2002 PLC 212 (PLP)

SABIHUDDIN AHMED, J.‑‑‑The admitted facts appear to be that the petitioner are the owner of a textile factory in the Landhi Industrial Area, Karachi and the respondents Nos.3 to 14 were performing different jobs in the weaving department of that factory. According to the, petitioner, by a contract dated 30‑4‑1985 the petitioner had awarded the contract for weaving of terry towels to the respondent No.2 who were required to carry out the weaving/manufacturing process and were to be paid on the basis of the quantity of different kinds of material at different rates. For the aforesaid purposes the respondent No. 2 were required to employee thereon workmen A upon terms and conditions to be settled by themselves and were responsible for payment of all wages etc. of such workers. Through a letter dated 29‑4‑1987, the petitioner terminated the contract of the respondent No.2 on the, ground of unsatisfactory performance of the latter as well as other factors making the production of towels uneconomical. At the request of the respondent No.2 the contract was extended up to 5‑1987.

2. The petitioners have further averred that after the expiry of the aforesaid extended period and the eventual termination of the contract the respondent No.2 terminated the services of all workers in the aforesaid weaving department. This is acknowledged by the respondent No.2. However, though all of them happened to be the employees of the respondent No.2 and not the petitioner, about 45 workers addressed grievance notices in terms of section 25‑A of the Industrial Relations Ordinance to the petitioner seeking reinstatement in service whereas, some other got their dues from the respondent No.2. The petitioner replied that they had nothing to do with those workers.

3. The workers, however, preferred an application under section 25‑A of the IRO seeking relief by way of reinstatement. The learned Labour Court by its judgment dated 26‑9‑1998 rejected the application holding that there was no employer/employee relationship between the petitioner and the, workers including the respondents Nos.3 to

14. The respondents Nos.3 to 14, however, preferred an appeal before the respondent No.1 which was allowed on the ground that there was an essential presumption to the effect that the aforesaid respondents were working in the factory belonging to the petitioner and the petitioner had failed to successfully rebut the aforesaid presumption. The petitioners have called in question the aforesaid appellate order of the respondent No. 1 by invoking the Constitutional jurisdiction of this Court. It may be pertinent to mention here that though proceedings before the Labour Court were filed by about 45 workers the majority of them got their dues settled by the respondent No.2 and only the respondents Nos.3 to 14 have persued the matter up to this level.

4. Mr. Noor Muhammad learned counsel for the petitioners argued that the terms of the contract dated 30‑4‑1985 between the petitioner and the respondent No.2 clearly showed that the aforesaid respondent was an independent contractor responsible for carrying out the work of weaving and producing terry towels and the contract explicitly visualized that any number of workers engaged in such process could only be treated as employees of the respondent No.2. The petitioner had nothing to do with the payment of wages etc. of these workers and no employer/employee relationship existed between the petitioners and the respondents Nos.3 to

14. The aforesaid agreement having been placed on record through an independent person i.e. an Assistant Director of the Labour Department the same could not be ruled out of consideration. Moreover, he relied upon several other documents like the appointment and termination letter issued by the respondent No.2, the C public notice appearing in daily Aman of 2‑6‑1987 on behalf of the respondent No.2 informing the workers about the termination of their services, and letters writing asking them to get their dues settled etc., show that such workers were employees of the respondent No.2 and not the petitioner.

5. Mr. Farid Gul Khan learned counsel for the respondents Nos.3 to 14 on the other hand stoutly defended the impugned order contending that no documents establishing the fact that the respondents Nos.3 to 14 were in fact the employees of the respondent No.2 having been adduced before the Labour Court, the presumption that they were the employees of the petitioner was clearly attracted. Moreover, he argued that this Court exercised a very limited jurisdiction in setting aside order passed by statutory tribunals and even if the respondent No.l came to a wrong conclusion on fact and law, there was no room for interference by this Court unless the order was found to be patently without jurisdiction, He relied upon; inter alia, the judgments of the Hon'ble Supreme Court in Muhammad Hussain Munir v. Sikandar (PLD 1974 SC 139) and Abdur Rahman Bajwa v. Sultan and others (PLD 1981 SC 522).

6. We have heard the respective contentions of the learned counsel and carefully gone through the record. The sole question to be decided was whether respondents Nos.3 to 14 were employees of the petitioner (as claimed by them) or of the respondent No.2 (as alleged by the petitioner). Admittedly no appointment letter was given to the respondents Nos.3 to 14 and the respondent No.3, who was the only witness appearing before the Labour Court, deposed in cross‑examination that some of the workers who had originally moved the Labour Court settled their accounts with the respondent No.2. He also admitted his own signatures in token of receipt of wages on a register maintained by the respondent No.2. The petitioner and the respondent No.2 also led some evidence in support of the petitioner's contention but in our humble view the most important factor to be considered is whether the respondent No.2 were independent contractor exercising all supervisory and controlling powers as employer of the respondents Nos.3 to 14 or that the so‑called contract between them and the petitioner was merely a facade intended to deprive the respondents Nos.3 to 14 of their rights which might be available to them under the law.

7. Foreseeing the possibility of devicing "contracts" with intermediary parties on the part of employers, both the Industrial Relations Ordinance and the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, defined a worker as not merely a person employed directly by the employer but also one employed through a contractor.

8. In the above context it would be pertinent to refer to the view taken by the Honourable Supreme Court in Farid Ahmad v. Burma Shell (1987 SCMR 1463), relied upon by Mr. Noor Muhammad and the earlier case of Munir Ahmad v. The State (1985 SCMR 257). In the latter case their Lordships held that an employee was not liable to issue attendance tickets to workers employed by a contractor to whom the work of loading and unloading in the factory was assigned. In the former case the following important observations were made:‑‑ "What was intended by the Legislature by this provision was to include amongst workmen or, employees not only person who had been directly employed by the owner or employer but also those who were employed by them through such persons who undertake contracts to supply labour. The word 'contract' in this context does not mean persons employed by owner or an employer of a factory or the company for performing any particular work or task to be done in relation to the running of the factory or the company. As observed in D.C. Works Limited v. State of Saurashtra (AIR 1957 SC 264), relationship of employer and workman are similar to the relationship between master and servant and that the prima facie test for the determination of relationship between master and servant was the existence of the right in the master to supervise and control the work done by the servant, not only in the matter of directing what servant is to do but also the manner in which he shall do his work. "

9. In view of the above it was necessary to examine the terms of the contract between the petitioner and the respondent No.2 to determine whether the respondents Nos.3 to 14 were employees of the petitioner employed through the respondent No.2 or whether the latter was an independent contractor and the former could only be characterised as his employees. The petitioner relied upon. the contract in writing executed between them and the latter also admitted its existence. A photocopy of this document was produced before the Labour Court by the Conciliation Officer of the Labour Department, Government of Sindh, to whom it had been forwarded. The respondent No. 1, however, declined to take this document into consideration on the ground that it was not produced by any of the parties to the contract and only a photo copy had been produced, We do not think it was a sufficient reason for rejecting such an important document which was drawn through a mechanical process and we produced in Court by an independent witness, particularly when respondents Nos.3 to 14 did not cross‑examine the witness to attack the veracity of the document or otherwise object to its admissibility.

10. A reading of the above document shows that the respondent No.2 were required to carry out manufacturing of Terry Towels according to the instructions and specifications given by the petitioner. The yarn was to be provided by the petitioner but the work was to be supervised by the respondent who were required to employee their own labour of suitable skill and were responsible for payment of all their dues. The respondent No.2 were also responsible to maintain the petitioner's machine on which the work was carried out and replace the damaged spare parts. The contributions which were by operation of law payable to the Social Security Institution and Employees Old‑Age Benefit Institution were also recoverable from the bill of the respondent No.2. Consideration for performing such services were payable on the basis of the quantity of towels produced at agreed rates.

11. From a consideration of the above document it appears quite plainly that the respondent No.2 was assigned the task of manufacturing towels and was required to engage any member of workers for accomplishing the same as well as to determine their terms and conditions of employment and exercise supervision and control over them in any respect. The petitioner should neither direct such workers to perform any work or to instruct them to do so in any manner. Indeed Mr. Farid Gul Khan appears to be right in contending, on the basis of the observations of the Honourable Supreme Court of India in Hussain Bhai Caliat v. Alat Factory Thozi Lali Uni and others (1978 LLJ 397) that the Court could lift the veil of such paper arrangement and discover the nacked truth. Therefore, in our opinion it was possible for the respondents Nos.3 to 14 to lead evidence to show that such contract was never given effect to and the petitioner exercised the powers of supervision and control over workers notwithstanding the said document. Nevertheless it appears from the evidence on record that apart from baldly ascertaining that the said respondents were employees of the petitioner not a single instance showing how the petitioner exercised control over workers or that the terms of this document were never adhered to was adduced. Learned counsel argued that the mere fact that the respondents Nos.3 to 14 were working in the establishment owned by the petitioner created a presumption in their favour which the latter was unable to rebut. We regret we cannot subscribe to this view. On the contrary in our opinion when the petitioner relied upon a contract, whereby supervision and control over worker was to be exercised by the respondent No.2 it was incumbent upon the respondent No.2 to rebut the same through tangible evidence.

12. Lastly Mr. Farid Gul Khan argued that this Court should not interfere in the finding of fact recorded by the respondent No. 1 and its jurisdiction under Article 199 of the Constitution can only be attracted when G the Tribunal below has acted without jurisdiction. He relied upon the observations of the Honourable Supreme Court in Nawab Syed Rounaq Ali v. Chief Settlement Commissioner (PLD 1973 SC 236) and other cases to argue that even wrong decision by statutory Tribunals could not be interfered with unless they were found to be patently without jurisdiction. We are unable to subscribe to this view. in the present context for more than one view. In the first place the observations that a Tribunal has jurisdiction to decide a matter it can decide the same rightly or wrongly appear to have been overruled by a latter decision of the Honourbale Supreme Court in Utility Store Corporation v. Punjab Labour Appellate Tribunal (PLD 1987 SC 447). Secondly the question whether the respondents Nos.3 to 14 could approach the Labour Court for the relief claimed against the petitioner was a matter which went to the root of jurisdiction and could always be examined by this Court as held in Farid Ahmad's case cited above. For the foregoing reasons we are constrained to allow this petition vide our short order announced in Court on 23‑8‑2000. H.B.T./S‑197/K Petition allowed.