1989 PLP 120 (PLC)

3. The learned counsel for the appellant has challenged the finding of the Social Security Court that contributions are payable in respect of the amounts paid to the secured workers on account of leave encashment and has also contended that the agreement allowance which the Courts below have held to be not forming part of wages should be included therein.

4. Taking up the second contention of the learned counsel first, from the order of the Commissioner Punjab Employees' Social Security Institution, Lahore, it is evident that the parties had agreed to exclude the agreement allowance from wages while calculating the social security contribution. The learned Social Security Court, Punjab, Lahore, in view of this agreement, held that the appellant could not challenge this finding in appeal. The learned counsel for the appellant has contended that no such concession was made by the appellant or its counsel before the Commissioner, Social Security Institute. However, no affidavit of the counsel who appeared before the Commissioner or even of the appellant has been filed in support of this assertion. The fact of such admission having been made finds mention in the order of the Commissioner as also the Social Security Court. There is a presumption of correctness attached to A the judicial record which has not been rebutted in the present case. It is, therefore, difficult for me to accept the contention of the learned counsel in this behalf.

5. The real dispute between the parties, however, is confined to the question as to whether the payment on account of encashment of leave forms part of the wages within the meaning of section 2(30) of the Social Security Ordinance so as to make it obligatory for the employer to pay social security contribution on this amount also. The learned counsel for the appellant has contended that the definition of wages as given in the aforesaid Ordinance does not include any sum paid on account of encashment of leave not availed of by the workers. According to the learned counsel, words "authorised leave" appearing in section 2(30) relate to leave which has been sanctioned and availed of by the workers and not to the unavailed leave which had accumulated and in lieu of which payment is made by the employer. The learned counsel points out that there is no provision in any of the laws requiring the appellant to make payment every year or periodically for the accumulated leave and this payment is being made to the workers on account of voluntary agreement between the management and the workers. The word "authorised leave", therefore, in section 2(30) does not have any reference to payment made in this behalf. It is also pointed out that Factories Act, 1934, particularly section 49(B) thereof provides for payment in lieu of accumulated leave, for not more than 28 days only at the time of cessation of employment and not periodically during its currency. Similarly, the payment envisaged by other provisions of that Act pertains to period of leave actually availed of and not to the unavailed leave in lieu of which such payment is being made as in the present case.

6. I regret my inability to agree with the interpretation being placed on section 2(30) of the Ordinance by the learned counsel which reads as under:‑ "Section 2(30): `Wages' means remuneration for service paid or payable in cash or in kind to a secured person, not being less than remuneration based on the minimum rates of wages declared under the Minimum Wages Ordinance, 1961 (XXXIX of 1961), without taking account of deductions for any purpose, under a contract of service or apprenticeship, expressed or implied, and shall be deemed to include any dearness allowance or other addition in respect of the cost of living and any payment by the employer to a secured person in respect of any period of authorised leave, illegal lock‑out or legal strike, but does not include:‑ (a)??????? any payment for overtime; or (b)??????? any sum paid to the person employed to defray special expenses entailed by the nature of his employment; or (c)??????? any gratuity payable on discharge; or (d)??????? any sum paid as bonus by the employer; It was observed by the Supreme Court in the cases of Divisional Superintendent P.W.R., Karachi v. Bashir Ahmad P L D 1973 S C 589; and Kohinoor Chemical Co. Ltd. and another v. Sind Employees' Social Security Institution and another P L D 1977 S C 197 that the Social Security Ordinance, 1965, is a beneficial and remedial legislation enacted for the purpose of ameliorating the lot of the working class and it should be construed so as to advance the remedy and suppress the mischief, or else it would frustrate the legislative intent Consequently, while keeping this object of the legislative view as wide. an interpretation as is permissible within the language of Statute, should be placed on the term `wages' appearing in the Ordinance. In Kohinoor Chemical Company's case, supra, it was observed at page 211 that the contribution which the employer and the workers are required to pay to the Social Security Institute is in the nature of a fee for rendition of service enumerated in the West Pakistan Employees' Social Security Ordinance and not a tax. The narrow interpretation which is sought to be placed by the learned counsel on section 2(30) of the Ordinance cannot be accepted.

7. On the plain wording of the subsection itself, the contention of the learned counsel is untenable. The definition of the `wages' as given in section 2(30) is inclusive and its ordinary meaning has been enlarged so as to specifically include the payment in respect of "authorised leave". According to B Black's Law Dictionary, 5th Edition at page 123, "authorised" is sometimes construed as equivalent to "permitted or "directed". Similarly in Ballentine's Law Dictionary, 3rd Edition, "authorise" has been defined as "to empower, to give a right to act, the connotation being permissible rather than mandatory." In American Jurisprudence 2nd Edn., Volume 17, at page 696, following definition of the word "authorised" appears:" "The word `authorised' is a word of permission merely, and generally has that sense when used in a contract; thus, an agreement authorising a person to do something merely gives him permission to do it and does not obligate him to do it."

8. From the above, it becomes obvious that "authorised leave" as mentioned in section 2(30) of the Ordinance has reference to the leave which a worker is entitled or permitted under the terms of his employment, or under any law or agreement between the parties to avail of. There is no further requirement that the leave should have actually been availed of before it can be termed as authorised leave. Any payment made to a worker on account of encashment of the leave which a worker has earned or is due to him will, therefore, fall within the definition of `wages' as appearing in section 2(30) of the Ordinance. The definition of `wages' came up for consideration before the Supreme Court of Pakistan in the case of Sind Employees, Social Security Institution and another v. Dawood Cotton Mills Ltd. P L D 1977 S C 177 wherein it was, inter alia, held "that it would be seen that rendering of service or at least the availability of the employee at the disposal of the employer for service is an essential requirement or prerequisite for payment of wages." The object in making payment on account of leave encashment to the workman in such cases is that instead of availing of the leave, which is his right, he continues to work for the employer, obviously to D his benefit. During this period of time the workman makes his services available to the employer though he is under no obligation to do so. (Sind Employees, Social Security Institution v. Dawood Cotton Mills Ltd. P L D 1988 S C 1 refers).

9. The Sind High Court in two cases namely Oadri Brothers Foundry and Workshop, Karachi v. Sind Employees' Social Security Institute, Karachi P L D 1977 Kar. 112 and M/s. Dawood Cotton Mills Ltd., Karachi v. Social Security Institution, Karachi P L D 1978 Kar. 744 has taken the view that payment on account of leave encashment forms part of wages and the social security contribution was payable in respect of such a payment. It was further held that such contribution is to be made in respect of the payment irrespective of the fact whether such leave was actually taken or not. I respectfully agree with the view taken in the two cases and have not been persuaded to differ from the same. For the foregoing reasons, this revision petition has no force. It is dismissed with no order as to costs. AA./M‑992/L ???????????????????????????????????????????????????????????????????????????????????? Revision dismissed.