1989 PLP 434 (PLC)

(c) removal from the mills premises of the press mud, boiler ash and boiler clinkers, and (d) handling of sugar bags and removing them to the godowns. In some cases the petitioners have provided the contractors with trucks and trollies for the haulage of sugarcane and sugar bags to the mills premises or godowas. The contractors employ their own labour including drivers and cleaners for the performance of their contractual assignments. The petitioners pay the contractors for the work done by them at rates linked with the weight of the goods handled by them. They are not concerned with the number of labourers, drivers and cleaners employed by the contractors, their wages or other terms and conditions of employment. In some of the contracts a specific provision has been made to the effect that the contractor will be responsible under the 'Workmen's Compensation Act and any other Act or laws for the time being in force for the purposes of paying wages or claims falling due to the labour engaged by him.

3. The Workers' Children (Education) Ordinance came into force in 1972. Section 3 (1) thereof directed that every employer of the establishment in which the number of workers employed at any time during the year was twenty or more should pay to the Provincial Government education cess at the rate of Rs.100 per worker per annum. The object in levying this cess could be spelt out from the provision of Sections 4 and 5 of the Ordinance which stated that the: amount of the cess levied would be expended for the purpose of providing education free of cost upto Matriculation level to one child of every worker employed in the establishment.

4. The Excise and Taxation Department of the Provincial Government which has been made responsible for the collection of the cess has called upon the petitioners to pay the cess in respect of the truck and trolly drivers and cleaners and the labourers employed by the contractors. The petitioners have challenged the legality of this levy on the ground that the persons engaged by the contractors are not their employees and as such they are not liable to pay the cess in respect of them. One of the questions for consideration in these writ petition is whether the persons employed by the contractors to perform their contract an be regarded as workers of the petitioners' establishment so as to make the petitioners liable to pay the cess in respect of them also. The expression `worker' has been defined in Section 2(c) of the Ordinance. It reads as follows: `Worker' means any person employed, whether directly or through any other person, in any establishment to do any skilled or unskilled, manual or clerical work for hire or reward whose monthly wages do not exceed one thousand rupees, but does not include‑‑ (i) persons in the service of the State including members of the Armed Forces, Police Force and Railway servants; (ii) persons employed in any undertaking under the control of any defence???????? organisation or railway administration; (iii) persons in the service of a local council, a municipal committee, a cantonment board or any other local authority." The arguments before me have centred round the words "employed, whether directly or through any person, in any establishment" as occurring in this clause. Admittedly, the drivers, cleaners and the labourers in respect of whom the cess is ;ought to be levied have not been directly employed by the petitioners. The contention on behalf of the Department is that even though the drivers, cleaners and the labourers are employed by the contractors, yet they perform functions at the premises of, and in connection with the running of, the petitioners' mills. Thus they are covered by the wide definition of the term `worker' as given in the clause in question which, as its plain language suggests, includes even such persons as lave been engaged indirectly by the employer.

5. On the other hand the case of the petitioners is that there is no nexus between their establishment on the one hand and the drivers, cleaners and labourers engaged by the contractors on the other. They do not control their umber (except to the extent of their sufficiency), their hours of working, their ages or terms of employment. There being no privity of contract between them and the employees of the contractors the latter can by no means be treated as workers of their establishment so as to make them liable for payment of the cess.

6. The contention of the petitioners finds support from a decision of this Court reported as Taj Din v. Punjab Labour Court (P L D 1976 Labour 1169). In this case Karam Elahi Chauhan, J. was considering the definition of the term worker' as contained in the Industrial Relations Ordinance. It may be mentioned hat the said Ordinance has also given an enlarged definition to the word workers" so as to include within its ambit persons employed by an undertaking through a contractor also. His Lordship observed: "The words `either directly or through a contractor' in section 2 (xxviii) of the Act indicate that the employment is by the Management directly or through some kind of employment agency and in either case there is a contract of employment between the Management and the persons employed. There should be a privity of contract between them and the Management. Where for example coolies are not employed by the Management directly nor they are employed by the Management through the agency of an independent contractor it follows that coolies employed by the said contractor are not workers with in the meaning of the definition in the Act. The various provision contained in the different sections of the act give a clear indication that a work under the definition of the Act is a person who enters into a contract of service under the Management and does not include and independent contractor or his coolies or servants who are not under the control and supervision of the employer." As would appear from the above observations a distinction exists between a contractor who has been engaged to procure the necessary labour, or to use a more general expression, manpower for the establishment and a contractor who has been entrusted to perform a certain function or functions for the establishment. In the former case even though the workers have not been directly employed by the establishment, yet they are completely under its control and supervision. The establishment can regulate and determine their numbers, wages, hours of week, leave and the mode in which they perform their duties. In the event the establishment finds their work unsatisfactory it can terminate their employment by sending them back to the contractor. But in the second case where the contractor has been engaged to perform certain functions and is to be paid according to the work done by him, the persons employed by him can hardly be treated as worker of the establishment for in such a case the establishment has no control over their number nor can it regulate their terms and conditions of employment. There is no privity of contract between them and the establishment. If the establishment finds their work satisfactory all that it can do is to direct the contractor to take appropriate remedial steps or, even, penalize him by making deductions from the compensation payable to him. It is difficult to regard the contractor as sort of an agent of the establishment in the matter of recruiting the workers.

7. In the petitions before me the petitioners are being asked to pay cess in respect of the truck and trolly drivers, cleaners and the labourers employed by the already stated the contractors were engaged to perform certain were to be paid at a fixed rate on the basis of the work done by their contracts, the contractors engaged their own truck and labourers. These employees of the contractors had no connection the petitioners establishment. They worked under the control of the contractors who alone were responsible to the petitioners their contractual obligations. They cannot, therefore, be said to have been employed by the petitioners directly or indirectly. If at all, they belong to the establishment of the contractor. The petitioners cannot be asked to pay cess in respect of them.

8. The petitioners have employed watchmen to look after their mills. Some of the petitioners have also set up housing colonies for their staff. Sweepers, Malis and bearers have been employed by the petitioners in those colonies. The Excise and Taxation Department has called upon the petitioners to pay cess in respect of watchmen and those also who are serving in the housing colonies. Before me the petitioners have challenged the levy of cess in respect of watchmen also. It is stated that a watchman is not a worker with in the definition of the term as given in the Ordinance because he does not perform any manual work. I find difficult to subscribe to this view. The definition of the worker include within its ambit persons who perform manual work. No doubt the expression ?manual work? literally mean work done by hands but quite frequently it is also used to denote work done by human energy or power as distinguished from the work done through mental exertions. The Ordinance falls in the social welfare filed and is intended for the benefit of employees serving at low levels in an establishment. I would be most reluctant to exclude watchmen from its purview unless the definition given in the Ordinance is so uncompromising that I am left with no other option. It cannot be disputed that a watchman has to physically exert himself for the protection of the property of his master. He, therefore, does fall within the category of persons who perform manual work.

9. For the reasons stated above, I am of the view that in so far as the truck and trolly drivers, cleaners and labourers engaged by the contractor are concerned, the demand on the petitioners for the payment of cess is without any legal effect. The petitions are accepted to this extent only. There will be no order as to costs in these petitions. M.Y.H./F‑87????????????????????????????????????????????????? Petition partly allowed.