1988 PLP 765 (SCMR)

SAAD SAOOD JAN,‑‑This is an appeal by special leave from the judgment, dated 15‑4‑1986 of the Sind High Court, Kara&), dismissing the constitutional petition of the appellant institution wherein it had challenged the legality of the appellate order of the National Industrial Relations Commission, upholding the registration of respondent No.3 as trade union under the Industrial Relations Ordinance, 1969.

2. The appellant institution has been constituted under section 4(l) of the Employees' Old Age Benefits Act, 1976, for the purpose, mainly, of providing old‑age benefits to persons employed in industrial, commercial and other establishments. Respondent No.3 is an organization of workers serving in the appellant institution. Respondent No.3 got itself registered on 7‑9‑1979 with the National Industrial Relations Commission, hereinafter referred to as Commission, as Federation of industry‑wise Trade Unions. On 30‑8‑1984 the appellant institution moved the Registrar of Trade Unions for cancellation of the registration of respondent No.3 on the ground that its employees were not covered by the Industrial Relations Ordinance, 1969. The Registrar found merit in the application and directed that a complaint be filed before the Bench of the Commission under section 10 of the Industrial Relations Ordinance for cancellation of the registration of respondent No.3. From the order of the Registrar, respondent No.3 filed an appeal before the Commission. By an order, dated 3‑7‑1985 a Full Bench of the Commission accepted the appeals , o(1 set aside the order of the Registrar.

3. Feeling aggrieved by the order of the Commission the appellant institution invoked the constitutional jurisdiction of the High Court. Its case before the High Court was that the Industrial Relations Ordinance under which registration had been granted to respondent No.3 was not applicable to its employees not only because they were specifically covered by the exclusion clauses (b) and (f) of section 1(3) of the Ordinance but also for the reason that its functions did not constitute 'industry' within the meaning of clause (xiv) of section 2, thereof. It also challenged the constitution of the Bench of the Commission which had allowed the appeal of respondent No.3. The High Court examined all these contentions but found no merit in any of them. Accordingly, it dismissed the petition.

4. Leave to appeal was granted to the appellant institution to examine the question whether the High Court was right in rejecting the contention of the appellant institution that it fell outside the purview of the Industrial Relations Ordinance.

5. In support of its case that its employees fell outside the purview of the Industrial Relations Ordinance, the appellant institution relied upon clauses (b) and (f) of section 1(3) and clause (xiv) 2 of the Ordinance. Section 1(3) excludes certain categories employees from the ambit of the Ordinance. It reads as follows:‑ "It shall not apply to any person employed ‑‑‑‑‑‑‑‑‑‑‑‑‑ * * * * * * * * * * * * * * * * * * * * * * * * * (b) In the administration of the State other than those employed as workmen by the Railway, Posts, Telegraph and Telephone Departments ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ * * * * * * * * * * * * * * * * * * * * * * * * * (f) by an establishment maintained for the treatment or care of sick, infirm, destitute or mentally unfit persons." For the appellant institution it is argued that under Articles 37 and 38 of the Constitution it is the responsibility of the State to promote social justice and in particular promote social security by compulsory social insurance and to afford relief to citizens who are permanently or temporarily unable to earn their livilihood on account of infirmity, sickness or unemployment. It is in discharge of these responsibilities that the Federal Government has set up the appellant institution. Its management is vested in a board of trustees whose members are appointed by the Government and are deemed to be public servants. As its employees perform functions which are relatable to the constitutional' responsibilities of the State they fall in the category of persons employed in the administration of State within the meaning of clause (b) of section 1(3), ibid.

6. It is difficult to accept this contention. The State has multifarious functions to perform in different fields in discharge of its constitutional responsibilities, affecting the citizens in almost all walks of life. For this reason it is the largest employer of man‑power in the country. If all persons who are concerned with implementing constitutional responsibilities of the State, are to be treated as employed in the administration of State within the meaning of clause (b) of section 1(3) of the Ordinance it will, as a consequence, effectively put the largest employer in the country beyond the reach of labour laws. This could hardly be the intention behind clause (b). It is to be noticed that certain categories of State employees, for example, those serving in defence forces and police, have been expressly excluded from the ambit of the Ordinance, even though they too discharge duties relatable to the constitutional responsibilities of the State. If clause (b) ibid, was intended to cover all those who were employed in connection with the constitutional responsibilities of the State it would have been un‑necessary to specifically exclude certain categories of State employees by name. Quite obviously, the expression 'administration of State' has been used in a limited sense in the said clause. In Sind Road Transport Corporation v. Staff Union 1975 PLC 361 this expression came up for consideration before a Division Bench of the Sind High Court and the learned Judges took the view: "the expression 'administration of the State' is to be interpreted in the limited and narrow sense of the practical management and direction of the executive machinery or the operation of the various organs of the sovereign or the conducting or carrying on of the details of the Government. * * * * * * * * * * * * * * * * * * * * * * * * * We see no reason to place a different interpretation on the clause. The old‑age benefits similar organizations. functions of the State nor are they pertaining to conduct or carrying on of the details of the Government. Clearly, its employees are not covered by the exclusion clause (b)

7. The contention that the appellant institution is one maintained for the treatment or care of sick, infirm, destitute or mentally unfit persons and, therefore, covered by clause (f) of section 1(3) is also untenable. It is to be noticed that under section 3, Employees' Old‑Age Benefits Act, all persons employed in an industry or an establishment under a contract of service or apprenticeship are required to be insured. Under section 9, the contributions in respect of insurance of the employees are to be paid by their respective employers. The contributions so collected together with donations, grants and bequests received by the appellant institution constitute a Fund set up under section

17. Out of this Fund, the appellant institution pays allowances to insured persons who fulfil certain qualifications as laid down in sections 22 and

23. The appellant institution does not run a hospital or a nursing home of its own. In fact in order to receive an allowance out of the Fund administered by the appellant, one need not even be sick, infirm, destitute or mentally unit; all that is required is that he should be an insured person, he should have attained a certain age, he should have retired from insurable employment and contributions with regard to him should have been paid by his employers for a certain minimum period. In the circumstances, it cannot be said that the appellant institution is being maintained for the treatment or care of sick, infirm, destitute or mentally unfit persons. It cannot, therefore, take advantage of the exclusion clause (f) of section 1(3) of the Ordinance.

8. Finally, it is urged on behalf of the appellant institution that its functions do not constitute "Industry" within the meaning of section 2 (xiv) of the Industrial Relations Ordinance. The said clause defines the word "Industry" to mean any business, trade, manufacture, calling, service, employment or occupation. There are a large number of reported cases in which attempts had been made to determine the precise scope of this clause; in some cases a narrower construction has been placed upon it while in others it had been given a wider content. For example, see K . G. Old, Principal Christian Technical Training Centre v. Punjab Labour Court 1976 P L C 675 and A.F. Ferguson & Co. v. The 5th Sind Labour Court 1974 P L C

98. For the disposal of this appeal, it is un‑necessary to refer to these cases as there can be little doubt that the functions of the appellant institution do constitute 'service' within the meaning of the said clause. Ordinarily, it would be the obligation of an employer himself to look after his workers by providing relief to them in the event of their becoming sick or disabled or aged. The statute which has created the appellant has institutionalized these functions, which really belong to the employer, by setting up a body for performing them for him. The appellant institution is thus rendering a service to the industrial I and commercial sectors. It cannot, therefore, say that its functions fall outside the purview of clause (xiv).

9. For the reasons stated above, we find no merit in this appeal which is hereby dismissed with costs. M.Y.H./E‑5/S Appeal dismissed.