1992 PLP 882 (PLC(CS))

5. Mr. Khalid Zaman Ahmad is Administrative Officer of respondent No.l and has been examined by respondent No.l. He has admitted in the cross-examination that the workers employed by respondent No.l are usually procured by Head Jobber or the Jobber but they arc formally appointed by the Manager. He has also admitted that respondent No.2 used to work in Doubling Section in the three shifts but further stated that respondent No.2 used to work as `Contractor'. It is not disputed that the appellant was appointed by respondent No.2 and also his services were terminated by respondent No.2. The question that requires consideration is whether the respondent No.2 was acting as an `Agent' and employee of respondent No.l while appointing and terminating the services of the appellant or whether he did so in his capacity as an independent contractor.

6. In the Written Statement the respondent No.l alleged that respondent No.2 was a contractor who had executed such contract and after conclusion of the contract had settled account with respondent No.l and taken with him all his employees. In the examination in chief, the appellant had stated that respondent No.2 was the employee and representative of respondent No.l for, all intents and purposes. He called upon the respondent No.l to produce the agreement of contract as claimed by them in their reply statement. The respondent No.l has not produced any agreement of alleged contract between them and respondent No.2. Their witness Khalid Zaman Ahmad had admitted in the cross-examination, that they had no other proof excepting the Annexure `A' to the Reply Statement to show that respondent No.2 was their contractor in the Doubling Section. Annexure `A' is the bill, dated 1-7-1989 to 15-7-1989 allegedly submitted by Muhammad Siddique for Rs.34,

060. Neither this bill was proved by examining Muhammad Siddique respondent No.2, nor any payment voucher had been produced nor any evidence was produced to show that any payment was made to Muhammad Siddiq against this bill.

7. Respondent No.2 Muhammad Siddique was admittedly working in Doubling Section and it is admitted by Mr. Khalid Zaman Ahmed that Doubling and Winding are the last stages of manufacturing process of yarn. According to Khalid Zaman Ahmed about 700 workers were working in the mill and 40 were working in the Doubling Section. There is no evidence to show, that in any other section the work was being carried on by respondent No.l through any contractor. It does not appeal to reason, that at the final stage of manufacturing process, the work would be entrusted to a contractor, for which there is no apparent reason. There is nothing on the record to show that this Muhammad Siddique, respondent No.2 was an `expert' in the job so as to entrusted with this final process. It is also admitted by Mr. Khalid Zaman Ahmed that there is no other establishment situated within limits of respondent No.l except that of respondent No.l, who is registered under the Factories Act. He has also admitted that the Spinning Master and Assistant Spinning Master, who are employees of respondent No.l, did check the working of Doubling Section. He also admitted that quality and quantity of the material was fixed by the Spinning Master of which the contractor was informed accordingly. Respondent No.2 was admittedly not competent to fix the quality and quantity of the work. It is also admitted that respondent No.2 had not made any investment in any of the above sections, from blow room till finishing raw material, machinery or their maintenance.

8. Mr. Khalid Zaman Ahmed has further admitted that there is only one gate through which employees entered the factory and there was no separate gate for the employees of the contractor. He has also admitted that the Chowkidar allows the employees inside the door on the basis of photo pass issued to that employee but they had not issued photo pass to the employee of respondent No.2 who used to inform the Chowkidar about the identity of his employees. The Chowkidar has not been examined to prove that he was informed by respondent No.2 about identy of his employees including the appellant.

9. In such situation the question that requires consideration of the Courts is as to who would be the employer of such an employee. This question was considered at length by Lahore High Court in the case of Taj Din v. Punjab Labour Court No.3, Lyallpur PLD 1976 Lah. 1169. The learned Judge in that case defined `contractor' to be a person who in pursuit of an independent business undertakes to do specific jobs of work for other persons without submitting himself to their control in respect to the details of work'. While discussing the employee in contractor's employment it was held:-- "A concept of employment involves three ingredients, (i) employer; (ii) employee; and (iii) the contract of employment. The employer is one who employs i.e. one who engages the services of other persons. The employee is one who works for another for hire. The employment is the contract of service between the employer and the employee where under the employee agrees to serve the employer subject to his control and supervision. Employment brings in the contract of service between the employer and the employee. The control of Management, which is a necessary element of the relationship of master and servant, is not directed towards providing or dictating the nature of the article to be produced or the work to be done, but the process of work the person carries out in the execution of the work. The manner of work is to be distinguished from the type of work to be performed:"

10. In a case reported in 1978 LLJ 397 the Supreme Court of India held:-- "the true test is that where a worker or group of workers labours to produce goods or services and these goods and services, are for the business of another, that other is, in fact, the employer. He has economic control over the workers existence, 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 an immediate contractual relationship is of no consequence, when on lifting the veil, the naked truth is discovered, though dropped in a different paper arrangement, that the real employer is the management and not the immediate contractor:" It was further held that "Courts should be astute to avoid the mischief.

11. In the case of Sindh Employees' Social Security Institute v. Pakistan National Produce Co. Ltd. 1989 PLC 81, the Sindh High Court had held the mill owner to be the employer of the employees of contractor for the purpose of payment of the contribution under the Social Security Ordinance.

12. This Tribunal in the case of M/s. Valika Woollen Mills Co. Ltd. v. Valika Textile Mills Employees Union 1969 PLC 783, had held that `persons providing labour to Mills and serving under contractors in employment of mills were employees of the mill.'

13. Mr. Abid Puri has relied upon the decision of this Tribunal in the case of Gul Muhammad v. M/s. Ameeji Valeeji & Sons 1987 PLC

212. In that case employee admitted that he had neither appointment letter nor attendance card nor he was paid anything in the shape of salary and his services were terminated by the contractor. Under the circumstances this Tribunal held that workman was employee of contractor and not of the establishment. He has also relied upon the case of M/s. Factor Sugar Mills Ltd. v. Director Excise and Taxation and others 1989 PLC 434 wherein learned Single Judge of Lahore High Court held the employees engaged with contractors did not come within the purview of workers as given in Industrial Relations Ordinance.

14. The "workman" as defined under the Industrial Relations Ordinance, 1969 includes `workman' of an establishment or industry for hire or reward either directly or through a contractor.

15. Under section 2(i) of the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 the `workman' is defined to mean any person employed in any industrial or commercial establishment to do any skilled or unskilled, manual or clerical work for hire or reward.

16. The claims of the appellant that he was working in the respondent No.l's mill is not disputed. The only question is whether he was employee of the alleged contractor viz. the respondent No. 2 or respondent No.

1. It is not disputed, that he was working for hire or reward. There is no evidence to sow that Muhammad Siddique had his own independent establishment as defined under section 2(f)(iv) of the Standing Orders Ordinance. There is no Written Contract showing, that he was given contract to do a particular work independently. Admittedly respondent No. 2 had no control over quality and quantity of work nor he had any investment in the mill or the machinery. Admittedly he used to supply labour to respondent No.

1. It is also admitted that the workers for the mill used to be procured by the Jobber or the Head Jobber. The appellant and his witness Ghufranullah have stated that respondent No. 2 was `Jobber' in the mill.

17. Considering all these factual and legal positions I have no hesitation in holding that the respondent No. 2 was representative/employee of respondent No.l and in that capacity he appointed the appellant and terminated his services. The appellant would, therefore, be deemed to be the employee of respondent No. 1.

18. The contention of the appellant that his services were terminated without any Written Order is not disputed nor any Written Order has been produced by respondent No.

1. Such termination of services would be violative of Standing Order 12(3) and is not tenable. In view of the above circumstances I allow this appeal and order the reinstatement of the appellant in service of respondent No. 1 with fifty per cent back benefits. This order to be implemented within one month. M.Y.H./1857/Lb.S Appeal Allowed.