of Pakistan in Sind Employees' Social Security Institution v. Consolidated Sugar Mills Limited (1989 SCMR 888). It appears to be so, the relevant portion is reproduced as under:‑ "Reading these provisions together the conclusion is inescapable that the owner of the industry is liable for employees engaged for his industry even through the contractor. The contention that the Contractor should A be taken to be employer and not the owner, as expressed in the agreements with the contractors and made liable for the contribution, cuts across the scheme of the statute where it was intended by law to make the Contractor, the employer. The statute made provision for it directly (State undertakings) Section 2(9) or indirectly (Section 20(8) and Section 20(9). By construction or interpretation if the Courts were to introduce such contractors also as employers on the basis of contracts or otherwise, then the Court would‑ be rewriting the law itself. Such an interpretation being in derogation of the express provision that "in every other case" it is the owner who is to be the employer. In the circumstances, the owner respondent is obliged to contribute to the Social Security Fund for employees engaged through the contractor. As to the satisfaction of the other requirements of law, viz., the minimum hours of work etc. we are leaving it to be sorted out in the first instance by the Institution itself if and when proper representation is made to it as required by law. This appeal is allowed with costs and the impugned judgments are set aside."

4. In view of the above, the appeal is allowed with no order as to costs. A.A./S‑454/K ‑ Appeal allowed.