1976 PLP 324 (PLC)

6. The only question which needs determination in these appeals, is whether the 45 appellants are employees of the respondent. In the Junior Labour Court all the applications were consolidated and the evidence was jointly recorded. Only one worker namely, Faqir Muhammad appeared as witness. He said that I alongwith other 44 petitioner; am employee of Rafhan Maize Products and the petitioners are working in the respondent's Mills as Pallaydars. Tine social security amount was paid by the Rafhan Maize Products. Social Security Card Exh. P. 1 is produced for perusal. Messrs Rafhan Maize Products Company had also issued me an Indentity card on 8-12-71 which is Exh. P. 2. 1 was not informed about the removal of my service from Rafhan Maize Products Company and about my new employment with contractor Lai Din. The said Lai Din contractor issued me a permanent card on 1-12-72 and also to the other petitioners. I produce the said card which is P.

3. On receipt of the card I learned that my services have been transferred to the contractor, I was further informed that in future I alongwith other petitioners well receive, wages front the contractor.

7. In the cross-examination he said: I am doing loading and unloading work nowadays. I am a permanent pallaydar and doing the same job since long. No letter of appoint ment was issued to me by the Company I demanded the appointment, letter but the Management refused. I work in the factory from 7 a.m. to 4 p.m. No fixed salary has ever been paid to us. No leave has ever been granted by the Management. Attendance register is being maintained of all of us. Lai Muhammad Thakedar is maintaining that register. Lai Mohammad Thakedar pays us the wages. When we do not work on any particular date he does not pay us for that day. Wages are paid on piece rate basis. It is incorrect to suggest that I am not an employee of Rafhan Maize Products and that instead of it we are employees of Lai Muhammad Thakedar.

8. He placed on record three cards. The first is Exh. PA issued by the Social Security Office. Admittedly the Social Secruity fee has been deposited by the respondent. The second card Exh. P. 2 is an identity card, issued by the respondent to the workers. This card was issued on 8-12-1971. The third card Exh. P. 3 was issued by Lai Muhammad Contractor on 1-12-1972. This is entire evidence produced by the appellant.

9. On behalf of respondent Mr. S. M. Akbar, Personnel Manager, appeared as a witness. He said All the 45 petitioners whose names appear in Annex. A are not employees of Refhan Maize Products. I have brought leave register which is being maintained under rule No. 109 of West Pakistan Factories Rules. In this register the name of all the workers is entered. The name of petitioners is not entered in this register (register seen and returned). The names of petitioners are not entered. Card P. 2 is issued only for security purposes under Government instructions. I produce the letter Exh. R. 1 from Director Social Security, Lyallpur and receipt R. 2 according to which Lai Muhammad. Contractor has been shown as employee of the respondent. All the petitioners shown in Annex. `A' were the em ployees of Lai Muhammad Contractor. The petitioners are employees of Lai Muhammad Contractor. The petitioners are not employees of Refhan Mills.

10. In the cross-examination be said: - I have not brought the attendance register of 1971-72 but I can produce the same in about one hour. Lai Muhammad was not an employed of our Mills but he was only a contractor. The Social Security cards in respect of the petitioners have been issued by the Social Security Department. It is incorrect that social security is applicable to permanent employees only. It is incorrect that cards P. 2 are only issued to the permanent employees of the Company. Lai Muhammad is our contractor and an agreement bas been signed. It is correct that the respondents were prosecuted by the Labour Department under sec tion 7 of the W. P. I. & C Employment (Standing Orders) Ordinance, 1968 and Court's decision thereon is Exh. P.

4. It is incorrect that the petitioners were the employees of the Refhan Mills.

11. In the light of the above evidence it is to be ascertained if the appellants are employees of the respondent. The Supreme Court of India in Chintaman Rao and another v. State of Madhya pradesh ((1958) 2 L L J 252) said: - The concept of employment involves three ingredients (1) employer; (2) employee; and (3) the contract of employment. The employer is one (1) 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 whereunder the employee agrees to serve the employer subject to his control and supervisions."

12. The above Indian case was concerned with the manufacture of Bidis. The accused was a Manager of Bidi Factory which employed an independent contractor who manufactured the Bidis in their factories by entrusting the work to the persons to whom the price was paid by main factory after delivery and approval. The Inspector of Factories, on inspection of the main factory found that some Thakedars and their coolies who had come to deliver the Bidis were working on the Bidis brought by them within the main factory. The Manager was prosecuted for failure to maintain the register of these workers. In this case the question for consideration was whether the contractors and their coolies were employees of the main factory in accord ance with the definition of worker as given in section 2 of the Factories Act. According to this definition worker means a person employed directly or through any agency whether for wages or not, in any manufacturing process. It was held that the contractors and the coolies employed by the main factory were not workers within the definition.

13. The above ruling made a distinction between the workers employed by the owner and workers employed by an independent contractor. Emphasis was laid upon the word "employ" in the definition, and it was observed that unless the workers were employed "by the factory" there would be no responsibility on the occupier or Manager if the employment proceeded from some independent contractor. The ruling thus gave a restricted meaning to the words of the definition "employed in any manufacturing process" and laid emphasis upon the word "employment" as denoting relationship of Master and Servant between the factory and the persons employed in the manufacture.

14. The above case is relevant for our purpose because the Standing Order No. 20 had also used the words "employ through contractors. It is interpretation of these words that would decide the whole issue in this case. The case of Chintaman was followed by the Supreme Court of India in (1961) 1 L L J

549. It was observed: - The distinction between an independent contractor and a servant was adverted to. That distinction is well-known. An independent contractor is charged with a work, and has to produce a particular result; but the manner in which the result is to be achieved is left to him. A servant, on the other hand, may also be charged with a work and asked to produce a particular result, but is subject to the directions of the master as to the manner in which the result is to be achieved. This distinction was utilized to determine whether the Sattedars and his coolies were workers of the main factory or not and it being found that the occupier and Manager of the main factory had no control over them, it was held that they were not the workers of the main factory.

15. A similar distinction was made by Sind Labour Appellate Tribunal in Shahab Industries v. Shah Nemroze (1974 P L C Note 60 at p. 69). In this case the respondent was employee of the contractor, who worked with Shahab Industries, It was held that the respondent was not employee of the appellant, Following para. of the judgment can be reproduced usefully:-- A distinction has to be made between two situations, the one where worker is employed through a contractor and the other where the contractor himself employs workers for carrying on the contract, which he has taken. The case of the appellant was that they had given a contract to manufacture Jerricans to Messrs. A. A Asad Jerrican Contractor. The agreement dated 10-1-72, amply proves that the Contractor was running the business on his own, as he had the power to dismiss and pay the workers. Standing Order 20 of the Standing Orders Ordinance would apply only where a concern employs workers through contractors and not where the contractor is himself running the business on his own. In the latter case, the industry pays only for the finished goods and has no control or supervision, over the workers.

16. In view of the above authorities, which have laid down the same principle, it is evident that the present appellants cannot be held employees of the respondent. One of the appellant Faqir Muhammad admitted that his duties were loading and unloading. He was known as Pallaydar. No letter was issued to him by the respondent. No wages was fixed for him. No leave was ever granted to him by the Management. The attendance register was maintained by Lai Muhammad Contractor and the wages were always paid to them by the Contractor. He further admitted that his wages were calculated on piece rate basis. Mr. S. M. Akbar who appeared on behalf of the respondent stated that the names of the appellants did not find any place in the leave register, that they were employed by Lai Mohammed Contractor who had signed the agreement with the respondent to do the work of Pallaydar (loading and unloading). The evidence on record leaves no doubt in my mind that the appellants were never engaged by the respondent. In fact, they were engaged by Lai Muhammad Contractor who has control of hiring and firing them. They do not fall within phraseology employed through contractor". There are numerous departments who get their work done through contractors. For instance the Building and Roads Department gets almost all their work done through the contractors. Such contractors employ huge number of workers for the construction of Roads and Buildings but these workers, with no stretch of imagination would be considered as employed by the Government Departments. In the present case stress was laid on the point that identity cards were issued by the respondent and social security was also deposited by the respondent and so on the basis of this evidence a finding should be give, in favour of the appellant. I find no force in this contention. The respondent is a limited concern and if Government Department had pressed on them to fulfil these conditions, they are bound to do so but that will not change the relationship of master and servant. The respondent neither engaged them nor has the control over them. They are under the administrative control of an independent particular contractor who had signed an agreement to do a particular work for the respondent and who pays wages to the appellants. I hold that all the appellants are employees of the contractor and they are not employees of the respondent.

17. For the above reasons alt the appeals are dismissed, No order as to costs.